June 30, 2014 / 10:55 PM / 5 years ago

Vancouver port volumes rise on U.S. port labor talks

VANCOUVER (Reuters) - Canada’s largest port is seeing higher-than-normal shipment volumes as some shippers divert cargo to Vancouver ahead of the deadline for contract negotiations at 29 ports along the U.S. West Coast.

A six-year contract covering some 20,000 dock workers from California to Washington state, including major hubs in Los Angeles/Long Beach and Seattle/Tacoma, is set to expire on July 1 at 5 p.m. PDT (0000 GMT).

While labor negotiations at the West Coast ports typically extend beyond the contract expiration date, the uncertainty has some shippers moving more containers through Canadian ports, particularly Port Metro Vancouver.

“What’s been happening over the last few weeks is shippers have been diverting cargo into Canadian ports,” Stephen Brown, president of Chamber of Shipping of British Columbia, said on Monday. “So the regularly scheduled ships coming into West Coast ports here, ... they’ve got quite a heavy load on them.”

The extra volumes are being offloaded in Canada and sent across the border via truck and rail.

The higher volume comes just three months after operations at Port Metro Vancouver’s four container terminals were crippled for weeks as hundreds of truck drivers walked off the job in protest over low pay and long wait times at port facilities.

The backlog from that work action has been cleared and shipments are now moving smoothly, said Brown, but he warned there was not much room for further additional shipments, should a labor dispute shut down U.S. West Coast ports.

“We don’t have a lot more capacity to offer at the moment and certainly if there were some cargo diversions they’d have to be on ships already coming to Canadian ports,” he said. “There’s not the capacity to start diverting ships scheduled for U.S. ports into Canadian ports.”

In 2002, a breakdown in negotiations at the West Coast ports resulted in a 10-day lockout, but representatives for both the workers and their employers played down the risk of a work stoppage, noting that talks are ongoing.

“It has been the norm for the negotiations to go beyond the deadline in all previous contracts. There has been no strike vote,” said Craig Merrilees, spokesman for the International Longshore and Warehouse Union.

The National Association of Manufacturers and National Retail Federation estimated in a recent report that a 10-day work stoppage at West Coast ports would cost the U.S. economy $2.1 billion per day and result in the loss of 169,000 jobs.

Key issues in the talks include rising healthcare costs and the use of outside contract labor.

Reporting by Julie Gordon in Vancouver and Lisa Baertlein in Los Angeles; Editing by Leslie Adler

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