Predicting Risk: The Vancouver Port Strikes

There’s a common misconception in the business world that risk is unavoidable. “There’s nothing we can do about risk,” you might hear. “We just have to accept it.”

Sure, there are some types of risk that you can’t predict. You can’t, for example, get advance notice of natural disasters like earthquakes or tornadoes (although you should know which of your business partners are located in these disaster-prone zones!). But it’s not true that there’s nothing you can do about risk. At the end of the day, here’s the real truth: Risk is often predictable—if you’re looking for the right signals.

As an example, let’s take a look at a risk event that could have negatively impacted multiple riskmethods customers: the May 2019 planned strike, and subsequent lockout, of Canadian dock workers in Vancouver, British Columbia. Members of the International Longshore & Warehouse Union Canada voted 98.4% in favor of supporting strike action during contract negotiations with the BC Maritime Employers Association (BCMEA). The action started small—no picket lines, just a ban on overtime work—but escalated quickly. In response to the overtime ban, the BCMEA notified all port workers (with some limited exceptions) that they would be locked out of the job. The result? The port of Vancouver, which sees $180 million in container traffic on a daily basis, essentially shut down.

Any major port closure can have devastating ripple effects, with potentially major delays in shipments from suppliers or to customers—and the lockout at Vancouver was no different. For those companies who learned about the port closure as it was happening, I wonder how many said, “Well, there’s nothing we can do about it. We just have to accept it.” I bet there were a lot. But, again, here’s the real truth: They didn’t have to accept it. If these companies had the upstream supply chain visibility they needed to get the appropriate warning signals, they could have known about the likelihood of a port closure 4 weeks in advance, and taken action to avoid being affected by it.

Here’s the timeline of warnings about this port closure that riskmethods sent to potentially affected customers, starting on May 6. (How did we do it? Easy: riskmethods Risk Intelligence™.)

In other words: riskmethods customers knew 24 days in advance that a port closure was likely. Imagine a company that finds out about the lockout on May 30, when they learn that their goods are stuck in Vancouver. Now imagine a company that finds out about the possibility of a port closure 24 days in advance, and reroutes its supplies through a different port to avoid the risk. Which company do you want to be? (Still not sure? Find out what it feels like to be a risk-aware organization.)

Bottom line: You don’t have to accept risk. So the next time you see someone shrugging their shoulders about it, give them a little tap and correct their perception. Your entire company—and your customers!—will thank you.

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