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Panic-buying in BC reveals weaknesses in our supply chain

Flooding in BC has shown us how brittle our supply chains really are.

Recent floods have forced closure of transportation routes and raised supply chain issues across Canada putting residents in a panic. 

At the start of the COVID-19 pandemic, we saw people panic buying and hoarding. Toilet paper disappeared from store shelves and opportunists even tried to re-sell the rolls at ridiculous prices. We now see that there is no shortage of toilet paper. Store shelves have restocked and there are even sales to buy them after all. 

Two years later, just when we thought supply chains were restabilizing, BC was hit with a ‘once in a lifetime’ rainfall that caused flooding and mudslides. The flooding and mudslides collapsed highways and washed out railroads. Major routes connecting the lower mainland and the interior were cut off. This left truck drivers stranded, essentially isolating the Port of Vancouver and delaying goods from entering or leaving the Port. Goods unloaded from the Port of Vancouver had to wait to be distributed. The possibility of supply issues put people in panic buying mode again and grocery store shelves started to empty.  

On November 17, 2021, BC authorities declared a state of emergency and asked people not to hoard food and supply. Conserving supply was critical while officials found different ways to transport people and goods. 

Save-On-Foods asked people not to panic buy. Chief executive Darrell Jones said in a video posted on Twitter, “We understand that these are very uncertain times, and stressful times, and are asking our customers to maintain normal shopping habits.”  

And Galen Weston, president of Loblaw Companies Ltd, stated in an earnings call that he suspects the BC floods will have some kind of incremented disruption but only for a limited time. 

Companies plan their supplies months ahead and can handle temporary delays and shortages. But they cannot handle unreasonable demand like panic buying. Panic buying creates the biggest short-term risk to supply chains. When people fear a supply shortage, they unreasonably buy more than what they can use before the goods expire, causing hoarding and food waste. This unexpected high demand often contributes more to shortages than supply interruptions. 

The floods created transportation disasters no one expected but there are still opportunities for food supply. Here are some examples for egg, poultry, beef, and milk.  

According to BC Egg Communications Director, Amanda Brittain, quotas for affected farmers could be passed on to other farmers who can ask BC Egg to produce more eggs than they were previously allowed. Chicken quotas may also be adjusted, and BC retailers may also receive chicken from other provinces if the floods cause a shortage in the market. Beef continues to be transported by truck, which is considered an essential service. If that is not possible, the meat can be flown in or driven through the United States and back to Vancouver. If there happens to be a shortage of milk, processors can divert milk for yogurt, cheese, and ice cream to storage shelves as drinking milk.  

UBC sauder school of business professor of Food and resource economics, Richard Barichello, called the provinces food supply chain “remarkably resilient for a variety of foods.” 

There may be temporary price increases and consumers may not get the same amount of selection, but supply will continue.  

Now in January, just months after the floods, the shelves at grocery stores remain stocked, which is evidence that our local food supply chain can handle temporary shortages. 

Professor Johnny Rungtusanatham, Canada research chair in supply management at Youth University’s Schulich School of Business in Toronto, said there was some talk about when supply chains would return to normal and had estimated this to be around ”mid-summer in 2023 at the very earliest to probably 2024” But it is not an exact science, as ”there are many things we don’t control,” he said. ”I would be foolish to try and tell you that we have a rosy picture,” he continued. ”All I can say is that we’re all going to have to exercise a little more patience.” 

“When it comes to supply chains I think patience is the word of the day,” Minister of Public Safety Mike Farnsworth said.  

“So there are challenges but there are also options, so we would urge people to recognize this and remember patience and that there are lots of supplies.” 

Cover Image: Province of British Columbia

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