Canada has just gone through its own version of the insurrection that took place in Washington, DC. on January 6, 2021. Unlike the one-day invasion of the U.S. Capitol building, the Canadian protests were extended over 23 days, in multiple locations, and may not be over. The Protest label is truly not correct; the more appropriate label is an Occupation. Here are a few personal reflections.

Why did these protests take place?

The U.S. protest was intended to overturn the November 2020 election. Canada’s protests were initially directed at the country’s vaccine policies, specifically the vaccine and masking mandates.

The motivation of the so-called “Freedom Convoy” was a piece of federal regulation that requires unvaccinated Canadian truckers to isolate for fourteen days upon returning to Canada from the United States. Unvaccinated foreign truckers, however, are not allowed into the country. Despite 90 percent of Canadian truckers being vaccinated, the support of the Teamsters union and the Canadian Trucking Alliance, this policy energized a vocal minority on the Right.

I am a resident of Toronto, Ontario, Canada. I live in a city and province where Covid-19 is just about out of control. It did not have to be this way. The warning signs have been there for months. But the premier of this province just did not get it and still does not get it. The Covid-19 pandemic has exposed a core set of leadership skills that are determinants of how successful a politician is in managing this crisis. Premier Ford has not demonstrated that he has these key leadership attributes.

A Belief in Science

The science has helped us understand the key elements of this highly transmissible virus. The Ontario’s Covid-19 Scientific Table is composed of several very knowledgeable medical experts. They advised the politicians that the virus is spread between individuals who are in enclosed spaces and are close together. The scientists have told us for months that if we stay home, wear masks, and remain socially distant, we can greatly reduce the spread.

In Ontario, we are in the third wave of the virus. The number of new cases is rising on almost a daily basis. But Premier Ford has chosen to close parks, golf and tennis clubs but keep factories, warehouses, and places of worship open. Is there a need to manufacture ladies’ purses during a pandemic? Why place people in congregated indoor settings which increase the risk of catching the virus?

Fifty-one days after taking office, President Biden signed into law the $1.9 trillion American Rescue Relief Bill, one of the most important pieces of legislation in the past 50 years. The bill is significant in many ways.

It will put money directly into the hands of lower- and middle-income Americans, those most in need of support. The bill directs $1,400 payouts to millions of Americans and continues unemployment checks for millions more as the country pulls itself out of the economic devastation of a pandemic that has killed more than 530,000 of its citizens. As itemized by Eric Levitz in New York magazine, the bill will have a broad range of impacts.

• A family of four with one working parent and one unemployed one will have $12,460 more in government benefits to help them make ends meet.

• The poorest single mothers in America will receive at least $3,000 more per child in government support, along with $1,400 for themselves and additional funds for nutritional assistance and rental aid.

The Covid-19 pandemic, and the response of the Canadian and U.S. governments and citizens to the virus, is clearly the major story of 2020. The pandemic did not just have impacts on the health of many Americans (i.e. over 11 million cases, 250,000 deaths) and Canadians (i.e. over 306,000 cases, 11,000 deaths); it also had significant impacts on our personal lives, business operations, and freight transportation. This blog will highlight the huge effect of Covid-19 on so many aspects of our lives; an upcoming blog will capture some of the other top freight stories of the past year.

1. Covid-19 – The Impact on our Health and Personal Lives

Millions of Americans and Canadians have been infected and continue to be infected at an escalating rate. Personal reactions have ranged from mild flu-like symptoms to significant health issues to death. To protect oneself from contracting the virus, many citizens have begun wearing masks and other PPE, limiting the size of groups with whom they interact and trying to maintain six feet or more of distance between themselves and others.

The lack of national strategies in Canada and the USA on testing, tracing, and quarantining have resulted in a protracted and extensive virus spread. Varying guidelines on mask utilization, industry sector lockdowns and re-openings, and varying leadership approaches have created confusion, fragmented responses, and disappointing results. Many citizens must stay home if they tested positive, if they had symptoms, or if they had to be quarantined. Many primary, secondary and university students are now participating in online learning rather than attending schools. The year is ending with at least two potentially effective vaccines, which will likely be distributed during the first six months of 2021.

There is considerable euphoria in the trucking industry these days. The July 2020 issue of Broughton Capital Truck Freight Barometers® is entitled “Fasten Your Seatbelts! The Economy & Truck Marketplace are Poised to Surprise to the Upside.” The issue contains the following thoughts.

“In all three modes, the Broughton Capital Truck Freight Barometers® are reflecting an environment in which demand exceeds capacity by a significant margin . . . the underlying fundamentals have never improved this dramatically in such a short period of time. The rapid, intense improvement runs counter to typical seasonality, making the gains even more impressive. Normally, July demand is softer than June . . . This year's Q3 trends, however, are shaping up to be exceptional in every way.” The report goes on to say the following.

“Consistent with our very bullish outlook for the U.S. domestic economy, the demand side of the equation is expanding robustly. Meanwhile, the capacity side of the equation has been constrained, which magnifies the imbalance and contributes to an extraordinary surge in spot rates. Today's spot rate levels are poised to exceed contract rates. As spot rates had fallen in April to record low levels, both nominally and in terms of the gap between spot and contract rates, the meteoric rise in spot rates over the last 13 weeks has been even more spectacular.”

Similarly, the Morgan Stanley Freight (MSFI) Index “has improved sequentially and outperformed seasonality for the 7th time in a row . . . On absolute terms, the index now sits at the highest level for mid-August in over a decade . . . Our straight-line forecast now projects 2020 ending the year nearly on par with 2017 levels, the highest YE level on record.” There is encouraging news on the Covid-19 front. This week reported new cases of the virus in the United States have dropped into the 30,000 to 40,000 range and reported deaths have dropped into the 400 to 500 range. Do these numbers signal a strong fall and winter season for the North American freight transportation industry? Here are a few thoughts to consider.

In my previous blog (https://www.dantranscon.com/index.php/blog/entry/economic-recovery-and-the-future-of-the-freight-transportation-industry-part-1), I suggested that the economic recovery during the balance of this year will likely have a number of peaks and valleys that reflect the spread of Covid-19. In this blog I will explore some of Covid-19’s impacts on freight transportation.

The latest economic data “most closely resembles a horror movie with Q1 GDP posting the worst numbers since the global financial crisis, nearly a quarter of workers now unemployed, and durable goods showing the worst two-month streak since data collection began,” stated Brett F. Ewing, Chief Market Strategist, First Franklin Financial Services.  The job market halted its pandemic-induced collapse in May as employers brought back millions of workers and the unemployment rate unexpectedly declined. Tens of millions of American workers are still out of work, and the unemployment rate, which fell to 13.3 percent from 14.7 percent in April, remains worse than in any previous postwar recession. All the same, economists warn that it will take far longer for the economy to climb out of the hole than it did to fall into it.

The gains in May indicated that the Canada Revenue Agency, the U.S. Congress and the Federal Reserve had at least partly succeeded in limiting permanent economic damage by providing trillions of dollars in assistance to households and businesses. But that aid is now in jeopardy in the U.S., and economists warned that there was no guarantee the job market would continue to improve without it.

Even as the economy shows signs of revival, the United States is confirming more than 20,000 new coronavirus cases and 1000 deaths a day, with counts rising in at least 21 states. The protests over the past three weeks have brought thousands of people to the streets across North America, most close to one another. While many protestors are wearing masks, the lack of physical distancing will likely produce increased virus case counts in many locations.

The recovery of the North American transportation industry is contingent upon the revival of the economies of the United States and Canada. The movement of auto parts, housing supplies, manufactured goods, food stuffs. and a host of other products drive the economy. If there are any impediments to the smooth operation of North American supply chains, this has a direct impact on the Transportation industry. This blog will focus on the forces shaping the revival of the two economies. Part 2 will focus on what the freight transportation industry will look like after the recovery.

Since the beginning of the Covid-19 crisis, Canada has lost about 3 million jobs while the U.S. has lost about 40 million jobs. Many of the unemployed have been forced to stay at home due to the contagious nature of the virus. For the past week, the United States has also been rocked by protests in over 75 major cities because of the killing in Minneapolis, Minnesota of an African American man, George Floyd, by a white police officer.

Most U.S. states and Canadian provinces are in “the restart” period. With no vaccine for probably nine months or more, companies need to generate revenue and profits during the “next normal” phase. Businesses and consumers are having to learn to adapt to the public health guidelines in each jurisdiction (i.e. social distancing, handwashing, mask wearing, drive to work rather than take public transportation etc.) and the new operating procedures (i.e. curbside pickup, controlled entry to stores and businesses, working from home etc.).

In the space of a few months, we have discovered that jobs that no one thought could be done remotely can be handled very effectively with a laptop computer and video conferencing. Cash-strapped businesses are learning that they can cut costs through the reduction or elimination of office space and its attendant costs. Teleconferencing reduces the need for business travel, another cost saver. Commuting costs can be cut – a walk to the home office beats hours in a car or on public transit. Of course, not everyone can work from home.

The Covid-19 pandemic is much more than a major health crisis that has produced massive business closures and job losses. It represents a “change agent” that will likely produce a range of impacts in Health Care, Education, Technology and in the world of Business. Some of these changes may be temporary but many of them will be permanent; they will remain long after a vaccine is found. Here are some examples of the changes taking place.

A recent study by Jonathan Dingel and Brent Neiman of the University of Chicago found that 37 percent of jobs in the U.S. can be performed from home. Webex, GoToMeetings, Microsoft Teams, Face Time and Zoom video conference calls are now a regular part of every day. While these services were in widespread use pre-Covid, they are being increasingly used by businesses, schools, churches, associations, and other organizations. Working from home has certain disadvantages (i.e. distractions, noise levels, inability to arrange impromptu face-to-face meetings with coworkers etc.) but it has certain inherent significant benefits (reduced travel time, fuel consumption and carbon emissions) that should provide many citizens with a better quality of life.

Just as important as the social and technological changes being driven by the pandemic are the changes taking place in the operations of specific business segments. Some industries (i.e. restaurants, travel, hospitality etc.) are being transformed as new processes and procedures are put in place to protect consumers and employees.

For example, restaurants are rearranging tables so their customers sit six feet apart, they are erecting plexiglass dividers to limit the exchange of potentially harmful respiratory droplets between patrons, or between patrons and employees, creating disposable menus, and ensuring their employees wear masks, gloves and other protective equipment. Similarly, airlines are making changes to their processes by performing temperature checks before passengers enter a departure gate, leaving the middle seats vacant on their flights and by more frequently sanitizing their planes.

As of May 2, 32 U.S. states and 5 Canadian provinces (https://nationalpost.com/news/canada/reopening-canada-provinces-ontario-quebec-saskatchewan-alberta) have announced plans to reopen businesses on a phased basis. Each state and province has developed back to work guidelines to manage the process. These actions are being taken even though Covid-19 is a very contagious virus with 1.1 million reported cases and 65,000 deaths in the US and 55,000 cases and almost 3400 deaths in Canada. Currently there is no cure and a cure is at least a year or more away.

Government Health Care Guidelines

While there are various sets of guidelines that have been published, those developed by New York State and by the Province of Ontario (https://www.ontario.ca/page/resources-prevent-covid-19-workplace?_ga=2.258615434.1461890914.1588269926-1610310933.1584035138 ) are particularly thoughtful and will be referred to in this blog. The NY state document stipulates that to open their economy, hospital and ICU capacity should not exceed 70%. Moreover, the rate of transmissions should be less than 1.1 (i.e. one person infects less than 1.1 people). Adhering to these guidelines will limit the possibility of hospitals being overwhelmed by a surge of new cases. The CDC (Centre for Disease Control) in the United States suggests that there should be a 14-day decline in Covid-19 hospitalizations immediately preceding the lifting of restrictions. Should the number of infections begin to escalate, restrictions should be put back in place. Note that some states are lifting restrictions while infections are rising.

The NY state plan stipulates that a testing regimen should be activated with a daily objective of 30 tests per 1000 people. There should also be a satisfactory number of testing sites in each location; there should be an immediate turnaround on testing results to limit the spread. New York State suggests that an advertising program be created to educate the public about the need and the process of being tested.

As seniors with underlying health issues, my wife and I have made the decision to commit to buying all groceries and supplies online, until the risks of this virus are greatly diminished. For the past three weeks, we have been testing a variety of online grocery service providers. This is what we have learned.

Grocery shoppers and online service providers were caught off-guard by the speed with which Covid-19 has changed purchasing behavior for both online and in-store grocery shoppers. Empty shelves and “out of stock” notifications have become the norm as self-quarantining, “panic buying,” hoarding, and the closure of restaurants and bars have dramatically altered buyer purchasing volumes. Therefore, rather than critique any specific online providers under these circumstances, I will share a few general observations on some of the challenges my wife and I have faced and offer some opportunities for improvement.

1. Expand the Range of Delivery Options

For one of Canada’ leading online grocery providers, it is nearly impossible to select a date and time for a delivery. They provide a one-month window usually with no available time slots. When you call the 1-800 line for assistance, it is always busy. You can sit at your computer all day and wait for a time slot to become available. That is not a good use of one’s time and is very stressful in these already stressful times.