North American supply chains under pressure from labour disputes and potential tariff hikes

Ongoing strikes at key Canadian and US ports, combined with the potential for new trade tariffs following President Trump’s re-election, are expected to create delays, congestion, and higher freight costs in the months ahead.

Canada’s west coast ports, including Vancouver and Prince Rupert, are currently disrupted by strikes led by the International Longshore and Warehouse Union (ILWU). These key gateways handle a large portion of Canada’s imports and exports, and the shutdown has already created severe knock-on effects across inland logistics networks, leading to delays and escalating costs.

The situation is similarly fraught on Canada’s east coast, where Montreal’s Termont terminals, which process around 40% of the port’s container traffic, are facing blockades from workers opposing proposed automation that could threaten jobs. With both the east and west coasts affected, many Canadian shipments are being diverted to US ports. This is adding to transportation costs, as truck shortages and increased delivery delays place additional strain on Canada’s inland logistics network.

US west coast ports, including Seattle, Oakland, Los Angeles, and Long Beach, are already dealing with high cargo volumes and are now absorbing additional Canadian shipments. Backlogs are expected to develop as these ports face sustained pressure, creating a ripple effect that could last well into 2024.

US labour disputes heighten congestion risks on the east coast
The situation on the US east and Gulf coasts remains precarious following an October strike that saw a three-day stoppage over unresolved contract issues. While the strike ended with a provisional wage agreement brokered by government intermediaries, the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) are still negotiating critical terms around automation, job roles, and work conditions. Without any face-to-face discussions since June, both parties face a deadline of 15th January 2025 to reach a comprehensive agreement.

The October strike reduced capacity on some key trade routes, with westbound trans-Atlantic volumes dropping by up to 15% and capacity reductions of around 17% expected for the Asia to US east coast route. While the strike’s brevity limited the disruption, a longer stoppage could have reduced capacity by as much as 40%.

Front-loading anticipated ahead of potential tariff hikes and contract deadline
As shippers anticipate potential disruptions, many are accelerating shipments ahead of the January 15th contract negotiation deadline. This front-loading could create early congestion, particularly if shippers seek to avoid delays or higher freight costs should further strikes occur.

Adding to this complexity, President Trump’s re-election and potential plans for a 60% tariff on Chinese imports could lead to a significant shift in trade patterns. Anticipating these tariffs, many importers may choose to front-load cargo before the January inauguration, aiming to bypass increased costs. This accelerated import activity could result in heavy congestion across North American ports, inland routes, and logistics networks, just ahead of the pre-Lunar New Year peak.

We encourage you to share your shipping forecasts as early as possible, allowing us to secure space on vessels and minimise congestion at impacted ports. As the North American situation evolves, we’ll keep you informed with regular updates. If you have questions or concerns about how these events may affect your shipments, please don’t hesitate to contact us.

EMAIL Colin Redman today to learn how we can help protect your North American supply chain during these challenging times.