Business group looks at supply snags
THUNDER BAY, ONT. – The Ontario Chamber of Commerce has released an outline of the global supply chain problems that are impacting businesses and consumers.
The document serves as a guide to help people understand the challenges and advises on how provincial and federal policies could help alleviate the problems.
Charla Robinson, president of the Thunder Bay Chamber of Commerce, says thay have had weekly conversations with the Ontario chamber to share the issues and challenges faced locally.
“The document was prepared for the business community and also for the government to understand the challenges that are being faced on the front line and where there are avenues for the government to maybe assist in some of those challenges over the both short and long term,” she said.
Robinson has learned first hand of some of the struggles being felt by both consumers and businesses.
“Certainly with the folks that I’m talking with, the majority of them are experiencing supply chain issues in some way,” she said.
Robinson described the plight of a local lawn equipment company that wasn’t sure how much inventory they would have to sell this year. She said at this time of year, where people are venturing closer to warmer weather, this lawn supply business is struggling to get clarity on whether or not they will have sufficient stock.
“I have heard something similar from the construction sector that the prices are going up quite high as well because of the supply challenges,” she said. “It’s sort of a double-edged sword because not only are there challenges in getting the supplies, but then when you actually order the supplies, the prices have gone up significantly because there’s so much demand and so little supply, so it’s definitely being seen across a number of sectors for sure.”
The document highlighted the challenges in several areas.
Origin of manufacturing challenges include:
– Raw material shortages including resin (a necessary component of plastics), polymer and additives, contributing to higher prices and posing challenges for the ability to manufacture certain goods.
– Rotating power outages in some countries such as China prohibiting factories from producing goods at full capacity.
– COVID-19-related capacity limits and safety measures also reducing ability to produce at full capacity.
Transportation to warehouse challenges include:
– Shortage of truck drivers and container chassis, as well as rising fuel costs – all contributing to higher prices and delays in moving goods.
– Warehouse space and labour shortages.
– Both owner-operator truck drivers and asset-based carriers are setting prices given an imbalance of supply and demand, leading to higher rates and cost barriers for businesses needing to move goods.
Exporting/importing shipping port challenges include:
– Major congestion and outdated infrastructure preventing efficient unloading.
– Shipping container shortage – many thousands of containers are sitting stranded at sea on ships anchored near jammed-up ports. In principle, there are more than enough containers to handle global trading volumes, but in practice, availability in several parts of the world has become extremely tight due to large volumes of containers being stuck in the wrong place.
– Imbalance between filled containers coming into North America vs. leaving – some U.S. exporters say shipping lines are refusing to send containers inland from ports to pick up American cargo because shipping lines are trying to get containers, even if they are empty, back to factories in Asia as quickly as possible to take advantage of historically high shipping prices for exports leaving the Asian continent.
Transportation to distribution and cargo facility challenges include:
– Truck driver labour and container chassis shortages, along with higher fuel costs, contributing to higher rates and delays in moving goods.
– Rail network congestion further adding to the inefficient movement of goods.
Advice on short-term government actions were broken into provincial and federal categories for the document.
Provincially, the document suggests striking an emergency task force consisting of government and businesses to explore potential support measures, particularly for small businesses still recovering from lost revenues due to the COVID-19 pandemic, and unable to compete with larger businesses financially or logistically.
The province is also urged to develop a local manufacturing sector strategy and diversify procurement and sourcing of components, offer loan guarantees or other temporary financial supports to help smaller businesses afford existing operations while awaiting product delivery, start government education campaigns to promote the transportation and supply chain industries as viable career paths along with incentives in transportation and supply chain sector training, and open immigration pathways and agreements for truck driving careers as well as other occupations along the supply chain.
At the federal level, the document recommends conducting a formal supply chain infrastructure assessment to address bottlenecks along the supply chain, especially for ports. It also urges the development of a national manufacturing sector strategy, coupled with an evaluation of a potential Crown Corporation steamship line.
Sandi Krasowski, Local Journalism Initiative Reporter, THE CHRONICLE-JOURNAL