Fruit and Veggie Outages in Canada Get Worse With Trucker Shortages
(Bloomberg) -- Canadian border agents began refusing entry to unvaccinated American truckers just days ago, and it’s already causing chaos -- particularly in fruit and vegetable markets.
A mandate starting Jan. 15 requires truck drivers crossing into Canada to be vaccinated. However, only about half of American truck drivers have gotten their shots. Meanwhile, as much as 90% of Canada’s fruits and vegetables comes from the U.S. during winter, and grocery stores are already having trouble getting some shipments, according to the Canadian Federation of Independent Grocers.
“We’re seeing shortages,” said Gary Sands, senior vice president of the Canadian Federation of Independent Grocers. “We’re hearing from members they’re going into some stores where there’s no oranges or bananas.'”
The mandate is adding to Canada’s supply chain turmoil that was already abundant due to recent storms as well as the pandemic. Shipping snarls and logistical headwinds have been blamed for rising inflation across the globe. Prices for consumers will likely rise as freight costs soar. Sending one truckload of fresh produce from California or Arizona to Canada is now $9,500, up from an average of $7,000, according to North American Produce Buyers. That works out to an additional cost of 12 Canadian cents per head of lettuce, according to the company.
The price to bring food and other exports over the border has doubled on some routes given the drop in eligible truckers, according to Alex Crane, operations manager at Paige Logistics, a freight broker in Surrey, British Columbia. That’s leaving hundreds of shipments bound for the U.S. waiting in warehouses to be picked up and trucked when and if carriers can find drivers to haul them, he said. The goods include everything from food to plumbing parts to gazebos.
“We have shipments all over the place not going out,’’ Crane said by phone. “They are just sitting at warehouses, waiting waiting.’’
The situation is only set to worsen with the U.S. imposing its own vaccine mandate on foreign travelers starting Jan. 22. The Canadian Trucking Association estimates the mandate will take as many as 16,000 drivers off the road.
The lack of truckers could potentially create “more of a shortage than what we’re experiencing now,” said Victor Smith, chief executive officer of JV Smith Companies, a grower and distributor of leafy greens. That’s because trucking is the only option for transportation. Rail service isn’t available everywhere, and shipping by air is too expensive.
Dairy trade between Canada and the U.S. may also take a hit. Canada is the sixth largest destination for U.S. exports, and nearly all of the volume moves by truck, said Nate Donnay, director of dairy market insight at StoneX Group.
“Any significant hiccup in the movement of dairy into Canada isn’t good news for dairy farmers,’’ Donnay said.
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