Small-business owner faces fees of at least $30K due to delays after shipping container flagged for inspection
Global shipping congestion is leading to lack of available space at federally approved examination facilities
A small-business owner could be on the hook for tens of thousands of dollars in fees after her container was flagged for inspection by the Canada Border Services Agency amid international shipping congestion.
Xiao Jing He, from Burnaby, B.C., is hoping to start a construction management company in the Lower Mainland. She says she booked a shipping container to transport all her supplies from China — the first container she'd ever ordered for her small business.
When the container arrived at the DeltaPort terminal in Delta, B.C., on Oct. 23, Xiao says it was flagged by the CBSA for random inspection, which required that it be transferred to a specialized marine container examination facility.
However, there is no room at any of the specialized warehouses in the Lower Mainland. The soonest day Xiao's container can be booked in is Dec. 6, she says.
While the container sits at the terminal, it's being hit with daily fees from both the port and the shipping service, Mediterranean Shipping Company (MSC), which are estimated to total more than $30,000 by the time the container is finally moved on Dec. 6.
At this point, it's unclear how high the final bill will climb.
"Six months of hard work, years of saving, and the dream to live a better life scattered because of this random inspection," said Xiao.
"After everything is said and done, we might end up with a bill that will take years to pay."
She says the fees will kill her business before it even gets off the ground.
"I feel helpless. I don't know what to do. I don't know who I can turn to … I feel like I got punished by being unlucky."
Both DeltaPort and MSC charge daily fees after a specified number of free days.
Their base fees start at $149.20 Cdn and $115 US per day, respectively, then continue to grow if delays continue. If the empty container isn't returned to MSC within a certain time period, the company adds a further $5,000 US late fee.
There will also likely be extra daily fees charged by MSC following examination until the container is returned.
Moreover, as well as being responsible for booking the inspection facility, Xiao must also pay for her container to be transferred there and for the cargo to be unloaded and reloaded. The CBSA covers the cost of the inspection.
Though the international shipping industry is a complex system, the cause of the backlog is quite simple, according to the Retail Council of Canada.
Once the pandemic hit, much of the world came to a halt. CEO Diane Brisebois says factories closed, ports shuttered and transportation companies struggled to find staff.
At the same time, Canadians had extra cash in their pockets and began to increase their online shopping habits.
"It's the whole issue of supply and demand," said Brisebois. "All of us are shopping and there are just not enough containers, not enough ships, not enough trucks."
Due to the demand, shipping costs have also risen, in some cases by 400 per cent. Xiao says it cost her $20,000 to ship her single container from China.
"The supply chain issue is probably the most unwelcome news for small businesses," said Brisebois.
Based on discussions with industry, she believes the international shipping traffic jam won't clear until at least December 2022.
'Our system is so broken'
The CBSA admits that global supply chain congestion has resulted in delays transporting containers to warehouse facilities.
Once a container has arrived, it says it is committed to completing the inspection within one or two days.
"Although sensitive to the current operational impacts and disruptions, the requirements to fulfil the CBSA's mandated marine container screening, examination processing, and other government department and international commercial agreements remain," said a spokesperson in a statement.
The CBSA says that, ultimately, the cost levied on importers by the shipping industry is outside its authority.
"However, the agency is committed to improving the examination process and exploring potential efficiencies through commitments to work collaboratively with industry associations and committees," it said.
Though it may be too late for anything to be done in Xiao's case, she hopes the CBSA recognizes the ever-growing financial impact of its inspection wait times.
She says the border agency should increase warehouse capacity during the shipping backlog to avoid the delays.
"Why do we as a small business need to pay for all that because our infrastructure is so left behind?" she asked.
"Our system is so broken. It couldn't handle the surge of the containers."