Freight Costs Skyrocket Amid Canada-US Border Blockades
The ongoing Freedom Convoy protests have sparked numerous blockades at various border crossings between Canada and the US, sending trucking costs skyrocketing and further deteriorating already-snarled supply chains.
For over two weeks now, truck drivers from across Canada have been occupying the city of Ottawa, in protest of the federal government’s recently imposed vaccine mandate, that would force freight carriers to be vaccinated against Covid-19. The protestors, which were initially labeled as a ‘Fringe Minority’ by Prime Minister Justin Trudeau, have gained a substantial amount of supporters, who have since occupied the Ambassador Bridge in Windsor, Ontario, the main border crossing between Canada and the US.
Although the trucker blockade was dismantled over the weekend and commercial traffic was able to resume by late Sunday, the standoff resulted in a substantial increase in freight costs. According to data from Truckstop.com cited by Bloomberg, the disruptions along the Ambassador Bridge resulted in a 39% increase in spot van rates, up from $2.81 per mile to $3.90 per mile between January 2 and February 5, while refrigerated market rates have shot up 33% to $4.77 from $3.59. The cost of a flatbed has also gone up almost 15%, from $2.63 to $3.01.
The sharp increase in freight costs will be particularly damaging on the agriculture and auto industries, which have already been grappling with global supply chain disruptions throughout the pandemic. “The disruptions created at the border is one in a long line of events that weighs on supply chains and is delaying it to return to normal— an event that more and more appears may not happen until 2023,” said Bloomberg senior logistics analyst Lee Klaskow. “The supply chains are dying by a 1,000 cuts. The trucker incident will be focused to ag and autos, which would ripple out to other industries.”
Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.