Lack of shipping containers causing bicycle shortages, headaches for Canadian agricultural exporters

Lack of shipping containers causing bicycle shortages, headaches for Canadian agricultural exporters

A bicycle shortage this spring has left consumers and bicycle shops to scramble, but the reasons behind it are also affecting the ability of Canadian exporters to get their products to markets far from a continent.
The difficulty in finding a good set of two wheels is a symptom of a larger problem occurring at sea and in ports around the world.

Strong demand for shipping containers or sea cans makes it more difficult for bicycles and other bulky consumer goods to get to Canada, and for agricultural and lumber products to leave Canada for Canada. Asia.

In fact, to meet the demand for sea cans, shipping companies are moving empty containers out of Canadian ports instead of taking the time to fill them with export products like lentils or lumber.

As a result, it has become increasingly difficult to get Canadian products onto ships in recent months, according to industry groups like the Canadian Freight Management Association and Pulse Canada.

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Farmers cannot send their crops offshore

Farm groups say the problem limits their ability to ship their crops overseas.

Jeff English of the Pulse Canada advocacy group, said Cost of life the situation is incredibly difficult for farmers who export. His group represents producers of lentils, soybeans and other legumes.

“One of the main selling characteristics of Canada… is our ability to supply. We’re there when countries need us, when buyers need us. Our ability to deliver is as good as the last time we did, ”said Mr. English.

The port of Vancouver is pictured – sea cans and all – on March 4, 2020. (Ben Nelms / CBC)

Pulse growers are among the agricultural players claiming that Canadian farmers do not have enough access to shipping containers to get their produce to markets, including China, the main buyer Canadian peas in 2020, according to the trade group.

The Canadian Cargo Management Association said demand for space on international shipping routes is high – and container stocks are low. The Ottawa-based trade group said container shipping has been severely affected by changes in demand due to COVID-19.

The conflict stems from the eagerness of importers and exporters to bring empty, high-demand sea cans back to Asia to fill up with also-in-demand consumer goods waiting to be imported, agricultural trade groups and companies say. maritime polled by CBC Radio. Cost of life.

They prefer to take an empty container out of Vancouver, immediately load it onto a ship and bring it back to China.– Jordan Atkins, vice president of logistics company WTC Group

This means companies don’t want to take the time to load Canadian exports into empty shipping containers at Canadian ports, according to Jordan Atkins, vice president of logistics company WTC Group.

The time to load products such as pulses into sea cans in Canada, then unload the product exported overseas to Asia, means more waiting time for shipping containers to be ready for reuse .

Lost income is worth it for exporters

According to industry players like Atkins, once Canadian ports received shipping containers full of overseas consumer goods, emptied sea cans would normally be filled with Canadian raw materials and returned from there. across the ocean in Asia.

Often, shipping containers are loaded onto trains or trucks and sent to the rest of Canada to be filled with goods such as pulses or lumber before returning to port, said Atkins, whose company specializes. in transshipment – the process of transferring goods from one mode. transport to another.

The high demand for shipping containers themselves means that in some cases this is not happening, he said.

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« [Shippers] prefers to take an empty container out of Vancouver, load it immediately on a boat and bring it back to China… we’re talking about a matter of days, just a few days where they’re trying to shave. ”

While companies can lose revenue by refusing to ship Canadian exports, Atkins said it was worth it for these companies.

“They just prefer to pay to move the void [sea can] and earn those few extra days, ”he said, adding that his company’s terminals for loading sea containers are operating at less than 50 percent of their capacity, compared to what they would normally expect. at this time of year.

Governments urged to act

These decisions have been gathering momentum for months, with German shipping company Hapaq-Lloyd announcing in October that it would not ship agricultural products from North America.

The US trade group Specialty Soya and Grains Alliance called the move a “blow” and said it was so that Hapaq-Lloyd could “quickly reposition empty containers” in Asia. The organization said the decision could “cause serious hardship” for the farming community.

A Hapaq-Lloyd ship is pictured in Halifax carrying dozens of sea cans in 2015. (Mac Mackay / Shipfax)

Even non-farm businesses are feeling financial hardship as a result of these decisions, with Nike reporting in March that its North American revenues had declined by 10% due to port congestion and a shortage of container space around the world. .

Business leaders have asked the federal government what it will do to support Canadian exporters who cannot get their equipment to port.

In a letter sent to the Minister of Transport at the end of March, the Canadian Cargo Management Association criticized what it called “unreasonable” actions by ocean carriers.

He warned that pulse producers and timber exporters “are losing international sales” as shipping companies return empty containers to Asia.

Bikes need a lot of space on the sea

The demand for imports from North America is part of the reason why there is such a need for empty shipping containers in Asia. The low availability of sea cans is part of the reason stores like Calgary’s Bow Cycle cannot meet the demand for imported products.

“We have about 25 percent of normal inventory at this time of year,” co-owner Kevin Senior said.

“I was just on the phone with a supplier who said they were supposed to ship bikes this week, and they actually ship next week because they can’t get a container. ”

Bow Cycle of Calgary said it only has about 25% of the stock it would normally have at this time of year. (Terri Trembath / CBC)

Part of the problem, according to Senior, is the overall bulkiness of the bikes. A six-meter-long shipping container can only hold around 250 bikes, which means bike makers also need a lot of sea cans which are in short supply.

It’s not just bikes and lenses

Aggregate demand on global supply chains has increased over the past year, according to shipping analyst Alan Murphy, in part due to a shift in shopping habits due to the pandemic of COVID-19.

As consumers spend much more time at home, Murphy suggested that the money was for goods rather than services.

“Housewares, washing machines, dryers, stoves,” Murphy said in an interview with Cost of life, listing some of the big items in increasing demand by North American consumers.

The CEO of Sea-Intelligence, a supply chain research firm, monitors shipping lanes or routes taken by international ships as they move goods across borders.

“Ride exercise bikes, forget to buy an exercise bike in the next six months. The game consoles were ripped off the shelves, ”Murphy said. “Really, all the commodities that we’ve seen develop are testament to this overwhelming shift from services to goods. “

Produced and reported by Tracy Johnson, with Anis Heydari.
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Cost of life airs weekly on CBC Radio One, Sundays at 12 p.m. ET (12:30 p.m. NT).


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