The Ontario Chamber of Commerce has released an overview of global supply chain issues impacting businesses and consumers.
The document serves as a guide to help people understand the challenges and provides advice on how provincial and federal policies could help alleviate the problems.
Charla Robinson, president of the Thunder Bay Chamber of Commerce, says she has had weekly conversations with the Ontario Chamber of Commerce to share local issues and challenges.
“The document has been prepared for the business community and also for the government to understand the challenges facing the frontline actors and where there are ways for the government to perhaps help address some of those challenges at short term and long term,” she said.
Robinson learned first-hand some of the struggles felt by consumers and businesses.
“Certainly with the people I talk to, the majority of them are having supply chain issues in one way or another,” she said.
Robinson described the plight of a local lawn equipment company that was unsure how much inventory it would have to sell this year. She said that at this time of year, when people are venturing closer to warmer weather, this lawn supply company is struggling to know whether or not it will have enough stock.
“I’ve heard something similar from the construction industry that prices are also going up due to supply issues,” she said. “It’s sort of a double-edged sword because not only is there difficulty getting the supplies, but when you actually order the supplies the prices have gone up dramatically because there’s so much demand and if Not much on offer, so it’s definitely seen in a number of sectors for sure.
Origin of manufacture
• Shortages of raw materials, including resin (a necessary component of plastics), polymers and additives, are contributing to higher prices and posing challenges to the ability to manufacture certain goods.
• Rotating blackouts in some countries like China prohibiting factories from producing goods at full capacity.
• Capacity limits and security measures related to COVID-19 are also reducing the ability to produce at full capacity.
Transport to warehouses
• Shortage of truckers and container chassis, as well as rising fuel prices — all of these factors contribute to higher prices and delays in transporting goods.
• Shortage of storage space and labour.
• Owner-operator truckers and asset-based carriers set prices due to an imbalance between supply and demand, leading to higher rates and cost barriers for companies that need to transport goods .
• Significant congestion and obsolete infrastructures preventing efficient unloading.
• Shortage of shipping containers — several thousand containers are stuck at sea on ships anchored near blocked ports. In principle, there are more than enough containers to handle global trade volumes, but in practice availability in many parts of the world has become extremely restricted due to large volumes of containers stuck in the wrong place.
• Imbalance between filled containers entering and leaving North America: Some US exporters claim that shipping companies refuse to send containers inside ports to pick up US goods because shipping companies are trying to bring back the containers, even if they are empty, to the factories. in Asia as quickly as possible to take advantage of historically high shipping rates for exports leaving the Asian continent.
Transport to distribution centers and freight facilities
• Labor shortages of truckers and container chassis, as well as higher fuel costs, contributing to higher rates and delays in transporting goods.
• Congestion of the rail network which adds to the inefficient movement of goods.
Short-term actions at the provincial level
• Establish an emergency task force comprised of governments and businesses to explore potential support measures, particularly for small businesses still recovering from revenue loss due to the COVID-19 pandemic and unable to compete financially or logistically with larger companies.
• Develop a local manufacturing strategy and diversify sourcing and component sourcing.
• Provide loan guarantees or other temporary financial assistance to help small businesses finance their existing operations while awaiting product delivery.
• Launch government education campaigns to promote the transportation and supply chain industries as viable career paths, as well as incentives for training in the transportation and supply chain sector.
• Open immigration pathways and arrangements for trucking careers as well as other occupations along the supply chain.
Short-term federal stocks.
• Conduct a formal assessment of the supply chain infrastructure to eliminate bottlenecks along the supply chain, especially for ports.
• Develop a national manufacturing strategy coupled with an assessment of a potential Crown corporation steamship company.