Connect with us

Top Story CP

‘All our margins are gone’: Supply chain challenges squeeze small businesses

Published

7 minute read

TORONTO — 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. Ansari’s products now take almost a year to make, and he pays about US$28,500 to get 10,000 of them to Canada — assuming he can get them shipped at all.

He’s often outbid for boat spots and has to stop shipping companies from sending his goods back to the factory by offering more cash.

“All our margins are gone. We’re selling product, but we’re not making any money,” said Ansari, who owns Grosche International in Cambridge, Ont.

“It’s insane. There’s absolutely no way that a small business like ours can really continue to cope with this.”

The pressures Ansari faces as he fights to keep his company alive are being mirrored by small businesses across the country.

They’re feeling the crunch of a tight labour market and supply chain challenges — semiconductor shortages, skyrocketing shipping costs, backed up ports and flooded regions of B.C. — but don’t have enough clout or cash to spend their way out of trouble.

The timing couldn’t 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.

“It’s a matter of survival,” Ansari said of the supply chain challenges, which pushed his 15-year-old company to take out its first bank loan.

“We 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 … we would have to lay staff off.”

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.

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.

“Meat has gone up by like $2 a pound and my co-packer said it used to go up by 25 cents,” said Lola Adeyemi, the founder of It’s 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.

“I still don’t know if I’ll be able to produce it through the producer or if I’ll actually just have to keep producing this myself,” she said.

David Yeaman has seen many small businesses face similar crunches or struggle to get products made or shipped from overseas.

“We’ve got some people that are definitely in trouble and looking to retool right now as we speak,” said the president of Oro Medonte, Ont.’s 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 Maguire’s outsole supplier struggled to get an ingredient from China.

“Even when they are produced in Italy, the main chemical comes from China, but right now China’s keeping as much as possible for themselves, so they’re having a really hard time,” Maguire said.

She’s 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.

“During 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,” said Maguire.

“The fact that they’re more patient really helps small businesses.”

This report by The Canadian Press was first published Dec. 5, 2021.

Tara Deschamps, The Canadian Press

Storytelling is in our DNA. We provide credible, compelling multimedia storytelling and services in English and French to help captivate your digital, broadcast and print audiences. As Canada’s national news agency for 100 years, we give Canadians an unbiased news source, driven by truth, accuracy and timeliness.

Follow Author

Justice

Florida man charged in Canada-U. S. human-smuggling scheme freed on appearance bond

Published on

FARGO, N.D. — A Florida man charged for his role in a human-smuggling scheme that turned deadly at the Canada-U. S. border will be allowed to go home to await trial. 

Steve Shand, 47, waived his right to a preliminary hearing before U.S. district court Judge Hildy Bowbeer agreed to release him from a North Dakota detention centre. 

He faces human-smuggling charges after he was arrested near the border last week behind the wheel of a rented passenger van, not far from where a family of four was found frozen to death in the snow on the Canadian side. 

Shand, clad in orange prison garb and a black face mask, said little throughout the virtual hearing beyond “Yes, your Honour” and “Yes, ma’am” in response to Bowbeer’s questions. 

Shand was released on an appearance bond, meaning that while he must abide by a number of release conditions, he will be required to make his own way back to Minnesota for any in-person court hearings.

“Sometimes we do it by Zoom and sometimes we may be doing it in person, but however it is that a court hearing happens in this case, you’re going to have to show up for it,” Bowbeer said. 

“The fact that you’re living in Florida is not going to be an excuse for not showing up in Minnesota.”

He will also be required to surrender his passport and other related travel documents, submit to a mental-health assessment and remain in his home district in Florida except for court hearings. 

He is also forbidden from possessing any weapons and from having any contact with any witnesses or others associated with the case, and will be expected to abide by the law, Bowbeer said. 

“There’s this kind of snowballing set of consequences, all of them bad, if you were to commit some new offence while you’re on release,” she said.

Monday’s court decision was the product of an agreement between U.S. prosecutors and Shand’s defence lawyers, and resulted in the accused opting to waive his right to a preliminary hearing. 

Shand was arrested Jan. 19, the same day the bodies of four people, including an infant and a teenage boy, were discovered in the snow on the Canadian side of the border near Emerson, Man.

Investigators believe the four were part of a larger group of undocumented migrants from India who were trying to enter the U.S. from Canada.

The bodies were discovered Wednesday, shortly after U.S. Border Patrol agents pulled over a passenger van on the American side and found two other undocumented Indian nationals inside. 

At about the same time, agents encountered another group of five migrants, one of whom told the agents they had been walking through the snow and bitter cold for more than 11 hours. 

Department of Justice officials say the deaths are likely linked to a larger human smuggling operation — a phenomenon that’s practically a fact of daily life in the southern U.S., but rarely seen up north. 

Agents encountered the van “in a rural area on a dirt road in an area far away from any services, homes or ports of entry into Canada,” according to an affidavit by John Stanley, a special agent with the Department of Homeland Security. 

“He was driving through blowing snow and snow drifts. The weather was severe at the time, with high winds, blowing snow and temperatures well below (-34 C).”

Evidence detailed in the documents also suggest the group was not the first to recently make the perilous trek: twice in December and once in January, border patrol agents found boot prints in the snow near where the van was later pulled over. 

On Jan. 12, agents found prints that “matched the brand of the types of boots worn by five of the seven foreign nationals arrested in the current smuggling event,” the documents say. 

On or about Dec. 12 and Dec. 22, “two groups of four appeared to have walked across the border into the U.S. and were picked up by someone in a vehicle.” 

In the first incident, RCMP officers found a backpack at a location in Manitoba “believed to be the drop-off point” that contained a price tag in Indian rupees. 

A court file from Florida that dates back to 2018 shows that Shand, a naturalized citizen originally from Jamaica, filed for bankruptcy more than three years ago, reporting assets worth $193,343 and liabilities of nearly $160,000. 

Describing himself as an Uber driver, Shand’s assets at the time included two vehicles — a 2016 Toyota SUV and a 2014 Honda Civic — and the $161,957 single-family home in the central Florida community where he lives. 

Consular officials met over the weekend in Winnipeg to assist with the investigation and to help identify the migrants and track down family members. 

“A special team, led by a senior consular officer from the Consulate General of India in Toronto, is in Manitoba to assist ongoing investigations by Canadian agencies and to render any required consular services for the victims,” the High Commission of India said in a statement. 

“Confirmation of identities will only be possible after investigations are completed this week.”

This report by The Canadian Press was first published Jan. 24, 2022.

— With files from Kelly Geraldine Malone in Winnipeg

James McCarten, The Canadian Press


Continue Reading

International

NATO outlines ‘deterrence’ plan as tensions with Russia soar

Published on

BRUSSELS (AP) — Tensions soared Monday between Russia and the West, with NATO outlining a series of potential troop and ship deployments and Ireland warning that upcoming Russian war games off its coast would not be welcome while concerns abound that Moscow is planning to invade Ukraine.

The Western alliance’s statement summed up moves already announced by individual member countries — but restating them under the NATO banner appeared aimed at showing the alliance’s resolve. It was just one of a series of announcements that signaled the West is ramping up its rhetoric in the information war that has accompanied the Ukraine standoff.

Russia has massed an estimated 100,000 troops near Ukraine’s border and is demanding that NATO promise it will never allow Ukraine to join and that other actions, such as stationing alliance troops in former Soviet bloc countries, be curtailed. Some of these, like any pledge to permanently bar Ukraine, are non-starters for NATO — creating a seemingly intractable standoff that many fear can only end in war.

Russia denies it is planning an invasion, and has said the Western accusations are merely a cover for NATO’s own planned provocations. Recent days have seen high-stakes diplomacy that failed to reach any breakthrough and maneuvering on both sides.

On Monday, NATO said that it is beefing up its “deterrence” in the Baltic Sea area. Denmark is sending a frigate and deploying F-16 war planes to Lithuania; Spain is sending four fighter jets to Bulgaria and three ships to the Black Sea to join NATO naval forces; and France stands ready to send troops to Romania. The Netherlands also plans to send two F-35 fighter aircraft to Bulgaria from April.

Secretary-General Jens Stoltenberg said the alliance will “take all necessary measures to protect and defend all allies.” He said: “We will always respond to any deterioration of our security environment, including through strengthening our collective defense.”

Kremlin spokesman Dmitry Peskov charged that it was NATO and the U.S. who were behind “tensions escalating” in Europe, not Russia.

“All this is happening not because of what we, Russia, are doing. This is happening because of what NATO, the U.S. are doing,” Peskov said during a conference call with reporters. He also cited U.S. media reports suggesting that Russia is evacuating its diplomats from Ukraine, something officials in Moscow denied.

The NATO announcement came as European Union foreign ministers sought to put on a fresh display of unity in support of Ukraine, and paper over concerns about divisions on the best way to confront any Russian aggression.

In a statement, the ministers said the EU has stepped up sanction preparations and they warned that “any further military aggression by Russia against Ukraine will have massive consequences and severe costs.”

Separately, the EU also committed to increase financial support for embattled Ukraine, vowing to push through a special package of 1.2 billion euros ($1.4 billion) in loans and grants as soon as possible.

The West is nervously watching Russian troop movements and war games in Belarus for any signs that a new invasion of Ukraine is imminent. Russia has already invaded Ukraine once, annexing the Crimean Peninsula in 2014. Moscow has also supported pro-Russian Ukrainian separatists fighting the Kyiv government in the Donbass region. Fighting in eastern Ukraine has killed around 14,000 people and still simmers.

Asked whether the EU would follow a U.S. move and order the families of European embassy personnel in Ukraine to leave, EU foreign policy chief Josep Borrell said: “We are not going to do the same thing.” He said he is keen to hear from U.S. Secretary of State Antony Blinken about that decision.

Britain on Monday also announced it is withdrawing some diplomats and dependents from its embassy in Kyiv. The Foreign Office said the move was “in response to the growing threat from Russia.”

Ukraine’s Foreign Ministry spokesman, Oleg Nikolenko, said the U.S. decision was “a premature step” and a sign of “excessive caution.” He said that Russia is sowing panic among Ukrainians and foreigners in order to destabilize Ukraine.

Germany has issued no order, but it has announced that the families of embassy staffers may leave if they wish. Foreign Minister Annalena Baerbock stressed that “we must not contribute to unsettling the situation further; we need to continue to support the Ukrainian government very clearly and above all maintain the stability of the country,”

Arriving at the EU meeting, Irish Foreign Minister Simon Coveney said he would inform his counterparts that Russia plans to holds war games 240 kilometers (150 miles) off Ireland’s southwest coast — in international waters but within Ireland’s exclusive economic zone.

“This isn’t a time to increase military activity and tension in the context of what’s happening with and in Ukraine.” Coveney said. “The fact that they are choosing to do it on the western borders, if you like, of the EU, off the Irish coast, is something that in our view is simply not welcome.”

Some of the member countries closest to Russia — Estonia, Latvia and Lithuania — have confirmed that they plan to send U.S.-made anti-tank and anti-aircraft missiles to Ukraine, a move endorsed by the United States.

But questions have been raised about just how unified the EU is. Diverse political, business and energy interests have long divided the 27-country bloc in its approach to Moscow. Around 40% of the EU’s natural gas imports come from Russia, much of it via pipelines across Ukraine — and many are skittish about being cut off from that supply in winter, with prices already soaring.

The EU’s two major powers appear most cautious. French President Emmanuel Macron has renewed previously rejected calls for an EU summit with Putin.

Late on Saturday, the head of the German navy, Vice Admiral Kay-Achim Schoenbach, resigned after coming under fire for saying that Ukraine would not regain the Crimean Peninsula, and for suggesting that Putin deserves “respect.”

Still, diplomats and officials said hard-hitting sanctions are being drawn up with the EU’s executive branch, the European Commission. They were reluctant to say what the measures might be or what action by Russia might trigger them, but said they would come within days of any attack.

___

This story has been updated to correct that France has said it is ready to send troops to Romania, not Bulgaria. ___

Associated Press writers Yuras Karmanau in Kyiv, Ukraine, Dasha Litvinova in Moscow, Geir Moulson in Berlin, Aritz Parra in Madrid, Mike Corder in The Hague, and Raf Casert in Brussels contributed.

Lorne Cook, The Associated Press

Continue Reading

Trending

X