The already stretched auto supply chain caused by labor shortages during the pandemic and scarcity of chips supply was further extended by traffic blockades between Canada and U.S. from protestors opposing vaccine rules.
As per Bloomberg News, protestors stopped traffic on Monday night on the Ambassador Bridge that connects Detroit to Windsor, Ontario. It is the busiest link between Canada and the U.S. and a critical artery for the automotive supply chain. Traffic to Canada was blocked on Tuesday afternoon through the lanes headed to the U.S. moved slowly.
This blockade is the latest obstacle facing the auto industry, which was already reeling under semiconductor supply shortages and pandemics, which resulted in erratic auto production. According to Alex Calderone, President of Calderone Advisory Group, a consultancy firm in Detroit that works with distressed suppliers, smaller suppliers have exhausted their covid relief loans, and shutdowns from virus outbreaks have made them vulnerable.
In a phone call, Calderone said that the supply chain destabilized during the pandemic had affected the smaller suppliers, and now they are not able to withstand this type of blow caused by blockades. Calderon spent time with a client in Michigan who was not exploring an alternate route for sending plastic parts to a Canadian supplier.
Most of the vehicles blocked on roads from a bridge coming into Windsor’s were pickup trucks with names of the construction companies.
Ford Motor Co., has a plant in Windsor said that they did not feel any impact from the blockade? Stellated NV operates a minivan plant in Windsor, and General Motors Co. has said they observe the situation and closely monitor the development. According to David Barnes, the spokesman of GM, they’re not facing any impact but monitoring the situation. Though the effect is yet to hit the bigger auto manufacturers, it may impact them if the blockade drags on.
Robert Wildeboer, Executive Chairman of Martinrea International Inc., who supplied parts, said on Bloomberg Television that the auto industry would come to a screeching halt in a couple of days if transportation routes were shut down. Last year, almost 1.4 million trucks entered the U.S. through the bridge.
Canada had made vaccine mandatory for all the Truckers entering Canada from the U.S. last month despite fears of supply chains getting undermined and affecting the economy. This move has ignited protests from truckers, farmers, and others aimed at Canadian Prime Minister Justin Trudeau, lockdowns, and vaccine requirements.
The disruption has not impacted the auto industry alone. One of the largest hospital chains in Detroit, the Henry Ford Healthcare System, said that it is experiencing delays and inconveniences caused to its staff due to rerouting. Sysco Corp., a restaurant supplier, noted that it was facing problems receiving orders from Canadian distribution centers to the local restaurants.
CEO Kevin Hourican of Sysco said it takes longer to normalize in an interview. However, this is a short-term situation caused by stringent government decisions.
