Sudden closure of the St. Lawrence Passage in Canada
Currently, 13 of the 15 locks on the St. Lawrence Passage in Canada have been closed
It has been learned that starting at midnight local time on October 22nd, workers on the St. Lawrence Seaway in Canada launched a strike, resulting in the closure of the waterway.
St Lawrence Seaway workers Began strike action on Saturday night just before midnight after negotiations failed to reach a satisfactory agreement
The Canadian based union Unifor stated that it had "made a difficult decision to strike" and held strikes at 13 locks in Canada.
It is understood that there are a total of 15 locks on the St. Lawrence Passage -13 in Canada and 2 in the United States - connecting the lower reaches of the St. Lawrence River with the Great Lakes, allowing ships to transit between Montreal and Lake Erie. More than 200 million tons of goods are transported on this waterway every year, generating over $50 billion in economic activity.
On October 18th, the union Uniffor officially submitted a 72 hour strike notice. Despite ongoing negotiations, as of 11:59 pm on Saturday, October 21st, no resolution had been reached between the two sides.
According to a press release from St. Lawrence Waterway Management Company (SLSMC), the negotiations between the two sides have reached an impasse due to the union's insistence on a salary increase.
The St. Lawrence Waterway Management Company, representing the management, stated that if wages increase, it may result in higher waterway tolls.
Although they hope to negotiate sincerely with the union, progress is currently slow, and the most serious impact of the workers' strike is the operation of the ship lock. The function of a ship lock is to ensure that ships can safely and accurately move between different water levels.
SLSMC explained, "Therefore, the system will remain shut down until an agreement is reached, as we are working to minimize interference to all stakeholders
The union stated that the issue of wages is the key to bringing the negotiations to a deadlock. The union hopes that workers' wages can keep up with the increase in inflation.
Maritime cargo transportation is an important component of the North American economy and supply chain. Last year, approximately $16.7 billion worth of goods passed through the waterway. Nearly half of them are grain and iron ore. Therefore, some analysts pointed out that under the general environment of Russia-Ukraine conflict and frequent extreme weather, the strike action will further hit the grain transportation link. A strike not only interrupts the flow of goods, but may also have a chain reaction on many industries that rely on waterway transportation, including agriculture. The Montreal Port Authority of Canada also issued a statement on Sunday stating that the Great Lakes and St. Lawrence Seaway systems serve 75% of Canada's manufacturing capacity and nearly two-thirds of the Canadian population. The supply chain disruption caused by a long-term strike at a port in British Columbia, Canada this summer has seriously affected small and medium-sized enterprises in Canada.
The Canadian Federation of Independent Enterprises stated that small and medium-sized enterprises are currently facing challenges such as inflation, labor shortages, and weak demand for debt burden. The latest strike by waterway workers may further lead to sales and inventory losses for enterprises. The Canadian Chamber of Commerce also stated that the St. Lawrence Seaway provides over 66000 employment opportunities for Canada, generating economic benefits of CAD 34 million per day, equivalent to approximately RMB 180 million. Any strike would harm Canada's economy and exacerbate inflation in Canada. The Canadian Chamber of Commerce is now urging the Canadian government to intervene immediately, while the Canadian Federation of Independent Enterprises hopes that the government will ensure that the waterway remains fully operational during the negotiations.