B.C. small businesses are bracing for the fallout from a strike by truckers who serve the Port of Vancouver.
Independent operators and business organizations are hoping for a quick settlement to the dispute that has disrupted shipments valued at $30 million per day.
Late last week the provincial and federal governments appointed veteran mediator Vince Ready to help resolve the strike. At press time, no talks had yet been scheduled.
"If it continues for a substantial length of time, you'll find that retailers will become concerned that they will not get their goods into stores in time for the fall season - and that will cause problems," says Mark Startup, president and CEO of Retail BC, which represents retailers across the province.
Startup says there will be no effect in the short term because it's already the middle of the summer season for retailers. Having said that, however, some ships in the harbour and containers on the docks hold summer-season goods, as well as goods to be sold in the fall.
The federal government said it will launch an inquiry under the Canada Labour Code to look into traffic issues at the port and recommend ways to resolve problems facing the truck drivers.
The Vancouver Container Truck Association (VCTA), which represents the striking truckers, contends high gas costs and low wages are preventing drivers from making a profit.
According to the VCTA, fuel costs remove $350 from a driver's $400 daily pay, leaving only $50 for truckers to take home.
The truckers, independent contractors who include members of the Teamsters union, are calling on trucking companies to park more cash in their pockets.
The port is advising in-bound ships to keep sailing here so their goods can be sent east by train.
Port of Vancouver spokeswoman Anne McMullin told The Canadian Press that roughly 19 per cent of the cargo shipped through Vancouver docks is in containers, with about 40 per cent of that transported by truck.
"This is another setback in establishing Vancouver as a viable port," says Startup. "We run the risk of importers and exporters choosing another port to get their goods into and out of the country, and that's not good for the B.C. or Canadian economy."
Kevin Evans, chairman of the B.C. Council of Businesses and Western Canadian vice-president for the Retail Council of Canada, says small local retailers will be the hardest hit because they depend mostly on trucks to get their products to stores.
Large companies can get around the strike by shipping containers by train to Calgary or Edmonton and trucking them back.
"If we get into a week (of a continued strike) then I think we get into some pretty significant disruptions," predicts Evans.
The strike comes at a time when the provincial government and B.C. businesses alike, especially those in the construction products sector, are expecting large increases in trade with China. Vancouver, Canada's largest port, is expected to benefit from most of the increased trade.
Retail BC's Startup says trucking companies are partly responsible because they have been undercutting each other. Truckers are not helping their image by hurting the Lower Mainland, B.C. and Western Canadian economies, he adds.
If truckers are unwilling to deliver goods because profits are too low, trucking companies and retailers are going to have to consider raising their prices, suggests Startup.
In the past, a port shutdown has forced Dwight Dubowits to raise prices temporarily. "If the product is not available, and people want it badly enough, they'll pay a premium to get it," says Dubowits, owner of West Coast Computers, a Vancouver-based computer dealer and service centre that sells many overseas products.
But Dubowits says the effect of increased trucking charges will be minimal on small retailers, because trucks make more than one delivery at a time, so costs can be shared evenly. He sympathizes with the striking truckers.
"I'm a small businessman," he says. "I understand the needs of truckers. They need to make a decent living."
But he says truckers should tread carefully because they have signed contracts with customers that are expected to be upheld. If they want to make a decent wage, trucking firms will just have to raise prices or wait until their next contract to negotiate a better deal - or go out of business.
"The trucking companies are undercutting each other on price and now they're crying foul - that's the problem," says Dubowits.
West Coast Computers actually benefited from the last port shutdown a few years ago, because the business is based on margins. After raising his prices, the usual percentages gave Dubowits a bigger share of the revenue.
Laura Jones, B.C. and Yukon regional vice-president of the Canadian Federation of Independent Business, says the strike is clearly not good for the economy. The longer it goes on, she says, the bigger the impact will be on members.
"Manufacturers will be the hardest hit in terms of their ability to move goods," says Jones, adding all sectors could be affected directly or indirectly.
Jones, whose group represents small and medium-sized firms across the country, says both sides have valid arguments, adding all businesses are affected by high fuel prices. The solution, she adds, is for both sides to negotiate a settlement.
"It's always a major concern when both sides seem so far apart that they are not willing to sit down," says Jones.
Retail BC's Startup says the feds are ultimately responsible for settling the impasse because the port falls under their jurisdiction.
Werner Knittel of the Canadian Manufacturers and Exporters told The Canadian Press that manufacturers across the Lower Mainland will quickly feel the pinch of the strike because any disruption to the supply chain is a serious issue "whether it is one day, or a week or more."
He added that many manufacturers have eliminated or reduced inventories as much as possible and rely on a steady constant stream of smaller shipments that come in just as they are needed.
"Any disruption will upset that and that's part of the reason why you never want these disruptions to last more than a day ... These guys don't carry any inventory. There is very little buffer."
Last week, authorities were investigating reports of violence and intimidation, including shots allegedly fired at a trucker making a delivery in Delta.
- With files from The Canadian Press (Monte Stewart can be reached at monte@businessedge.ca)
