Unifor, the union representing over 360 seaway workers across five union locals in Ontario and Quebec, on Wednesday served the corporation with 72 hours’ strike notice.

The SLSMC said Friday an application is being made to the Canada Industrial Relations Board, seeking an order to confirm how section 87.7(3) of the Canada Labour Code — relating to movement of grain during a strike or lockout — will apply in this case.

Under that section, either a union or an employer can apply to the CIRB to determine any question of how section 87.7(1) applies and “make any order it considers appropriate to ensure compliance with that subsection.”

Section 87.7(1) of the Code requires longshore or other workers to “continue to provide the services they normally provide to ensure the tie-up, let-go and loading of grain vessels at licensed terminal and transfer elevators, and the movement of the grain vessels in and out of a port.”

That section of the Code kept bulk grain vessels moving during a month-long B.C. longshore workers’ strike this summer. However, traffic in containerized pulse crops and other agricultural goods and commodities does not have such an exemption under the Code.

In all, as of Friday, there are more than 80 vessels, 40 of which are ocean-going, still in the Seaway, the SLSMC said.

The corporation said it “will continue negotiating in an effort to reach a new agreement without disruption of service” before Sunday.

Unifor said in a separate release Friday it’s “willing to continue negotiations with (SLSMC) after the scheduled bargaining dates” to try to reach an agreement ahead of the strike deadline of 11:59 p.m. Saturday.

Talks “will continue until the very last minute in an attempt to reach a deal,” the union said, but added that “at this time the union and employer remain 1,000 nautical miles apart on wages.”

SLSMC said it hopes talks can lead to a solution “adapted to the Seaway’s reality as a not-for-profit corporation.”

However, it added, progress “continues to be slow as the high union wage demands could potentially lead to increasing tolls to a level that would make the waterway less competitive and eventually increase the price for the goods that transit through it.”

“It’s really up to the employer at this point to seal this deal and avoid any transit disruption,” Unifor Quebec director Daniel Cloutier said in the union’s release. “These are jobs that require intense training, a high level of understanding of the health and safety risks, and that carry enormous responsibility for the well-being of seafarers and their cargo.”

SLSMC added Friday that the “necessary steps for an orderly shutdown are now underway, including providing cut-off times for vessels to safely clear the Seaway system” before a work stoppage begins. — Glacier FarmMedia Network

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The BDI, a major indicator of bulk shipping rates, has risen for seven straight sessions to settle Monday at 935 points, up from the low of 530 points hit on Feb. 16. The BDI had traded above 3,000 points as recently as May 2022. Increased shipments of iron ore out of Brazil and Australia reportedly contributed to the increase in the BDI.

The BDI is compiled by the London-based Baltic Exchange and provides an assessment of the price of moving major raw materials by sea. The overall BDI includes sub-sectors for the different classes of ocean vessels such as capesize, panamax and supramax. It is often seen as a leading indicator of global economic activity.

While bulk rates have shown some improvement, container rates remained in a steady downtrend. As of Feb. 23, Drewry’s World Container Index (WCI), which tracks container rates, was at US$1,898 per 40-foot container. That marked an 82 per cent drop from the peak hit in September 2021 and is 30 per cent below the 10-year average. However, the Drewry WCI is still up from the pre-pandemic rates averaging US$1,420 in 2019.

Canada is at a freight disadvantage compared to its competitors exporting grains and oilseeds into many markets, with lower freight rates helping counter that disadvantage.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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The Baltic Dry Index (BDI), a major indicator of bulk shipping rates, settled at 1,149 points on Tuesday, marking its ninth-straight decline and only slightly above the yearly low of 965 points hit at the end of August.

The BDI, compiled by the London-based Baltic Exchange, provides an assessment of the price of moving major raw materials by sea. The overall BDI includes sub-sectors for the different classes of ocean vessels — including capesize, panamax and supramax. It is often seen as a leading indicator of global economic activity.

Canada is at a freight disadvantage compared to its competitors exporting grains and oilseeds into many markets, with lower freight rates helping counter that disadvantage.

Container rates have also come down lately as global recessionary concerns and mounting supplies of empty containers at many worldwide ports weighed on prices.

As of Nov. 17, 2022, Drewry’s World Container Index, which tracks container rates, has fallen by 72 per cent compared to the same time a year ago. The composite index of US$2,591 per 40-foot container compares with the peak of US$10,377 hit in September 2021 and is well below the five-year average of US$3,764.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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Container-based transportation has been hit by sky-high costs and delays amid booming shipping demand, while container terminals at ports struggle to deal with the flow.

Commodities such as refined sugar, coffee, rice, cotton and cocoa have moved from dry bulk vessels to containers in the past since the large boxes were more practical and offered good quality control. But now shippers are moving back, at least temporarily.

“Around 80 per cent of the trade on refined sugar was done using containers before the pandemic. This has now fallen to around 60 per cent,” said Paulo Roberto de Souza, CEO of Alvean Sugar, the world’s largest sugar trader.

According to Souza, the change is only not bigger because there are not a lot of small vessels available in the market.

Data from shipping agency Williams regarding port movement in Brazil, the world’s largest sugar exporter, shows that volumes of refined sugar transported using containers fell 48 per cent in June and July (latest data available) compared to the previous year.

Bob Cymbala, owner at food trader A+J Global USA, based in Vancouver, said that some clients are turning down offers due to high prices for container freight, looking for shipping alternatives instead.

One of his clients, a rice exporter in India, is looking to use a dry bulk cargo to ship to Western Africa a volume of rice equivalent to 10 full containers.

Coffee exporters are not considering a change away from containers yet, besides the difficulties, mostly due to concerns over quality. They say containers, with proper lining, better preserve coffee characteristics such as smell and taste.

— Reporting for Reuters by Marcelo Teixeira.

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Now it bears a different treasure: Paw Patrol Movie Towers, Batmobile Transformers and Baby Alive Lulu Achoo dolls.

The dry bulk cargo ship has been drafted into the service of retail giant Walmart, which is chartering its own vessels in an effort to beat the global supply chain disruptions that threaten to torpedo the retail industry’s make-or-break holiday season.

“Chartering vessels is just one example of investments we’ve made to move products as quickly as possible,” said Joe Metzger, U.S. executive vice president of supply-chain operations at Walmart, which has hired a number of vessels this year.

The aim is to bypass log-jammed ports and secure scarce ship space at a time when COVID-19, as well as U.S.-China trade ructions, equipment shortages and extreme weather, have exposed the fragility of the globe-spanning supply lines we use for everything from food and fashion to drinks and diapers.

More than 60 container ships carrying clothing, furniture and electronics worth billions of dollars are stuck outside Los Angeles and Long Beach terminals, waiting to unload, according to the Marine Exchange of Southern California.

Pre-pandemic, it was unusual for more than one ship to be in the waiting lane at the No. 1 U.S. port complex, which handles more than half of all U.S. imports.

Other big retail players, such as Target, Home Depot, Costco and Dollar Tree, have said they are chartering ships to deal with the pandemic-driven slowdown of sea networks that handle 90 per cent of the world’s trade.

Or, as Steve Ferreira of shipping consultancy Ocean Audit describes the escalating concern: “Containergeddon.”

U.S. retailers’ traditional lifeline from Asia is freezing up due to a resurgence of COVID-19 in countries like Vietnam and Indonesia plus a power-supply crunch in China. The supply snarls coincide with booming demand as consumers spend more on goods than going out, and the festive shopping frenzy nears.

Burt Flickinger, managing director at retail consultancy Strategic Resource Group, said at least 20-25 per cent of the goods stuck on ships were unlikely to make it onto shelves in time for the Nov. 26 Black Friday kickoff for the holiday shopping season, a period when retailers make more than a third of their profits.

Route for great profit

The biggest chains are taking matters into their own hands.

In a typical year, Walmart would have moved those toys from China to Los Angeles in hundreds of 12-metre cargo boxes stacked like colorful Lego bricks on gigantic container vessels that serve multiple customers.

But 2021 is far from typical. Incoming cargo at the Port of Los Angeles is up 30 per cent from last year’s record levels. Trucks and trains can’t remove it fast enough, leading to logjams, said the port’s executive director Gene Seroka, reflecting the surge in consumer demand.

“It’s like taking 10 lanes of freeway traffic and squeezing them into five,” Seroka said.

Chartered ships that offer valuable cargo space and can sidestep the container terminals play a critical role in this second pandemic holiday season, particularly for time-sensitive goods like Christmas sweaters that won’t sell if they arrive too late.

The Flying Buttress, for example, entered Los Angeles waters on Aug. 21. It got stuck in a queue outside the port before it bypassed clogged terminals and unloaded its goods at a separately operated bulk cargo dock nearby on Aug. 31, according to Refinitiv data and shipping records.

During that voyage, Walmart circumvented the shortage of 12-metre containers typically used for global shipping by switching to bigger 16-metre containers that are almost exclusively used to move goods by truck and train within the United States.

Other companies are also playing the shipping game including Home Depot, which said it was “creatively working to obtain additional capacity.”

The home improvement retailer dodged the Los Angeles gridlock by sending its Great Profit charter ship nearly 200 km south to the Port of San Diego.

On Sept. 15, the ship’s onboard cranes hoisted seven-foot Halloween “Spellcasting witches,” Christmas lights and other holiday decor onto docks there, said Ocean Audit CEO Ferreira, who helps shipping customers claw back overpayments.

“This is the home stretch. They’re doing whatever it takes” to win in an overheated market, he said of retailers.

Why port size matters

Yet there is a limit to such workarounds.

Great Profit moored at a terminal that handles everything from sugar to windmill blades but can only accommodate a maximum of 500 containers from one to two ships per month between now and the end of the year, said Greg Borossay, the port’s maritime business development principal.

That’s because San Diego, like many other U.S. seaports, doesn’t have the towering gantry cranes needed to pluck boxes from massive ships. Rail service is equipped for autos and other specialty cargo. And, roads in surrounding commercial and residential areas aren’t set up for the fleets of trucks needed to whisk thousands of containers to other parts of the country.

“We’d have a very unhappy community if we had 3,000 (boxes) coming off a ship,” Borossay added.

Not all retailers will hire ships to support sales, and other factors could be significant in picking out potential winners and losers.

Clothing and accessory retailers have seen their inventories decline even as sales have accelerated, stoking worries about sell-outs, said Jason Miller, associate professor of logistics at Michigan State University’s business college.

General merchandise retailers like Walmart and Target, on the other hand have done a better job of keeping inventory on pace with sales, he added.

Paying $20,000 per container

The global supply crunch is providing lucrative opportunities for bulk cargo ship operators, though; they are cashing in on a record spike in container shipping rates that has sent freight costs above US$20,000 per box on the biggest liner vessels.

Global container shipping players like AP Moller Maersk and Hapag Lloyd, are flush with cash from the soaring rates. Major lines are “putting in every ship we can find,” Hapag Lloyd CEO Rolf Habben Jansen said.

Several shipping sources said other firms were snapping up second-hand container vessels of all sizes.

Hong Kong-based Taylor Maritime, which according to shipping databases manages the Flying Buttress, did not respond to a request for comment.

Dry bulk transporters have a short window of time to prepare decks to safely secure and carry cargo boxes. They typically transport commodities in below-deck cargo holds.

Genco Shipping and Trading is seeking approval from its ship safety certifier to prepare some of its own dry bulk vessels to carry containers.

Genco isn’t going all-in on container shipping, said CEO John Wobensmith, who called the project “opportunistic.”

Separately, agribusiness giant Cargill said it is looking into using some of the dry bulk ships it charters to instead hold containers, if only as a temporary solution, to “alleviate bottlenecks.”

— Reporting for Reuters by Lisa Baertlein in Los Angeles, Jonathan Saul in London and Siddharth Cavale in Bangalore; additional reporting by PJ Huffstutter in Chicago.

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While no valuation was given in the announcement, the deal values Ports America at over US$4 billion, according to two sources familiar with the matter.

The transaction comes amid heightened interest in logistics, with supply-chain disruption in focus as the global economy recovers from the paralysis caused by the coronavirus pandemic.

“There are lots of tailwinds for logistics assets writ large, but our approach is for the long term and so this type of strategic ports asset will be important to the U.S. for decades to come,” Scott Lawrence, head of infrastructure at CPPIB, said in an interview.

Under the terms of the deal, which is expected to close by the end of the year, the Canadian pension manager will take full ownership of Ports America.

CPPIB had previously held a 9.4 per cent stake in Ports America. The pension fund also owns a 34 per cent stake in Associated British Ports, as well as stakes in toll roads, utilities and digital infrastructure providers in the Americas, Europe, Asia and Australia, according to its website.

Alternative asset manager Oaktree has controlled Ports America since 2014, when it acquired Highstar Capital and the infrastructure-focused investor’s funds, which included the Jersey City, N.J.-based ports operator.

“Ports America’s growth, track record of innovation and strong financial profile have positioned the company for success in today’s cargo management and terminal operations environment, and we fully expect the business will only benefit from this new ownership structure,” said Emmett McCann, managing director and co-portfolio manager of Oaktree’s Infrastructure Investing strategy.

Founded a century ago, Ports America has operations in 70 locations across 33 ports in the United States. It currently handles 13.4 million twenty-foot equivalent units (TEUs) annually, which includes 10 million tons of cargo, 2.5 million vehicles and 1.7 million cruise ship passengers.

In the bulk/breakbulk sector — which handles commodities including grains, vegetable oils, raw sugar and refrigerated products, among other non-food cargoes — Ports America operates facilities at 24 U.S. ports.

In the containerized cargo sector, which includes pulses and specialty crops among other goods, Ports America provides services at 28 terminals across 18 U.S. ports, which it said gives it about a one-third share of the container market in the country.

— Reporting for Reuters by Sohini Podder in Bangalore and David French in New York. Includes files from Glacier FarmMedia Network staff.

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The tug-barge combo discharged a calcium chloride brine solution, used as a stabilizer and dust suppressant. The same combo also opened the season 2020, one year ago to the day.

Two bulker vessels arrived early Saturday morning for grain cargoes, and six more were anticipated over the weekend as grain loading operations in the port hit the ground running.

Two wintering vessels carrying bulk grain departed the northwestern Ontario port ahead of the official opening: MV Blair McKeil of the McKeil fleet, and MV Algoma Strongfield of the Algoma Central fleet.

Thunder Bay, on the northern shores of Lake Superior, had its busiest year in over two decades in 2020, with annual cargo volumes topping 10 million tonnes for the first time since 1997.

Of the 10.2 million tonnes of total cargo shipped in 2020, grain accounted for 9.2 million tonnes, up from 7.9 million in 2019.

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The Baltic Dry Index (BDI), a major indicator of shipping rates, has moved higher most of the past month, settling above 2,000 points for the first time in five months on Tuesday, at 2,017 points. That’s up about 700 points since the beginning of February and roughly triple the level seen at the same time a year ago.

The BDI is compiled by the London-based Baltic Exchange and provides an assessment of the price of moving major raw materials by sea. The overall BDI includes sub-sectors for the different classes of ocean vessels — including capesize, panamax and supramax.

Improving global economic optimism, as vaccination programs pick up speed around the world, contributed to the recent strength in freight rates, according to analysts.

Canada is at a freight disadvantage compared to its competitors into some markets, and higher freight rates can heighten that disadvantage.

However, Canadian grain exports continue to move at a solid pace, with total bulk exports of the major grains and oilseeds, through Week 31 of the 2020-21 crop year, at 33 million tonnes, running 34 per cent ahead of the previous year’s pace, according to Canadian Grain Commission data.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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CUPE’s Syndicat des debardeurs Local 375, which represents about 1,150 longshoremen and longshorewomen at the port, served notice Friday that it would launch an “indefinite” strike Monday morning.

The indefinite strike followed a series of four brief strikes last month, the most recent of which ran July 27-31.

The Montreal Port Authority said Friday the strike means the “suspension of berthage services normally provided by longshoremen (and) longshorewomen and the handling of goods in the Port of Montreal terminals.”

The work stoppage doesn’t affect Viterra’s 262,000-tonne capacity grain terminal at the port. The federal Labour Code calls for port workers during a strike or lockout to “continue to provide the services they normally provide” for loading, tie-up, let-go and movement of grain vessels in and out of port.

Liquid bulk handling will also not be affected, the port authority said — nor will Oceanex services through the port’s Bickerdike terminal, which handles traffic bound for Newfoundland and the Magdalen Islands.

However, the strike is expected to affect traffic through Montreal’s container terminals, including the CanEst Transit terminal devoted to storage, cleaning, sifting, packing and loading of agricultural products.

According to the port authority, the CanEst terminal — whose ownership group includes Quebec ag co-operative Sollio and Regina pulse and durum processor AGT — loads about 200 containers per day at a rate of about eight per hour on average.

The facility is served by both Canadian National and Canadian Pacific railways, and includes 91 silos with a total capacity of 68,000 tonnes.

A port spokesperson confirmed Monday via email that the strike stops work at CanEst. An AGT representative said via email that the company would not comment on the matter.

‘Intervention’ sought

The last collective agreement between port workers, represented by CUPE 375, and the Maritime Employers Association representing terminal operators expired at the end of December 2018. According to the union, the main obstacle in talks is worker scheduling as it relates to “work/life balance.”

CUPE representative Michel Murray, in a separate release Monday, said the union plans to keep working with a mediator and keep channels open to discuss a truce that would allow work at the port to resume.

The port authority said Friday it’s “very concerned about these work stoppages affecting public health and safety during a global pandemic, as port operations are essential to keep the economy running smoothly and to supply food and other essential products.”

The port authority warned a strike will “create long delays in handling goods for Canadian companies, especially exporters” and “oblige many export companies to lease warehouses or choose a different supply chain, if they are unable to move their goods internationally out of the Port of Montreal.”

The strike may also lead international shipping firms “to re-route certain vessels, sometimes to competing U.S. ports, resulting in higher costs for businesses and, ultimately, consumers.”

Several Quebec business organizations called jointly Monday for “immediate intervention” by the federal government to end the strike.

“Think about Quebec’s independent food producers, or about supply chain issues: the impacts will be widespread throughout the regions and they will have terrible consequences,” Karl Blackburn, CEO of the Conseil du patronat du Quebec, said in those groups’ release.

Federal Labour Minister Filomena Tassi, in a separate statement Monday, said she and Transport Minister Marc Garneau “have reached out to both parties to convey our expectation that they focus their efforts on reaching an agreement and avoid further disruption.”

In her statement, Tassi appeared to rule out any federal intervention beyond the government’s offer of continued help from the Federal Mediation and Conciliation Service. “We have faith in the collective bargaining process, as we know the best deals are made at the table,” she said.

“It is in reaching a negotiated agreement that normal functions can return at the port, and anything that delays the bargaining process is disappointing and harmful to both the local and national economies.” — Glacier FarmMedia Network

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