C.H. Robinson

We’re 25 days away from a potential U.S. port strike. See the industry impact and how to prepare. 

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RAIL STRIKE RESOLVED: Canada has ordered the Teamsters to return to work at both railroads, ending the union’s new attempt to strike. Here’s what shippers should know and do as the railroads resume operations, from our Scott Shannon. “From our experience with previous rail strikes in Canada, we expect it to take up to a week for each railroad to be fully reset and running smoothly again. It will take much longer to catch up with backlogged shipments. “Railroads are like an outdoor conveyor belt that never quits running. They’re designed to operate 24/7, not stop and start. Just like they couldn’t flip a switch to shut down at midnight on the strike deadline, they can’t flip a switch to restart the conveyor belt. “ “There aren’t a lot of places to park trains during a disruption, so hundreds of trains were sitting wherever they reached a convenient spot to get the crews off last week. The railroads have to get crews back to all those spots. Then each train needs clear track ahead and enough space between them and the next train before they can move. In the meantime, containers that the rail terminals kept taking in up till the deadline are still sitting there. Any trains the railroads idled at their hubs have to move out before new trains can come in to drop off or pick up containers.” “Trains sitting at the ports would have continued getting loaded as container ships arrived last week, because port labor rather than rail labor loads at the dock. Those trains can move out fairly easily. That won’t be of much help at the Port of Vancouver though, because roughly 13,000 containers were already stacked up at the rail ramps before the shutdown and one of the three container terminals there had reached maximum capacity. The port is requesting that ships on the water slow down their arrival.” “For our customers whose cargo we’ve been diverting to U.S. ports so they can use U.S. railroads, we advise they return to Canadian gateways as soon as it’s practical. This is part of our contingency planning for what could be the first strike in 44 years at U.S. ports along the East Coast and Gulf Coast, possibly at the end of September.” “We hope this will soon ease the container shortage that started to develop in Canada as a result of rail strike preparations. With U.S. companies that typically import into Canada diverting to U.S. ports and some Canadian importers holding off, that has meant fewer import containers coming into Canada. Exporters are dependent on import flows to get access to those containers.” “For our customers we’ve switched from rail to trucks to keep their supply chains flowing, we’ll continue helping them get their most critical freight to and from the ports and across the border until the railroads are completely fluid again. Spot rates for trucking in Canada may remain elevated for a week or two until the dust settles and then slowly return to their pre-strike levels."

UPDATE: After the Canadian government attempted to end the rail shutdown by ordering the Teamsters and the railroads into binding arbitration, the union is challenging the order and has filed a new strike notice. Here’s the latest from our Scott Shannon. “As the status of both Canadian railroads is fluid and global supply chains are disrupted, we are actively advising shippers to maintain the alternative transportation plans we have in place for them until the legal and operational issues are sorted out.” “That is the case for customers whose imports and exports we’ve been diverting to U.S. ports, as well as customers we have switched from rail to trucks to keep their freight flowing through Canadian ports, to points across Canada or across the border.” “At the same time, customers may want to ship only the most critical freight, while we hold back less urgent shipments until conditions are more favorable. For example, we’ve helped some customers secure less-than-container (LCL) shipping – sending smaller orders to keep their end customers supplied without having to turn to more costly air freight." “Exporters from Canada need to be aware that a container shortage has begun to develop, given a slower flow of imports into Canada.” “Importers should be advised that conditions at the Port of Vancouver, Canada’s largest, remain congested. Roughly 13,000 containers were already stacked up at the rail ramps before the shutdown and one of the three container terminals there had reached maximum capacity. The port is requesting that ships on the water slow down so they can work on the backlog.” “For customers who need further assistance, please contact your C.H. Robinson representative.”

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With ongoing strikes shaking up the global landscape a potential East and Gulf Coast port strike may seem far off. But with less than two months left on the current ILA-USMX contract, shippers should start preparing now to minimize significant disruption. Learn more about the potential impacts of a port strike and how to prepare in our latest blog ➡️ http://ms.spr.ly/6045lIBMl