China import wave jams ports, rail

The Globe and Mail: “Companies importing goods from China could face billions of dollars a year in extra costs as it becomes increasingly difficult to move fast-growing supplies of merchandise on time through a strained transportation system, industry representatives say.

The extra expenses could flow not only from shipping delays and penalties for late deliveries, but also from the potential for lost future business, said Jayson Myers, chief economist at Canadian Manufacturers & Exporters.

‘It is a risk, and an increasing cost as a result of that,’ Mr. Myers said in an interview from Ottawa. ‘There are more and more strains on the capacity to ship. There’s a real backlog of product, especially in Western Canada.

‘We’re probably talking billions of dollars, if you’re looking at the overall cost of transportation for Canadian manufacturers and retailers.’

Some companies are even starting to reassess their decision to buy cheap merchandise from China, looking for alternative supply sources because of the clogged routes, he said.

Mr. Myers said the strains on the overseas transportation system are twofold: shipping from China to West Coast ports in North America, as well as shipping from those western ports to centres across North America. The capacity to move goods from the coast inland is also lagging, he said.

The difficulties will probably get worse in January when quotas on imported clothes will be lifted, setting the stage for cheap apparel from China and other low-cost producers to flood the market, industry officials added.

‘It will be a real volatile situation,’ said Bob Kirke, executive director of the Canadian Apparel Federation. ‘It’s going to be a real scramble.'”

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