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Challenges in the Canadian Supply Chain

The Canadian supply chain has faced a lot of challenges and strains this past year. There’s congestion across the entire chain, and expected shipment arrival dates are constantly being pushed back.

The Canadian supply chain typically faces some logistical challenges every year. The cause of these challenges varies between unexpected weather, government regulations and more. This year, however, the Canadian supply chain has faced some unprecedented challenges.

Many Canadian businesses believe supply chain issues have worsened due to delayed deliveries, higher input prices and supply shortages. Factoring in the war in Ukraine, border restrictions in early 2022 and soaring fuel costs, it’s been a tough year for Canada’s supply chain. 

Here’s a closer look at three supply chain challenges that Canada has faced this past year.

Unexpected weather

Bad weather is one of the biggest challenges for Canada’s supply chain. Though we love living in a beautiful country that experiences all four seasons, some areas of Canada experience particularly harsh winters that unfortunately impact the supply chain.

Truck freight is often impacted in the winter due to spontaneous, severe snowstorms. These snow storms, and other unforeseen weather conditions, can severely impact the speed at which products are delivered. In November of 2021, British Columbia experienced floods that cut off access to Vancouver—Canada’s busiest port. This intensified ongoing supply chain issues and the impact was felt all over the nation, for many weeks following the floods.

Fuel hikes

If there’s one thing Canadians nationwide experienced this past spring, it was the fuel hikes. In the last year, gas prices rose more than 50 percent across Canada. When fuel costs go up, transportation companies have to adapt and allocate a bigger budget to moving freight. When this happens, transportation companies may begin to charge more for their services, which eventually leads to the businesses charging consumers more for their products. While the record-high gas prices increase operational costs and product costs, the cost of oil drives up the cost of shipping goods from trucks to shipping containers to airplanes.

Rising business costs

According to the Canadian Chamber of Commerce, rising costs of doing business are the biggest obstacles for Canadian businesses. These business costs include inputs, labour, capital, energy and raw materials. Just like the fuel hikes, once the businesses feel the rising costs, their customers will feel them soon, too.

Though avoiding supply chain challenges can be close to impossible, here are three ways businesses can potentially lessen the impact of the challenges on their business. 

  1. Invest in the right technology

Investing in the right technology will help you get ahead of the game. We suggest investing in inventory management software that provides real-time visibility into your inventory and supplier on-time performance. Knowing your inventory levels at your vendor and raw materials supplier will help you mitigate issues before they become problems. 

  1. Diversify suppliers and manufacturers

You know what they say, don’t put all your eggs in one basket. If your business permits, don’t rely on one supplier or manufacturer for a key component of your product. Always diversify so you can avoid losing business and customers if your supplier experiences difficulty getting their raw materials.

  1. Work with an experienced customs and freight company

Supply chain issues don’t stop with the manufacturer. The backlog of products and goods entering Canada can impact how long it takes for your freight forwarder to get your products where they need to be. 

Working with an experienced customs and freight company will ensure your goods get where they need to be, when they need to be there. If your products already faced manufacturing delays, you don’t want to risk any further delays getting your finished products where they need to be. Avoid working with a freight company that cuts corners or that doesn’t have the experience to get your goods moving quickly. An experienced customs and freight company will have industry connections and knowledge to ensure the quickest delivery times.

We know supply chain issues have been a constant headache for Canadians since the start of the pandemic. Welke Custom & Logistics has been in the game for over 37 years and we’re committed to getting your products where they need to be, as quickly as possible. Reach out to our team today to get a quote on your shipment.

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