Cross border barriers – On Saturday the new rules for Canadian drivers crossing the US/Canada border, which we focused on last week, came into effect. Despite a brief reversal from the CBSA, a reverse reversal by the Trudeau government at the eleventh hour upheld the new rules ensuring that all Canadian truck drivers attempting to return to Canada from the states were vaccinated, less they face a quarantine period that would keep them from work. You can read more about the the issues leading up to the new rule in last weeks blog post HERE

The Fallout: Transportation Protests

One of the expected responses to the new rule was a series of protests from drivers who opposed the new mandate. Drivers took to the roads with signage out and horns honking to signify their disdain for the new health regulations earlier this week. The most prominent protest took place in Manitoba, where several truckers participated in a “slow roll” protest. Their convoy of trucks and support vehicles crawled across major roads in and out of the border crossing, slowing traffic to a near halt. However, a larger protest is starting to gain traction across Canada, accompanied by American support and a GoFundMe campaign, as unvaccinated drivers plan to create a convoy of disgruntled citizens who will be on their way to gather in Ottawa, on parliament hill, later in the week.

The Fallout: Resignations and Incentives for Truckers

A major impact of the new rule was also a wave of resignations from current truck drivers who don’t want to face the new rule when crossing the border. Before the rule came into effect many companies reported drivers leaving in order to dodge the rule and the trend has seemingly continued after the official implementation. Some companies have gone out of their way to combat the new additions to the driver shortage by offering cash bonuses for new vaccinated drivers or offering bonuses to existing unvaccinated drivers if they do choose to get their shots.

Blizzards – Trucking Delays for Canada and the USA Supply Chain

To add to the already strained supply chain, a huge swath of the northeast was covered in snow Sunday night, leading to a whole new batch of delays. South of the border New York, Ohio and Pennsylvania received over a foot of snow which lead to power outages in some cities in the three states.

In Ontario and Quebec, most schools called a snow day on what was supposed to be the first day back to in-person learning this year. Some flights were cancelled due to the conditions at Toronto and Ottawa airports, and many east coast flights were cancelled as the storm continued to make it’s way across the country yesterday. The biggest impact of the storm though was on the roads. Low visibility and roads covered in 25-60 centimetres of snow lead to many accidents, stranded drivers, and roads locked in a standstill.

Some key highways were shutdown in Ontario early on Monday in order for plows to get to work before motorists took to the streets. However, for those routes that were open, most were moving extremely slowly, if at all. Many carriers in Ontario and Quebec decided to “Ground” their fleets in order to avoid the delays, damages and other issues that might come with braving the snow storm. These delays are likely to be felt for the remainder of the week as many shipments that were delayed Monday and Tuesday, get re-booked

If you’re planning on going shopping this week, it might be a good idea to stock up on some fresh fruit and veggies as starting next week they may get even more expensive – thanks to the impact of the vaccine mandate and cross border trade.

That’s because starting Saturday, the Canadian government will require that all non-vaccinated Canadian truck drivers returning to Canada quarantine for 14 days after returning to the country. The new rule, which was announced late last year, will also see the Canadian Border Security Agency (CBSA), turn away any American unvaccinated drivers attempting to enter Canada. This measure, in tandem with rules from the US government taking effect on Jan 22nd, are aimed at reducing the spread of COVID and increasing the number of vaccinated truck drivers, and members of the general public, on both sides of the border. However, the new measures are not without strong critiques.

The push back & possible fallout

Since the rules were announced there has been pushback from countless groups, from Industry advocates and supply chain experts to freight forwarders and individual drivers. One of the loudest opponents of the new mandate has been the Canadian Trucking Alliance (CTA), an association of several provincial trucking groups which lobbies in the interest of Canadian truck drivers. The CTA has projected that 10-20% of the 120,000 Canadian drivers who regularly cross the border will be forced off the job due to the new rules. It’s likely that a similar percentage of the 40,000 US Cross Border drivers will be affected by the rule as well. Industry experts say that these losses would disproportionately harm smaller companies that don’t have the resources or capabilities that large companies have. With two-thirds of Canada-US trade moving by truck, it’s likely that any sort of driver shortage would have ripple effects that could displace millions of dollars of goods.

Government response

Despite trucks crossing freely since the beginning of the pandemic, despite lockdowns, the government’s tone has switched to one much more committed to a stricter inoculation policy. Despite the onslaught of public pushback, the Trudeau government is going ahead with the new rules come hell or high water, though they say the water might not be that high. The government has assured Canadians that they do not expect significant disruptions or shortages as a result of the new mandate. The government also estimates that only 5% of drivers will even be affected by the rule, a far cry from the CTA’s 10-20% estimate.

Takeaway

With an existing shortage of nearly 20,000 cross-border truckers, any impact on the labour supply of drivers will no doubt have an impact on the price and availability of products moving across the border. This isn’t just a concern of the transportation industry either. With the inflation rate already rising to a nearly two-decade high, any increase in the price of transportation will contribute to add to the snowball effects that are growing around the globe. With transportation costs from Asia already rising, as we’ve mentioned before in our newsletter, adding more barriers on the southern border will add pressure to an already squeezed supply chain. Despite the good intentions our fingers are crossed from a last-minute change of heart from the Canadian government in order to keep more essential drivers on the road.

January 13th update

As pressure mounted approaching the mandates roll out the CBSA walked back their position on the mandate, saying that Canadian truckers who are unvaccinated would now be exempt for quarantining after returning from the states. The CBSA did uphold that it would turn away unvaccinated American drivers who try to enter Canada.

See our December Post (Crossborder Vaccine Pushback) for more history on this topic.

In the first week of 2022, we wanted to take a quick look back at 2021 to recap some of the biggest stories of the year.

Suez Stuck 

The beginning of the year was somewhat uneventful as people began to believe that we may be getting back to normal after a very difficult 2020. However, in March we received our first major blow that threw the industry into a panic. After being stuck for less than a week the Evergiven caused massive delays around the globe and caused major economic impacts. The short blockage caused so many issues, many experts say that it is still contributing to equipment shortages and high rates today. – more details covered in the New York Times

Strikes and Shutdowns

Two major delays that affected key transportation infrastructure in 2021 were labour strikes, and port shutdowns. In a year still largely defined by COVID-19, one of the major recurring stories of the year were port shutdowns caused by virus outbreaks. Several ports were forced to partially or completely shut down due to confirmed cases among workers. Meanwhile, the pandemics exposure of major social issues also gave way to a series of strikes from workers unions in everything from manufacturing to tech to transportation. 

BC’s Double Dose of Catastrophe 

This year Canada’s west coast was hit by two separate devastating natural disasters. Over the summer, several areas of BC were continuously plagued by wildfires that caused massive evacuation efforts and millions of dollars of property damage. Unfortunately, there was barely any reprieve for the hardest-hit communities as not long after, waves of flooding struck areas of BC creating more evacuation orders and causing more damage. Certain key infrastructure damaged by the floods took weeks to repair and once again cut off access to a large swath of the country. – We covered more on this in our Dec. 8th post on BC Flooding.

Vaccine Rollout 

One of the positive stories of the year has been the world’s effort to combat the COVID-19 virus through vaccination. In late 2020 and early 2021, several vaccines were approved around the world, and deployment efforts began to inoculate as many people as possible in order to stem the spread of the virus. To date over 9 billion doses of vaccines have been administered globally and millions more are being added to the total every day. – We covered more on this in our Dec. 13th post Crossborder Vaccine Pushback.

Heading into 2021, the epicenter of Canada’s shipping delays may shift from the west coast to the southern border. The looming threat for 2022 is the impending cross-border trucker vaccine mandate expected to come into effect in late January. The joint effort between the Canadian and US governments is aimed at reducing the spread of COVID amid the current omicron variant situation. 

The mandate has received pushback from industry groups and politicians alike who worry about the effect this mandate could have on the supply chain. Currently, 120,000 Canadian drivers handle about 75% of all cross-border truck freight, and industry experts predict that this mandate would see up to 22,000 of these drivers pass on cross-border work in order to dodge the mandate. Such a large hit to an already short supply of drivers could spell disaster for Canada and its most crucial trade partner.

– An updated article is available here: Vaccine Mandate and Cross Border Trade.

Update on BC Flooding

Now that it seems like the worst is behind us, repairs and recovery efforts are underway in BC. On Monday, CN & CP notified customers that its mainline between Kamloops and Vancouver was reopening. This would allow certain gates across Canada and the US to accept freight bound for the Port of Vancouver again.

Over the road shipments had a similar level of positive news, with Highway 3 reopening quickly after the flood subsided, though only for essential travel. The BC government has given no timeline for when non-essential travel will be allowed on the route. Instead they have projected that the other major highway affected by the storms, Highway 5, the Coquihalla Highway, will not be reopening until late January.

From a supply chain perspective, the country will likely be feeling the effects of the storm damage for weeks or months to come. Many experts are already predicting shortages of everything from turkey to alcohol across Canada for the remainder of this year and into next. 

LA/LB Delays

We’re pretty sure its time to start taking bets on whether or not the $100 a day waiting fees from the ports of Long Beach and Los Angeles were ever intended to be implemented. Our money is on NO. After delaying the fees for the fourth time, now till December 13th, it’s likely that we may never see the fees come into effect. Authorities rationalized the delay the same way they had explained the last three, saying that the mere threat of the fees has already had an impact on the number of containers sitting at the port.

Note: If the decline in slow-moving containers continues, we’ll need a fixed section in this newsletter to let you know fees are once again being delayed. 

More issues pertaining to West Coast ports were discussed in last weeks article – read more here.

Little Relief for Flood Stricken B.C.

Over the last week, flooding and landslides in British Columbia have continued to affect local communities and the national supply chain, and looking forward, there may not be a reprive insight this week either. Heavy rain and flooding continued throughout last week but during the weekend rescue workers and inspectors had a brief window in which the weather let up to help retrieve citizens who were left behind, and survey the damage.

Reports were initially positive on when people would be able to return home and when supply chains would be back to normal. Initial projections had rail service to the port of Vancouver being restored sometime this week, and yesterday Class 1 Rail company announced it would be restoring service between Kamloops and Vancouver today. Unfortunately, the good news did not last as more storms and heavy flooding are on the way for B.C.

Though the coming storm, expected to hit Thursday, won’t be as devastating as last week’s, it’s expected to have a compounding effect as the landscape has already been made extremely vulnerable by the previous batch of bad weather. It looks as though supply chains in the area will continue to be affected for the next several days at least so expect delays on cargo moving in or out of the Canadian west coast. 

You can read more about the flooding in more recent posts HERE

A Note on Newfoundland

As the west coast prepares for a second batch of bad weather, the east coast, Newfoundland and Labrador especially, is preparing for unprecedented flooding. For the remainder of this week, Atlantic Canada will be feeling the effects of a storm similar to the one that hit B.C last week. 

A Fee Fakeout?

This week the ports of LA and Long beach once again delayed their enforcement of $100 a day escalating fees for containers left waiting in port. This comes after two previous delays, pushing the date first to November 15th, then November 22nd, and now to the end of the month. Having been announced a month ago, and with no enforcement mechanism detailed, suspicions are rising that these fees may have been a bluff all along.

Since the fees were announced, the ports have seen a decline of 33% in aging cargo on the docks. At this point, it seems that the ports may be happy with this reduction and could end up scrapping the whole fee plan. However, it’s possible that if container dwelling begins to trend in the opposite direction, the ports will finally push through the enforcement, and the fallout from that could be disastrous. 

You can read more about the fees and the delay HERE