The head of Ottawa-based Lee Valley Tools Ltd. says the company is facing unprecedented backlogs as international shipping costs mount and global shipping delays increase. The video needs upgrading, but this fails to load. I apologize.
Tap here to see more videos from our team. Try refreshing your browser, or to take a container from Asia that used to cost $34,000 now costs $7,000 unless you re Home Depot and can afford to charter a ship, Chief Executive Robin Lee said in an interview. I don't think the public understands how much of what they buy is comprised of freight. Meanwhile, shortages for finished materials, such as magnesium, are slowing production of raw goods, causing further delays and price increases. Lee said that the high-grade Baltic birch plywood used in some Lee Valley products now costs twice what it did a year ago. The family-owned firm, famous in Canada for its high-end woodworking tools, kitchen gadgets and gardening accessories, has gone so far as to warn customers to temper their holiday expectations.
The lead time for some products was longer than one year, but not all of our orders are accepted, Lee wrote in an email to customers. The retailer is launching its Christmas catalog uncomfortably early and customers can count on many prices increasing, he wrote. Right now he expects those increases to be between 5 per cent and 9 per cent. Employment costs are also rising. Since its beginnings in 1978 as a mail order company created by Lee's parents Leonard and Lorraine Lee, Lee Valley has maintained a pay slope in which the lowest-paid worker doesn t earn more than twelve times the wage of the highest paid worker. Despite this, the company faces labour shortages and is raising salaries to retain workers and will offer flexible hours. There is a shortage of machinists, in particular, as many new immigrants retired during the Pandemic and the talent pool of older immigrants shrank, he said. We don t know how good we had it two years ago with the availability of goods and services. It is not like one tennis ball is going through a snake, it is like a snake is going to be eating tennis balls for another 18 months.