'It's a nightmare': B.C. floods create supply chain problems for Alberta food manufacturers
Highway and rail closures are limiting companies’ ability to import and export
Alberta food manufacturers are scrambling to secure backup suppliers after record-breaking rain and flooding in B.C. closed highways and cut off rail access to Canada's biggest port.
Business owners say the closures are compounding existing supply chain disruptions and could make it harder for consumers to find some products in stores.
"It's a nightmare — that's the only way I can describe it," Kinnikinnick Foods CEO Jerry Bigam told CBC News on Wednesday.
The Edmonton company, which produces gluten-free baked goods, waited weeks for a container of cocoa to arrive at the clogged Vancouver port. Though it was finally unloaded on Tuesday night, the cocoa will sit in a warehouse until rail service to and from the port resumes.
"We are chasing around North America trying to find other suppliers — at much more expensive rates — but these relationships are not easy to develop in the short-term," Bigam said.
The company is suspending production on products that require cocoa and suspending product shipments to retailers in B.C.
Gord DeJong, vice-president of Siwin Foods, which makes prepared foods, is in a similar position.
"We had a load that was to leave here yesterday, that we export to Japan, and obviously that's not going anywhere any time soon," he said.
The company has put five other shipments to Vancouver on hold and is having trouble importing ingredients from B.C.
The food production industry is not the only one affected by transportation route closures, but it does represent a large portion of interprovincial exports between the two provinces.
A 2019 report, based on Statistics Canada data, showed that food and non-alcoholic beverages were the second-most valuable export from Alberta to B.C., after refined petroleum products.
Alberta companies that find ways to send their products to the Lower Mainland may pay a premium to do so.
Marvin Nakonechny, the CEO of Progressive Foods, which sells quick-cooking barley products, said he paid two and a half times more to send a large order to Richmond by air instead of by truck on Tuesday.
Nakonechny and other business leaders predict that if closures persist, consumers in Alberta will start to see empty shelves in stores soon.
"Eventually it's going to really hurt supply chains," he said.
Major problems, minor delays
For some companies, the disruption is disastrous — Bigam compares the transportation problems to those that followed 9/11 — but for others the hurdles are smaller.
Colin Ruttle, vice-president and general manager of Wow Factor Desserts in Sherwood Park, said the company has only suspended one order to the Lower Mainland. Luckily, one of their B.C. suppliers had enough ingredients for them in a local warehouse, he said.
Sherwood Park's Confetti Sweets, which uses local ingredients for its cookies, does not have import issues but owner Kathy Leskow said contract packaging problems due to a lack of trucks will result in short delays.
Past planning has helped Nisku's Aliya's Foods meet some of the supply challenges.
The company, which produces packaged Indian dishes under the Chef Bombay brand, imports chicken and cardboard packaging through B.C. before exporting 85 per cent of its products to the U.S.
President Noorudin Jiwani said the company pro-actively comes up with solutions to hypothetical disasters every year. Three years ago, staff made a plan if their chicken supplies ever dried up.
"That went into action almost immediately on Monday," he said.
Though many companies are searching for alternate suppliers, changing ingredients can be risky in the food business, said Gord DeJong of Siwin Foods, which relies on a spice blending company in Vancouver.
"Consistency is extremely important," he said.