Small-business owner faces fees of at least $30K due to delays after shipping container flagged for inspection
A small-business owner could be on the hook for tens of thousands of dollars in fees after her container was flagged for┬аinspection by the Canada┬аBorder Services Agency amid┬аinternational shipping congestion.
Xiao Jing He, from Burnaby, B.C.,┬аis 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 тАФ the first container she’d ever ordered for her small business.
When the container arrived at the DeltaPort┬аterminal in Delta, B.C., on Oct. 23, Xiao says it was flagged by the CBSA for random inspection,┬аwhich required that it be transferred to a specialized marine container examination facility.┬а
However, there is┬аno room at any of the specialized warehouses in the Lower Mainland. The soonest day Xiao’s container┬аcan be booked in is Dec.┬а6, 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┬аcontainer 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┬аwill 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 тАж┬аI feel like I got punished by being unlucky.”
Fees breakdown
Both DeltaPort and MSC charge daily fees after a specified number of free days.
Their base fees start at $149.20 Cdn and $115┬аUS┬аper 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.┬а
Moreover, as well as being responsible for booking the inspection facility, Xiao must also pay for her container to be transferred there and┬аfor the cargo to be unloaded and reloaded.┬аThe CBSA┬аcovers the cost of the inspection.
Shipping backlogs
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.┬а
“It’s the whole issue of supply and demand,”┬аsaid 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,┬аin some cases by 400 per cent. Xiao says it cost her $20,000 to ship her┬аsingle 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┬аthat┬аglobal 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┬аthe 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┬аsays that, ultimately, the cost levied on importers by the shipping industry is┬аoutside 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┬аcase, she┬аhopes 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.┬а
“Our system is so broken.┬аIt couldn’t handle the surge of the containers.”
