Logistics Nightmare: Trucker vaccine mandates aggravate shortages as freight rates skyrocket
Fallout from U.S. and Canadian mandates for cross-border truckers results in massive inflation
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Get ready — another wave of inflation is about to crash on the shores for consumers. In recent days, you may have noticed the massive trucker convoy making a trans-Canadian pilgrimage from British Columbia to the Canadian capital of Ottawa. Their demands are simple: stop the mandates.
Beginning January 15, Canadian Prime Minister Justin Trudeau required unvaccinated truck drivers re-entering Canada to automatically quarantine for 14 days.1 The United States on January 22 made a similar mandate for border truckers requiring full vaccination for entry into the states.2 Unvaccinated truckers are facing a reciprocal embargo on each country’s industries.
The resulting impacts are immediate. Pig producers in Canada have weanlings stuck unable to be transported to the Midwest. Crushed soybean meal used as a protein booster for hog meal cannot make it into Manitoba.3 With hogs unable to move south and feed not entering the provinces, producers are struggling to keep their livestock fed. Hog futures surged 19.6% in the two weeks since the mandates went into place.4
“We are hearing directly from our members that the shortage of drivers able to cross the border is causing delays in freight movement of 7 to 14 days and growing and increases in the rates of moving goods from 30% to as much as 100% in certain lanes,”5
- Anne Reinke — TIA President & CEO
The mandates are collapsing trucking capacity across the board. Rates to move goods are skyrocketing 30–100% depending on the good according to trucking executives. Fruits, vegetables, automobiles, lumber, livestock, raw energy commodities, are all being trapped and backing up for each respective producer. It’s a disaster manifesting in frustration and in convoys of protests across Canada and globally.
Canada and the United States are each others’ biggest trading partners. For the US, our northern partner is our largest export market by far, accounting for $292.7 billion in 2019. The top export categories were:
- Vehicles ($52 billion)
- Machinery ($45 billion)
- Electrical machinery ($25 billion)
- Mineral fuels ($25 billion)
- Plastics ($13 billion)6
The United States’ trade deficit reached $1 trillion in 2021 for the first time ever.7 The trade deficit is defined as net exports, or exports minus imports. A negative balance, or trade deficit, subtracts from the GDP calculation. A trade deficit shrinks the economic growth figures for a given economy. By reducing trucking capacity with our largest export customer, this will certainly usher in economic headwinds.
The resulting surge in shipping costs will work its way through to the end consumer. Money will be squandered unnecessarily on higher transportation fees caused by an easily avoidable policy blunder. At a time when supply chains are strained, the cooperative embargoes between the US and Canadian governments rank up there among the most boneheaded decisions.
As for the truckers, who can blame them? Governments wandered astray far from their scopes of authority and appear determined to cause as much economic distress as possible. Entering Year 3 of failed mandates and control, the people have had enough.
Similar movements are being organized in the US and globally. Trucking is a vital piece of logistics in any supply chain. Their cause is everyone’s cause. Perhaps these events will lead to an ultimate conclusion where life returns to normal. Truck Yeah!
