Supply Chain Scanner - Week of January 27, 2025

Weekly blog by Emily Atkins

Opportunities may be lurking behind tariff chaos, industries suggest

The Port of Vancouver is again in the spotlight as it is trying to clear a three-week backlog of containers waiting to be put on trains. According to the January forecast for the ITS Logistics US Port/Rail Ramp Freight Index, the backlog at Vancouver is resulting from the Lunar New Year rush, a November port strike that has now come to an end, and lack of rail equipment.

Further, “US West Coast port and rail ramp operations will remain at an elevated status, and there are still concerns that there may be an increase in transpacific inventory front-loading throughout the month. This is in addition to Western Canada port and rail issues,” said Paul Brashier, vice president of global supply chain for ITS Logistics.

Although Port Vancouver said it expects to clear backlogs by February, the quick imposition of tariffs, which Trump said could happen as early as February 1, is working against it. Due to uncertainty as to what these tariffs could mean for the industry and overall economy, retailers have continued to front-load their imports, bringing stock in as quickly as possible. Some retailers also chose to pre-empt the previously expected East Coast port strike which also boosted port volumes.

“Shippers should prepare for the potential of a front-loading event similar to 2018, impacting transpacific trade lanes from Asia into North America – regardless of origin – as front-loading bottlenecks at the same entry point ports,” Brashier said. “Industry professionals should also expect exports to be negatively impacted as well due to equipment imbalance and these possible retaliatory tariffs.”

It looks at thought it could be a boom and bust situation, with volume potentially seeing a dramatic drop after tariffs are imposed. Buyers of Canadian-made goods in the U.S. will potentially pause purchasing while they sort out alternatives to our products. And at home manufacturers are facing severe challenges.

Canadian Manufacturers and Exporters president and CEO Dennis Darby pointed out in a letter to the leaders of Canada’s four main political parties, the impacts that its members expect should Trump follow through:
· 90 percent of manufacturers expect significant or severe impacts if tariffs are imposed.
· 30 percent have already postponed planned investments, and
· 22 percent have implemented hiring freezes due to heightened uncertainty.
· If tariffs proceed, 48 percent of manufacturers anticipate layoffs or hiring freezes, 49 percent plan to shift some production to the U.S., and 45 percent expect to cancel or delay planned capital investments.

On the flip side, the Canadian Trucking Alliance has suggested that the tariffs present an opportunity to revamp Canada’s internal trade rules, in order to promote stronger trade among provinces and territories instead of being focused on our neighbour to the south.

“CTA applauds the federal government and the provinces for looking at expediting a review of internal trade issues. Through a CTA-led process, our sector has identified multiple inefficiencies that could be addressed to improve the productivity of the trucking supply chain and our competitiveness domestically,” said CTA’s chair Greg Arndt.

The food production industry here also sees a potential opportunity for growth. “Canada has an opportunity to strengthen its economic resilience. The Indo-Pacific region presents a promising opportunity for Canada to expand its trade footprint. With rising demand for agricultural and manufactured goods, forging partnerships in this region can help mitigate our reliance on the U.S. Expanding access to these markets is not just strategic – it’s essential for long-term stability,” the Food, Health & Consumer Products of Canada (FHCP) industry group said in a LinkedIn post.

“What we’re lacking is a comprehensive manufacturing strategy for Canada – one that ensures our industry can grow and innovate sustainably over the long term. Stopgap measures won’t cut it. If we are serious about food and consumer health product sustainability, we need a plan,” said Michael Graydon, FHCP CEO.

While the tariffs will be terrible, what this suggests is an opportunity for government, manufacturing and transportation to come together and create that plan. Steps are already being taken, what’s needed is the leadership to create a comprehensive strategy to make Canada stronger and more self-sufficient in the face of trade disharmony.

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Emily Atkins
President
Emily Atkins Group

 

Emily Atkins is president of Emily Atkins Group and was editor of Inside Logistics from 2002 to 2024. She has lived and worked around the world as a journalist and writer for hire, with experience in several sectors besides supply chain, including automotive, insurance and waste management. Based in Southern Ontario, when she’s not researching or writing a story she can be found on her bike, in a kayak, singing in the band or at the wheel of her race car. LinkedIn: https://www.linkedin.com/in/emilyatkinsgroup/