Ongoing Canadian Protests Shine Spotlight on Ripple Effect of Supply Chain Disruptions
Although the last two years have seen a nearly never-ending line of supply chain impacts for manufacturers, the latest disruption is also serving to shine a spotlight on the broader impact that relatively small disruptions in the supply chain can have on the global economy. We all know that trucking is a critical component of the economy. The U.S. estimates seventy two percent of goods in the U.S. travel by truck. Trucking has become even more important in this era of increased deliveries and backlogs at ports and other logistics hubs.
In Canada, what began as protests by truckers regarding certain pandemic-related restrictions and mandates have snowballed into broader protests and blockages of roads, bridges, and border crossings.
Protesters have been blocking various bridges and roads in Canada in protest of certain pandemic-related restrictions and mandates. On Tuesday, the bridge connecting Windsor, Ontario to Detroit (a critical linkage for cross-border travel) was largely blocked, with traffic stopped going into Canada and slowed to a trickle going into the United States. The blockades are now leading U.S. automakers to begin trimming shifts and pausing certain operations in their Michigan and Canadian plants. The bridge protests and automakers’ reduction in capacity continued on Thursday without an end in sight.
The ongoing protests in Canada have also served as a reminder of how seemingly local trucking disruptions in one country can cascade through the supply chain. This is not the first time that trucking strikes and blockages have rippled through the supply chain and economy. In 1996, a truckers’ strike in France lasted 12 days, barricading major highways and ultimately leading to concessions from the French government over certain worker benefits and hours. The resulting agreement led to heightened tensions with Spain, Portugal, and Great Britain due to the impact felt across borders. In 2008, truckers went on strike in Spain and blocked roads and border crossings, protesting fuel prices. In 2018, truckers in Brazil staged a large strike and protest that lasted for 10 days, blocking roads, disrupting food and fuel distribution, canceling flights, and causing certain part shortages for automakers.
The ongoing protests in Canada have similarly expanded from Ottawa to the current blockage of border crossings, further raising their profile internationally as they begin to impact global trade. It remains to be seen how the blockades and protests will resolve, as leaders call for de-escalation and re-opening of roads and crossings. However, the ripple effects of what started as a localized protest will continue to be felt far beyond Canada’s borders.