Recent supply chain problems could be the new normal

Canada needs surge capacity for imports.Ottawa—The supply chain problems of the last few years may be around long term and Canada needs to quickly expand transportation infrastructure to cope with the unpredictability, says Stephen Paul, Vice-President of Supply Chain Logistics at Ray-Mont Logistics of Montreal.Gaining market share drove the growth in international container shipments in recent decades but now shipping lines and other players are focused on financial stability and higher margins, he told the Commons agriculture committee. “We have to come to a realization that this might be the new normal.”Surge capacity is needed for ports and railways and the National Transportation Corridors Fund should encourage private firms to expand their supply chain capacities, he said. “The process must be streamlined to react quickly, as the emerging issues in the global supply chain are growing and developing more rapidly than Canada is keeping up with them.”All levels of government must support supply chain development projects to boost the economy as a whole. Ray-Mont has tried for six years to expand its container-handling capacity Montreal “only to be met with challenges from multiple levels of government. Had the project been developed from the outset, many of the challenges that currently plague agricultural exports through this corridor, as well as the supply chain as a whole, would have been absorbed by that expansion.”The federal government should engage co-operatively with all the supply chain companies, especially in the shipping industry, to understand the problems and help find solutions.“It's imperative to work with them and not against them, as ocean carriers are private companies making a choice to call at Canadian ports.” Some have stopped serving Canadian ports and the government needs to understand why, Paul said.Ray-Mont has been involved with shipping agricultural products for the last 30 years. The supply chain problem started before the pandemic struck and led to disruptions of containerized agricultural exports forcing the system to readjust and reinvent itself.Port and rail congestion “happened after the first wave of COVID as imports surged seemingly without notice, and then changes to supply chain strategies on large import companies from just-in-time to just-in-case, which has subsequently placed additional pressures on warehousing and container storage capacity.”While there have been improvements, “there are many challenges that persist today and numerous areas for improvement to move agricultural products more effectively and efficiently,” he said.The speedy creation of large-scale logistics parks and supply chain infrastructure projects would provide the most benefit. Similar projects elsewhere are developing so much faster than Canada. “By the time we catch up to those initiatives, we're already behind the new initiatives happening elsewhere.”Canada lacks surge capacity so shipments can be rerouted or shifted. “Putting elasticity in the supply chain and allowing us to really move to where it's more efficient will increase the efficiencies and the effectiveness of the exports as well as the imports. It will also change the reputation of how Canada moves exports,” Paul said.

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