The Ontario Chamber of Commerce released a summary of global supply chain issues affecting businesses and consumers.
This document is intended to guide people who want to understand the issues and offer suggestions on federal and provincial policies that could be used to alleviate them.
Charla Robinson, president of Thunder Bay Chamber of Commerce, says they have had weekly discussions with the Ontario chamber to discuss locally’s challenges and issues.
She stated that the document was created for both the government and the business community to help them understand the issues facing front-line workers and the possible avenues to assist them.
Robinson knows firsthand the struggles that consumers and businesses face.
She stated, “Certainly, with the people that I’m speaking with,” she added.
Robinson spoke out about the dilemma of a local lawn equipment business that was unsure how much stock they would need to sell. Robinson said that at this time of the year when people are more likely to venture into warmer weather, the lawn supply business is having trouble determining if they will have enough stock.
She said similar stories had been heard from the construction industry, stating that prices are rising due to supply problems. It’s a double-edged sword. There are challenges in getting supplies. Then when you order supplies, prices go up substantially because of the high demand. This is evident across many sectors.
Origin of manufacturing
- Reduced availability of raw materials, including resin (a vital component of plastics), and polymer, can lead to higher prices and pose challenges in the production process for certain goods.
- Factory production at its total capacity is prevented by rotating power outages in certain countries, such as China.
- Limits on capacity and safety measures in COVID-19 also reduce the ability to produce at maximum capacity.
Transport to warehouses
- A shortage of truck drivers and containers chassis and rising fuel costs contribute to higher prices and longer delays in moving goods.
- Labor shortages and warehouse space.
- Owner-operators and asset-based truck drivers set prices based on supply and demand imbalances. This results in higher rates and more costly barriers for businesses that need to move goods.
Exporting/importing shipping ports
- Inefficient unloading is prevented by significant congestion and obsolete infrastructure
- Shipping container shortage — Many thousands of containers are stranded at sea, anchored in ports that have been blocked off. Although there are plenty of containers available to handle global trade volumes, in practice, availability has been limited by large numbers of containers stuck in the wrong places.
- The balance between the number of filled containers entering North America and those leaving — Some U.S. exporters claim shipping lines refuse to ship containers inland from ports to pick up American cargo. This is because shipping lines want to quickly get empty containers back to Asia’s factories to benefit from historically high shipping costs for exports.
Transport to distribution centers and cargo facilities
- Reduced truck driver labor, a shortage of container chassis, and higher fuel costs contribute to higher rates and longer delays when moving goods.
- Inefficient movement of goods is further exacerbated by congestion in the rail network.
Provincial-level short term actions
- Create an emergency task force of businesses and government to look into possible support measures for small businesses still reeling from the COVID-19 pandemic and unable or unwilling to compete financially with larger companies.
- Create a strategy for local manufacturing and diversify your procurement and sourcing.
- Provide loan guarantees and other temporary financial support to assist smaller businesses in obtaining the necessary capital while waiting for product delivery.
- Launch government education campaigns to promote transportation and supply chains industries as viable career options.
- Agreements and open immigration pathways for truck driving careers and other occupations in the supply chain.
Short term federal-level actions
- Perform a formal assessment of the supply chain infrastructure to identify bottlenecks in the supply chain, particularly for ports.
- Assess a possible Crown Corporation steamship line and develop a national manufacturing strategy.
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