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COVID-19’s impact on trucking industry: Part two

Friday, October 23, 2020 @ 11:28 AM | By Jaclyne Reive and Mabel Kyei

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Jaclyne Reive
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Mabel Kyei
As we discussed in our first article in this series, the Canadian trucking industry has had to adapt to the changing circumstances of COVID-19 in order to keep supply chains moving. This article continues our overview of some of the legal issues that this industry has faced and considerations in connection with the reopening of the economy.

Safety guidelines for commercial vehicle operations

Transport Canada, the Public Health Agency of Canada and Employment and Social Development Canada also collaborated to produce guidelines, which could be used to protect drivers and employees working in commercial vehicle operations. The document, which is available in English and French summarizes the recommendations made to date to limit the spread of COVID-19 in this context. Full compliance with these guidelines by individuals and companies involved in commercial vehicle operations during the pandemic is recommended, for the following critical reasons.

(1) Employers have occupational health and safety obligations towards their workers, including those engaged in carrier operations. These obligations arise under the Canada Labour Code in regards to extra-provincial motor carriers, among others, or under provincial legislation for motor carriers that operate solely within the boundaries of one province or territory.

(2) Motor carriers and logistics companies could consider bringing these guidelines to the attention of shippers and consignees to help explain why certain operational changes were made that may require all parties to be flexible with regard to the way that the carrier performs its obligations under contracts of carriage during the pandemic. Carriers may wish to indicate that their goal is to keep cargo moving and avoid having to rely on force majeure clauses. However, these important changes must be implemented to protect the workers of the carrier, the shipper and the consignee so that all parties remain healthy and safe.

(3) Compliance with these guidelines may also help reassure the carrier’s workers that their employer is taking all commercially reasonable steps to keep them and their families safe.

Bills of lading

Due to the rapid spread of COVID-19, we were also seeing cases of consignors and consignees not wanting to sign the hard copy of the bill of lading due to social distancing precautions and sanitary protocols. We saw a rise in inquiries on whether a physical copy of the bill of lading and wet ink signature were needed or whether electronic copies could suffice. The requirements for bills of lading vary based upon the jurisdiction of origin of the shipment, and although there are many similarities across the provinces, the requirements are not entirely uniform. For example, some provinces require paper copies whereas others do not, and similarly some provinces require consignee to sign whereas others do not.

Many carriers, shippers and consignees desired to protect the health and safety of their workers first and foremost, and combined with statements of various provincial and federal governments to engage in physical distancing and increased sanitary precautions during this pandemic, some parties in the industry decided to forgo physical signatures from all parties on hard copy documents or found other ways to ensure that signed copies were received by the necessary parties (e.g. sending bills of lading by fax or e-mail with instructions to confirm receipt/good order and condition of the goods by signing and returning the signed copy by fax or e-mail).

Steps to take as economy reopens

We have started to see provinces begin to reopen, and with that comes a variety of things for trucking businesses to consider regarding their operations. How to prepare for transitioning for a “post-COVID” world is something that the industry is beginning to consider. Part of this process involves evaluating how current business relationships have been impacted during the pandemic.

Trucking businesses should be considering:

  • How their operational procedures have changed as a result of the pandemic;
  • Which new procedures worked well and should be kept in place going forward;
  • Which procedures are not reflected in their contracts with customers and suppliers, and accordingly, which contracts will need amendments as a result;
  • Which procedures are also not reflected in any written policies that the trucking company has in place, meaning that amendments are needed;
  • Whether the business’s customers or service providers have been financially impacted and what rights the business has under its contracts to obtain financial information or assurances;
  • What provisions the trucking company can rely on in its contracts to ensure that it gets paid;
  • Whether its contracts include rights to a lien, and if so, the process that needs to be followed in order for a lien to be validly asserted, if needed; and
  • Whether any parties are entitled to set off rights.

Once the trucking company has finished reviewing its contracts and policies in light of the current situation and potential issues in the future, it will need to determine whether or not these contracts and policies will need to be amended and where applicable, how to start negotiating those changes.

The Quarantine Act and travel restrictions are expected to remain in place in the upcoming months; however the exemptions and policies (national and provincial) have been changing periodically. It is important that companies have up-to-date information for letters and documentation and contact legal representatives as needed for Canadian immigration updates.

This is part two of a two-part series. Read the first article: COVID-19’s impact on trucking industry: Part one.

Jaclyne Reive and Mabel Kyei are associates at the Toronto office of Miller Thomson LLP.

Photo credit / Buntiam ISTOCKPHOTO.COM

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