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CP strike hurts port's fragile international reputation

Work stoppage undermines Port Metro Vancouver's latest sales pitch to global companies promoting new labour reliability in B.C.'s shipping sector
Port Metro Vancouver estimates that a one-week CP rail strike costs the Canadian economy $545 million

Reversing some crucial gains from recent longshore agreements, the Canadian Pacific (TSX:CP) strike has dealt a new blow to the port's troubled international reputation for labour reliability.

The BC Maritime Employers Association (BCMEA) said the federal government's intervention to end the strike, while positive, hasn't neutralized fallout for Port Metro Vancouver (PMV) and the companies that operate on the waterfront.

"The reputational damage has been done," said Greg Vurdela, BCMEA vice-president of marketing, customer and government relations.

Vurdela said the labour disruption undercuts the labour reliability message the port has been trying to sell to overseas customers since signing two key eight-year longshore agreements in the past year.

"It's certainly going to discount what we're terming as our historic eight-year deals as we attempt to draw additional business through the Gateway, both on the import and export side," he said.

Peter Xotta, PMV's vice-president of planning and operations, agreed that the strike has damaged the port's reputation.

"We've made great strides, so it's disappointing that we're in a position now with a fairly significant disruption to the smooth shipment of goods through the port," he said.

"It will take us some time to restore confidence in the Gateway."

As to more tangible impacts of the strike, Xotta said the work stoppage has already caused some customers to divert their cargoes to rival ports.

"The extent of that and how long the duration of that will be, whether we'll recover from that immediately or at all, is something that really takes time," he said.

"But those that have the flexibility, particularly for inbound cargoes where goods are expected in auto plants or in stores in Eastern Canada – those shippers will be taking steps to divert cargo as quickly as possible.

"So I have no doubt we probably lost some container business to Seattle or Tacoma or other ports in the days leading up to and through the disruption."

Vurdela added that even a short rail strike can backlog the port's transportation network for weeks.

"We're probably going to be another four to six weeks before it's fully fluid again," he said.

"So essentially a week off is not just a week off – a week off continues to reverberate through the supply chain for literally weeks after as the transportation network itself has to recover from the fact that it's been stopped."

PMV estimated that a week-long rail strike would cause a $545 million loss to Canada's economy.

As of press time, CP workers were back on the job as a result of back-to-work legislation. •