Wednesday, February 9, 2022
It’s been 11 days since protests started in Ottawa with truckers calling themselves the “Freedom Convoy”. The group opposes the new Canadian mandate on drivers requiring them to get the covid vaccine, or get tested and following quarantine requirements before going into Canada. The convoy has made its way into Windsor, Ontario, and as of 3:00PM on Monday, February 7th made the Ambassador Bridge (between Windsor, Ontario and Detroit, MI) a target. This created a backup that lasted into the night and as of Tuesday morning, there was huge backup of thousands of drivers, many of whom are stranded on the highways. The Bluewater Bridge (between Sarnia, Ontario and Port Huron, MI) is also a target as of this morning resulting in an average wait time to cross of 60 minutes for commercial vehicles.
New restrictions for travelers coming into the US started January 22nd which have added to the interruption in cross border trucking.
With these protests, carriers are experiencing less drivers, less equipment and poor employee retention. The market was already beyond capacity before the protests but now we are seeing a sizable impact of the supply chain on the US, Canadian and Mexican sides as the three countries depend on each other equally to develop products. Logistics is still dealing with overall staffing/driver shortages since COVID started, as well as a major influx of inbound ocean freight coming in from overseas.
The trucking industry has faced a multitude of obstacles the past 2 years and this is just another complication we are hit with that adds to the continued increase of transportation costs. Trucking rates increased 36% from October 2020 through October 2021 according to Bloomberg.com. Real world rates we have seen this week versus November of 2021 have risen drastically to around 21% on top of the increase reported in October of 2021. Currently the Canadian trucking industry is the most affected due to the protests and because of this, most Canadian trucking companies aren’t quoting on new business as they cannot predict what assets they will have once the protests come to an end. Those carriers that do provide quotes, only honor the quoted rate for 48 hours because of the extreme volatility of the trucking market.
The future in logistics has never been so unpredictable as it is now. Asset capacity and drivers are in very short supply and considering the average age of a truck driver is 45, many drivers are going into retirement. There are not enough young people getting their CDL. Even the DOT is considering loosening the requirements of getting their CDL. Major shifts are happening in transportation.