Trade entering North America through key ports on Canada’s West Coast is facing increased uncertainty after dock workers rejected a tentative labor deal on Friday.

This rejection has resulted in a delay of at least two months for the flow of trade destined for U.S. chemical companies, retailers, and manufacturers due to the 14 days of strikes.

The president of the International Longshoremen and Warehouse Union of Canada, Rob Ashton, has urged the employers of the dock workers to return to the negotiating table in order to reach a mutually beneficial deal.

The British Columbia Maritime Employers Association (BCMEA) has not responded to the union’s request for further negotiations. The BCMEA expressed disappointment over the rejection of the four-year tentative agreement and is awaiting guidance from the Canadian government on next steps.

The Canadian Minister of Labor, Seamus O’Reagan, stated on Twitter that stability is needed in the ports of British Columbia following the 14 days of strikes. O’Reagan did not provide specific details on the next steps but promised to share more information soon.

The proposed deal was presented to both sides by a senior federal mediator. The BCMEA released the terms of the deal in its announcement, which includes a 19.2% increase in compounded wages over four years, a signing bonus of $1.48 per hour per employee, and an 18.5% increase in retirement payout.

In response to the union’s argument about salary sustainability against rising inflation, the BCMEA highlighted that longshore wages have increased by 40% over the past 13 years, surpassing the 30% inflation rate.

The timing of this strike has created additional challenges during the peak season when retailers are receiving holiday items. At the height of the strike, $12 billion worth of freight was stranded on the water, some of which was diverted to ports on the U.S. West Coast.

Paul Brashier, vice president of drayage at ITS Logistics, stated that their clients are experiencing a two-month delay in product delivery due to the strike. Rail-bound containers are currently sitting at the Ports of Vancouver and Prince Rupert.

Steve Lamar, CEO of the American Apparel and Footwear Association, estimated that the initial strike would cause an average disruption of 6 to 8 weeks in the supply chain before conditions return to normal. The association had called on the Canadian government to intervene during the first strike.

Following the on-again, off-again strike at western Canadian ports, rail traffic from Canada to the U.S. has decreased for the third consecutive week. During the first two weeks of the strike, over 80% of rail trade into the United States was prevented, with an additional 12% decrease in trade observed this week.

The labor unrest is also negatively affecting the revenue of railroad companies. Canadian Pacific Kansas City railroad’s Chief Marketing Officer, John Brooks, stated that the strike will result in an $80 million revenue loss. The company is working to recover these losses during the remainder of the third and fourth quarters.

Canadian National Railway has announced the operation of additional trains to expedite the clearing of container congestion.

The Railway Association of Canada initially estimated that it would take three to five days for networks and supply chains to recover for each day of the strike. After the first strike ended on its thirteenth day, delays for rail containers were estimated to be between 39 and 66 days. With the on-again, off-again strike last week, the estimated time for congestion removal increased to 42 to 70 days.

Eric Byer, CEO of the National Association of Chemical Distributors, emphasized the importance of West Coast Canadian ports for delivering chemicals required for U.S. manufacturing. Various chemicals, such as sulfuric acid, phosphates, acetone, sodium fluoride, and sodium bicarbonate, are among the products stranded on the water, impacting industries ranging from cleaning to personal care.

The unpredictable nature of the strike has caused turmoil for logistics managers and the trade industry as they navigate decisions regarding ocean and rail transport during the peak shipping season.

Alan Baer, CEO of trucking company OL USA, highlighted the complexity of global supply chains, stating that they cannot be easily switched on and off. Due to concerns about cargo being stuck or diverted due to labor tensions, trade moving through the U.S. West Coast has declined over the past year, with many shippers redirecting business to East Coast ports.

“Once changed, not everyone will simply return,” Baer added.