QUEBEC INC.

Walmart abandons plan to open Quebec fulfilment centre, will instead upgrade stores

Walmart Canada says it is abandoning plans to open a new fulfilment centre in Quebec.

The U.S. retail giant was due to spend $100 million on the facility slated for the Montreal-area municipality of Vaudreuil-Dorion. It was expected to open early this year.

Walmart Canada spokesperson Sarah Kennedy confirmed the change of plans in an emailed statement, but d toronto id not say what prompted the company's decision.

Kennedy says the company will instead focus its attention on accelerating upgrades to its network of stores, including locations in Quebec.

She says Walmart has plans to invest about $100 million to upgrade eight stores in Quebec by the end of the company's next fiscal year. 

Walmart has allocated more than $120 million toward store upgrades in the province over the last two years.

This report by The Canadian Press was first published Jan. 4, 2024.

Gildan activists turn up heat on board for

shareholder vote

Stephanie Hughes, Bloomberg News

Jan 4, 2024

Canadian investment firm Turtle Creek Asset Management Inc. is backing another shareholder’s push to change the board of Gildan Activewear Inc., saying the company needs a “swift resolution” to the battle over who should be CEO. 

Turtle Creek, one of Gildan’s largest investors, plans to vote for a slate of five new directors proposed last week by Los Angeles-based money manager Browning West LP. 

The two firms, along with several others including Jarislowsky Fraser Ltd., are angry that the Gildan board sacked longtime Chief Executive Officer Glenn Chamandy in December. Browning West says it plans to force a shareholder meeting to vote on a new board.

“The board’s reckless and ill-conceived termination of CEO Glenn Chamandy alienated long-time shareholders and exposed Gildan to significant risks including a loss of essential leadership, damaged employee morale, and threatened key customer relationships,” Turtle Creek said in a statement Thursday.

“We cannot recall a situation where shareholder objection to a board’s decision was so wide and so swift.” Gildan shares have fallen 13 per cent since Chamandy was ousted.

New York-based Oakcliff Capital followed with its own letter to Gildan, pledging to vote for Browning West’s slate of directors. The firm said the sale of shares by some other members of Gildan’s management team pointed to a lack of confidence.

Chamandy “should be reinstated as CEO immediately,” Oakcliff said.

These firms’ latest missives mark another escalation in the boardroom brawl at Gildan, a Montreal-based clothing manufacturer that owns the American Apparel brand. It may be months before the matter comes to a head — Browning West may be able to force a shareholder meeting, but the board has some discretion over the timing.

Gildan has appointed a new CEO, Vince Tyra, to take over on Feb. 12.

“Each member of the board should carefully consider how they conduct themselves in this matter. Investors across North America are watching closely,” said Turtle Creek, which owned more than 3 per cent of Gildan shares as of Sept. 30, according to data compiled by Bloomberg. Browning West says it owns about 5 per cent.

LA REVUE GAUCHE - Left Comment: Search results for GILDAN 

RENT IS INFLATIONARY

Rentals.ca, StatCan to launch new rental 

housing market index

Jordan Fleguel, BNN Bloomberg

Jan 4, 2024

Statistics Canada and housing site Rentals.ca are teaming up to create a new rental housing market index.

Rentals.ca announced the data sharing partnership with the federal agency on Thursday.

In a press release, the site said the soon-to-be-released Rental Market Industry Index will track trends in the rental housing industry across Canada with a goal of helping landlords and tenants make “informed decisions.”

Rentals.ca will provide StatCan with rental listing data, while the agency will be “directly responsible for the analysis, aggregation, and development” of the index, the release said.

The index is also intended to help policymakers at all levels of government better understand how to address the housing needs of Canadians, Rentals.ca said.

“Through this new partnership, we’re able to get data into the hands of institutions,” Max Steinman, CEO of Rentals.ca’s parent company Rentsync, said in the release.

Steinman said the index will allow “policymakers, developers, and the Canadian public as a whole to make more informed decisions to help tackle the rental housing supply crisis.”

RENTS AT RECORD HIGHS

Rentals.ca, in partnership with research firm Urbanation, publishes a monthly rent report that examines average asking rent prices across Canada and how they’ve changed over time.

Their latest report found that asking rents for all residential property types in Canada averaged $2,174 in November, slightly below the record high of $2,178 set in October.

Rentals.ca said their new partnership with Statistics Canada represents a “significant step towards enhancing transparency and understanding” in Canada’s rental housing market.

• CANADA
  

• Here are some of the big union 

• talks set for 2024

Jordan Fleguel, BNN Bloomberg

Jan 4, 2024

Labour leaders say they plan to keep the pressure up in 2024 with potentially “tough” contract negotiations on the horizon in industries such as transportation, health-care and the public sector.

High-profile strikes and labour talks made headlines throughout 2023. Thousands of autoworkers negotiated major wage gains with Detroit’s Big Three carmakers, and strikes at B.C. ports and the St. Lawrence Seaway brought ships to a halt as workers demanded higher wages and better job protections.

Labour relations expert John Peters said high-profile labour negotiations and strikes usually come in “big waves,” as union wins spur similar demands from others.

“Unions are all watching what each other are doing and they're seeing their successes,” Peters, an associate professor in business administration at Memorial University, told BNNBloomberg.ca in an interview.

He expects 2023’s labour trends to continue next year. 

“We have seen bigger wins, both in terms of wages and better working conditions,” he said. “I think that provides context for unions taking and using strikes more frequently than they have in the past and getting more courage to do so.”

Lana Payne, president of Unifor, echoed Peters’ comments, calling 2023 a “renaissance” year for workers “understanding their power” and leveraging it for themselves and their families.

“These moments don't come around all the time,” Payne told BNNBloomberg.ca in a telephone interview.

“For us, it was making sure that we were ready to be able to do the best that we could and get the strongest agreements that we could in this moment in time, in this window.”

Payne, who heads Canada’s largest private-sector union, said she sees the labour movement’s momentum carrying through the next calendar year.

“I don't believe the window is closed yet.”

Here is a look at some of the major labour negotiations set to take place in 2024:

RAIL WORKERS

Workers at CN Rail and Via Rail have contract negotiations on the books.

“Transportation will be a big sector for us next year, in both road and rail,” Lana Payne, Unifor’s national president, told BNNBloomberg.ca in an interview this month. 

More than 5,000 CN Rail workers will head to the bargaining table next year. More than 6,000 CN yard and track maintenance workers represented by the Teamster Canada Rail Conference (TCRC) are already bargaining.

Those workers yet to enter into new contract talks are represented by Unifor, and will negotiate with the railway ahead of their contract’s expiry date on Dec. 31, 2024.

Unifor will also be bargaining with Via Rail in 2024, with some 2,400 workers’ contracts set to expire at the end of the year.

HEALTH-CARE AND EDUCATION

Around 40,000 health-care workers in Ontario represented by the Canadian Union of Public Employees (CUPE) will head to the bargaining table in 2024.

There are also signs of labour tension among public workers in New Brunswick, where the provincial government recently voted to transfer five public sector pension plans to a shared-risk system.

The change impacts school bus drivers, school administrative staff, nursing home workers, custodians and maintenance workers, and it has drawn fervent opposition from CUPE.

After the government’s vote on the policy, the union’s New Brunswick president, Stephen Drost, said “today wasn’t the end, it’s just the beginning."

“I can’t tell you exactly what’s in store, but I can tell you they’re not going to take this lying down. Stay tuned,” Drost said.

FLIGHT ATTENDANTS, PILOTS, PORT WORKERS

CUPE’s current agreement with Air Canada flight attendants expires in 2025, but bargaining is set to take place in 2024. The agreement covers approximately 10,000 workers.

Canadian Labour Congress president Bea Bruske said the negotiations will likely be challenging.

“Flight attendants, not just at Air Canada but across the board, they're not paid for boarding or passengers on and off or the safety check time, they're only actually paid when that plane pulls away from the gate,” she told BNNBloomberg.ca in an interview.

“That's going to be a huge challenge to address that particular issue, and that's going to be a really big component that could potentially shut down air travel for a period of time.”

Air Canada pilots, represented by the Air Line Pilots Association (ALPA), are also in the midst of negotiations with the airline, which have been ongoing since June.

Their decade-long collective agreement expired in September.

First Officer Charlene Hudy, ALPA’s Air Canada master executive council chair, called the expired contract “outdated.”

“The Air Canada pilots are seeking a world-class collective agreement that reflects today’s world, addressing career progression, job security, aviation safety and closing the growing wage gap between the U.S. and Canada,” Hudy said in an emailed note.

Hudy said the union’s primary goal is to reach an agreement at the bargaining table, adding that flight disruptions are never an ideal outcome for passengers or pilots.

“If talks break down, we will follow the requirements as set out by the Canada Labour Code, which will determine any timelines for labour action,” she said.

More labour action from port workers could be on the horizon in 2024 as well, as contract talks with longshore workers at the Port of Montreal stalled in December.

“CUPE will be very much engaged with that, and I think that's likely going to be a tough round of bargaining,” Bruske said.

Canada job gains miss forecast, jobless rate

steady at 5.8%

Randy Thanthong-Knight, Bloomberg

Canada’s labour market missed expectations for jobs gains, confirming a marked slowing of the economy at the end of last year.

The country added about 100 positions in December, while the unemployment rate held steady at 5.8 per cent, Statistics Canada reported Friday in Ottawa. The figures missed expectations for a gain of 15,000 positions but beat a jobless rate of 5.9 per cent, according to the median estimate in a Bloomberg survey of economists.

Canada has one of the world’s fastest rates of population growth because of high levels of immigration. But employment growth has been slower than the expansion of the labour force in recent months.

Overall, the report shows an economy in which growth is being constrained by high borrowing costs, cooling demand. That gives policymakers some room to consider lowering interest rates in the coming months, though faster wage growth may keep them from talking about easing anytime soon.

Wage growth for permanent employees accelerated to 5.7 per cent, higher than expectations for a 5.4 per cent rise, and up from 5 per cent a month earlier. That’s the strongest pace since January 2021.

The population aged 15 and older grew by 74,000 in December, on par with average monthly population growth in 2023 of 79,000. On the other hand, employment growth slowed in the second half of 2023, averaging 23,000 per month, compared with the average of 48,000 during the first six months.

As population growth outpaced job gains, the employment rate — the proportion of the working-age population who are employed — trended down over the past year. It fell 0.2 percentage points to 61.6 per cent in December, the fifth decline in the past six months, and was down 0.9 percentage points from its recent high of 62.5 per cent in January 2023.

Last year, the economy averaged about 36,000 new jobs per month, yet the unemployment rate rose 0.8 percentage points — highlighting how quickly the pool of workers is growing.

Total hours worked rose 0.4 per cent on a monthly basis in December, and were up 1.7 per cent from a year earlier. Although that points to relatively strong economic momentum at the end of 2023, it followed a 0.7 per cent month-over-month drop in November. Economists surveyed by Bloomberg expect gross domestic product to expand at a 0.4 per cent annualized rate in the fourth quarter.

This is the only jobs report before the first rate decision of this year by the Bank of Canada on Jan. 24.

All 29 forecasters in a Bloomberg survey expect the central bank to keep the overnight rate unchanged for a fourth consecutive meeting at 5 per cent, which is seen as the likely end point in this tightening cycle. Markets and economists see rate cuts by mid-2024.

The participation rate fell 0.2 percentage points to 65.4 per cent in December. That’s down from a recent peak of 65.7 per cent in June, and most of the decline was due to a drop in the youth participation rate.

Job gains were led by professional, scientific and technical services, as well as health care and social assistance. Wholesale and retail trade saw the biggest job losses, suggesting a slowdown in consumption. December is the third consecutive month where employment fell in this sector.

Regionally, employment rose in British Columbia, Nova Scotia, Saskatchewan and Newfoundland and Labrador, while it fell in Ontario and was little changed in the other provinces.

Jobs data shows gig economy growing, drivers up nearly 50%

Ben Cousins, BNN Bloomberg

More Canadians are turning to ride-sharing or food delivery apps as a source of income, according to the latest data on Canada’s job market.

Statistics Canada’s Labour Force Survey for December, released Friday, showed 135,000 Canadians between the ages of 16 and 69 provided ride-sharing services in 2023, an increase of 48.1 per cent compared to 2022.

Meanwhile, the number of people who provided delivery services through apps climbed 19.2 per cent from the previous year to 272,000 people.

“In 2023, digital platforms and apps continued to offer Canadians a convenient way of accessing personal transport and delivery services, while also making it possible for individuals to earn income by performing the associated work activities,” the report states.

A whopping 49.9 per cent of people providing app-based transportation and delivery services were located in Canada’s three biggest metropolitan regions: Toronto, Vancouver and Montreal.

New Canadians are also more likely to take up gig work, as 57.5 per cent of those who worked for either ride sharing or delivery apps were new immigrants, while 70.5 per cent of gig workers belonged to racialized groups.

Unemployment rose for most racialized

populations in 2023: StatCan

BNN Bloomberg

The unemployment rate for most of Canada’s racialized populations grew in 2023, according to Statistics Canada.

The federal agency’s December report on the country’s labour force, released Friday, looked at unemployment across different racial groups.

It noted that as of December, people belonging to racialized groups accounted for just over 30 per cent of Canada’s labour force, a sight increase from 28.5 per cent a year earlier, while unemployment went up for a number of those groups.  

“As the tightness of the labour market eased in 2023, the unemployment rate increased for most racialized groups,” the report said.

As of December, the unemployment rate for Black Canadians between the ages of 25 to 54 rose 1.6 percentage points to 8.5 per cent from the previous year, the report said.

For South Asian Canadians in the same age range, the unemployment rate rose 0.8 percentage points to 5.7 per cent.

Meanwhile, the unemployment rate for Chinese Canadians was little changed from 12 months earlier, at 5.1 per cent, StatCan said. 

 

What do the latest jobs figures mean for the

Bank of Canada?

Jordan Fleguel, BNN Bloomberg

The Canadian economy added a meager 100 jobs in December and economists say weakening in the labour market increases the chance of a Bank of Canada interest rate cut in the second quarter of this year.

“The softening employment numbers and the rise in unemployment that we've seen over the past six or 12 months is moving things in the way of a cut,” Brendon Bernard, senior economist with jobs site Indeed, said in a Friday interview.

He made the comment after Statistics Canada released what he called “weak” employment numbers for the previous month.

Statistics Canada’s Labour Force Survey found that the country’s unemployment rate held steady at 5.8 per cent, slightly below the expected 5.9 per cent, according to the median estimate in a Bloomberg survey of economists. 

Meanwhile, the 100 jobs added were well off an expected gain of 15,000, following the addition of 25,000 new jobs in November.

Bernard said the numbers reinforce the expectation that the Bank of Canada will cut rates at their April 10 decision.

Employment numbers are among the many economic data sources the central bank is watching for signs that its rate tightening cycle, aimed at bringing down inflation, is successfully slowing the economy.

Bernard noted that Canada would need monthly job growth in the tens of thousands to keep up with population growth.

“To come in basically flat, it’s not a great sign,” Bernard said. “It didn't show up in the unemployment rate, which held steady, but that just reflects the fact that the labour force participation declined, so taking that all into account, the share of the population with a job declined.”

WAGE GROWTH STILL HOT

Tu Nguyen, economist with accounting and consultancy firm RSM Canada, said last month’s job figures make a rate cut in the second quarter of this year “imminent to avoid a downturn.”

Nguyen and Bernard pointed to strong wage growth of 5.4 per cent as a factor that may complicate the Bank of Canada’s decision, as the central bank may interpret that number as a sign of sticky inflation.

“That wage growth is maybe the fly in the ointment there,” Bernard said.

“But I think we're getting a sense that these wage growth metrics are really lagging developments elsewhere in the economy that probably follow the inflation numbers rather than lead them.”

Debt levels mean Canada’s recovery could lag other advanced economies: report

Ben Cousins, BNN Bloomberg

Jan 3, 2024

Canada’s economy is largely expected to rebound this year, but a recent report suggests Canada could fare worse than similar countries in 2024 due to high levels of household debt.

An Oxford Economics report projects interest rates will come down in late 2024 as Canada experiences a “modest recovery.” But the researchers cautioned that the bounce-back will fall below consensus projections and “worse than other advanced economies.”

“One of the reasons we think Canada is going to have a recession and the U.S. might avoid one is because we have highly indebted households that are very dependant on the housing market and the economy and those impacts are flowing through now,” Tony Stillo, Oxford Economics’ director of economics for Canada, told BNN Bloomberg in Wednesday interview.

Overall, the December report suggested that Canadians will remain reluctant to spend even as interest rates come down.

It also predicted immigration will help the labour market, but hurt the country’s housing supply.

“(Immigration) will benefit the economy,” Stillo said in the interview. “What we’re seeing is that it adds to the labour supply, but it takes a while for newcomers to fully settle into the economy, so that benefit for the economy in terms of higher actual GDP will be a few years away,”

Stillo doesn’t expect elevated immigration figures will impact home prices, as newcomers typically rent for a few years when they first arrive in the country. That means rental prices will be squeezed, but home prices shouldn’t feel the effects, he explained.

GOVERNMENT POLICY

Stillo said he expects governments will come up with smaller measures to fight economic slowdown in order to avoid stoking inflation.

“What we’re expecting to see is modest targeted measures like you’ve seen to date, whether it’s the exemption from the carbon tax for home heating fuel, the GST exemption for purpose-built rentals, the grocery rebate, things of that nature,” he said.

BUSINESS INVESTMENT

If Canada wants to get back on the right track, it needs a boost from businesses, Stillo said.

“We’ve had lacklustre business investment for some time, what we need to see is higher investment by businesses (and) government as well in terms of the infrastructure that supports growth, and then you’ll see that benefit in terms of higher productivity,” he said.

“We have to improve our capital investment per worker, per person, and then we will hopefully get that benefit in productivity and higher living standards.” 

 

Florida plan to import cheaper prescription drugs from Canada gets FDA approval

Ian Lopez, Bloomberg News

FDA headquarters in White Oak, Md. Photographer: Sarah Silbiger/Getty Images North America , Photographer: Sarah Silbiger/Getty Images

The Biden administration will allow Florida to import cheaper prescription drugs from Canada, giving the green light to a plan put in motion by the state several years ago.

The Food and Drug Administration made the decision on Florida’s plan Friday, saying that the state’s health department must likewise provide quarterly reports to the agency, including information on cost savings and potential safety and quality issues.

FDA Commissioner Robert Califf said in a statement that the agency was “committed to working with states and Indian tribes” trying to develop importation proposals.

“These proposals must demonstrate the programs would result in significant cost savings to consumers without adding risk of exposure to unsafe or ineffective drugs,” Califf said.

The FDA decision marks the latest turn in a back and forth between states and the federal government over importing cheaper drugs.

The pharmaceutical industry is already pushing back on the FDA’s announcement.

Stephen Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), called the FDA’s approval of Florida’s plan “reckless.”

“Ensuring patients have access to needed medicines is critical, but the importation of unapproved medicines, whether from Canada or elsewhere in the world, poses a serious danger to public health,” Ubl said in a statement. “Politicians need to stop getting between Americans and their health care.”

Ubl also noted that PhRMA “is considering all options for preventing this policy from harming patients.” The group had sued the FDA in 2020 over a Trump administration plan for importing Canadian drugs. The lawsuit was later dismissed.

President Joe Biden issued an executive order in July 2021 that included a call for the FDA to work with states on importing drugs from Canada.

In August 2022, however, Florida sued the FDA, claiming the agency was standing in the way of its drug importation plan.

In addition to Florida, states like Colorado, North Dakota and Vermont have laws that allow importation of drugs, according to the National Conference of State Legislatures. Over five of those states have asked the FDA for approval, the conference said.

U.S. allowing Florida to import drugs from

Canada, reviving fears of shortages

CBC
Fri, January 5, 2024 

Florida is one of a handful of states that have applied to import wholesale prescription drugs from Canada. (David Donnelly/CBC - image credit)

The U.S. Food and Drug Administration is allowing Florida to import what could amount to millions of dollars worth of prescription drugs from Canada — a move that could reignite worries about the drug supply north of the border.

Florida has estimated that purchasing prescription drugs from Canadian wholesalers to treat such conditions as HIV/AIDS, diabetes and hepatitis C could save the southern state $150 million US annually.

Marking a shift in U.S pharmaceutical policy, the FDA approved Florida's request. In a letter to the state government dated Friday, the director of the administration signed off on the proposal and said that importing medications from Canada could "significantly reduce the cost of covered products to the American consumer without posing additional risk to the public's health and safety."

The sunshine state is one of a handful that have applied for permission to import wholesale prescription drugs from Canada, meaning Friday's approval could be just the first of several.

Canada — which set up a federal regulatory agency decades ago to ensure patent drug prices are not excessive — has resisted such import plans for years.

In a media statement, federal Health Minister Mark Holland said Canada has regulations in place to protect its supply.

"I want to assure Canadians that they will continue to have access to medications they need when they need them," he said.

"Canadians can be confident that our government will continue to take all necessary measures to protect the drug supply in Canada."

Five provinces, including Quebec, allow pharmacists to prescribe Paxlovid directly to people who get sick with COVID-19. avoiding the need to see a doctor. 'It's really about getting the drug to the person as quickly as possible so they can start it and have the best possible outcome,' said Montreal pharmacist Daron Basmadjian.

The Canadian Pharmacists Association is urging Canadians not to rush out to stock up on their prescriptions in wake of the U.S. FDA's decision. (CBC/Radio-Canada)

Joel Lexchin, a retired emergency physician who studies pharmaceutical policy, said it's still not clear if Florida's plan will actually pan out.

"But if it goes ahead, then we should be worried," he said.

"Canada has 40 million people. Florida has more than half of that, so 22 million people. We can't supply Florida with the drugs that they may need without doing damage in Canada."

Lexchin said the U.S. is "attempting to use Canada to solve a relatively unique American problem.

"The U.S. government, amongst all the other OECD countries, doesn't allow price negotiations with manufacturers. So drug companies are free to set whatever prices they want. Here in Canada, we control prices so our prices for brand name drugs tend to be two and a half to three times lower than the U.S. prices."

Pharmacists' group calls for calm

Joelle Walker, vice president of public affairs for the Canadian Pharmacists Association, said the FDA's decision is "certainly not good news for Canadians" but she shares Lexchin's doubts about Florida starting bulk imports any time soon.

"Historically, we've had some pretty devastating drug shortages in Canada. And so the idea that they could import them from us is not really feasible," she said.

"I'm skeptical that it will actually come to fruition in its current form, but we want to make sure that we're diligent about reviewing it and making sure that we're not missing something."

Walker urged Canadians not to rush out to stock up on their prescriptions, which could trigger shortages.

"Don't be alarmed today. This certainly isn't happening tomorrow. This may never happen. So don't rush to your pharmacy, don't be concerned about it right now," she said.

"Hopefully, the measures that we have in place will help sort of restrict that flow from Canada to the United States."

This debate is not new. In 2019, then-U.S. president Donald Trump proposed a rule to allow wholesale bulk imports of prescription drugs, promising it would be a "game changer for American seniors."

Within months, the Canadian government blocked bulk exports of some prescription drugs to stave off the risk of shortages at home.

Health Canada issued a statement at the time saying approximately 10 to 15 per cent of drugs have been in short supply in Canada "at any given time" since 2017.

Lexchin said that while the Canadian government has brought in regulations to avoid mass exports, drug shortages — like the shortage of children's Tylenol in 2022 — can be hard to predict.

"If drugs are being made in a single plant, and there's a fire in the plant, or they discover there's contamination, that creates a shortage without any real warning," he said.

"So if we are committed to exporting large amounts of drugs, when a shortage comes up, then we may be on the short end of the stick."

Americans have been buying drugs from Canada for some time.

Pharmacists along the border have reported U.S. citizens making the trek to stock up on cheaper medicine, including insulin and Ozempic, a prescription diabetes treatment that has skyrocketed in popularity recently as an off-label drug for weight loss.

"People driving over the the border and coming and getting a little bit at a time, that wasn't really jeopardizing our supply," said Walker.

"But we've had recent examples in B.C., for example, where the importation of Ozempic was actually leading to a potential shortage because the numbers were so high."

Decision could harm Canadians, warns trade group

Innovative Medicines Canada, a trade group that represents about 50 pharma companies, said allowing Florida to import drugs meant for Canadians could "disrupt" Canada's health-care system.

"Canada simply can't supply drugs to Florida, or any other U.S. states, without significantly increasing the risk and severity of drug shortages nationwide," David Renwick, interim president of Innovative Medicines Canada, said in a statement.

"The U.S. market is nearly 10 times bigger than Canada's, and allowing drugs that were intended for Canadians to be exported to the U.S. would harm Canadian patients and disrupt our health-care system."

The head of Pharmaceutical Research and Manufacturers of America (PhRMA), one of the largest pharmaceutical industry lobby groups in the U.S., called the FDA's decision "reckless."

"Ensuring patients have access to needed medicines is critical, but the importation of unapproved medicines, whether from Canada or elsewhere in the world, poses a serious danger to public health," said PhRMA president Stephen Ubl in a media statement.

"PhRMA is considering all options for preventing this policy from harming patients."

 

Red Sea attacks to have ripple effect on shippers — and consumers — in Canada

The Canadian Press

Canadian shippers and consumers could soon be feeling the ripple effect of attacks on cargo vessels in the Red Sea.

Shipping companies across the globe are turning away from the key trade corridor after Houthi militants in Yemen stepped up attacks on commercial boats in the region in protest against Israel's military campaign in the Gaza Strip.

Shipping giant Maersk said Friday it plans to continue rerouting all vessels bound for the Suez Canal around Africa's Cape of Good Hope "for the foreseeable future," following an earlier pause through the waterway that links Asia and Europe.

The route change adds 10 days and hundreds of thousands of dollars in extra fuel and crew costs per trip, resulting in potential price increases for wholesale and retail products.

Université Laval business professor Yan Cimon says Europe will feel the impact most directly, but that consumer goods and some manufacturing parts destined for Canada also come via the canal, which carries roughly a third of global container traffic.

Data from Drewry, a maritime industry research firm, shows that global container shipping rates surged 61 per cent in the past week alone, with hikes on routes between Asia and North America as well.

This report by The Canadian Press was first published Jan. 5, 2024.

Repercussions of Red Sea Turmoil Mount as Box Rates Jump 60% in One Week

Spot freight rates are skyrocketing due to the impact of the situation in the Red Sea (file photo)

PUBLISHED JAN 4, 2024 3:03 PM BY THE MARITIME EXECUTIVE

 

 

Spot freight rates are the leading indicator of the mounting repercussions from the ongoing disruptions to the shipping industry due to the security problems in the Red Sea. With the attacks continuing, nearly 20 major carriers have reported that they are rerouting vessels adding to the travel time and expense which is quickly being reflected in the spot price for shipping as well as the growing concerns of impacts to supply chains and a renewal of port congestion.

Analytics firm Drewry provided its first report of 2024 on its closely watched World Container Index and to no surprise rates have skyrocketed. In one week, Drewey calculates the composite index is up by two-thirds (61 percent) per 40-foot container and stands 25 percent above the end of 2022/start of 2023. The latest Drewry World Container Index composite is 88 percent higher than the 2019 average.

Predictability, the highest increases are on the routes most directly impacted, i.e. those using the Suez Canal. Freight rates from Shanghai to Rotterdam, for example, are up by 115 percent. The increases for shipping containers to the Mediterranean are also up more than 100 percent, while rates from Asia to North America are up a more modest 26 to 30 percent.

Last week’s rate jump was fueled in part by Maersk’s decision to reverse course and again divert all shipments scheduled to transit the Red Sea. There had been an emerging hope that the international coalition might stabilize the security situation with Maersk previously reporting it was planning to send some ships back through the Red Sea while CMA CGM also said it was increasing the number of transits.

Freightos, a global freight booking and payment platform, highlights the longer-term impact on rates which began to jump after the first diversion programs were announced in mid-December. They are reporting that rates from Asia to Northern Europe are up 173 percent to more than $4,000 per FEU since just before the first diversions, while rates to the Mediterranean have doubled to over $5,000 per FEU.

Judah Levine, Head of Research for Freightos Group however believes that additional repercussions are likely in the near term, especially with the container carriers. Freightos reports that some carriers are already shortening up return times for empty boxes in North America as fears mount of equipment shortages.

“The longer voyages for diverted services mean longer lead times for importers and some threat of port congestion if updated schedules can’t be maintained and multiple vessels arrive at once, though so far there have not been reports of backlogs,” writes Levine in his weekly market analysis. “The excess capacity that carriers were contending with before the Red Sea disruptions will now be activated to use more ships than usual per service to try and keep up with departure schedules and keep containers moving.”

Commenting on the longer-term outlook, however, Christian Roeloffs, co-founder and CEO of Container xChange, a platform for container leasing, notes that trade will not stop as the diversions provide ways to circumvent the challenges in the Red Sea. “The Red Sea situation is acute, but not chronic in the long term for the shipping industry,” comments Roeloffs.

Container xChange interviewed leading industry players and surveyed customers as it prepared its 2024 Market Forecast. In the analysis, they report, that in response to these geopolitical risks, the majority of shipping professionals surveyed in December 2023, reported they are “gearing up to enhance resilience through strategic initiatives like - ‘risk assessment and scenario planning’, ‘diversification of routes’ and ‘suppliers and regulatory compliance’,” reports Container xChange. “The biggest ‘headache’ resulting from geopolitical upheaval is the ‘associated costs’ that they will have to bear on top of the rising operating costs that they have to already face.”

Analysts have begun to warn that consumers could experience some supply disruptions especially near-term as the shipping companies adjust schedules. However, the bigger concern is that increased shipping costs will be passed on to consumers. There are fears that the pass-along in shipping costs could fuel a resurgence in global inflation rates after much of the world had been able to reign in the rates created as a result of the supply problems from the pandemic.

 

ECSA Appoints its First Female President

DEI; ANOTHER GLASS CEILING BROKEN

Karin Orsel (ECSA)

PUBLISHED JAN 4, 2024 8:58 PM BY THE MARITIME EXECUTIVE

 

The European Community Shipowners' Associations (ECSA), the representative voice for EU shipping, has appointed Karin Orsel as its first-ever female president. Orsel takes the helm at a pivotal moment for European shipowners, as the EU begins to implement its carbon emissions trading system for merchant vessels for the first time. 

“Our commitment is clear: to promote the energy transition of shipping, meet our climate targets, and foster the sector’s competitiveness amidst rapidly evolving geopolitical and security challenges," Orstel said. 

She also emphasized seafarer training - particularly for digitalization and green technology - as a major area of focus for her two-year term as ECSA president. 

Orstel has been CEO of her own ship management company, MF Shipping Group, since 2001. She is a past president of the Royal Association of Netherlands Shipowners (KVNR) and holds an honorary doctorate in public administration from Massachusetts Maritime. 

Orstel takes over from Philippos Philis, CEO of dry bulk shipping firm Lemissoler Navigation and past president of the Cyprus Shipping Chamber. 

The European Union is moving faster towards maritime decarbonization than any other jurisdiction, and ECSA has an advocacy role as that process unfolds. The organization calls for EU support for decarbonization R&D; "vast" improvements in port-side infrastructure for clean fuels; and global rules for low-carbon shipping to level the playing field. 

ECSA has also advocated for EU protection for European shipping abroad, including recent contributions to the defense of Red Sea traffic from attacks by Yemen's Houthi rebels.