Ahead of possible labour unrest hitting Canadian rails from coast to coast Wednesday night, B.C.’s car dealers are among those worried about what this could mean for them as the supply chain could come to an abrupt halt.
If the Teamsters Canada Rail Conference, Canadian Pacific Kansas City (CPKC), and Canadian National Railway Co. (CN Rail) don’t come to a deal, job action is set to kick in at 9 p.m. PT.
The union has said its workers will walk off the job, while CN Rail says it will lock workers out unless they come to an agreement, or some form of binding arbitration is reached.
Blair Qualey, president and CEO of the New Car Dealers Association of British Columbia, says they’ve been through this before with issues during the height of the pandemic and during the 2023 strike at the Port of Vancouver.
“It’s a pretty dire the impact on the dealers in British Columbia and the consumers in British Columbia, and quite frankly across the country,” he told 1130 NewsRadio Vancouver.
“Inventories are already fairly tight for various manufacturers and dealers. So, if you turn the tap off of the delivery of vehicles, it makes it pretty hard to keep the doors open and the lights on.”
Qualey says things will become very challenging, very quickly.
“Construction and the building of vehicles back east is going to be massively impacted, so the layers of this onion are pretty significant,” he added.
He explains there are likely a lot of vehicles ready to be delivered to B.C. from the east coast that are sitting on railways.
“If the switch gets turned off on that transportation system, consumers out here who have ordered vehicles or dealers who are ordering vehicles to have available on their lots won’t be seeing them. As the inventories on the lots are sold or delivered, there won’t be anything to replenish them.”
Qualey says if people are forced to turn to the used car market, it will drive up prices there.
“It’s this vicious cycle as we saw during COVID, when we couldn’t get the delivery of vehicles because factories were shut down, we saw what happened to prices of both new and used vehicles,” Qualey shared.
He points out there are also potential consequences around electric vehicles.
“The provincial government has electric vehicle mandates in place, requiring manufacturers to meet certain targets and if you can’t get the vehicles to sell to the customers, then you can’t meet the targets and there are penalties and that just becomes another vicious cycle.”
Qualey thinks manufacturers are working with dealerships right now to figure out a plan B.
Port shares concerns ahead of possible rail disruptions
Meanwhile, the Vancouver Fraser Port Authority is also raising concerns about what rail disruptions could mean for goods moving through its gates.
In an emailed statement to 1130 NewsRadio Vancouver, the authority says about two-thirds of all cargo volumes in its facilities are moved by rail, including 90 per cent of international exports.
“Trade through the Port of Vancouver plays a vital role supporting Canada and our economic prosperity, with approximately $1 of every $3 of Canada’s trade in goods outside of North America moving through the Port of Vancouver,” the email reads.
The authority says it’s taking proactive steps to prepare.
“For example, ships currently en route to Vancouver are being told to adjust their arrival times in port by slowing down to prevent further congestion. We expect disruptions to the movement of containers, grain, potash, coal and other cargo transported to and from port terminals by rail.”
The Vancouver Fraser Port Authority points to last year’s port strike as one example of how backed-up things could get. During the 13-day longshore workers strike, it says at the port alone, $800 million of goods were affected every day and more than a dozen cargo ships had to be diverted.
-With files from Michael Williams