West Coast dockworker dispute has ripple effect on...
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Feb 21, 2015  |  Vote 0    0

West Coast dockworker dispute has ripple effect on Canadian supply chain

Honda’s Alliston plants ran at reduced capacity this week as labour dispute continues on U.S. West Coast

OurWindsor.Ca

An ongoing contract dispute involving dockworkers at seaports along the U.S. West Coast has stalled international trade and impacted production at several Ontario automotive plants.

Both of Honda’s Alliston plants were running at about 60-per-cent capacity this week said Gilles Madore, vice-president of administration for Honda Canada Manufacturing.

While Madore estimated that just 10 per cent of the components used at the plants are sourced from Asia and other overseas markets, “it only takes one component to prevent you from building a car.”

Madore said both plants will have a nonproduction day on Monday, with the plant that produces the Honda CRV returning to full production after that. The second plant, which produces the Civic, will also have nonproduction days on Tuesday, half of Thursday, and Friday.

“We’re actually making some plans to find alternate shipping methods,” Madore added. “We’re making all efforts to restore full production.”

The plants employ around 4,200, and Madore said production employees still have the option to come into work on nonproduction days.

A spokesperson for Toyota — which operates two facilities in Cambridge and Woodstock that employ around 8,000 people — issued a statement saying the company hasn’t seen a significant impact on importing and exporting operations by the U.S. port situation.

“Due to delays in the processing of overseas parts at the West Coast ports, we have adjusted overtime at some plants in North America as needed. In an effort to minimize production disruptions we are expediting shipments by air, a standard method we use as needed,” read the statement provided by Greig Mordue, general manager of Toyota Motor Manufacturing Canada.

Seaports from Southern California to Seattle have been impacted by the ongoing contract dispute that has led to significant port congestion and a backlog of imports and exports along the West coast.

The economic impact has been hardest on specific U.S. industries — produce and meat exporters, for example, and smaller importers of consumer goods — though Walmart warned Thursday that port congestion could also affect their store selection.

U.S. Secretary of Labor Thomas Perez reportedly set a Friday deadline for dockworkers and their employers to end their long-running labour dispute. Talks between both sides were continuing by press time.

Discussions regarding a new contract began in May and broke down in recent weeks, and Perez began overseeing negotiations on Tuesday. The two sides had negotiated late into the night on Thursday but no agreement was reached.

The dispute has led to some congestion at B.C. ports as well, including Port Metro Vancouver, amid an increase in shipments to the Canadian West coast region.

“We’re seeing container ships arriving five to 10 days late, but they’re moving through our supply chain at a normal speed,” said John Parker-Jervis, media and government affairs adviser for Port Metro Vancouver.

Ships arriving late means retailers in central Canada may get their goods five to 10 days late as well. “That’s an effect we’re hearing from customers across the country,” Parker-Jervis said.

But given the constant flow of goods through Canadian ports, retailers north of the border seem to be faring better than their American counterparts.

“As we’ve been checking with our members, the impact seems to be fairly limited from a Canadian retailer perspective,” said David Wilkes, senior vice-president of the Retail Council of Canada.

Joy Nott, president of the Canadian Importers and Exporters Association, said large multinational companies are typically not impacted by this kind of disruption due to their sophisticated supply chain planning. Small and medium-sized companies may take a bigger hit, she added.

Nott said the backlog could also have a trickle-down effect to the end consumer, as additional costs buildup in the supply chain, leading to potential price increases.

“In a modern-day supply chain, the last man standing is the customer,” she said.

- With files from Toronto Star wire services

Toronto Star

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