Note: Like we saw in 2020, 2021’s holiday supply chain and delivery systems are already showing signs of being stretched beyond the limit of possibility. This means it’s even more important to be on top of your inventory this holiday season, as well as keep the lines of communication with your customers open, honest, and transparent. Square’s inventory management and marketing tools can keep you prepared. Before your holiday presents can get under your tree this season, they have to pass through the gauntlet of the worst “traffic jam” in modern supply chain history.
Canada’s Minister of Finance, Chrystia Freeland, is “concerned about the challenges facing global supply chains” and is “watching Canada’s ports closely”. According to PricewaterhouseCoopers (PWC), 53% of Canadians expect this year’s holiday spending to be affected by the ongoing global pandemic. PwC still expects a rather significant jump in holiday spending but states it still won’t return to pre-pandemic levels.
Get started with Square Gift Cards.
Pay no monthly subscription or redemption fees for gift cards.
But before getting ahead of things, and maybe it’s obvious – retailers can’t make these predicted sales without the goods to sell. And that’s where the issues lie this season. Record numbers of shipping containers are still on ships awaiting port entry in the United States and Canada.
Adding to the dismay is a holiday season right around the corner, which will only add to the current intensely congested shipping traffic. Retailers aren’t just in competition with one another for sales – they’re in competition for cargo space, too. Freight prices have soared even as shipments lag or worse, never arrive.
In September, the Globe and Mail reported Canada also set records for the number of empty shipping containers sent back to Asia, when normal practice – after unloading the imports – is to refill the containers with Canadian goods for export.
Daniel Dagenais, Vice President of Operations at the Port of Montreal, says Canada’s ports “are not going through the same type of ordeal” as other countries, such as the United States.
What do holiday supply chain issues mean for retail sellers?
Covid outbreaks across the supply chain, from ports to factories, have caused a reduction in shipping abilities – not the least of which occurred in 2020 when capacity was dropped to zero amid shutdowns, closures, and mandatory stay-at-home orders.
While the United States faces insufficient port capabilities to handle the traffic jam and Canadian supply chains are feeling the pressure, the problems are not one and the same. For instance, the Port of Vancouver already operates 24/7 and doesn’t face the same types of labour issues as its counterparts in the United States. So, what is the problem in Canada?
According to the Chamber of Shipping President, Robert Lewis-Manning, it’s land space. There’s not enough room to move the containers out of the port terminals to Canadian warehouses to unpack and place the goods on trucks.
For retailers, these holiday supply chain issues could mean rough waters ahead. Bare shelves, the likes of which 2020 brought to the forefront, were child’s play. It could be a bleak holiday season.
Since your inventory might be lower due to this container crunch, now is the time to put Square Marketing to the test and sell gift cards to customers, new and old alike. Consider offering discounts on future purchases, as well, because – passing on some savings to your customers now will likely benefit you tenfold in the long run.
Learn More About the Future of Retail in Canada
If this indicates what the future may hold for Canadian retail, what can you do to help your business survive? Read our guide, The Future of Retail in Canada 2021, to learn more.