Trade Trends | December 2021
Trade Trends is brought to you by ANDY Transport. It highlights notable news and trends in trade, transportation, and supply chain logistics.
Cross-Border Vaccine Mandates for Canadian and US Truck Drivers?
Vaccine mandates for the COVID-19 vaccine in the US are set to take effect on January 22, 2022 and apply to companies with 100 workers or more. According to the American Trucking Association (ATA), approximately 34 percent of drivers are presently unvaccinated. The ATA believes that there may be some room for exemptions for commercial drivers.
Under the new US mandate, workers will be exempt if their indoor contact with other employees and persons such as customers and vendors is minimal.
Photo: U.S. Customs and Border Protection
In Canada, trucking companies that are federally regulated are not included in the mandate requiring air, rail, and marine employers to establish vaccination policies. However, Canada will require truck drivers to be vaccinated against Covid-19 before crossing the border as of Jan. 15, 2022. The Canadian Trucking Association (CTA) and the industry overall both support vaccines and encourage drivers to get vaccinated to protect themselves and those around them.
Photo: Ontario Trucking Association
“We have conducted internal surveys to see what the situation is within our driver population as well as the willingness amongst unvaccinated drivers to get vaccinated before January 2022,” says Tammy Gauthier, Vice President, Human Resources and Marketing, for ANDY Transport. “We are offering to answer drivers’ questions and educate them or facilitate their vaccination appointments if they are willing to participate. For those who are still planning to not get vaccinated, we are working within other divisions, for the moment, to accommodate all stakeholders involved, from drivers to customers”.
Rising Fuel Prices Slowing Truckers?
Transportation demand appears to be strong throughout North America—and truck transport stands to benefit. However, many things may challenge the progress and profitability of the sector, one being the rising fuel prices for trucking firms. According to the CTA, fuel is the second largest cost for trucking operations.
The rise of fuel prices has led many carriers to levy fuel surcharges to continue operations seamlessly. Without these surcharges, many trucking firms—especially small ones—would be unable to absorb the rising costs and fluctuations in fuel prices.
Other firms try to keep a watchful eye on fuel prices and include them in contractual obligations. Fluctuations in the price of fuel are sometimes accounted for in a trucking firm’s purchasing and forward-buying. Along with fuel, other prices, such as salaries, are currently volatile.
Photo: iStock
“As a trucking company, we are always stuck with juggling many challenges at once. Fuel just happens to be in the current mix,” says Remus Arbanasi, Chief Financial Officer of ANDY Transport. “It is always difficult to increase rates the moment the fuel prices increase, as you want to try to respect your contractual obligations and continue serving your customers. We try to keep a mix of spot and contracted lanes to give us flexibility, but it is not always soundproof because the moment another cost increases such as salaries or the US dollar takes a swing, it forces us to reevaluate our mix all over again.”
Supply Shortage in US, but Canada Suffers Labor Shortage, Necessitating Strong Partnerships
There’s been a bottleneck in the supply chain coming into North America, which appears to begin in West Coast ports. Much of the glut is driven by changing purchasing habits and an overall surge in the demand for goods imported from Asia. Supply chain managers and business leaders are struggling to find ways to get their goods to critical markets in time, such as during holiday season.
However, a bigger concern in Canada is the labor shortage for truck carriers as the hangover from the worldwide pandemic wears off and shippers increase their reliance on truck transport.
According to a report in National Post, labor shortages are a menace to Canadian trucking and pose the greatest concern to North American supply chains. The National Post cited a study by Nanos Research for the CTA that found that worker shortages have worsened and pose a significant threat to supply chains and the economy.
Another study by Trucking HR Canada noted that there were some 18,000 driver vacancies in the second quarter of 2021. The study also estimated that there will be approximately 17,230 driver vacancies each year between 2021 and 2025. This all comes as carriers face rising demands for their services as the effects of the pandemic become increasingly manageable.
Photo: Bloomberg
With limited resources, an effective carrier strategy is to build close partnerships with shippers to cut through economic obstacles and challenges.
“It’s all about partnerships. We try to serve our customers in good and bad times,” says Arbanasi. “Transportation works in cycles, which is why it is crucial to be transparent and to maintain a good relationship and reputation. When truck capacity is in high demand, we stay and serve our loyal customers, even if we temporarily need to agree on a rate adjustment. Through our network of terminals and services, we try to offer flexibility and the best cost-efficient solutions.”
Ensuring a steady supply chain flow, in and out of Canada, relies on forging partnerships between shippers and carriers and finding ways to mitigate the risks and consequences of labor shortages in marine terminals, warehouses, trailers, storage sites, and other places that affect major ports of entry and transportation in the US and North America.
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