Blockades, fruit and the annoying impact of hiccups in the supply chain

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Mike Dean Local Grocer, an Eastern Ontario retailer that ships food to clients in the Arctic, sent notices on Thursday to two little stores in remote Nunavut hamlets. Both stores ordered clementines but Mike Dean Local Grocer, which operates about an hour outside Ottawa, didn’t have any. The company’s fruit importer in Toronto couldn’t send any. There weren’t any Thompson grapes from Peru either, or Mandarin oranges from South Africa, or Washington Bartlett pears.

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The stores had a choice: cancel the item or pick a substitute. Clementines, for example, could be swapped for small navel oranges. From there, the order would be packed — a careful process that takes about two hours — then trucked to Ottawa, where it would catch a Friday flight to Iqaluit, and then eventually another smaller flight to its end destination. By Tuesday, the orders should have arrived, according to Gordon Dean, owner of Mike Dean Local Grocer. (His dad was Mike.)

Dean wasn’t quite sure why his importer couldn’t get the fruit. He’s been seeing rolling outages in products for months. Right now, he said, some varieties of Eggos aren’t available.

It’s hard to single out one factor behind it, because the supply chain has been disrupted by a long list of factors, each one manageable enough on its own — if only other ones didn’t keep cropping up. At this point, he said, it’s all blended together — one big, dizzying problem, like a case of the hiccups. Backed up seaports, delayed ships, the clogging of the Suez Canal, floods in British Columbia, droughts in California, Omicron, labour shortages, truck shortages, vaccine mandates, and now, a blockade at the most important trade crossing in Canada.

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This week’s shutdown of the Ambassador Bridge and other border crossings in Alberta and Manitoba, by protesters calling for an end to pandemic restrictions, has imperilled the flow of agricultural imports and exports and impacted “the livelihoods of Canadian farm families,” according to a joint-statement from eight of the top industry groups in the Canadian agri-food sector.

In a call on Friday with Prime Minister Justin Trudeau, U.S. President Joe Biden expressed concern that the situation has forced American companies to scale back production and cut employee hours. Auto plants on both sides of the Detroit-Windsor border have not been able to get enough parts to run at full capacity since the Ambassador blockade started, and as of Friday afternoon the Canadian private-sector union Unifor was reporting that 10,000 of its members had been laid off or put on reduced hours by Ford, General Motors and Stellantis.

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A Superior Court judge granted an injunction, effective 7 p.m. Toronto time, against the protesters blockading the Ambassador Bridge, the Windsor Star reported.

“The border cannot and will not remain closed,” Trudeau said at a press conference before the court ruling on Friday, though he suggested the situation was “a long way” from needing military intervention.

Ontario Premier Doug Ford announced a state of emergency in the province, which will give authorities the ability to arrest and fine anyone up to $100,000 for blocking the movement of goods and services along critical infrastructure.

About 23 per cent of all trucks entering Canada cross at the Ambassador Bridge, representing about $409 million, or a third of all daily truck trade with the U.S., according to calculations by University of Toronto economist Ambarish Chandra. The Retail Council of Canada (RCC), which represents the biggest grocery chains in the country, has estimated that about a quarter of all food and consumer goods in stores came across the Ambassador.

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RCC warned earlier this week that an ongoing blockade of the bridge would risk “reduced on-shelf availability.” But on Friday, grocers weren’t “reporting any hard-to-manage issues in getting food onto store shelves,” RCC spokesperson Michelle Wasylyshen said in an email, adding that fresh produce risked being spoiled if delivery delays get “too extensive.”

This week, retailers and importers estimated that navigating around the blockade was adding about 12 to 24 hours onto cross-border shipments. But fresh fruit and vegetables imports were already severely delayed prior to the blockades, with shipping containers waiting several days, if not weeks, longer than normal to transit through ports due to labour shortages and a tight international supply of both ship and trucking capacity. So 24 hours could be the difference between sellable, and rotten.

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Ron Lemaire, president of the Canadian Produce Marketing Association, said older shipments coming into an importers’ warehouse might have to be “culled” — a labour-intensive process where staff go through cases of product and throw out anything with signs of decay. That adds another layer of time and money onto a logistics cycle already thick with both.

By Friday, Lemaire was hearing blockade-related delays were starting to get better, down to about six or seven hours. “You’re going to get food,” he said. It’ll just cost more. And it might not be the quality, or the variety, you expect. Instead of a clementine, it might be a small naval orange.

That’s the thing about hiccups in the supply chain, he said. They won’t kill you. “But they’re annoying.”

— With additional reporting from Bianca Bharti, Financial Post

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