FROM INCONSPICUOUS TO ESSENTIAL
Truck drivers now key to getting goods on empty shelves in coronavirus crisis.
Apotex has enough APIS on hand to manufacture the first two products, said Jordan Berman, vice- president of global communications for the company, which fills one in five Canadian prescriptions. But it is still too early to know whether delays in obtaining API for the third will lead to supply challenges.
“About 98 per cent of our products are made in Canada, but for a small number, we do rely on APIS from India,” he said.
As demand for essential supplies surges, the nightly volumes of freight between cities that Cargojet Inc., Canada’s only national cargo airline, handles has spiked to 1.8 million tonnes, an increase of nearly 40 per cent. The company has hired 50 new pilots and employees, ramped up its sanitizing and cleaning routines and boosted the pay for its workers to help cover the expense of childcare and other costs.
In all, the measures will cost the company an extra $ 4 million to $ 5 million a month, said chief executive Ajay Virmani, who has also refused more lucrative international work to focus on domestic demand.
“We have not raised our rates, we have not gone to the market because we don’t feel that’s the right thing to do,” he said. “We have asked the government for help getting basic things like masks for our pilots and sanitization materials, but we haven’t received it. Our teams are working 18-hour days to keep the supply chain of this country moving. We wish there was a little more support.”
Further into the supply chain, Canada’s ports and trains are once again operating normally following significant disruptions due to the rail blockades, freight companies said, but new challenges have emerged elsewhere.
To enforce social distancing, considered crucial to limiting the spread of the virus, Ontario, Quebec and B.C. have created lists of essential businesses, with B.C. going a step further by granting itself the power to take over supply chains through the Emergency Program Act.
Those moves have shuttered warehouses and distribution centres that would normally receive sea containers full of “non-essential” goods already en route to Canada, said Kim Campbell, chair of the Canadian Association of Importers and Exporters.
As shippers are forced to move the items elsewhere to be stored, the system will be further deprived of the empty containers needed to move essential items, she said.
The balanced exchange of sea containers — critical to the smooth flow of global trade — was already thrown into disarray after COVID-19 ripped through China, forcing the country to shut down most of its industry in January and February.
Incoming container traffic at the Port of Vancouver plunged 14 per cent in February, echoing losses at other major ports including the Port of Los Angeles, where container traffic fell 23 per cent.
The closure of warehouses for non- essential goods threatens to exacerbate the problem, Campbell said.
“Ocean ports, rail yards, and trucking terminals will quickly become overwhelmed with the business of undeliverable non- essential freight, which will greatly hamper the delivery of essential products that Canadians need during this crisis,” she said in a letter to Prime Minister Justin Trudeau.
What’s more, Campbell said, the discrepancies between provincial lists of essential items could leave a product badly needed in one province stuck in another. Her organization wants all goods to be deemed “essential” or, at the very least, a uniform federal definition of which goods fall into the category.
“We’re not saying open up all the stores,” she said in an interview. “We’re saying make all products essential so we can open warehouses, products can be delivered and the system can keep functioning.”
Surging demand for food deliveries to refill grocery store shelves already has some trucking companies running at full capacity. Travel across land borders — closed to non- essential travellers — has been smooth, but the lineups at warehouses have caused long delays, said Steve Foxcroft, vice- president at Hamilton, Ont.- based Fluke Transportation Group.
“The delays are at the distribution centres,” he said. “That’s the issue for us, getting things off the truck and into the warehouse.”
Trucking industry leaders are also increasingly concerned about another l ong- standing problem threatening supply chains: driver shortages. The job vacancy rate in trucking has soared higher than in any other industry in Canada aside from crop production as older drivers retire and the industry struggles to draw new recruits, a recent study by Trucking HR Canada and the Conference Board of Canada found.
Now, the industry is confronted with the parallel challenge of workers becoming infected or being unwilling to risk their health by coming to work, said David Carruth, president of the Ontario Trucking Association.
“The Ontario government has been doing what they can to extend licensing and permits when they come up for renewal, of helping us with the bureaucratic issues,” he said. “But when it comes to bringing in new drivers, you need someone to be trained, tested and licensed. That takes time and there’s no way to speed that process up.”
For the customers at the end of the supply chain, the snags have so far materialized in the inconsistent supply of goods in some cases and none in others, said Rob Hattin, chief executive of Provantage Automation, an Ancaster, Ont.- based manufacturer of factory automation products.
“Some things have taken off and others just aren’t there, so you just don’t know what you’re going to get,” he said. “That’s as much of a problem as anything. It’s like baking a cake. If you have a lot of eggs and no flour it’s not going to happen.”
you just don’t know what you’re going to get.