Expecting the unexpected has become a core part of the logistics and supply chain playbook in recent years. It is fair to say that, at least initially, the disruptions at the Detroit-Windsor Ambassador Bridge fell into that “unexpected” grouping, to be sure.
Before going any further, this column is not me getting political and telling people they must get vaccinated or not. Free speech is a right we all have, and people on both sides of the border, when it comes to the pandemic and vaccinations, have made their cases clear, for whatever their beliefs are, and that is fine.
But, at the same time, the impact of the disruptions on the North American supply chain left a mark, prior to cross-border traffic between the U.S. and Canada resuming last Sunday.
As an example, a report in the Detroit Free Press, citing data from the Anderson Economic Group, an East Lansing, Mich.-based economic research firm, said that the protesting at the Ambassador Bridge came at the expense of the auto industry, to the tune of more than $250 million, a staggering sum no matter how it is measured.
What’s more, the firm added that: “In just one week, automakers, including General Motors, Ford, Chrysler, Honda, and Toyota suffered an estimated $155 million in losses. Within hours, assembly plants were troubled with shortages and slowdowns.”
Make that two staggering sums.
The U.S. Chamber of Commerce, National Association of Manufacturers and Business Roundtable made its views clear on how these disruptions were negatively impacting trade flows and goods movement in a joint statement it issued on February 10, when the protests remained in full swing.
“The disruptions we are seeing at the U.S.-Canada border — at the Detroit-Windsor Ambassador Bridge and at other crossings — are adding to the significant supply chain strains on manufacturers and other businesses in the United States,” the organizations said. “The business community is rolling up its sleeves to find workarounds and keep facilities up and running, but we are already seeing some production cuts, shift reductions, and temporary plant closures. The North American economy relies on our ability to work closely together, including our manufacturing sectors. We need to apply the same spirit of cooperation to tackle this problem.”
There are some very good points made in that statement, make no mistake. Should the protests and disruption head south into the U.S., as has been reported, it stands to reason these types of problems could persist to different extents.
Eric Starks, Chairman & CEO of FTR Transportation Intelligence explained that, from a supply chain and logistics operations perspective, these protests and disruptions result in short-term headaches for shippers, to varying extents, depending on their specific vertical.
“The automotive sector obviously got hit particularly hard with this caravan crossing blockade,” he said. “The thing about that, though—and it is just a gut feeling as to how I personally see the situation, is that this was probably a good thing for the auto sector, in the sense that it was continuing to have supply chain problems, specifically as it relates to chips,” he said. “In essence, having a couple days down here and there is not going to hurt them, because they are not running at full capacity. Over a longer-term, yes, it structurally creates some issues. From everything we have seen, it has not hurt overall production levels, at least at what we expect them to be between now and mid-summer. Chip availability will continue to be the real constraint.”
Given the political elements of this situation, Starks added that there is the possibility of always stepping into are area in which one needs to be cautious, adding that he is not seeing any specific issues regarding the potential of caravans entering the U.S., as it relates to resulting in being something overly problematic more so than additional nuisances and headaches in various areas for the long-term.
Matthew Moroun, Chairman of the Detroit International Bridge Co. that owns Ambassador Bridge, and Chairman of Universal Logistics holding company, told Mike Regan, Chief Relationship Officer for TranzAct Technologies, that until these recent events the Ambassador Bridge had never closed, having previously survived the Great Depression, World War II, and September 11th, but “somehow, the truckers figured out how to shut it down—something that has never been done in its 93 year history,” the interview noted.
And Moroun added in the interview that the closure demonstrated that truckers “know how the supply chain works better than most other people, even those in ‘suits’ that work in the supply chain,” as well as the leaders from political and law enforcement areas.
“Since the number of drivers is finite and there is no elasticity in finding more drivers that have been vetted by the Canadian and U.S. governments, shippers are likely to see cross-border shipments delayed for the next couple of weeks,” it added.
Regardless of the reasons, the unexpected always seems to occur more quickly than even anticipated. That said, these days continue to be significant in that sense, with the situation at the Ambassador Bridge serving as the most recent example. What happens should the caravan make its way into the U.S. is unclear just yet, but it is something all stakeholders need to keep a watchful eye on.
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
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