Above the Fold: Supply Chain Logistics News (February 4, 2022)

It’s Friday.

1/12th of 2022 is over.

It’s sleeting outside.

I’m not sure if there’s a connection between those things, but those are the only three pennies rattling around in my glass jar brain this morning.

So, let’s move on to the supply chain and logistics news that caught my attention this week:

Cross-Border Truck Drivers and COVID-19 Vaccine Mandates

Per new Canadian regulations, beginning on January 15, 2022, foreign truck drivers had to be fully vaccinated in order to enter Canada.

The United States implemented a similar mandate. Beginning on January 22, 2022, “the Department of Homeland Security will require non-U.S. individuals [including truck drivers] seeking to enter the United States via land ports of entry and ferry terminals at the U.S.-Mexico and U.S.-Canada borders to be fully vaccinated for COVID-19 and provide related proof of vaccination.”

On January 26, the Transportation Intermediaries Association sent a letter to DHS asking the department to “reverse this ill-advised and poorly-timed order immediately.”

All of this prompted us to ask our Indago supply chain research community members — who are all supply chain and logistics professionals from manufacturing, retail, and distribution companies — “How disruptive do you believe these vaccine mandates will be for cross-border supply chains? Are you requiring drivers to be vaccinated to haul your freight?”

Indago members will receive the results today.

However, an article in the Wall Street journal provides conflicting perspectives on the current impact. As Paul Vieria reports in the article:

“So far there is no sign whatsoever that the mandate has had an impact on the volume of trucks crossing the borders,” Mr. Omar Alghabra [Canada’s transport minister] said at a press conference. “That does not mean that there aren’t any supply-chain disruptions; it does not mean that there aren’t any challenges out there; and it doesn’t mean that people aren’t finding enough truckers to carry their load.”

The Transportation Intermediaries Association, an Alexandria, Va.-based trade group representing freight brokers, said the vaccine requirements are slowing cross-border freight movement and adding stress to supply lines. “We are hearing directly from our members that the shortage of drivers able to cross the border is causing delays in freight movement of 7 to 14 days and growing and increases in the rates of moving goods from 30% to as much as 100% in certain lanes,” TIA President and Chief Executive Anne Reinke said in a statement.

If you’re moving goods across the U.S.-Canada (and/or U.S.-Mexico) borders, have you experienced any issues or delays since these vaccine mandates went into effect? Post a comment and let me know.

EU Mobility Package

Meanwhile, over in Europe, a different type of regulation is going into effect that could impact trucking capacity. As I highlighted in the December 2021 edition of Transporeon Journal, starting in February 2022 there will be further implementation of the EU Mobility Package, which covers driving and rest time rules for drivers, CO2 standards for heavy duty vehicles, and the digitization of transport documents (among many more things).

Per the Mobility Package, truck drivers will need to take longer breaks and trucks will have to return to their home country every eight weeks. How will this change impact driver availability and capacity?

Time will tell, but there’s a general belief that the Mobility Package will change the landscape of the European transport market. Among the concerns is the restrictions related to cabotage operations. Once the cabotage limit is reached, carriers will have to bear the costs of vehicle downtime, which will ultimately translate into rate increases.  Another risk is that the new regulations will make the transport system less flexible and reduce the amount of available capacity.

Let’s see what happens.

And with that, have a happy weekend!

Song of the Week: “Where Are You Now” by Lost Frequencies ft. Calum Scott