The trade industry has dealt with a lot of challenges, and that’s especially true when it comes to Canadian importers.

They’ve been dealing with a lot of major challenges, from logistics to hardware issues, and beyond. The reason is simple: ever since the pandemic, the entire world has been dealing with a semiconductor surge that made it more and more challenges for businesses to not only grow, but also fulfill current orders in an appropriate manner and keep up with demand.

Read on to learn more about the chip shortage’s impact on Canadian importers.

How affected are Canadian importers and businesses?

Unfortunately, many importers (and businesses at large) in Canada are gravely affected by this issue. They’re taking a sales hit that varies from 20% and it can even go well above that.

The chip shortage is severe and since a lot of companies need these chips and the demand is high, it can take at least a year, if not more for things to get back to normal. 

chip shortage imports canada

Why did the chip shortage happen?

Ever since the pandemic started, the demand for electronics has exploded. In theory, people stayed at home more than they did before and they started needing more and more gadgets (and electronics in general.) Some chip factories entered lockdown and eventually closed due to the pandemic, so now we’re dealing with a situation where Canadian importers and businesses can’t fulfill the demand. 

It’s unfortunate to see that the demand can’t be fulfilled, but the problem is that something like this ends up damaging businesses’ bottom lines, and it becomes increasingly problematic across the entire supply chain. It affects shipping costs, since there’s higher demand, and some Canadian trade companies have been required to increase their prices quite a bit to balance the books, due to this issue.

The reality is, the chip shortage is one of those things that can end up solving the problems, while pushing the boundaries in an empowering and clever manner. 

Are lockdowns influencing the situation?

The short answer? Unfortunately, yes. Due to lockdowns, many shippers and Canadian importers have experienced work slowdowns and a reduced amount of capacity. As a result, they have to increase prices in order to cut any losses.

Yes, the global semiconductor shortage is COVID's fault. No, it won't end any time soon » Stuff

Further to this, supply chains are affected because they have fewer items to produce and the costs per unit increase because of that. Adding in a variety of new solutions like this is definitely becoming a major issue, and it will only become more challenging in the long term, which is something to keep in mind.

Can the chip shortage be solved?

Until the pandemic is over and the supply of chips increases, there’s not a whole lot you can do here.

The truth is that the chip shortage is estimated to last throughout 2022, and possibly even beyond that time. Canadian importers need to implement the right systems to not only improve processes, but also streamline workflows, and become more efficient in other ways. It will take some trial and error to get past the chip shortage, but creating a new supply chain plan and adjusting the current systems is pretty much mandatory at this point!

Staying plugged in to the issues that impact Canadian (and global) trade is an essential part of navigating imports. Working with a trusted customs broker is a surefire way to help improve efficiencies at the operational level and stay informed on world trade matters. To start the conversation with a customs broker, click here.