PortandTerminal.com, April 14, 2020
Newfoundland and Labrador Premier is warning that the island has just a five-day supply of food and that losing Oceanex shipping line’s services could lead to critical shortages.
ST. JOHNS, NEWFOUNDLAND – Increasingly, there are growing concerns around the world that the supply chain is straining under the pandemic, breaking down in places and creating the potential for food shortages.
In Canada, the premier of Newfound and Labrador is warning that the island has just a five-day supply of food left before it runs out of key staples. He is asking the federal government to step in and financially shore up a key shipping line, Oceanex, that supplies them.
Newfoundland and Labrador
Newfoundland, Canada’s easternmost province, relies upon maritime transport to supply it with the food and medicine its 537,000 thousand people need to live. The province is made up of two parts -Newfoundland Island where the bulk of the population lives, and Labrador which is a remote, sparsely populated area attached to the mainland.
The Oceanex shipping line is a primary source of freight services for the island of Newfoundland, including food and medicine. Oceanex claims that it delivers 50 per cent of all freight to Newfoundland — and 75 per cent of all goods to the more heavily populated St. John’s area of the province.
Oceanex Inc. — which runs weekly trips from Montreal and Halifax to St. John’s — says it is losing millions a week due to a drop in volumes caused by the COVID-19 pandemic.
“We just can’t continue,” said Sid Hynes, the company’s executive chairman in an interview with CBC Canada. “It’s costing us $5 million a week to operate and we are about $2 million short.”
Hynes said the company almost certainly will have to cancel one of its weekly trips from Montreal, tie up that boat and lay people off.
The company is the major supplier for Costco, Walmart and other major grocery stores in Newfoundland and Labrador and it delivers a significant amount of medicine and medical supplies to the province.
“For the many staples that we have in our life right now, Oceanex is the supplier,”Dwight Ball, Premier of Newfoundland and Labrador
One of the big risks involved in trying to supply the island without Oceanex’s services has to do with the availability of protein and fresh produce. Newfoundland and Labrador has a domestic dairy and poultry supply. But fresh vegetables, beef and pork are largely brought in by shipping container or truck — and Oceanex is a core part of that delivery system.
“For the many staples that we have in our life right now, Oceanex is the supplier,” Premier Ball told CBC News. “So we’re literally less than a week away to running out of food that we eat and are part of our lifestyle here in our province.”
The second shipping line that supplies the province is Marine Atlantic. They have said that they could pick up the slack were Oceanex to reduce its calls on the Port of St. John’s, but that would take time to sort out.
Oceanex has asked for a subsidy from the government to offset its $2 million weekly losses until at least September. According to CBC, Federal government officials were said to have spent the weekend working on the file.
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