Julie Fass has been running her downtown Toronto store, Ziggy’s At Home, for 15 years. She says she has never had to deal with as many product delays as she’s dealing with now.
“I have some orders that were placed back in May or even before then and now I’m looking at November-December arrivals, which really cuts it close for Christmas. And I’ve totally lost those summer sales,” Fass tells Global News.
She describes it as a “big hassle” she doesn’t have much bandwidth for these days. Fass is juggling the demands of a family life, which includes a young son, new COVID-19 protocols, and now, “staying on top of suppliers” and trying to pinpoint ever-expanding shipping dates.
The deepening shipping container crisis is to blame for the added headaches, delays and costs being felt by store owners across Canada. And retail experts say that given multi-month lead times for getting international goods to our shores, it will likely lead to increased costs to consumers during the holiday season.
Problems related to shipping containers began surfacing in mid-2020 as demand for goods, primarily exports out of China, began to pick up. Factor in persistent global supply chain issues while economies reopened around the world and you have a recipe for backlogs and increased costs.
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According to Michael LeBlanc, a senior advisor with the Retail Council of Canada, the current skyrocketing costs are unprecedented.
“Everything from shipping pallets to the cost of containers to getting on to the boat. We’ve seen all these costs hitting retailers,” he tells Global News. “So it is both causing slowdowns, a shortage of supply in certain items and cost increases.”
Fass says it has primarily affected items coming from China and Europe, and most noticeably larger products, which take up more volume in a shipping container, such as furniture. Locally produced goods aren’t immune, though, as they sometimes require parts from overseas, which can be held up by the crisis.
She says her suppliers have already started raising their prices, by about five to 20 per cent.
“We eat some of that, and I try to eat it as long as I can but if this continues I would imagine that I can’t hold off much longer,” she says.
Mandy Swanson owns Mandy’s Fashions, a clothing store in Rimbey, Alta. She tells Global News that one of her suppliers asked her to pay more for a shipment than the price they initially agreed upon because of shipping container inflation.
“They told me they usually spend about two to four thousand on a shipping container and they were looking at costs that are hitting $25,000 for a container so the price is exponentially huge compared to what they usually pay,” says Swanson.
She made her fall purchases in February and March, with deliveries arriving over the summer months, but she worries about the impact on her business beyond that as the crisis intensifies.
“I couldn’t imagine if every single supplier now said to me, ‘We have to up our dollars,’” she says. “Do we take the loss or do we just increase our prices?”
LeBlanc says pricing dynamics take months to play out and that although the price of some items, such as cars and gasoline, have increased in the past year, consumer goods are a mixed bag. But notable inflation at retail stores may be coming during the second half of this year and continuing into the early part of 2022.
“Retail is a super competitive industry and it is not an ordinary time. Retailers are recovering. This is probably not the time for many to start raising prices,” says LeBlanc.
So far, Fass says customers have been understanding, though she feels she is “constantly apologizing to people” for not having the items in stock. She hopes customers continue to be patient during these unprecedented times.
“For someone who prides themselves on excellent customer service, I feel like I’m failing my people,” she says. “That’s the hardest part for me.”
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