By Jack Kohane
“When world markets look to Canada, they see a trading partner that can be counted on, meaning that our shipping systems can be relied on to move people, goods and services across land mass and waterways quickly, smoothly and reliably.” Those remarks by Lisa Raitt, Canada’s Minister of Labour, launched her keynote address, encapsulating the theme of transportation labour at the Canada Maritime Conference held recently in Toronto.
“Virtually all exports are channelled through federally regulated ports, railways and trucking companies. Our economic and trade positions depend on making sure that our transportation systems – both domestically and internationally – operate efficiently. The workplace is the engine room of Canada’s economy … that includes Canada’s ports – a sector of our economy responsible for a quarter of a million direct and indirect jobs, contributing some $30 billion to Canada’s GDP.”
Ms. Raitt emphasized that labour peace is crucial to Canada’s trade agenda, without which the Canadian economy is at a serious risk. “But strikes are the exception, not the rule,” she asserted, citing the government’s Preventive Mediation Program as an effective dispute resolution mechanism available to those who ask. As part of the Federal Mediation and Conciliation Service (see: www.hrsdc.gc.ca), the program offers sessions designed to help boost constructive labour-management relationships. The Preventive Mediation Program’s services, which can be customized, must be jointly requested by the union and the employer. “That builds and maintains constructive working relationships and deals with difficult workplace issues as they arise, as opposed to them happening at the bargaining table,” the Minister explained. “Preventive Mediation can address concerns that arise between formal negotiation periods before they have a chance to escalate.”
“B.C. Ports are a great example of how this system can work,” Ms. Raitt continued. “Our conciliation officers and mediators worked closely with the unions and employers to prevent a work stoppage, which would have been a major blow to the Canadian economy. Instead, parties reached two historic eight-year agreements without any interruption in service.” She noted other examples: agreements at Algoma Central Corporation; Algoma Great Lakes Corporation; Port of Montreal and Port of Quebec; The St. Lawrence Seaway Management Corporation; and Seaspan Marine Corporation. “Canada’s workplaces are a gold-standard that the world looks to as a solid way to do business,” Ms. Raitt concluded.
The Canada Maritime Conference (CMC), staged by the Journal of Commerce and host-sponsored by Canadian National, brought together senior-level executives from shippers, ocean carriers, railroads, logistics providers, and bulk and breakbulk carriers. The two-day intensive program featuring a series of panel discussions delved into the challenges and opportunities confronting the ocean-based supply chain – chief among them being labour-management issues.
“In a perfect labour world, we would have an equal playing field and companies would be allowed to compete on innovation, technology, entrepreneurship, and by just being better managers than their competition; I also know that we are far from the perfect labour world,” stated Ron Tepper, Executive Chairman and CEO of Consolidated Fastfrate Inc., headquartered in Woodbridge, West of Toronto, a leading Canadian LTL intermodal transportation provider. “Any union today needs to think about its role and how it can help the company, which in turn helps the union members,” he argued. “Today everyone needs to work in lockstep with each other and anything other than that will be destructive to the company. The union’s role is to improve the lot of its members, and it can do that in several ways: making their employers less competitive is not one of them. No one wins.”
Tepper presented his action plan to help reduce some of the costs for both sides of the labour agreements, proposing contracts to be five years in length rather than the current two and three years, thus cutting the cost of the negotiations by half. “I think the history of pattern bargaining has come back to haunt us. Different companies agree to different costs based on their own requirements as well as their ability to negotiate. The unions will always look for the weakest link, get a somewhat better contract as a result, and then force it on other companies in that same group. That is what is known as pattern bargaining. But unions have to understand the competitive landscape that employers are facing. Unions have to think out of the box to create incented productivity and, to the extent possible, create a meritorious compensation solution.”
CMC attendees then heard from Jean Bédard, President and CEO of the Montreal-based Maritime Employers Association. “Contrary to pre-recession negotiations, the economic issues are not about wage increases, but about pension deficits and maintaining or creating jobs during difficult times. It forces the parties at the table to take stock of the economic environment in which their industry is active.”
On the matter of labour-management negotiations, Bédard, whose organization acts on behalf of its member companies in the negotiation and management of collective agreements for more than 1,200 employees working in the ports of Montreal, Trois-Rivières/Bécancour, Hamilton and Toronto, stated that cost-effective modifications to current agreements and increased flexibility of manpower is the order of the day. “Competition between shipping lines and for that matter, between the ports they call, is fierce and it is changing not only the topics discussed at negotiation tables, but also the way they are brought forward and discussed. The result is a negotiation that is focused on the effect of a future agreement for the clients, the company’s competitiveness and, for the employees, the employer’s ability to maintain jobs and benefits.”
Bédard compared the agreements coming out of the most recent negotiations to those of the past, which he said are different in two ways. The terms of the agreement are considerably longer than in the past and they include some form of permanent negotiation. “This satisfies the need for a stable environment conducive to attracting new business and long-term deals,” he stated. “It is reassuring for both the union and for the Ports’ customers to expect labour peace for an extended period of time.” As an example, recent agreements in Canadian Ports have gone from the usual two- to three-year agreements to an eight-year agreement in Vancouver, five years in both Toronto and Hamilton and seven years in Trois-Rivières. “Although the worldwide economy has dealt us a few blows and tested the patience of Canadian management and unions in the last few years, we are learning new ways of evolving and creating opportunities for employment,” he said in summary.
One of Canada’s newest Port success stories was pointed out to CMC attendees by Dave Bedwell, the Vancouver-based Executive Vice-President of COSCO Container Lines Americas Inc., the national flag carrier of the People’s Republic of China and a global full-service intermodal carrier. He explained the reasons why COSCO has made Prince Rupert its Canadian port of call. First, Port of Prince Rupert’s is the closest North American port to China. Secondly, the port’s natural deepwater draft allows for larger ships and increased overall capacity. And thirdly, COSCO is committed to routing its cargo through Prince Rupert because of the quality of its workforce. “Prince Rupert is not a Vancouver, Seattle or Los Angeles in which cities many well-paid jobs are available. I made it clear (to the Port Authority) that containerization in Prince Rupert would bring well-paying longshore jobs.” Over the last five years, the ILWU (the International Longshore and Warehouse Union – Canada) in Prince Rupert has seen its numbers grow from about 100 to over 400 that are now working steadily and earning hefty paychecks. “The longshoremen in Prince Rupert certainly understand that their new-found wealth can easily disappear if they are insufficiently productive when servicing the containerships calling on that port. It’s clear that the performance of the ILWU in Prince Rupert is ‘over the top’. There is a willingness to go the extra mile to meet client expectations. This creates stability and consistency for COSCO, all of which reflects to the fluidity of the ship, the terminal, the railroad and ultimately benefits the customers.”
Speaking about ongoing employment opportunities and infrastructure improvements at Canada’s ports, Wendy Zatylny, Executive Director of Ottawa-based Association of Canadian Port Authorities, said that it’s critical to all transportation stakeholders that efficiencies in the use of port facilities and cargo throughput continue to be strengthened. “I’ve had occasion to visit several Port Authorities now, and have been very impressed by how each of them – big and small – have managed to wring every last ounce of productivity out of their facilities, through the use of process improvements in cargo scheduling and traffic management and planning,” she told CMC delegates. “This is all done in collaboration and partnership with other players in the system [including terminal operators, rail, trucking and workforce]. Together, these players orchestrate a very complex dance, very efficiently. Success depends, of course, on a level of openness, trust and communication among all partners.”