Calgary Fire Department's procurement faced difficulties due to supply chain

Calgary Fire Department's procurement faced difficulties due to supply chain disruptions, tariffs, and industry consolidation.

The way we conduct business is going to need to change, as it seems that these challenges won't be resolved anytime soon," stated Calgary Fire Chief Steve Dongworth.

Acquiring fire trucks from sources outside the U.S. could pose a significant challenge for the Calgary Fire Department (CFD). According to Chief Dongworth, while the city claims that most procurement contracts are awarded to Canadian firms, this does not apply to firefighting equipment, which is largely obtained from three U.S. manufacturers.

During his annual report to a city council committee last Wednesday, Chief Dongworth expressed concerns about the impacts of U.S. tariffs and supply chain issues stemming from industry consolidation. He noted that the procurement process for a fire engine can now take over four years. To mitigate these challenges, Dongworth emphasized the need for proactive planning regarding equipment purchases. "If we're facing longer delivery timelines, we need to start thinking about and ordering our needs sooner," he explained. He also highlighted the effects of global inflation on fire truck prices, stating that the cost of a fire engine has surged by 50% compared to pre-pandemic prices. This increase is partly driven by market consolidation, as only three major companies—Rev Group, Oshkosh Corp., and Rosenbauer—dominate the U.S. fire truck manufacturing sector. Additionally, the ongoing trade conflict with the U.S. is expected to further raise procurement costs for CFD. Canadian retaliatory tariffs of 25% are in place for fully-assembled vehicles from the U.S. that do not comply with the CUSMA free trade agreement. Dongworth confirmed the lack of Canadian fire truck manufacturers, confirming that most of CFD's trucks are sourced from the U.S. He noted, "While there are many dealerships in Canada, they primarily sell U.S. products. We're waiting to see how tariffs will affect us, which may lead to purchasing fewer vehicles due to budget constraints.
" The Alberta Fire Chiefs Association has also raised alarms about the impact of tariffs, emphasizing that nearly all standard firefighting equipment is assembled in the U.S. Their recent memo cautioned that the second round of retaliatory tariffs will impact all types of trucks entering Canada, including fire trucks, as well as components purchased by Canadian manufacturers. City's Response to Tariff Threats: On the day before Chief Dongworth presented his report, the city council's executive committee received an update regarding the city's approach to U.S. tariffs. Amit Patil, the director of supply chain management, reported that the city has awarded 131 procurement contracts and made 3,500 purchase orders since February 25, with 95% of the contract value going to Canadian suppliers. As of Tuesday, the direct cost impact of tariffs on city purchases has totaled around $9,000. Patil noted that the primary categories of concern include automotive vehicles, parts, steel, and aluminum. However, Patil cautioned that the greater worry lies in the potential for tariffs to destabilize markets, which could lead to inflated costs in the long run. In response to these challenges, the city has implemented strategies such as diversifying suppliers to enhance the resilience of Calgary's supply chain, exploring alternate logistics routes to avoid border issues, and reviewing product specifications for local alternatives.
The city has also developed a supply chain resiliency dashboard, which analyzes historical data to proactively identify risks and supply chain threats. This tool, created three years ago in response to labor disruptions, helps the city anticipate potential supply disruptions and their impacts on specific contracts. Additionally, the city has introduced a tariff exposure calculator that uses advanced forecasting to estimate tariff-related effects across various commodities, available to all city contract holders.