The 2:00 Minute Warning

North of the U.S. border, the trucker protest (a.k.a. the Canadian Convoy) continues. At its peak, it is estimated that 8,000 – 10,000 truckers arrived in Ottawa, the capital of Canada, on January 29th to rally against several important issues. The Canadian government's vaccine mandate border policy tops their list of concerns.

In case you missed the news, on January 15th Canada closed its border to unvaccinated drivers and then on January 22nd the United States closed its borders to unvaccinated drivers from Mexico or Canada. Now, almost two weeks later, thousands of truckers still remain and according to the Wall Street Journal, Canada is now weighing the use of military intervention to end the protest.

What happens when thousands of truckers decide to protest instead of picking up and delivering freight? Rates go through the roof and that is what has happened in Canada and with cross border traffic. At its peak, the truck convoy is estimated to have spanned over 50 miles in length.

For those shippers who aren’t too concerned because they don’t have any freight in Canada, brace yourself: It’s apparent that there are lots of truckers here in the United States who are also upset. Yesterday, we saw truckers on both sides of the border successfully shut down the Ambassador Bridge between Ontario and Detroit – arguably the most important border crossing point between Canada and the United States. And there is a grass roots initiative to organize a truck convoy and travel from Los Angeles to Washington D.C. in March.

One of my favorite presentations to give is called “Predictable Surprises,” based on a book by the same name. The premise of the book is that the things people refer to as “surprises” are in fact predictable, if they pay attention to events and things that are happening in the marketplace. So shippers should not be surprised to see that they will be impacted by a transportation marketplace that is very likely to be turbulent and challenging for at least the first two quarters of 2022.

Whether it’s shutting down the Ambassador Bridge or organizing convoys that span miles and miles of trucks, one thing is for certain. By all accounts there are a lot of truckers who are channeling their inner Howard Beale (the famous TV anchorman from the movie Network) who encouraged his viewers to protest against what was happening in the country by opening the windows in their houses and yelling: “I’m mad as hell and I'm not going to take it anymore!”

With that thought in mind, if the U.S. convoy occurs and thousands of truckers decide to join that convoy, shippers should not be surprised if they see their freight rates skyrocket and/or they experience delays in getting their freight shipped.

Politics aside, it’s important for those involved in logistics to consider how events like convoys or other “Black Swan” events could have an impact on their supply chain. If these events cause your shipping costs to rise by 20% or more, what will your company do?

Since no one can predict where or when these "Black Swan" events will occur, it’s critically important that shippers have a plan in place to deal with contingencies that could affect your company.

Does your company have a written supply chain plan to guide your company in these uncertain times? If not, why not give us a call and talk to us about how your company can create a plan that can protect your supply chain and your company’s bottom line? If you’re interested in discussing this or anything else, we encourage you to get in touch.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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