The logistics industry is bracing for potential disruptions as concerning labor issues loom across North American ports and railways. The potential Canadian rail strike and the threatening US East and Gulf Coast dockworker strike are flashing warning signs for logistics operations, particularly for intra-Canadian and North American trade.
In Canada, the situation is tense as the Teamsters Canada Rail Conference (TCRC) and major rail operators, Canadian National (CN) and Canadian Pacific Kansas City (CPKC), continue to struggle in negotiations. The Canada Industrial Relations Board’s (CIRB) decision to allow a strike after a 13-day cooling-off period has heightened concerns. CN has already begun a phased shutdown of its network, issuing embargoes on critical shipments, including hazardous materials. Despite ongoing negotiations, no meaningful progress has been made, leaving the prospect of a strike highly likely.
Simultaneously, the threat of a strike by the International Longshoremen’s Association (ILA) on the US East and Gulf Coasts, set to begin on October 1, is adding further uncertainty. The ILA’s push for a 76% wage increase has raised the stakes, with the possibility of widespread supply chain disruptions. The mere threat of this strike has already caused a surge in container spot rates, and a full-blown strike could exacerbate the situation, potentially leading to a significant capacity crunch in the coming months. This action could affect major ports, including those in New York, New Jersey, Savannah, and the Gulf of Mexico.
Additionally, the West Coast Marine Terminal Operators Agreement (WCMTOA) has announced a 6% increase in the Traffic Mitigation Fee at the Ports of Los Angeles and Long Beach, effective September 1, adding to the operational costs for shippers. The Federal Maritime Commission (FMC) is also set to implement a new framework on September 23 to address potential refusals of cargo space by ocean carriers.
Meanwhile, the ocean shipping market is experiencing volatility, with spot rate disparities between East and West Coast routes driven by concerns over peak season capacity rather than demand. Container traffic is nearing record levels as retailers rush to secure merchandise ahead of potential strike actions.
In the air transport sector, disruptions continue due to the Russian airspace ban, affecting flight routes and transit times, with Virgin Atlantic and British Airways adjusting or pausing their services to China. This action will push more cargo bound for China onto other airlines that still offer services, likely driving up rates across the board.
Finally, the trucking industry is seeing a slight rise in costs and capacity, with predictions of further tightening and rate increases this fall, though the market remains volatile.
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