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US West Coast Ports Poised to Gain from Canadian Port Disruptions

Containers and shipping cranes lie idle after striking Pacific coast dock workers with the International Longshore and Warehouse Union (ILWU) issued a new 72-hour notice of a walkout in Vancouver, British Columbia, Canada, July 19, 2023. REUTERS/Chris Helgren

US West Coast Ports Poised to Gain from Canadian Port Disruptions

Mike Schuler
Total Views: 614
August 28, 2024

Recent labor disputes at Canadian ports have created opportunities for US West Coast ports to capture additional cargo volumes, according to a Moody’s report.

A Canadian rail stoppage last week, involving Canadian National Railway, Canadian Pacific Kansas City, and the Teamsters union, briefly disrupted cargo handling at the ports of Vancouver and Prince Rupert. This follows a two-week strike last summer that also affected operations at these ports.

The potential shift in traffic from British Columbia ports could significantly benefit U.S. West Coast ports, particularly the Port of Los Angeles, Port of Long Beach, and Port of Tacoma. The Port of Oakland and others may also see increased activity.

“If material disruptions in port and rail systems in Canada continue, it could raise questions about the reliability of the Vancouver and Prince Rupert ports and others in the country, prompting some customers to reorient supply chains toward US ports on a more sustained basis,” the report states.

East Coast ports, including New York and New Jersey, Boston, and Virginia, could also benefit from this shift. However, the impact will depend on how shippers weigh the risk of disruption in Canada against longer transit times from Asia through the Panama Canal.

The report notes that there are limitations to how much U.S. ports can immediately benefit from short-term disruptions due to current capacity constraints. Additionally, the interconnected nature of the North American railroad system means that disruptions in Canadian operations could potentially impact the entire US rail network.

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