Trucker blockade hits key artery in US-Canada auto industry

The Biden administration has urged Prime Minister Justin Trudeau's government to use its federal powers to end the truck blockade that has temporarily sidelined a key auto industry transport route, adding stress to a North American car industry already pinched by low inventories and supply chain problems that have sent vehicle price soaring.

Several leading automakers said on Thursday they reduced production and cut labour shifts due to the blockade at the Ambassador Bridge, which links Windsor, Canada with the US city of Detroit.

The bridge has been sidelined since Monday night as a two-week, trucker-led uprising against coronavirus restrictions has spread from the Canadian capital.

The bridge is used daily by more than 40,000 commuters and tourists, along with trucks carrying $323 million worth of goods on average.

The car industry has relied on easy and reliable access to the bridge since the 1960s, said Fraser Johnson, a supply chain expert at Ivey Business School at Western University.

In an era of "just in time" inventories, "the plants may have anywhere from just a few hours of inventory to just a few days of inventory," he said.

"So as soon as we get disruptions like this, then that puts the continuous operation of the car plants and their supplier in jeopardy."

The route is a crucial gateway for the car industries in the neighbouring nations, in a region that is effectively a "giant auto industry cluster," said Jason Miller, a professor of supply chain management at Michigan State University.

Miller said finished goods pass north and south over the bridge, while parts and components may cross the border six or seven times during the manufacturing process, making the country of origin essentially irrelevant for the auto industry.

READ MORE: Ford plant shuts down as Canada truck blockade hardens

Significant damage to trade

Canadian and American officials and industry groups have warned of significant damage to trade and employment if the disruption is prolonged.

So far, auto companies have described the impact as meaningful but limited.

Ford is running its Canadian plants in Oakville and Windsor at "reduced capacity," a company spokesperson said. "We hope this situation is resolved quickly because it could have a widespread impact on all automakers in the US and Canada."

A Toyota spokesperson alluded to existing supply shortages, adding that plants in Canada and the state of Kentucky have been affected by "this most recent challenge."

Toyota expects disruption through the weekend but "we do not anticipate any impact to employment at this time," the official said.

Stellantis said all of its North American plants were running Thursday morning, "but a number of US and Canadian plants cut short second shifts Wednesday night, while General Motors canceled its second shift on Wednesday and first shift on Thursday at a Lansing, Michigan plant.

The disruption comes as US retail inventories of new vehicles remain extremely low, and used car prices are still elevated, although the massive increases seen last year have slowed.

Automakers have offered mixed appraisals on the semiconductor picture that has impacted manufacturing. 

READ MORE: US-to-Canada crossing blocked by truckers protesting Trudeau's Covid curbs

Possibility of trucker protests in US, France, Belgium

Meanwhile, the Biden administration urged Trudeau's government to use its federal powers to end the truck blockade.

The White House said Homeland Security Secretary Alejandro Mayorkas and Transportation Secretary Pete Buttigieg spoke with their Canadian counterparts and urged them to help resolve the standoff.

The US braced for the possibility of similar truck-borne protests inspired by the Canadians, and authorities in Paris and Belgium banned road blockades to head off disruptions there, too.

The US Department of Homeland Security said in a bulletin to local and state law enforcement agencies that it has received reports that truckers are planning to "potentially block roads in major metropolitan cities" in a protest against vaccine mandates and other issues.

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