Containerships Diverted From Vancouver Amid Port Strikes, Headed for Seattle

VesselsValue reports that two containerships bound for the Port of Vancouver are now diverted to Seattle.

This is the first in a series of reroutings that could affect many ships. It will delay planned arrivals, and put pressure on supply chains.

It is unclear if the American ports will be able to work on the containers.

VesselsValue data shows that two containerships bound for the Port of Vancouver have changed course and been diverted to Seattle.

Labor strikes

The West Coast of Canada is now in its sixth day.

Containerships MSC Sara Elena, and OOCL San Francisco have been identified as those that were diverted. This is the first in a series of reroutings that could affect many ships. It will delay planned arrivals, and put pressure on supply chains.

The holiday season and the back-to school items are in full swing.

Strikes could cause congestion in ports, as longshoremen are unable to unload ships. Congestion can lead to backlogs that can lead to delays in terminal pickups. These can lead to late fees, similar to those imposed during the pandemic.

Re-routing containers can also delay the delivery of products by several days. These delays can have a negative impact on production in the auto industry, which operates under strict just-in-time schedules.

At typical speeds, the distance between Port of Vancouver to Port of Seattle takes a little more than a half day.

MarineTraffic's latest data shows that 15 containerships are bound for Vancouver, and nine containerships for Prince Rupert. These combined vessels would move containers worth $10.7 billion.

Ports of Vancouver and Prince Rupert have become popular destinations for U.S. traders because they are major ports of entry for goods coming from Asia. CNBC reported that some logistics managers said the rail service from those ports was much faster than through Seattle or Tacoma.

ITS Logistics informed CNBC that it has containers aboard the OOCL, San Francisco. The containers were due to arrive in the Port of Vancouver, on July 3, and then be transported by rail to Memphis. Paul Brashier is the vice president of drayage at ITS Logistics. He said that clients are looking for alternative American ports.

Brashier stated that "we are currently advising clients who have freight booked for Vancouver or Prince Rupert, to work with their agents to track US ports of call on the vessels their containers are traveling on, and to see if ocean liners are willing to allow reconsigment to a US Port."

Many ITS customers have asked for a change of container destination. They are waiting to find out if ocean carriers accept the change. Ocean carriers are the final arbiter for any change in container destination. You can usually change the destination of a container five days before a vessel docks.

Canadian ports process a wide range of goods destined for the United States, from footwear and apparel to auto parts and manufacturing components. CNBC reported that trade organizations such as the American Apparel and Footwear Association and National Retail Federation urged the Canadian government to keep the parties at the table for negotiations.

The International Longshore and Warehouse Union Canada and the British Columbia Maritime Employers Association both have a chapter in Canada.

Walk away

Both sides blamed each other for the collapse of talks in labor negotiations that took place earlier this week.

Talks still paused

ILWU Canada releases a

Statements that are scathing

The British Columbia Maritime Employers Association was accused of a smear and demanded to return to the mediation table.

Rob Ashton, ILWU Canada president, said: "Our people work hard under difficult and dangerous conditions. They kept Canada's economic system moving during the worst of this pandemic." "This is a far cry from the image the employer would like to portray." The pay can be good, but it will take years to achieve it, and the work is still hard.

Ashton cited several reasons to support the union's position. These included sporadic earnings for waterfront workers due to on-call systems, inconsistent hours because many workers are dispatched daily, and high injury rates, including deaths in recent years.

The ILWU Canada President also stated that higher pay rates require night shifts six or seven nights a week.

"Our members are struggling to pay for food, rent, and interest. "All we ask from employers is that they share in the wealth created by our labor and pay our members a fair and reasonable wage increase, so our members can continue their work with dignity and respect," Ashton stated.

In a statement released to CNBC on Thursday, the BCMEA confirmed that the negotiations have not resumed.

The group stated that they were "continued to be prepared to return at a moments notice to the table, assuming ILWU Canada was willing to make a reasonable offer, especially on their demand for ILWU to expand its jurisdiction aggressively over the maintenance work at the terminal."

U.S. union workers

It is unclear if the workers at American ports are going to cross the picket lines.

Both the International Longshoremen's Association and the ILWU West Coast U.S. Chapter have expressed support for the strike in the Canadian West Coast Ports.

ILA, North America's largest maritime union, which represents workers at ports along the Atlantic and Gulf Coasts and the Great Lakes as well as major U.S. Rivers, Puerto Rico, and Eastern Canada said that it would not accept any cargo diverted from ports in strike.

The ILWU U.S. West Coast Chapter declined to comment on whether or not its members intend to work any of the vessels diverted. Earlier this month, ILWU U.S. West Coast Chapter President Willie Adams had met with Ashton his Canadian counterpart. The ILWU has stated in the past that it supports its union brothers in Canada.

Port authorities expect the first of the diverted containers to arrive at the Port of Seattle by July 10.

Canadian ports move approximately $225 billion worth of cargo every year. Items such as home goods, electronics and apparel are transported by rail. According to data from the port authority, approximately 15% of the consumer trade that goes through the Port of Vancouver will be heading to or coming out of the U.S. Port data indicates that around two thirds of the containerized import volume heading to the Port Prince Rupert is headed to the U.S.

Three Class 1 railroads are available at these ports.

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