As always, our in-house expert on all things finance and economy, Paul Micucci, is joining me to talk about logistics in Canada. In this episode, we talk about how the cost of shipping has increased by 120% in the past 6 weeks, and why this is happening.
00:01:19.800So the major manufacturer, and that's because their mass production capabilities,
00:01:25.100their lower cost production they've got steel on hand they don't have great steel but quite frankly
00:01:30.680you don't need great steel for shipping containers so it works perfectly into their business model
00:01:36.800or their production model for china so most of your most of your containers are coming from china
00:01:41.240so when you say you know uh shipments have gone up 120 percent coming from uh asia into the west
00:01:50.000coast of canada that equates to about sixty two hundred dollars for a container right so you
00:01:56.400figure 120 increase up to sixty uh six thousand two hundred dollars is pretty significant when
00:02:03.420you look at you know that amazon thing you're getting or whatever you're you're buying that's
00:02:09.060coming from asia that's a that means that cost is almost doubling that's incredible so if i ordered
00:02:15.460something now shipping on it could be as much as or even maybe more than the actual item that
00:02:20.640i'm purchasing just had it the other day i ordered something for five hundred dollars it was coming
00:02:24.400from asia got the shipping cost they came in and gave it to me to sign i'm like what do you mean
00:02:29.180this is twelve hundred dollars i'm like shipping is higher than the the item yeah it's higher than
00:02:33.760the item so again you know that said to me forget it i'm not doing it and then i asked the question
00:02:39.340i'm saying i go why is shipping escalating so crazy high like why and these are shipping
00:02:44.600containers i'm talking about why is it started to to mess up all of our trade and of course the
00:02:51.880first thing came more tariffs well yeah and in fact you're right uh businesses hate uncertainty
00:02:58.180more than they actually hate the tariffs i think because what we're seeing is a massive influx
00:03:04.800of pre-tariff importing and exporting yeah remember our gdp mike so we did a gdp for
00:03:12.400for listeners if you have a chance go and listen to our gdp shows but we are actually we have some
00:03:17.600graphs there that show gdp before the first quarter of 2026 was still growing yeah you know
00:03:24.560month over month we had two three four percent growth in gdp all of a sudden the tariffs come
00:03:30.720uh q1 you see the impacts boom we went below the line yeah we went to technical recession which
00:03:37.120you know we also did a show about um but it's a very interesting now we're seeing the cause and
00:03:43.200effect so we're seeing the cause which was tariffs and the tariff shows now we're seeing the effect
00:03:47.920and we're seeing these shipping prices escalate people like well how like why would a tariff
00:03:52.640cause well it caused all this dysfunctional trade so 100 so now you've got warehouses
00:03:59.840Because right now, capacity is really at the burst point.
00:04:05.900Rail capacity, trucking capacity, warehouse availability is almost non-existent.
00:04:13.300It's very difficult to get a container right now.
00:04:15.640In fact, I think it's near damn impossible to purchase a container anywhere in Canada right now.
00:04:20.640And over the last couple of years, three years specifically, and more so in the last eight months, illegal container yards, illegal truck yards throughout Ontario are being shut down every day just because the capacity and the expense to house these vehicles to be part of this cloud or bubble, if you will, of shipping is unmanageable.
00:04:48.000We're seeing it burst, to tell you the truth.
00:04:49.460but you think about it for those of you and just a very uh basic example so um end of 2025
00:04:56.460you were seeing a flurry of activity right we were shipping things so we were trying to ship
00:05:02.520things as fast as possible as we could anywhere so good whatever we were making things we were
00:05:08.600manufacturing auto parts we were double time triple time that's why the gdp was so high because
00:05:15.040quite frankly it was showing that it was showing that we were preparing for doom we saw the tariffs
00:05:20.560coming and we were starting to get things moving as quickly as possible and getting them out of
00:05:24.160here the problem is how do they get out of here they get out of here in shipping containers right
00:05:28.960so these chinese shipping containers that had landed in country were being filled up and trucked
00:05:34.560over now what had happened was we were still trying to bring things in we're still trying to
00:05:40.160bring materials in as fast as we could it wasn't working the supply chain was breaking and the
00:05:45.920supply management chain was starting to become uh offset by this rapid exporting of goods to try to
00:05:52.720get them out of the country before they got hit by tariffs so we shorted on we we basically shorted
00:05:58.720containers and so now these containers so think about it so now china who's getting hit with these
00:06:04.880tariffs right so they're anything there's you know doing with the u.s they're getting hit with
00:06:09.600tariffs china is then looking and saying okay uh canada may not be a good bet u.s definitely not a
00:06:16.460good bet i'm going to start sending these containers to australia and i'm going to send
00:06:21.440them to middle east and i'm going to send them so they start redirecting containers of goods
00:06:26.300so these containers are shifting off all of a sudden we don't have right shipping containers
00:06:33.120See what happens, and we should explain this, it comes off the shipping container onto the truck, from the truck to the warehouse, the container is then emptied and put back into circulation.