Impacts of the blockade of Canadian truckers

What started as a protest against cross-border COVID-19 vaccination mandates in Canada is now part of a global protest movement, with similar truck convoy protests in France, Belgium and New Zealand.

Politico reported that the truck convoy protests, which are being organized under the hashtag #FreedomConvoy, have gained support from anti-vaccine groups in the United States, Europe and around the world through social media like Telegram. Adding to the complexity of the situation is the rise of disinformation being pushed by foreign content factories in Bangladesh, Romania and Vietnam, with many of these factories beginning to promote more disruptive convoys, which could lead to further delays in the supply chain in the future.

What was the effect of the blockade on the supply chain?

In the wake of the severe and ongoing disruptions due to COVID-19, global markets are now more sensitive than ever to supply chain disruptions. The recent blockades of the Freedom Convoy are an example of this. Protesters blocked two-way traffic on the Ambassador Bridge, a key link between the cities of Detroit and Windsor. The road is the busiest land border crossing in North America, and it is a main artery for supply chain and freight movement.

The blockage has caused difficulties for large companies. Several major automakers, including Toyota, Ford and GM, have cut production due to the protests. Parts shortages in particular slowed the process.

“This blockade is the latest shoe to fall in the series of supply chain challenges over the past two years and represents another challenge for companies, their senior executives and supply chain professionals to navigate” , said Scott Hill, a member of Varnum’s Corporate Practice. Team and the firm’s executive partner. “While the impact of this particular challenge has been felt hardest in the Midwest in the near term, with significant delays in deliveries to an already strained auto industry, these effects will persist and be felt across the country in the coming weeks, as the Ambassador Bridge accounts for 25% of all trade – approximately $360 million per day – between Canada and the United States.

Toyota noted a significant slowdown in manufacturing of its RAV4 vehicles and Ford said it was operating several plants at reduced capacity. Similarly, GM completely halted production at a Michigan plant, running out of components needed for a line of sport utility vehicles.

US lawmakers and politicians have already answered the question. On Feb. 9, the White House announced it was working with automakers and Canadian officials to circumvent any disruptions.

What are the impacts of social media movements and supply chain blockages?

The truck convoy movement has grown in popularity, with supporters using messaging apps like Telegram to organize food and supply deliveries along protest routes.

A recent bulletin from the Department of Homeland Security warned that truck convoys could start in California and end in Washington, DC, potentially causing more delays and traffic disruptions. Such protests have the potential to impact economic activity, with the previously blocked Ambassador Bridge between Windsor and Detroit generating $13.5 million per hour in economic activity.

While the bridge remains open for the time being, local officials fear protesters may return. Jennifer King, a lawyer for the city of Windsor, told Ontario Superior Court Chief Justice Geoffrey Morawetz during a hearing that “there is a real and present threat” that the protests could reignite their blockade of the Ambassador Bridge.

While protesters have used less moderate platforms like Telegram, the movement is also popular on more mainstream platforms like Facebook, which recently shut down a page with 140,000 followers for violating its guidelines against promoting QAnon, a theory of the far-right conspiracy.

“Given the ‘success’ of the blockade, there could be other instances of activity being organized around key ports or trade areas, not just in the United States and Canada, but around the world. Companies have been working hard to rethink and dissect their supply chains over the past two years,” Hill said. “This type of development is another eventuality that companies need to factor into their process mapping and scenario planning as they continue to optimize their supply relationships and their ability to secure critical components related to their supply processes. manufacturing.”

Trucks have become an important part of supply chain infrastructure as backlogs have become more common at ports, with trucks carrying 72% of goods in the United States. If blockages such as the Freedom Convoy occur more frequently, supply chain delays and economic impacts could become more common. .

How can businesses prepare for supply chain disruptions?

Given the significant legal ramifications of a supply chain disruption, companies should prepare carefully and develop contingency plans for this eventuality. Ensuring that supply chains are as streamlined and secure as possible will ensure that disruptions are as minimal as possible.

Companies can take a number of approaches to mitigate these issues. One of these options is the adoption of new sources in the supply chain. Moving from a single source of materials to a larger network of materials can ensure delays are shorter than expected. Additional preparation for complicated federal and state transportation laws will also ensure that any blockages are avoided.

“We have seen steady improvement in supply chain contingency planning since the start of the pandemic. This disruption is just the latest reminder of the need for thorough due diligence across the chain as companies assess supply relationships,” Hills said. “This type of exogenous event also demonstrates the need for dual-source, multi-channel sourcing and underscores the need for manufacturers to truly understand the flow of their inputs and outputs.”

Regular communication up and down the supply chain is equally important. Proactive correspondence with suppliers allows all parties to prepare accordingly. In addition, indicating likely shortages or delays demonstrates an honest effort to honor prior agreements. To do this, it may be necessary to set up new internal and external channels, to enable rapid communication.

“It will be very difficult, if not impossible, to bring legal action against the protesters. However, this, once again, serves as a reminder of the importance of well-thought-out force majeure clauses in supply and commercial contracts with customers and trading counterparties,” Mr. Hill said.

Copyright © 2022 National Law Forum, LLCNational Law Review, Volume XII, Number 57

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