August 24, 2005
Executive Summary
Retailers big and small were hard hit by this summer's withdrawal of services by truck owner-operators. It is not possible to quantify retailers' total losses, nor the long-term impact on the Port of Vancouver's reputation for reliability. But on both counts, there is no question that the damage has been severe.
Members estimate that the incremental costs for larger retailers who were able to affect work-arounds could easily hit $100 million in transportation, demurrage and contingency expenses to divert containers to other inland points.
That is over and above the immeasurable cost of lost sales, significant markdowns to move out-of-season inventory, cancelled orders and diminished consumer spending in Western Canada due to the negative impact on the economy overall.
Small and medium-size retailers with fewer options were at the mercy of the dispute.
There is nothing more imperative in retail supply chain management than reliability. It takes just one weak link to trigger a retailer's sensitivity about reliability. And in the eyes of the Canadian retail community, as thousands of containers piled up stranded on the docks in the heat of July, the Port of Vancouver's short-haul trucking network was revealed to be just such a weak link.
Retail Council of Canada members are perplexed that many of the items at issue in the work disruption of 2005 were also involved in a port dispute of 1999.
A disturbing element of this disruption that has shaken the confidence of Retail Council of Canada members is the response of authorities to the violence and intimidation that characterized the work stoppage.
While government action prompted the trucking owner-operators to return to work, Retail Council of Canada's members are concerned the "solution" has solved little and has in fact created several serious, though perhaps unintended and unanticipated, consequences.
Retail Council of Canada recommends that government re-think its approach and refrain from re-introducing trucking regulation at Lower Mainland ports and enable shippers such as Canada's retailers to select their transportation partners based on service and cost. In addition, the Vancouver and Fraser Port Authorities should be empowered to conduct an inquiry into possible impediments to the effective functioning of free market dynamics at the ports.