Feb 8, 2022
Canadian Bridge Blockade Stretches Fragile Auto Supply Chain
(Bloomberg) -- Protestors blocking traffic between the U.S. and Canada to oppose vaccine rules are further stretching an auto supply chain already worn thin by pandemic-related labor shortages and a scarcity of chips.
Protesters halted traffic Monday night at the Ambassador Bridge that connects Windsor, Ontario, to Detroit, the busiest border link for goods moving between Canada and the U.S. and a crucial artery for the automotive supply chain. Traffic to Canada appeared to be largely blocked as of Tuesday afternoon though it was moving again, slowly, on lanes headed to the U.S.
Read more: Trucker protest jams key Detroit bridge as tensions rise
The protest is the latest obstacle as the U.S. auto industry struggles to navigate a pandemic and global semiconductor shortage that have made vehicle production erratic. Smaller suppliers that have run out of Covid-relief loans and suffered shutdowns because of virus outbreaks are particularly vulnerable, said Alex Calderone, president of Calderone Advisory Group, a law firm that works with distressed suppliers.
“The supply chain has been destabilized” during the pandemic, he said by phone. “The smaller suppliers in particular are just not in a position to be able to withstand this type of a blow.”
Calderone spent Tuesday morning with a Michigan-based client that needed to send plastic parts to a supplier in Canada this week in order to make payroll, he said. They were planning an alternate route to avoid the bridge.
Most of the vehicles blocking the road coming from the bridge into Windsor were pickup trucks, some with names of construction companies on them.
Ford Motor Co. said Tuesday afternoon that it hadn’t seen an impact from the blockade, and Stellantis NV said it was monitoring the situation. While the effects have yet to hit major auto manufacturers, the impact could be felt quickly if the blockade drags on.
“Basically if there’s a shutdown of transportation routes, the auto industry comes to a screeching halt in about two days,” Robert Wildeboer, executive chairman of parts supplier Martinrea International Inc., said on BNN Bloomberg Television.
About 1.4 million trucks entered the U.S. through Detroit last year, almost all of them via the bridge.
Canada imposed a vaccine requirement on all truckers entering from the U.S. last month despite worries it could undermine supply chains and damage the economy. The move ignited protests among truckers, farmers and hangers-on that have taken aim at vaccine requirements, lockdown measures and Canadian Prime Minister Justin Trudeau.
The disruption has extended beyond the auto industry. Henry Ford Health System, one of the largest hospital chains in Detroit, said its staff has experienced some minor delays and inconveniences due to re-reouting. Restaurant supplier Sysco Corp. said it had slight problems getting orders from Canadian distribution centers to local restaurants.
“It’s taking longer to deliver. We think it’s a short-term situation,” Sysco Chief Executive Officer Kevin Hourican said in an interview. “I think what you’re seeing is a reaction to some of the decisions the government made, which were very strict.”
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