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Why it’s still taking so long to fill shelves in Kamloops, Okanagan

Until last fall’s washouts on B.C. Interior highways, the term “supply chain” was not something very many people had even heard about.

Now that the roads and rail lines are open, COVID restrictions are more-or-less over and the world is getting back to normal, some are wondering why “supply chain” is still frequently used to justify shortages and delays in delivery.

“There’s definitely a disconnect happening with things like appliances and shipping some fixtures,” Krista Paine vice-president of the Central Okanagan branch of the Canadian Home Builders’ Association and owner of Ian Paine Construction, told iNFOnews.ca in April.

She’s completed expensive new houses that, six months later, are still waiting for appliances.

Her problem, which is shared by so many others in the Thompson-Okanagan region and beyond, is due in part to the Russian invasion of Ukraine.

Those are two major suppliers of rare earth metals that are essential to manufacturing electronics, Greg Wilson, the B.C. director of government relations for the Retail Council of Canada, told iNFOnews.ca.

“Another reason is the manufacturing of those components, a lot of which is happening in China,” he said. “China keeps locking down for long periods of COVID. Shanghai is the biggest port and also the largest manufacturing centre so there’s a lot of manufacturing not happening and there’s a lot of shipping not happening.”

Closer to home is the current shortage of baby formula in the U.S. that’s now spreading to Canada, triggered largely by the three-month long shutdown of Abbott Nutrition's plant in Sturgis, Michigan because of contamination problems.

READ MORE: EXPLAINER: What we know about shuttered baby formula plant

That shortage has taken longer to hit Canada.

“We have a very big difference between us and the United States,” Wilson said. “We have a lot of very dominant store brands – think of President’s Choice and things like that. Because those store brands tend to buy from different manufacturers, we have a better situation on baby formula.”

Even so, the concern about shortages, triggered first by COVID then by the last fall's floods, has an impact on consumer thinking.

“The supply chain is frail and consumers are a bit frail so, sometimes when there’s a shortage of something the natural reaction is to go out and buy a whole bunch so you don’t run out,” Wilson said. “Effectively, that’s hoarding.”

READ MORE: Here's why people are fighting over the last pack of toilet paper

Ironically, when the floods cut off the Interior from Vancouver, baby formula was one of the products that was shipped in from the U.S., after the federal government eased labeling rules, not only for bilingualism but for nutritional and ingredient listings.

READ MORE: Here’s why we still have food, supplies in Kamloops, Okanagan after highways closed

While there are somewhat different causes of shortages for electronics versus baby formula, there is one very strong common ingredient: concentration.

For example, there’s a lot of potential for mining of rare earth metals in Canada, particularly in Northern Ontario and NWT, Wilson said.

“There’s not always the social licence to do that mining,” he said. “People are going to have to understand that that circuitry might require some rare earth minerals.”

Finding other sources for raw materials is one thing, diversifying where they’re assembled is another.

“In the end, diversified manufacturing is the best way to smooth out these bumps,” Wilson said. “Not only domestically, but in different places in the world, so it’s not all concentrated in China and India. That’s one of the issues. If that particular elephant has a problem, the rest of the world has to deal with it.”

Some manufacturing from China has started to shift to places like Vietnam and Malaysia, he said. But, over the last 30 years, a huge amount of U.S. manufacturing has been shipped offshore.

“Probably, the U.S. is going to have to make a decision,” Wilson said. “They’re going to have to make a policy decision on whether they want to continue to have all this manufacturing and production offshore.”

None of this even touches on the transportation network, where there’s a worldwide shortage of shipping containers and bottlenecks at ports.

The Port of Vancouver is the largest port in Canada and the sixth largest in North America, according to Shipa Freight, so when it was cut off from the rest of Canada, that triggered major supply chain disruptions.

The geographic reality is that all major highway and rail networks pass through the bottleneck at Hope.

“I don’t think these climate crises are going to disappear in the short term,” Wilson said. “Odds are they are going to increase.”

That means there needs to be redundancies built into the transportation system, along with the mining and manufacturing ends of the supply chain.

Yet, Canada is actually better off, from a transportation perspective, than the U.S., according to many of the U.S. based and trans-national corporations Wilson deals with.

“As much as, here I am saying get that port terminal fixed, get more storage, get better capacity on rail and road to help solve and smooth these issues, the Americans say that we have a lot more advanced work on infrastructure than the U.S. does,” he said.

Canada, for example, has two rail lines running all the way across the country, which the U.S. does not have. That means off loading and reloading shipping containers onto different rail lines.

“That does cause us problems too because, while a lot of goods come in through Vancouver, a lot come through Los Angeles/Long Beach and through Houston and New Jersey,” Wilson said.

Until those systemic problems with the world trade system are resolved, and they certainly won’t be in the short term, shortages of products and delays in shipping are likely to continue for a long time to come.

To contact a reporter for this story, email Rob Munro or call 250-808-0143 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

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