Fresh frozen products that lose their value because they can no longer be exported and goods stuck on container ships. The impacts of the strike at the port of Vancouver are felt as far away as Quebec, where they amount to “millions of dollars” at Olymel. And it’s not over if the impasse is not resolved.
Asia is an important market for the meat processor. Each week, approximately 1.5 million kilos of fresh produce – such as pork tenderloins and loins – leave its Quebec and Red Deer (Alberta) plants for countries such as Japan and South Korea.
With a 12e day of paralysis in the ports in British Columbia, the Quebec company must begin to make difficult decisions: to freeze fresh cuts to prolong their life and limit the damage.
“It’s now that we say to ourselves: ‘OK, we’re going to have to suspend these products for export'”, says its first vice-president, Paul Beauchamp, in a telephone interview with The Press.
We come to devalue the product. It’s an impact that runs into millions of dollars. We lose a significant value per kilo because it is a product whose value is linked to its condition since it is sold fresh. This is what constitutes our losses at the moment.
Paul Beauchamp, first vice-president of Olymel
In Canada, the port of Vancouver – the largest in the country – is the main gateway for containers imported from Asia. But it is also an important springboard for exporters. According to government data, Quebec exports $2.1 billion worth of pork annually. Around 63% of stocks are sold in China (46%) and Japan (17%).
This labor dispute, which is taking place some 4,600 kilometers west of Quebec, is also looking like a “logistical headache” for Olymel. In addition to seeing the doors of its main export market closing temporarily, the subsidiary of Sollio Groupe Coopératif cannot help but turn to markets deemed “less lucrative” to dispose of its stocks.
PHOTO OLYMEL, PROVIDED BY REUTERS
The strike at the port of Vancouver prevents Olymel from exporting fresh pork products to Asia.
“We don’t waste the product,” says Mr. Beauchamp. But we are moving from a premium market to containers full of frozen products where customers have to be found. There is the United States, South America and Mexico, for example. Places where you can afford to have longer transport times. »
The walkout is a new tile for Olymel, which is trying to improve its financial situation after posting a pre-tax loss of approximately $446 million last year in a context of unfavorable economic conditions for the pork market. The company had also announced the closure of its slaughterhouse in Vallée-Jonction, in Beauce. We will close the door towards the end of the year.
Uncertainty
The repercussions of the port paralysis in British Columbia are also beginning to be felt elsewhere. There is no danger in delay at DeSerres, but the retailer of materials for artists and craft enthusiasts would have done well without this new turbulence after the pandemic disruptions of the past few years.
PHOTO DARRYL DYCK, THE CANADIAN PRESS
Port of Vancouver
“As we speak, we have containers on the sea and we do not know when they will be able to enter Vancouver, explains its president Marc DeSerres. I have boxes of pencils that are blocked. For me, obsolescence is not a problem, but I still need it. In the back to school [rentrée scolaire], we were missing a few things. We wait. »
Other companies have also started receiving warnings from their Asian suppliers. This is particularly the case of Taiga Motors, even if the production rate does not seem threatened by a slowdown for the moment. The Quebec manufacturer of electric snowmobiles and personal watercraft could, however, wait a little longer for certain parts.
We have been warned by some suppliers that there will be an impact for certain deliveries. There is mitigation work that has been initiated to redirect some deliveries and assess alternate routes.
Annick Lauzon, Marketing Director at Taiga
Mme Lauzon, however, did not specify what types of components could arrive later than expected in the workshop of the young recreational vehicle manufacturer.
It’s not just the duration of the longshoremen’s walkout that worries companies that depend on maritime transport. They also wonder how long it will take to return to some normality once the conflict is over.
“How long will it be before we reconnect with a level of service that will allow us to serve our customers well? asks the senior vice-president at Olymel. “The longer it takes, the more it worries us. »
Mr. DeSerres shares the same concern. The businessman fears having to wait “a few weeks” after the end of the conflict before “everything unblocks”.
Cross-border solidarity
Businesses looking to ports like Seattle to circumvent BC’s lockdown may be in for a nasty surprise.
In a statement to US network CNBC last week, International Longshore and Warehousing Union President Willie Adams said members of his organization had no intention of handling containers bound for Canada. or who had to leave the country from British Columbia.
“Companies don’t have many options for Asia,” says Véronique Proulx, President and CEO of Manufacturiers et Exportateurs du Québec. Even if you want to go through Mexico, the goods have to travel a long way by train. Contingency plans are limited. »
Elsewhere in Canada, on Tuesday, other companies also had to adjust to the longshoremen’s strike in Western Canada. Nutrien has reduced production at its potash mine in Cory, Saskatchewan, warning that other sites could suffer the same fate if the labor dispute drags on.
Where are the negotiations?
A glimmer of hope is on the horizon. Both parties have received recommendations from a federal mediator in hopes of ending the strike that began on 1er last July, according to a source quoted by The Canadian Press. The union representing British Columbia longshoremen and the employer will now have 24 hours to accept or reject the agreement proposed by the mediator. Competence in maintenance, improved wages, outsourcing and automation are at the heart of the stumbling blocks between the two parties.
The story so far
June 28: A strike notice is brandished by the International Union of Longshoremen and Warehousemen of Canada. The employment contract expired last March.
1er July: A walkout begins in more than 30 ports in British Columbia, including Vancouver, the largest in the country. More than 7,400 longshoremen desert the docks.
July 11: Nothing seems to point to a settlement. The Canadian Federation of Independent Business says that at least one in two contractors (53%) will be affected by the labor dispute.
Learn more
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- 7400
- Number of longshoremen on strike in about thirty ports in British Columbia
source: international longshoring and warehousing union
- 16%
- Proportion of goods traded annually in Canada that pass through ports on strike
source: British Columbia Maritime Employers Association