Passion fruit vinegar, pineapple cakes and fermented bamboo sprouts. Most items at Maeli Market, a Taiwanese retailer in North York, are tough to find elsewhere in Toronto.
The products travel 12,236 kilometres to get here: across the Pacific Ocean on cargo ships, into British Columbia, and through the prairies via freight train. They typically arrive at the store in three weeks’ time, but delivery times have been far from typical lately.
Now, Maeli Market can expect a haul of Taiwanese snacks to arrive in two months. The shipping containers carrying the goods have been stalled at the Port of Vancouver for weeks on end, the byproduct of pent-up demand, worker shortages and disastrous weather events that have only worsened delays. In November, when flooding in British Columbia damaged rail lines around the port, the market’s shipments were pushed back an extra month.
For Alice Chung, Maeli Market’s co-owner, the backlogs hamper the founders’ lofty ambitions to source exclusive ingredients.
“We wanted to offer products you can’t really find in most supermarkets around here,” she said. “But that’s really hard to do when shipping takes this long.”
Over the past year, the highly interconnected system known as the global supply chain has been thrust into a crisis with no immediate solution. Pent-up consumer demand for factory-made goods has overwhelmed ports across North America. Boats the size of horizontal skyscrapers, carrying tens of thousands of shipping containers, sit idly outside ports and wait for trucks and trains to distribute their shipments across Canada and the United States.
The cost of shipping, in turn, has skyrocketed. High-volume orders are rapidly outpacing the availability of containers, prompting cargo companies to hike prices.
Before the COVID-19 pandemic, Maeli Market paid $3,000 (U.S.) per container on a weekly basis; now, the it’s $12,000 for the same deal. For frozen foods, delivered in a specialized container known as a “reefer,” a single shipment costs $20,000.
To save money, Maeli Market has cut down on shipments. It downsized orders of frozen milkfish to reduce the need for reefer containers. They recently stopped selling Taiwanese fruits and fresh produce because the lengthy delivery time was killing their shelf life. Chung raised prices to help account for an approximate 400 per cent increase in shipping expenses, but any more price hikes and she worries customers will get sticker shock.
“The higher we raise prices, the more likely that customers will shy away. So we try not to,” she said.
Logistics experts say Canadian retailers could face continuous shipping backlogs for weeks if not months to come. With the spread of the Omicron variant, further restrictions on business activity could stall shipments and reinvigorate strong demand for goods over services, said Barry Prentice, an economics professor at the University of Manitoba specializing in supply chain management.
“I didn’t anticipate this would last past February, but then again, I’ve thought the pandemic was going to end three times now. So it’s really hard to say when this will all be over. It entirely depends on what happens with the new variant, lockdowns and weather,” Prentice said.
The journey from Taiwanese factory to Toronto storefront is an intricate odyssey that, until recently, appeared mostly impenetrable. For Maeli Market, the route requires an international conveyor belt of manufacturers, wholesalers and logistics companies that move products from Nantou City in Taiwan to Vancouver’s downtown eastside as quickly as possible.
A case of green tea egg rolls, for example, is packaged and labelled at a mid-sized wholesaler in Nantou City called Jan Hong Enterprise Co. Ltd. They are then placed in a shipping container along with hundreds of similar products and driven by truck to the Port of Taichung, nearly an hour away.
From there, the container is hauled onto a cargo ship administered by Evergreen Marine Corp. and sent across the North Pacific Ocean. Upon arrival in Vancouver, the container is loaded onto a freight train that stops in cities through Alberta, Saskatchewan and Manitoba before arriving in Toronto.
Drivers working for Kuo Hua Trading Co. Ltd., a trading company affiliated with Maeli Market based in Markham, collect the container and deliver it to the store, where the fluffy pastries are sold to customers.
Companies like Evergreen operate hundreds of vessels that each carry tens of thousands of containers; the Ever Given, a ship owned by Evergreen that made headlines earlier this year when it turned diagonal in Egypt’s Suez Canal and lodged itself between the sand banks, was transporting 24,000 containers full of goods at the time of its embedment — each belonging to retailers with shelves to stock.
At best, the ships can travel the vast expanse between Taichung and Vancouver in about 14 days. The delays, however, begin when entering and exiting ports. Vancouver’s port reached a 60-ship backlog this month, as it navigated the aftermath of flooding and landslides from mid-November. As of Dec. 8, approximately 139 kilometres of containers were sitting idly on the Vancouver port’s docks for five days or longer, according to the Vancouver Fraser Port Authority.
“Anchorage demand continues to exceed capacity,” the port authority reported in a recent operations update.
The flooding in B.C. also caused damage to the tracks surrounding Vancouver’s port, forcing freight trains to sit idly while crews rushed to repair the infrastructure.
Some of the largest companies avoid supply chain woes by building their own. Before the pandemic, Amazon began chartering private cargo ships, creating containers and leasing planes to better control the complicated shipping journey. Home Depot recently bought an entire cargo ship to deliver items from manufacturers in East Asia. In August, Canadian Tire bought a 25 per cent stake in Ashcroft Terminal Ltd., B.C.’s largest inland port, in part to help ease delay times and capacity issues.
Small businesses, meanwhile, are left to rely on a patchwork of shipping companies that can raise transport costs in short notice. Some retailers have pivoted to airplane shipments but the hefty pricing can outweigh the benefits. Chung says the shipping companies have warned her that prices are likely to increase again in the coming months.
Eventually, those higher costs are passed onto shoppers. Canadian consumer prices grew 4.7 per cent in November from a year earlier, pushing inflation to a 30-year high. The increase was driven in part by food prices and transportation, both of which are heavily influenced by supply chain disruptions.
Ottawa has acknowledged that supply chain problems have put a strain on small businesses. In its economic and fiscal update, released in December, the government announced a $50 million fund to help Canadian ports improve storage capacity and reduce congestion.
But the move doesn’t go far enough to protect retailers from rising costs, says the Canadian Federation of Independent Business. In a recent survey of its membership, 64 per cent of small businesses told CFIB that supply chain disruptions were one of their biggest concerns, contributing to their plans to increase prices by an average of 3.9 per cent over the next year — the highest figure on record since 2009.
“Supply chain disruptions are hitting at the worst possible time for small businesses. Many rely on holiday sales to get in the black or build a reserve for the lean months at the start of the new year, but businesses are reporting shortages or delays in everything from equipment parts to concrete to seasonal decor,” said Corinne Pohlmann, senior vice-president of national affairs at CFIB, in a recent statement.
The group is calling on federal and provincial governments to freeze scheduled tax increases on businesses until the supply chain disruption is cleared.
Chung’s parents own Kuo Hua, the trading company that was one of the first to supply Canadian grocery chains with Taiwanese goods like lychee jelly. For 26 years, the company prided itself on distributing snacks and ingredients that are otherwise hard to find in Canada.
Chung says she wanted to do the same at Maeli Market, though the supply chain crisis has complicated that objective.
“It’s getting very difficult to afford this,” she said.
