Employers threaten to lock out ILWU Canada
Date: Wednesday, May 29, 2019
Dockworkers in Vancouver and Prince Rupert will be locked out beginning with the first shift on Thursday due to the impasse in contract negotiations that has dragged on for more than a year.
Halting cargo handling at Vancouver, Canada’s largest container port, and Prince Rupert, could quickly send port and intermodal operations into gridlock because Vancouver is already operating at close to its practical capacity. Incidents the past two years involving rail service, late vessel arrivals, and weather events resulted in severe congestion and excessive container dwell times even though labor was working at full capacity.
“We’re shocked and dismayed,” said Robert Ashton, president of the International Longshore and Warehouse Union (ILWU) Canada. “I think it’s reckless on the part of BCMEA [the British Columbia Maritime Employers Association].” Ashton said he was informed of the lockout late Tuesday by the BCMEA.
Ashton said he spoke with the federal mediator who has been working with labor and employers during the negotiations and told him ILWU Canada is ready to resume talks. He said BCMEA negotiators walked out of the talks at 4 am on Monday, even though ILWU Canada negotiators were willing to continue talking.
The BCMEA wasn't immediately available for comment. In a statement, the group said it had given formal notice for an 8 am lockout.
"Our preference remains to resolve this at the bargaining table without disruption; however, as a result of the significant disruptions caused by ILWU Canada's work-to-rule job action, we can no longer effectively and safely operate the impacted terminals," said Jeff Scott, chair of the board of the BCMEA. "This has already caused cargo diversions from the BC [British Columbia] coast and threatens further loss of cargo."
The automation factor
Ashton said the negotiations, which began in February 2018, involve various issues, but one of the most important is to agree upon a path forward for addressing the complex and controversial issues involved in port automation.
Although ILWU Canada opposes automation and its impact on jobs, five terminals in the US are either fully or semi-automated. The ports of Vancouver and Prince Rupert have ambitious expansion plans, which may or may not involve automation. ILWU Canada wants all of these issues to be on the table for discussion before it is too late, but, “They don’t want to talk about it,” Ashton said.
ILWU Canada on Monday launched a softer version of its previously announced intention to strike at the Deltaport and Vanterm terminals in Vancouver. Rather than calling for a full strike that would have crippled operations at Vancouver’s two largest terminals, ILWU Canada instead is turning down any overtime work, such as early or late flex gates, and working through meal breaks. However, the union will work a second shift if needed.
“This is having minimal, if any, impact on production,” Ashton said. Although negotiations have been called off for a few days, he said talks could resume at the end of the week. The level of frustration is growing because the previous eight-year contract covering Vancouver and Prince Rupert expired in March 2018.
Opposition to automation, and the impact the loss of jobs could have on dockers specifically and surrounding port communities in general, is a front-and-center issue — even more so than wages and benefits — for longshore unions on the US West and East coasts and in Canada. Ashton referenced the port of Prince Rupert, 500 miles north of Vancouver. Losing longshore jobs in a community of 12,000 would filter down from the union to the mom-and-pop stores in the area. “It would be devastating,” Ashton said.
On the other hand, automation of marine terminals in North America is not going away. Terminals in Europe have been automating yard and gate operations since 1993. Long Beach Container Terminal’s (LBCT's) Middle Harbor facility and the TraPac terminal in Los Angeles are completing the automation of their facilities. The West Coast waterfront contract specifically allows terminal operators the right to automate. The Global Container Terminal in New Jersey and two terminals in Virginia are semi-automated, which means the lifting of containers into and out of the stacks is automated, but horizontal ground transportation that moves containers to and from the stacks is performed with yard tractors manned by longshore workers.
Terminals that automate are normally high-volume operations that move hundreds of thousands of containers on a limited footprint. Traditional manual cargo handling cannot efficiently move containers in a densified operation. The Middle Harbor terminal in Long Beach, for example, is being built with an annual throughput capacity of more than 3 million TEU.
Automation is quite costly, more than $1.4 billion in the case of Middle Harbor, so reducing labor costs is needed to recover the investment. Estimates of job losses due to full automation vary from 40 to 70 percent. Ashton said it could be as much as 85-90 percent. Therefore, it is crucial for employers and the union to hold frank discussions on the path forward for automation, he said.
It is difficult to automate a facility that is in full operation because the construction activities interfere with cargo handling and can result in congestion and excessive container dwell times. Deltaport experienced such issues over the past two years when it automated its rail facility.
Terminal operators therefore prefer to introduce automation on greenfield sites, or at least a portion of a working facility that is not in use. LBCT followed the latter model and has been phasing in additional sections of the terminal without interfering with cargo handling. APM Terminals in Los Angeles announced its intention to automate a vacant 100-acre parcel at its 440-acre facility. The ILWU in Southern California is attempting to block that project by seeking denial of a construction permit because it can’t block automation through the coastwide contract.
Vancouver's expansion plans
Ashton noted that in British Columbia, the Deltaport terminal in Vancouver has identified the greenfield Pod 4 location as an expansion site. Additionally, the port eventually would like to expand through construction of a new terminal at Roberts Bank (RB2). Prince Rupert is considering construction of a new terminal at South Kaien Island. Because all of these locations involve greenfield sites, automation would be at least a feasible option if the terminal operators would choose to take that path.
Last year, Vancouver handled 3.4 million laden and empty TEU, and Prince Rupert handled 1,036,009 TEU, according to statistics provided by the ports. A report by Quay Consulting said that, combined, Vancouver and Prince Rupert have an existing capacity of 5.34 million TEU, and last year their terminals were operating at 82.4 percent utilization. Maritime engineers say cargo-handling efficiency begins to deteriorate when a terminal exceeds 80 percent utilization.
ILWU Canada, similar to the ILWU on the West Coast and the International Longshoremen’s Association on the East Coast, is philosophically opposed to any degree of automation. However, with the British Columbia ports’ ambitious expansion plans, which are expected to come online in the mid- to late- 2020s, now is the time to open a dialogue about automation and agree upon a path forward, Ashton said.