Thursday, January 20, 2022

Destroying the Supply Chain One Mandate at a Time | Armstrong Economics

The Canada Border Services Agency (CBSA) initially announced that it was eliminating vaccine requirements for truck drivers amid a severe supply and labor shortage. Health Minister Jean-Yves Duclos decided that contributing to inflation by reversing the order was the “right thing to do,” and now unvaccinated truck drivers have “a right of return” but must quarantine for 14 days. So, although Canada cannot ban their citizens from re-entering the country, they can force drivers to submit to tests and quarantines.

Truck drivers gathered at the US/Manitoba on Monday to protest the absurd laws (see image above). Numerous truckers and advocates have stated that a two-week quarantine would ruin their finances and potentially cause smaller trucking companies to go under as it will lead to a labor shortage.

The United States has decided to contribute to the supply chain crisis by implementing a vaccine mandate for truckers as well. As of January 22, all drivers entering from Mexico or Canada must be fully vaccinated. As mentioned in an earlier post, over two-thirds or C$650 billion ($511 billion) of trade between Canada and the US occurs via road, and any disturbance would have significant consequences. The Canadian Trucking Alliance (CTA) estimates that the vaccine mandate will force up to 10% (16,000) of Canadian truckers off the road. “There isn’t one aspect of the supply chain that won’t be impacted,” warned CTA President Stephen Laskowski.

Mexico’s drivers will be less affected by this law as the US typically does not allow trucks to pass the border.

Only 55% of US truck drivers are currently vaccinated; 9% plan to take the vaccine, but 36% refuse. The Supreme Court’s ruling to end Biden’s vaccine mandate for private corporations did not expand to border laws. The US Department of Homeland Security is already warning travelers to expect border crossing delays once this mandate goes into effect. This will have a negative chain reaction — driver shortages will lead to supply shortages, which will lead to higher prices for both businesses and consumers. If these mandates continue, expect the supply chain crisis to continue as well.