Before the COVID-19 pandemic, Helmi Ansari could get espresso makers and stainless steel water bottles manufactured within three months and delivered to Canada by boat for about US$4,500 per shipping container.
Between labour shortages, rising stainless steel costs and overwhelmed ports, those days are long gone. Ansari91Ƶs products now take almost a year to make, and he pays about US$28,500 to get 10,000 of them to Canada 91Ƶ assuming he can get them shipped at all.
He91Ƶs often outbid for boat spots and has to stop shipping companies from sending his goods back to the factory by offering more cash.
91ƵAll our margins are gone. We91Ƶre selling product, but we91Ƶre not making any money,91Ƶ said Ansari, who owns Grosche International in Cambridge, Ont.
91ƵIt91Ƶs insane. There91Ƶs absolutely no way that a small business like ours can really continue to cope with this.91Ƶ
The pressures Ansari faces as he fights to keep his company alive are being mirrored by small businesses across the country.
They91Ƶre feeling the crunch of a tight labour market and supply chain challenges 91Ƶ semiconductor shortages, skyrocketing shipping costs, backed up ports and flooded regions of B.C. 91Ƶ but don91Ƶt have enough clout or cash to spend their way out of trouble.
The timing couldn91Ƶt be worse. With the winter holiday nearly in full swing, late shipments and bare shelves could be disastrous for the busiest sales season of the year.
The outcome could be even more grim for companies that were counting on this period to help them rebound from COVID-19 closures and even stave off bankruptcy.
91ƵIt91Ƶs a matter of survival,91Ƶ Ansari said of the supply chain challenges, which pushed his 15-year-old company to take out its first bank loan.
91ƵWe have people who depend on our business to be able to put food on the table, so we need to make sure the business survives, but not having inventory would mean 91Ƶ we would have to lay staff off.91Ƶ
Ansari has resisted raising prices, but knows many other companies have taken that route because demand for shipping is at a record high and packages are piling up at many ports, allowing shippers to raise their prices. In some cases, the cost has more than tripled.
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The Drewry World Container Index, for example, showed the rate to move a 40-foot container from Rotterdam to New York reached US$6,214 at the start of December and has surged by 208 per cent since last year. The Shanghai-Rotterdam route was even more expensive at US$13,500, up 283 per cent from last year.
Prices are also climbing because Statistics Canada said the annual pace of inflation hit 4.7 per cent last month, the largest year-over-year gain in the consumer price index since February 2003.
Food prices saw a four per cent bump last month alone.
91ƵMeat has gone up by like $2 a pound and my co-packer said it used to go up by 25 cents,91Ƶ said Lola Adeyemi, the founder of It91Ƶs Souper, a Toronto company making Afro-fusion soups.
She had to increase her pricing to cope with the inflation and a labour shortage at a company Adeyemi hired to manufacture her new sauce line that kicked in just as the products were scheduled for packaging.
Adeyemi had no choice but to rent a kitchen, stock up on supplies and turn to friends, who took time off work to help her cook and bottle batches of green pepper and peri-peri sauces.
91ƵI still don91Ƶt know if I91Ƶll be able to produce it through the producer or if I91Ƶll actually just have to keep producing this myself,91Ƶ she said.
David Yeaman has seen many small businesses face similar crunches or struggle to get products made or shipped from overseas.
91ƵWe91Ƶve got some people that are definitely in trouble and looking to retool right now as we speak,91Ƶ said the president of Oro Medonte, Ont.91Ƶs Molded Precision Components, which has been trying to speedily reshore their manufacturing.
While companies often opted for foreign production before the pandemic because of lower costs, Yeaman said shipping prices and other expenses have surged so dramatically, businesses are no longer saving as much through overseas manufacturing.
Myriam Maguire, the Montreal designer behind Maguire Boutique, understands those risks well.
She had to create wait-lists for goods sold through her fashion business after European factories closed during COVID-19 outbreaks. The factories reopened, but now problems loom in Asia.
Her $300 combat boots handmade in Florence have been delayed four times because Maguire91Ƶs outsole supplier struggled to get an ingredient from China.
91ƵEven when they are produced in Italy, the main chemical comes from China, but right now China91Ƶs keeping as much as possible for themselves, so they91Ƶre having a really hard time,91Ƶ Maguire said.
She91Ƶs coping by shipping products by air and using pre-sales and waiting lists to train customers to expect delays.
About 300 people are on the wait-list for combat boots, with no complaints lodged so far.
91ƵDuring the pandemic, people were ordering stuff on Amazon that would arrive a month after or two months after, so people have gotten used to it,91Ƶ said Maguire.
91ƵThe fact that they91Ƶre more patient really helps small businesses.91Ƶ
Tara Deschamps, The Canadian Press
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