Edmonton-based wholesalers experiencing shipping delays, rising costs due to Red Sea attacks

March 5, 2024 Canuck

Longer transit times, the risk of receiving expired goods and ballooning freight charges are some of the challenges facing Brothers Choice Foods, a South Asian wholesale food manufacturer in Edmonton.

Accounts manager Sunny Khaira is seeing higher costs for imported South Asian goods, which are trickling down to business owners and then to the customer, as a result of ongoing shipping disruptions caused by recent attacks launched by Yemen’s Houthi militia group on international ships in the Red Sea.

“[Businesses] have to put that product up by $1, or $2, or $5, whatever it may be, which causes the next customer to be a little more frustrated when they’re buying the product,” Khaira told CBC News.

The Houthis have wreaked havoc on international shipping traffic since November by carrying out attacks on merchant ships in the Red Sea — a key transit route from the Indian Ocean through the Suez Canal to the Western world.

About 15 per cent of all global trade passes through the Suez Canal via the Red Sea, including 30 per cent of the world’s container shipments, according to the World Economic Forum.

WATCH | How the Red Sea shipping crisis could raise the cost of almost everything:

How the Red Sea shipping crisis could raise the cost of almost everything | About That

3 months ago

Duration 8:24

Recent attacks on ships launched by Yemen’s Houthi militia group have threatened one of the world’s most crucial trade routes — the Suez Canal. As several shipping companies divert their vessels, About That producer Lauren Bird explains the economic ramifications of it all.

The attacks have forced ships to take a longer path around the coast of Africa, adding thousands of kilometres — and about 10 days worth of fuel — to the trip.

“Transportation costs are definitely going to go up,” said Joong Son, an expert in supply chain management from MacEwan University.

Edmonton businesses haven’t seen the worst of the conflict’s impact yet, but it will still slow down global transportation significantly and affect shipments throughout North America, Son said.

“When it gets to us, it will actually hit us with huge shipping costs plus very slow deliveries,” he said.

Local businesses are still feeling some effect, however.

Colourful spice boxes lined up on shelves. — Brothers Choice Foods, an Edmonton-based South Asian wholesale food manufacturer, says it’s seeing higher costs for imported goods. (Logan Turner/CBC)

Foods and special goods stored in 12-metre-long shipping containers usually arrive in Edmonton from Vancouver every month to 45 days, said Khaira. Now, shipments are taking almost twice as long.

In January, the delays disrupted celebrations of Lohri, a Punjabi festival, he said.

“[People] need certain kinds of foods and snacks to be able to celebrate like they would back at home. But because our containers were delayed, we had to miss those festivals entirely,” Khaira said.

Westbrand Industries Ltd., an Edmonton-based wholesaler in bolts, nuts, and rods, has experienced skyrocketing import prices from shipping containers since the new year, said Darren Baumgardner, the company’s managing partner, while on CBC Radio’s Edmonton AM.

LISTEN | Why an Edmonton-based wholesale company is monitoring conflict on the Red Sea:

Right now, a lot of Canadian companies import out of China and Taiwan, Baumgardner said, adding that the Taiwan Strait has been a “very sensitive area” for his company. But more importers are trying to diversify their supply chain to India.

“It’s difficult to look ahead but instability in the world is something we’re watching all the time,” he said.

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