November 17, 2021 by Canadian Underwriter Staff
Brokers are struggling to support their transportation clients as a new border-crossing vaccine mandate adds to driver shortages and supply chain concerns for an industry that’s already grappling with a host of prolonged concerns, a broker has said.
The recent U.S. move to open the Canada-U.S. border to both essential and nonessential travelers includes a proof of double vaccination requirement for all travelers entering the U.S. And, starting in January 2022, that will include truck drivers.
While many Canadian trucking companies have a double-vaccination rate of around 85%-to-90%, the Canadian Trucking Alliance (CTA) estimates around 20% of Canadian truck drivers crossing the border (22,000) and 40% of U.S. truck drivers (16,000) “would almost immediately exit the Canada-U.S. trade system” should the vaccine mandate take effect early next year.
However, brokers are already seeing a driver exodus, adding to the transportation industry’s existing driver shortages and prolonged global supply chain disruptions, said Rob Cyr, transportation insurance expert and senior account executive at Rogers Insurance, a member of the Canadian Broker Network.
“I haven’t personally come across it, but many brokers have been saying their clients are struggling with drivers already quitting because of the mandate,” Cyr said. “It’s going to have a massive impact.”
Around 70% of the $648 billion in trade between Canada and the U.S. moves by truck, with 120,000 Canadians operating cross-border and 40,000 U.S.-licensed drivers moving north-south trade, according to the CTA – which called on the U.S. and Canadian administrations to reconsider the vaccine mandate timing to avoid border delays and further supply chain disruptions.
This latest challenge adds to a list of woes the industry has struggled with for the past five years, and which were amplified by the impacts of COVID-19, Cyr added.
“We continue to see sticker shock from clients across the board as premiums keep rising,” Cyr said. “Although there are signs of stabilization as the market starts to soften, our transport clients are far from out of the woods.”
In addition to global supply chain disruptions, the industry has been dealing with a general driver shortage amid Canada’s aging population and insurers’ scaling back coverage for inexperienced drivers.
“There’s also been equipment shortages, with clients often waiting months to get parts. Some manufacturers are only able to supply equipment again at the end of 2022,” Cyr added.
What to tell clients
Cyr said brokers need to move the sales conversation with clients beyond price and loss to risk management.
“It’s more important than ever to talk to clients about risk management survey preparation, compliance and driver risk management,” Cyr said. “If we can all help improve the trucking industry, we’re all better off.”
Feature image by iStock.com/MayaCom