Source: Tyler Durden
Overwhelmed supply chains and truck driver shortages worsened when Canada imposed new border mandates prohibiting unvaccinated American truckers. With low vaccination rates among US drivers, Canadian supermarkets are already reporting rising food inflation and shortages of certain products, according to Bloomberg.
Canada’s vaccine mandate for truckers came into effect on Saturday. The new rule requires US truckers to be vaccinated to cross the border. We warned earlier this week such a mandate would have “consequences.”
The vaccine mandate has exacerbated the shortage of truck drivers and made wait times at border crossings even longer. Eighty percent of trade between the US and Canada is transited by truck. America exports about 90% of Canada’s fruits and vegetables during the winter season. As shipments decline because only about half of US truck drivers are vaccinated, grocery stores report shortages.
“We’re seeing shortages,” said Gary Sands, senior vice president of the Canadian Federation of Independent Grocers. “We’re hearing from members they’re going into some stores where there’s no oranges or bananas.’”
The main concern is the mandate could create a domino effect and ripple through the already stressed supply chain. Logistical disruptions have been a significant source of soaring inflation. According to North American Produce Buyers, the cost of sending a truckload of fresh produce from Southern California to Canada is now $9,500, up from $7,000. That means companies are paying more for freight and will pass on costs to consumers.
Given the drop in eligible truckers, products bound for Canada will build in US warehouses with no place to go until new drivers are seen.
The situation will only worsen on Jan. 22 when the US begins imposing its vaccine mandate on Canadian truckers. The Canadian Trucking Association warned the mandate would sideline up to 16,000 truckers.
Canadian truck drivers are furious with the US decision and have blocked the highway near the US-Manitoba international border to protest the new mandates. Videos posted on social media show the chaos playing out on the other side of the border.
Cross-border vaccine mandates will only make the supply chain more stressed to the point where it might break.