Canadian Shipper July/August 2014

JULY/AUGUST 2014

PUBLISHED SINCE 1898 | FORMERLY CANADIAN TRANSPORTATION & LOGISTICS

SHIPPER’S CHOICE Shippers have their say CHEMICAL LOGISTICS Managing a step up the chain

OLD WORLD

NEW WORLD

CHARM SPIRIT Shorter supply chains, a wealth of services await shippers trading with Mexico and Latin America

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© 2014 C.H. Robinson Worldwide, Inc. All Rights Reserved. www.chrobinson.com

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CONTENTS

JULY/AUGUST 2014

DEPARTMENTS

14

6 | Viewpoint China’s rejection of, the P3 maritime alliance could be a good thing in the long-term.

COVER STORY MEXICO AND LATIN AMERICA

8 | In the News Cargojet ramps up charter cargo services with new partnerships, equipment

are becoming hot trade zones for shippers in North America. Here’s a look at

52 | Inside the Numbers

the services, trends and

State of the Nation: a report on how US logistics is faring

challenges in the region

2014

21

SHIPPER’S CHOICE

©Gerardo Borbolla/iStock/Thinkstock

54 | The Bigger Picture Contingency planning in the global logistics arena goes a long way

FEATURES

Mexico City’s Angel of Independence, “El Ángel “commemorates the beginning of Mexico’s War of Independence. Today, Mexico has emerged as a modern, stable economy offering North American shippers manufacturing links and shorter supply chains.

DIMENSIONAL PRICING | 10

SHIPPER’S CHOICE Our 13th annual Shipper’s Choice Awards Survey sets industry benchmarks for carrier performance excellence. Who is exceeding them?

A look at courier pricing mechanisms in B2C commerce

REPORT FROM THE INTERNATIONAL TRANSPORT FORUM SUMMIT | 11 Shaping the future of recruitment and retention in the transportation industry

NEARSHORING DARLING | 18 How Mexico’s light manufacturing industry is creating shorter supply chains for North American shippers

INTERMODAL UPDATE | 40 On a growth curve across North America, intermodal is becoming a popular option for shippers, but capacity and service pinch points remain obstacles

continued

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Surface TranSporTaTion

On October 15th 2014, please plan on joining Canada’s top Transportation Executives for a day of education & networking.

ummit

Introducing the 2014 team of presenters...

We have created an agenda that truly addresses the many challenges facing both Shipper and Carrier executives.

AGENDA

Patrick Cain

LOOK AHEAD: The economy in 2015 – what trends will impact your business. Expert analysis from an economist, a transportation market specialist and two transportation company CEOs.

Elias Demangos

CEO Cain Express

President and CEO Fortigo Transportation Management Group Ltd.

Greg Laurin

Carlos M. Gomes

Doug Harrison

President and CEO VersaCold Logistics Services

Kevin Taylor

Jacquie Meyers

VP and General Manager DTA Services

President Meyers Transportation Services

THE VIEW FROM THE TOP: The transportation executive’s perspective on the major trends driving truck and rail transportation.

SHIPPER – CARRIER COLLABORATION 2.0: What does the new face of collaboration really entail?

President Conestoga Cold Storage

Senior Economist Scotiabank

Kris McBride

VP of Transportation Metro Supply Chain Group

Mark Seymour CEO Kriska Group

Mathiew Faure

VP of Marketing Sales, Intermodal, CP Intermodal

SAME DAY DELIVERY SERVICE: Are you ready for this game changer?

INSURANCE TELEMATICS: How they will reshape your insurance policy.

REGULATORY ISSUES IN TRANSPORTATION: An insider’s look ahead.

Gary Fast

Sean Watson

Associate VP International Transportation Canadian Tire

VP of Transportation SCI Logistics

John Oldfield

Jason Sonnbichler

Kelly Hawes

President ColdStar Freight Systems

David Newman

Sanchia Duran

Equity Research Analyst Transportation & Industrial Products, Cormark Securities

Account Manager Sales Shaw Tracking

Michael Bourque

Alan Taliaferro

TECHNOLOGY IN TRANSPORTATION: Are you getting the most out of your TMS? WAREHOUSING & LOGISTICS: What makes for a Best in Class distribution network?

FREIGHT RATE PRICING: Skipping the tough talk and working on real solutions.

Senior Account Executive Dalton Timmis Insurance

Registration: 7:30 am

VP Business Development Supply Chain Solutions

Rob Penner

Executive VP and Chief Operating Officer Bison Transport

President and CEO Railway Association of Canada

Director Deloitte Canada

Presentations: 8:20 am sharp MISSISSAUGA CONVENTION CENTRE 75 Derry Road West, Mississauga, ON

Mark Sauve

Senior Manager Distribution Operations, Canada The Hershey Company

Ed Ryan

CEO Descartes

Ken Manning

President Transportation Costing Group

Paul Cooper President SLH Transport

Marc Wulfraat

President MWPVL International

Ryan Fletcher

Canadian Account Manager Private Fleets PeopleNet Canada

2014 SUMMIT SPONSORS

For more information and to register, please visit www.SurfaceTransportationSummit.com PRODUCED BY MOTORTRUCK FLEET EXECUTIVE, CANADIAN SHIPPER, AND DAN GOODWILL & ASSOCIATES

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s

WHAT’S ONLINE

continued

CHEMICAL LOGISTICS | 46 Shippers in this vertical will have to deal with more onerous regulations in the year ahead.

CHEMICAL SHIPPERS | 48 Managing a step up the chain on capacity and conversion.

aylor

al Manager vices

Contingency planning for labour disruption?

54

WEB TV Transportation Matters

Faure

SUPPLY CHAIN TOOLKIT:

ng Sales, ntermodal

How an interactive self-assessment tool will boost skills, knowledge and aptitude in the supply chain sector.

SHAPING POLICY What’s at stake on the world’s transport policy agenda? See highlights from this year’s International Transport Forum Summit.

Duran

anager s cking

Ä

FEATURES What’s the Buzz?

A police officer’s view of cargo crime: Constable Trevor Archibald, talks about how cargo crime is perceived and how industry can fight back

Seven Key Things to Consider when Outsourcing

aferro

or anada

Customs Processing: tips and strategies for the outsourcing process

Navigating the waters of CBSA carrier codes

©Thinkstock

cher

nt Manager eets anada

Harper Grey LLP’s Jonathan Meadows and Natalie Parsonage recently prepared this guest editorial regarding the Canada Border Services Agency’s evolving approach to carrier codes, as well as a brief snapshot of the Shipping Federation of Canada’s response to the CBSA’s impending July 2014 amendments.

Find us on Twitter at: @CanadianShipper

|

@LouSmyrlis

|

@JuliaKuzeljevic

|

@JamesMenzies

|

@FleetExecutive

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THE VIEW Lou Smyrlis, MCILT July/August 2014 Volume 117 Issue No.4

EDITORIAL DIRECTOR Lou Smyrlis (416) 510-6881 Lou@TransportationMedia.ca

Thinking long term Why China’s scuttling of the P3 Alliance may be better for the long run

S

hould shippers of marine transportation services be rejoicing or upset about China’s surprise decision in June to wreck plans for a broad alliance among the world’s three largest container shipping companies? It’s not an easy question to answer.

The proposed P3 Global Alliance among Denmark’s AP Møller-Mærsk A/S, France’s CMA CGM SA and Switzerland-based Mediterranean Shipping Co. would have resulted in lower underlying costs and improved industry stability, according to respected UK-based Drewry Maritime Research. Certainly the proposed alliance promised to lower costs for the shipping giants involved by allowing them to share ships and port facilities. In turn it was hoped this would result in lower freight rates. Even a major Europe-based rival conceded to the media that the alliance “threatened to eventually drive down freight rates that would be hard to match.”

The alliance had already won US and European approval and the three companies involved had started to reorganize operations ahead of the expected approval of the deal. But China’s anti-trust regulatory body, which is flexing its global regulatory muscles in accordance with the country’s economic standing, felt the alliance would have given the three European-based shipping companies too much control of the globe’s trade routes.The P3 Alliance, expected to start operating this year, would have positioned the three shipping lines in a commanding role, controlling as much as 40% market share in the world’s main liner trades, including over 46% market share in the Asia-Europe market.

The alliance was also fiercely opposed by smaller shipping companies and logistics suppliers. The Global Shippers Forum, of which our own Freight Management Association of Canada is a member, was also concerned, stating that: “Shippers are rightly worried about the potential of the P3 to eliminate effective competition in the world’s main liner trades.”

Once the European Commission agreed to the Alliance, the Global Shippers Forum (GSF) asked the Commission to “closely scrutinise the P3 to ensure the Agreement is in line with the general provisions of the EU competition guidelines.” At the same time the GSF wanted the P3 lines to “step up to the plate and deliver on their promises of improved services and lower costs.” The GSF wanted to see a wider range of services, enhanced service performance including improved service reliability and on time delivery, arguing that “above all, shippers expect to share in the benefit of more competitive freight rates through reduced costs.”

Following China’s decision, the three lines involved announced that they have ceased preparatory work on the alliance. Will marine service buyers looking for competitive rates be the ultimate losers through this turn of events or did they just manage to avoid the longer-term issue of excessive market consolidation?

Most of the marine shipping industry’s major players have been aggressively forming alliances to shore up sagging freight rates, raise ROI, and reduce high-capital investments. As pointed out in the recent CSCMP Annual State of Logistics Report, the 20 largest carriers worldwide now control more than 80% of the total fleet capacity, up from just around 55% a few years ago.

The huge debt load carried by so many of the globe’s major marine lines is well documented and there is a strong argument for consolidation to boost efficiencies. But one has to wonder at what point consolidation goes too far. At what point do we start to see distinct signs of a reduction in service quality and the elimination of effective competition with not enough players left in the marketplace to do anything about it?

The Chinese throughout their history have tended to favor the longer term view in their decisions. It wouldn’t be a big surprise if China’s blocking of the P3 Alliance was at least partially influenced by its need to protect its own shipping companies – both China Costco Holdings and China Shipping Container Lines have posted troubling results in recent years.

But perhaps the Chinese regulators have done us a favor nonetheless by thinking long term once again with their decision to block the P3 Alliance. CS 6

July/August 2014

ASSOCIATE EDITOR Julia Kuzeljevich (416) 510-6880 Julia@TransportationMedia.ca PUBLISHER Nick Krukowski (416) 510-5108 nkrukowski@canadianshipper.com ART DIRECTOR Ellie Robinson erobinson@bizinfogroup.ca CONTRIBUTING EDITORS Carroll McCormick, Leo Ryan, James Menzies, John G. Smith, Ian Putzger, Ken Mark, Carolyn Gruske MARKET PRODUCTION MANAGER Gary White (416) 510-6760 gwhite@bizinfogroup.ca VIDEO PRODUCTION MANAGER Brad Ling RESEARCH MANAGER Laura Moffatt CIRCULATION MANAGER Barbara Adelt (416) 442-5600 ext. 3546 badelt@bizinfogroup.ca EXECUTIVE PUBLISHER Tim Dimopoulos VICE-PRESIDENT PUBLISHING Alex Papanou PRESIDENT Bruce Creighton HEAD OFFICE: 80 Valleybrook Drive, Toronto, ON M3B 2S9 Canadian Shipper is written for Canadian transportation and logistics professionals who manage product flow from manufacturer to point-of-sale. Editorial is focused on reporting, analysis and interpretation of Canadian logistics trends and issues. It is published by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd.

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IN THE NEWS

CARGOJET BUILDS APPETITE FOR CHARTERS The fledgling partnership of Air Canada Cargo and Cargojet came up roses in its first joint foray. In May Cargojet flew one of its B767 freighters to Bogota to load up with flowers in time for Mother’s Day. It was a fit that suited both partners. Air Canada had recently reduced its capacity to Bogota, so Cargojet could provide the additional lift to have a strong go at the flower surge that comes with Mother’s Day. On the southbound leg Canada’s largest allcargo airline was carrying mostly freight that Air Canada had hauled across the Atlantic from Europe.

The partners intend to build on this in the months ahead. “We are looking at a number of opportunities this summer,” says Jamie Porteous, executive vice president of sales and service at Cargojet. “A couple of opportunities in Mexico and South America” are on the radar, he added.

Cargojet, which generates the lion’s

BY IAN PUTZGER

Cargojet B767 freighter

© Courtesy Cargojet

share of its business hauling express traffic across Canada for the large integrated carriers, has been steadily building up its charter business. “We doubled our ad hoc charter revenue every year over the past

three years,” Porteous says.

The cargo airline is getting a significant boost in its capacity, as it virtually doubles its lift. Over the past couple of months it has leased or acquired a number of Boeing

CS

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IN THE NEWS

767 and 757 aircraft, some of them in passenger configuration that will be converted into freighters. According to Porteous, it will have added six, possibly seven, B767 freighters to its line-up by November 1. In addition, it is procuring three B757Fs, of which two are due this year and the third in the first quarter of 2015.

The fleet expansion is in preparation for the seven-year contract with Canada Post to provide nationwide lift for the postal agency’s traffic, including volumes of Canada Post subsidiary Purolator. The $1 billion contract kicks in next April, but the agreement stipulates that Cargojet should have the capacity in place by the fourth quarter.

“A couple of opportunities in Mexico and South America are on the radar.”

majority are coming into the province, for the most part carrying equipment to the oil sands, he says.

Stan Wraight, executive director of Strategic Aviation Solutions Internation-

al, predicts that Cargojet will control its exposure to the charter market. “Their priority is with the overnight linehaul.

They won’t do anything to jeopardize this,” he comments.

Going Far, Further…

And Growing

Jamie Porteous, executive vice president of sales and service at Cargojet

With the new planes entering the picture, Cargojet has ample capacity to operate charters, especially before next April.

Moreover, unlike now, the 767s will not all be stationed at the carrier’s home base at Hamilton. Some will be operating from Vancouver and Calgary, which will give the airline more flexibility to respond to charter demand in these markets, Porteous says.

He is looking to ramp up his sales force and is considering hiring a person with a strong focus on the charter segment. “Our charter business has been strong with two 767s,” he remarks, adding that customers have indicated that they anticipate a strong peak season this year.

Not everybody is bullish. Charter demand has been erratic, notes Ron Buschman, managing director of Calgarybased charter broker and airline GSA Aerodyne. Some months this year have been above expectations, whereas others were disappointing, he reports.

Moreover, he has noticed a change in direction.Traditionally most charters out of Alberta were outbound, but nowadays the

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DIMENSIONAL PRICING

FedEx Ground goes for dimensional pricing B2C pricing mechanisms could mean higher costs for shippers and consumers For some customers, shipping with FedEx Ground will become more expensive in the coming year, considerably more expensive, according to some observers.

The company announced in May that it would apply dimensional pricing to all shipments on FedEx Ground effective 1 January, 2015. Currently it levies dimensional charges only on shipments in that segment that measure more than three cubic feet.

Management emphasized in the announcement that this would align pricing at FedEx Ground with the current practice in its Express division, which has been applying dimensional charges to all packages regardless of size.

Some observers suspect that the move has more to do with raising prices than creating a more harmonized pricing mechanism.

Horst Manner-Romberg, principal of German research and consulting firm M-R-U, which focuses on the parcel and mail markets, notes that dimensional pricing has been a popular tool for package delivery companies to extract higher payments from customers.

“Because the market is so competitive, they cannot come up with higher charges up front, but they measure the shipment when it arrives at the sort centre, and if they find it exceeds the dimensions that the customer gave when he made the booking, they levy additional charges.This is met with less opposition from the clientele,” he says.

Dimensional pricing has been used by carriers to boost yields. Some airlines encountered vociferous protest last year when then announced plans to levy security surcharges on the basis of chargeable rather than actual weight, a plan that was branded a money grab by freight forwarders. Likewise, an airline attempt a few years ago to change the formula for calculating volumetric charges met with stiff opposition.

Some observers anticipate significantly higher costs for clients who ship or receive lightweight items measuring less than 3 cu ft via FedEx Ground. By some estimates, they could end up paying about 30 percent more. Items like diapers, sweaters or shoes that have been shipped by e-tailers free of charge or at low rates will face considerable rate hikes.

Gary Breininger, president of Toronto-based BGR Coaching & Strategic Solutions, notes that volumetric pricing can be a lever for

BY IAN PUTZGER

asset utilization. “I think this may be driven by e-commerce,” he adds.

Manner-Romberg agrees that the growth in B2C e-commerce has created additional cost pressures for delivery companies. Besides the economics of residential deliveries, the growing size of such shipments is presenting challenges.

“In Europe we see a trend to ship larger and heavier products by e-commerce - washing machines, dryers, furniture...This is extremely challenging for delivery firms. Often they need a second person on the vehicle because the driver cannot carry some items alone,” he says.

Moving bulky goods through sort centres designed for parcel traffic creates additional issues and cost, he adds.

Some observers have described the FedEx move as a harbinger of a tectonic shift in the e-commerce delivery sector. This seems unlikely, as the company is aligning its pricing mechanism with practices that many of their competitors embraced long ago.

“In Canada, this is nothing new. UPS -like many competitors charges on weight and dimension,” a spokesman for UPS Canada comments. He confirms that the company has been applying dimensional charges across the board in Canada, not only for shipments measuring more than 3 cu ft.

“This is nothing new. It is rampant in the freight sector,” agrees Breininger. “FedEx already did it on the express side.”

In 2011 both FedEx and UPS changed the factor for computing volumetric charges in their domestic systems. This is done by multiplying a shipment’s length, width, and height, and then dividing that figure by its weight. Both companies changed the dimensional weight volumetric divisor from 194 to 166.

Since then there have not been any changes to the formula, the UPS spokesman says.The company is constantly analyzing its costs, but there are no indications of an imminent change, nor is there any fundamental review of charges and yields in progress at this point, he states.

“With regard to rate changes, there is nothing new on the horizon,” he says, “but there are new services around B2C on the horizon.”

Meanwhile users of FedEx Ground are left to ponder one question.

Who will pay for the higher charges - shippers or consumers? CS

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INTERNATIONAL TRANSPORT FORUM

Shaping the future of transport Where will the transportation industry find the skilled workers it requires?

The International Transport Forum Summit, an annual event run by the Organization for Economic Cooperation and Development, was held in late May this year in Leipzig, Germany, and centered on the theme of ‘Transport for a Changing World’.

This strategic think tank for transport policy, which brings together some 54 member countries and features an annual summit of ministers, featured a panel discussion on shaping the future of transportation.

The Honourable Lisa Raitt, Canada’s Minister of Transport, was a guest on the panel along with Susan Kurland, the Assistant Secretary for Aviation and International Affairs of the US Department of Transportation, Cindy Miller, CEO Europe, with UPS, Eduardo Chagas, general secretary, European Transport Workers Federation, Jean Pierre Loubinoux, Director General of International Union of Railways, and Daniel Azema, Directeur de Cabinet of the Secretary General of the International Civil Aviation Organization (ICAO).

Minister Raitt said that the federal government in Canada is in-

Transport Minister Lisa Raitt addresses participants at the ITF summit

creasingly focused on making sure people have the right skills that sectors like transportation require. continued

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INTERNATIONAL TRANSPORT FORUM

“We have a small population, and we have a skills shortage and gap. From the government’s point of view we have tried to educate kids, moms and dads about the jobs available in the future. Canada leads the OECD in the number of students graduating from tertiary education. We determined

offer them skills and training,” she said.

Creating a diverse workforce in transport is very difficult, she added.

“Most of the time when I walk in to a room to discuss what is going on in policy it’s to a room full of men. It’s not a diverse cut of what Canada looks like. We have to

“The key that really has to be pushed is to ask how much businesses invest in training. It says a lot about who businesses are and what they believe.”

Cindy Miller, CEO Europe, with UPS industry is not doing as much training as they should be. We set up a Job Grant program for employers to be able to bring in an apprentice. The main concern of employers is training someone who will then leave.

There are two specific pools of candidates that are untapped: First Nations groups and women.We really need to make sure we

work better to ensure we get that diversitywith diversity you get more innovation and more productivity, we believe. That would help us have a competitive transportation workplace,” said the Minister.

In the US, transportation paints a similar picture. Said the DOT’s Susan Kurland: “Of the 11 million jobs transportation

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accounts for in the US, and 8.7% of civilian workers, studies are indicating that 50 % of this transportation workforce will be eligible to retire in the next ten years. That is double the retirement rate of the nation’s entire workforce. Some of the initiatives we’re planning under the Grow America Act are to create jobs and strengthen the transportation workforce. Under this proposed bill there are USD $245 million dollars in workforce development grants and three areas of focus: strengthen collaboration between transportation agencies, employers and workforce programs, promote the use of registered apprenticeship and job programs, and work to create an incentive grant program for the states,” said Kurland.

Every billion dollars spent in public infrastructure creates 13,000 jobs, Kurland noted.

“With the help of our Canadian colleagues, we have launched a Women in Transportation task force. It is so important not just to have governmental directives but have it be a top-down initiative,” Kurland said.

“Since the opening of the markets we have unfortunately raced to the bottom in terms of labour costs. This has kept people away from the transport professions,” said Eduardo Chagas, general secretary, European Transport Workers Federation.

UPS’ culture of promotion from within has helped the company on the retention side, said European CEO Cindy Miller.

“I started as a package car driver over 25 years ago. Here in Germany over 80% of our people in management started with a front line position. That’s part of the secret we’ve had for 107 years. I see that becoming that much more a part of our unique culture that seems to work well,” she said.

UPS spends roughly 500 million a year on training, 25% going specifically to safety training, the rest on other types of skills, advancements and technologies, said Miller, and “I can’t even begin to tell you how important all of that is from an attraction and retention perspective to future employees,” she said.

“The key that really has to be pushed is to ask how much businesses invest in training. It says a lot about who businesses are and what they believe,” she said.

While the apprenticeship concept is great for attracting new talent, “to be honest transport is not sexy but the education system needs to do a better job. We carry 2% of global GDP-if you were going to get something somewhere, more than likely we had something to do with it. We need continued on p. 44

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H g w

W

Hard work goes a long way.

Wheels MSM wins the 2014 Shipper’s Choice Award.

We’re very proud to have won this prestigious award, one of only two companies to have done so for the past 13 consecutive years. We want to thank our customers and suppliers for continuing to keep their trust in us, and our employees for their hard work and dedication. Here’s to another great year.

“One of Canada’s Best Managed Companies” – Platinum Member for 16 Consecutive Years

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LATIN AMERICAN TRADE

LATIN AMERICAN TRADE

©Thinkstock

14 July/August 2014 www.canadianshipper.com

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LATIN AMERICAN TRADE

MEXICO, LATIN AMERICA AIMING FOR WINS ON TRADE GROWTH

BY KEN MARK

M

exico and Brazil are going head-to-head for top spot in World Cup soccer and among Latin American economies. In the second contest, Mexico wins because its forecasted 2014 GDP growth is 4% vs. 2% for Brazil.

Mexico’s new president, Enrique Peña Nieto has unleashed a number of dramatic reforms to wake up its sleeping economy. The most exciting move was ending the 76-year government monopoly of Pemex that opens up the oil and gas sector to foreign competition.

The government has also launched a National Infrastructure Plan to boost logistics connectivity. It focuses on improving roads, railways, ports and airports to transform Mexico into a global logistics centre of high added value.

Specific projects include 60 new roads (15 toll roads, 29 freeways, and 16 rural roads), three passenger railroads, seven ports, seven airports and the launching of two new satellites. Most of the funding will come from public-private partnership (PPP) contracts worth more than US $100 billion.

In related news, Panama and a consortium of European construction companies agreed in February to resume work on the multibillion-dollar project to widen the Panama Canal. The US $1.6 billion cost overrun will boost the expansion’s final cost to nearly US $7 billion when it is finished in 2015.

While such projects offer smoother logistics tomorrow, Canadian shippers still have to cope with existing processes and procedures.

Says Arnon Melo, Mississauga-based president & managing director, Mellowhawk Logistics Inc. “Many are afraid to ship goods to Latin America because they believe it requires paying bribes. In my experience, that’s never happened. Instead, what they need to fear is bureaucracy- time lines and regulations.”

Melo states that for trade-show items, most customs officials want to see them three weeks before the show opens. To exhibitors

planning to ship heavy equipment by sea that can take up to 25 days, he suggests sending them several months in advance. Airfreight is more flexible but also more expensive.

He assures shippers not to worry about getting paid whether the sale is on open account or letter of credit terms. If they have any concerns, EDC offers financing for overseas sales as well as insurance against possible buyer bankruptcy etc.

“Customs regulations rules may be longer and more detailed than ours but they are not complicated,” he says. “Shippers also need to have someone in constant contact with customs officials. Chile is the easiest country to deal with since they respond quickly. Other countries take longer.”

In terms of clearing goods Melo believes Mexico is the fastest, typically taking three to five days likely because of its NAFTA experience. However, be aware of high handling charges.

Moving exports out of Mexico is quicker than moving imports into the country. He cites a Canadian client’s experience setting up its own distribution centre down there. It saved money thanks to lower labour costs. But it was hard to find enough people with sufficient logistics knowledge and experience to staff it.

He strongly suggests conducting adequate due diligence. Can the product actually be shipped to the destination? Don’t take your customer’s word for it, check with a freight forwarder or someone reliable who knows the rules and has the proper contacts to find the right answer.

Melo’s two golden rules for shipping to Latin America are first, never ship goods before receiving prior approval. “Trying to resolve problems after they arrive creates nothing but trouble,” he says. Second, find a reliable partner in the country to be your eyes and ears on the ground.

“Logistics is more about who you know than what you know.”

From Mexico’s long list of new infrastructure projects, ocean freight will benefit from an expanded Port of Vera Cruz on the continued CS

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www.canadianshipper.com July/August 2014 15

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LATIN AMERICAN TRADE

The so-called “four amigos”-Chile, Colombia, Mexico, and Peru - have recently signed the Pacific Alliance, a major regional trade pact. It will reduce tariffs on 92 per cent of products traded between partners upon ratification with the rest to be phased out later.

Gulf of Mexico coast as well as updated facilities in Lázaro Cárdenas and Manzanillo on the Pacific side.

Transforming Lázaro Cárdenas will help it to compete for Asian cargo by enabling it to reach the US Midwest more quickly and cheaply by avoiding crowded Southern California ports and rail lines.

Similar to Prince Rupert BC and its CN Rail link, Lázaro Cárdenas enjoys a dedicated Kansas City Southern Mexico (KCSM) rail line that will deliver containers to Chicago faster via Kansas City.

The Multimodal Corridor Master Plan for Mexico (MCMP) will, among other duties, create strategies for promoting infrastructure development, coordination agreements and logistics services to facilitate domestic and foreign trade.

At a recent Toronto breakfast meeting, Cesar Bueno, the recently installed Trade & Development Commissioner of Mexico outlined how his country’s demographic profile is crucial to its future growth. The median age of its 118 million people is 27 years. By 2020, it more 80 million of its citizens will be in their economic productive years. Foreign firms can benefit from this huge pool of productive workers and middle-class consumers who have enjoyed better education standards as well as improved social and economic stability.

Unlike its Latin American neighbours, Mexico’s strength is based on advanced manufacturing, not commodities. As a result, it has become a “nearshore” source for large complex components and equipment to help North American producers to reduce costs and eliminate uncertain product delivery times of goods outsourced to Chinese and Asian firms.

Many Canadian companies such as Bombardier are enjoying the improved productivity of Mexican workers. Bueno attributes that growing national resource to their ability to “learn fast, work fast and think creatively”. Thanks to those attributes, Mexico has passed Canada to become the largest automotive exporter to the US. Beyond NAFTA, Mexico and several other like-minded neighbours are ready to take on the world. The so-called “four amigos”Chile, Colombia, Mexico, and Peru - have recently signed the Pacific

Hong Kong Chief Alliance, a major regional trade pact. It will reduce tariffs on 92% of Executive C.Y.Leung products traded between partners upon ratification with the rest to be addresses the Third phased out later.

Asian Logistics & Maritime Current members have more than 200 million consumers and Conference November 7, claim 35% of the economic output of Latin America and the Ca2013 in Hong Kong. ribbean and 55% the region’s exports. Costa Rica will join in 2015 with Panama and Guatemala coming in later.

Canada has active free trade or other agreements with all of them.

Alliance countries also plan to join global value chains, especially those in Asia. Chile, Peru, and Mexico are already members of the Asia-Pacific Economic Co-operation (APEC) group that includes Canada and the US. Chile and Peru are actively involved in the current Trans-Pacific Partnership (TPP) negotiations.

There are also early-stage discussions with the existing Mercosur trade group consisting of Argentina, Brazil, Paraguay, Uruguay, and Venezuela. Informed observers point to ultimately achieving the long-held dream of a Free Trade Agreement of the Americas (FTAA) encompassing the entire region.

In Mexico, many Canadian and foreign producers have set up operations in maquiladoras or free trade zones. Effective Jan. 1, 2014, the government eliminated some tax breaks for such manufacturers or maquilas including VAT-free temporary imports of goods, parts and components, not to mention machinery and equipment and raising VAT rates in Mexico’s border states, flat income and corporate tax rates.

As a result, maquilas must remit VAT payments for imported inputs upon entry into Mexico. That could complicate their cash flows since the tax paid will only be refunded after finished goods leave Mexico. However under the new rules, maquilas that receive new tax certification will continue to receive VAT tax credits upon importation and receive refunds for any VAT payments within 10-20 days.

The government’s other contribution-a modern, efficient logistics network linking maquiladoras more closely to border crossings, rail lines, harbours and airports will, in turn, attract more foreign producers to set up operations there.

Unlike in soccer, that results in a win-win for all sides. CS

Ken Mark is a Toronto-based freelance writer and a 2013-2014 Asia Pacific Foundation of Canada Media Fellow supported in part

by Cathay Pacific Airways.

16 July/August 2014 www.canadianshipper.com

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T:10.875”

S:10”

If you’re in the pizza and pasta business, so are we.

LATIN AMERICAN TRADE

Nearshoring darling Mexico offers the right mix of services for shippers who can strategize around its supply chain challenges

BY JULIA KUZELJEVICH ©Thinkstock

M

exico, benefitting from a trend towards nearshoring in light manufacturing, is now the go-to centre in North America for the manufacturing of electonic consumer products, high tech products, automotive parts and air conditioners.

A rise in inflation in Asia means labour costs in China will reach the same in 20162017 as they are now in Mexico, said Gene Sevilla, VP Supply Chain Solutions, Ryder International.

“Mexico is definitely a market for growth and needs to be looked at if you have manufacturing needs to take care of. For most light manufacturers it would not make a lot of sense to move manufacturing to Asia considering transport costs, with regard to higher inventory costs. I think in general trade between Mexico, the US and Canada is growing every year as Mexico becomes the centre of manufacturing for North America.We have a very solid presence in Mexico, and we do have a lot of northsouth movement between Mexico and the US and Canada and Mexico,” he said.

“From a lot of Canadian perspectives NAFTA has made Mexico the clear winner, but on the positive side all trade partners have benefitted from an increased integration of supply chains,” said Troy Ryley, Director, Mexico at Transplace Mexico, LLC. Ryley said that most companies who have limited experience in Mexico take a very silent approach, and may have a fragmented logistics strategy.

“But there is a tremendous opportunity for companies to work with ‘integrated suppliers’ to get rid of the ‘black hole at the border.’”

Among other services, Transplace in Mexico offers bilingual customer service and a Transportation Management System (TMS) with capabilities tailored for the Mexican market. In 2011, Transplace Mexico became a licensed US Customs Broker, Ryley noted.

NAFTA has raised the bar for transportation and competition in Mexico, and as China becomes more of a service economy with an aging workforce, Mexico, which has simplified business procedures, and which boasts a young population who are high consumers

of goods, is poised to take its place.

“The most important factor is people want things quicker and faster, and that proximity to Mexico creates an important dynamic,” he added.

However Mexico faces the challenge of ramping up its infrastructure to accommodate the increase in import and export traffic.

“Some of the bigger challenges with Mexico becoming a manufacturing centre are that a lot of finished product is flowing from Mexico to the US northbound in trucks and

rail, but not as much is flowing southbound.

The other challenge is the border. There are issues with security in Mexico. A lot of programs like C-TPAT deal with issues like drug smuggling and security, and there has been tremendous improvement over the last few years where the border crossing processes have been streamlined, and they continue to be streamlined. Customs clearance has been accelerated as well,” Sevilla said.

Ports infrastructure improvement also points to more streamlined and faster flow

18 July/August 2014 www.canadianshipper.com

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LATIN AMERICAN TRADE

of goods into the manufacturing centres.

“For many years what we would see in Mexico is stuff that would come from Asia would get offloaded in Los Angeles and be trucked to Laredo, Texas. Mexico has improved its ports infrastructure tremendously. Some rail companies even have service from Manzanillo all the way through the Northeast in the US. It’s a potential avenue for imports into the US,” he said.

Laredo, the 5th largest port in the US, is the main US-Mexico gateway and sees some 14,000 shipments crossing per day.

“It’s the shortest entry port to the largest markets of Mexico City and Monterrey, and 70% of its industrial base is in the triangle of Mexico City, Monterrey and Guadalajara,” Ryley said.

He credits former president Carlos Salinas with having the foresight to seek investment from private groups into better infrastructure in the country.

Investment around toll roads “changed the dynamic of the country tremendously,” said Ryley.

Cross-border trade is largely centered around truck and rail transport (80%) with 20% ocean and some airfreight.

Between May-July a mix of agriculture and auto retooling absorbs a lot of northbound capacity. The imbalance of 1 southbound to 3 or 4 northbound loads changes the price competition, Ryley noted.

“Mexicans need to consume more in order to balance this. Mexico City is the main consumer right now. There is a trend toward more integration at the border between US and Mexican agencies but the biggest thing is trying to interact with all of those distinct business partners,” Ryley said.

On the Atlantic side the ports of Altamira and Veracruz are two large container ports offering lots of access to ocean liners from the eastern seaboard. According to Sevilla there is lots of talk about expanding rail service from Veracruz to Mexico City and from Altamira to Monterrey, an industrial city close to the US border.

In terms of service offerings in Mexico Ryder is offering warehousing capabilities including value-addeds such as labeling and the Mexicanization of products.

Transportation management services, in terms of managing common and dedicated carriers in distributing products nationwide throughout Mexico, whether LTL or truckload, are also widely required.

“We also offer line feeding-manag-

ing the inbound materials that may come from Asia and the US, and delivering them to the assembly lines on a JIT basis according to the manufacturing schedule. We manage all the yard operations of some manufacturing plants-that means all the rail operations inside the

continued

appsexpress.com • 1.800.465.2513 275 Orenda Road, Brampton, ON L6T 3T7

p14-20 CdnShipper JulyAug2014_CoverStory1.indd 19

plants, and the distribution of inbound freight to the manufacturing facility,” Sevilla said.

Distribution of finished cars, following quality inspection, see them loaded into rail cars and shipped northbound to

www.canadianshipper.com July/August 2014 19

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LATIN AMERICAN TRADE

sistencies, and having the contingency plans around these.

If you’re doing business in Mexico, Ryley advises, you should ‘build in flexibility’, by having backup customs brokers, using more than one carrier and different ports as options.

There are some misnomers around se-

the US and Canada.

“They vary in the routes and processes but being NAFTA vehicles there are not a lot of customs issues. We just need to make sure they get to the right ramp head,” Sevilla said.

Ryley also noted that one of the fundamental consistencies in Mexico is incon-

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curity in Mexico.

“Drug cartels sell drugs. Cargo thieves deal in cargo. They are seldom the same elements,” he said.

“The real issue in Mexico is limited liability- this causes a lot of heartache for carriers on cargo liability. Mexican truckers don’t understand our concept of liability. Their legal liability is extremely limited to the merchandise they haul.

Our recommendation is if you need a lot of insurance you should leverage your global policy,” Ryley said.

On the intermodal front, Transplace and Celtic International recently announced expanded intermodal services in Mexico, considered the ‘final frontier’ for the North American intermodal market, according to a Raymond James and Associates report.

“The use of intermodal transportation continues to grow across North America, but there are few companies that have an intermodal marketing company presence across all three North American countries,” said Steven Golich, president, Celtic International. Celtic has access to more than 75,000 pieces of rail equipment in the network and extensive experience working in North America, he added.

Loads can move in-bond to Mexico interior ramps with Customs clearance performed at strategically located key Mexican markets and the company has partnerships with all the Class 1 railroads, as well as Mexican primary carriers FERROMEX and KCS de Mexico.

As of May, BNSF Railway and Ferromex also have a new intermodal service running between Chicago and Silao, Guanajuato, Mexico.

“Our partnership with Ferromex to launch this service from Chicago to Silao means that automakers and manufacturers in the U.S. and Mexico will now have direct access to the advantages of intermodal rail in the Bajio region,” said Steve Bobb, BNSF executive vice president and chief marketing officer. CS

Associate editor Julia Kuzeljevich has been writing about transportation issues for more than a decade.

Her meticulously researched articles have garnered several transportation and Canadian Business Press writing awards.

20 July/August 2014 www.canadianshipper.com

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2014

SHIPPER’S CHOICE

2014

SHIPPER’S CHOICE An impressive field of 37 carriers rose to the top in our annual Shipper’s Choice Awards survey. Read on to discover how their performance set them apart.

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2014

SHIPPER’S CHOICE

A CUT ABOVE THE REST Our 13th Annual Shipper’s Choice Awards Survey sets industry benchmarks for performance excellence and identifies the 37 carriers who exceed them

A

s the global recovery takes firm hold and freight volumes grow, commercial transportation in North America is likely to experience capacity shortages.

This will ultimately shift the focus of transportation service buyers from price to service. The hyper competitive nature of many sectors such as retail, however, will mean that there will continue to be an emphasis on cost containment.

For carriers the challenge will be in taking the leap of faith to invest in the equipment, technology and service strategies necessary to deal with growing freight volumes – a costly endeavour – at a time when rates are not rising as quickly as they would like.

It makes for a difficult balancing act but our research shows clearly that no matter what the challenge, some carriers are able to rise to it. They’ve learned how to best balance atop that quality service at a competitive price tightrope, during both tough economic times and growth periods.

This report reflects the research we conduct annually in an attempt to provide buyers of transportation services with consistent, national and scientifically derived benchmarks of excellence for carrier performance in each mode.

This year 37 carriers managed to surpass the Benchmark of Excellence in our 13th Annual Shipper’s Choice Awards Survey. Particularly impressive are the carriers who have

Geographic distribution of respondents

19%

46%

35%

Western Canada

Central Canada

Eastern Canada

scored above the benchmark of excellence for five years in a row to be awarded our special “Carrier of Choice” designation. To see these winners, turn to the final page of this report.

Our survey provides shippers, 3PL service providers and freight forwarders across Canada with the opportunity to set benchmarks for carrier performance on eight key performance indicators (KPIs) and to rate their top carriers against those benchmarks.Aside from identifying the best carriers across all modes through this process, survey respondents also provide clear indications of the different values Canadian buyers of transportation services place on each key performance indicator (KPI) based on mode as well as a comparison of how high these standards are set for each mode. (For example, transportation buyers set their highest standard on information technology for air carriers while expecting marine carriers to live up to the highest standard for competitive pricing.)

The importance survey participants place on the KPIs for each mode (based on a five-point scale) is used as a weight in calculating carrier evaluations. Survey participants then rate up to three of their main carriers in each mode (again on a five-point scale.) The final weighted score for each carrier is derived by multiplying the carrier’s average performance score by the average importance rating for each key performance indicator for that mode. continued

Importance Of Performance Criteria Mode

22

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

LTL Trucking

4.753

4.315

4.034

4.678

4.647

4.369

3.603

4.060

TL Trucking

4.848

4.506

4.168

4.715

4.633

4.409

3.910

4.210

Ocean Carriers

4.588

4.426

4.365

4.731

4.634

4.441

4.117

4.188

Couriers

4.862

4.321

4.516

4.708

4.619

4.342

3.852

4.128

Air Carriers

4.924

4.531

4.547

4.647

4.721

4.551

4.069

4.195

Rail Carriers

4.545

4.385

4.295

4.722

4.572

4.288

3.813

4.178

July/August 2014 www.canadianshipper.com

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p21-39 CdnShipper JulyAug2014_ShippersChoice1.indd 23

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2014

SHIPPER’S CHOICE

Because survey participants are first asked to rate the importance they place on each of the eight KPIs when making their carrier selections, and that data is used as a weight on their carrier evaluations, we feel that the benchmarks set are truly standards of excellence. In other words, carrier performance is judged against an ideal of what shippers expect and the areas given the most weight are the ones that matter most to buyers of transportation services. As a result, of the hundreds of carriers rated in our survey, only a very few are deemed by participants’ evaluations as providing a service so superior that it warrants a Shipper’s Choice Award.

Carriers receive the Shipper’s Choice Award when their total score meets or surpasses the total benchmark of excellence for their mode. Only those carriers who exceed this benchmark have their names and scores included in the following tables.

Average shipper satisfaction ratings for each KPI are shown by mode.The final column on the right shows the total benchmark of excellence set for each mode. The

benchmarks for each of the eight KPIs per mode are indicated with each modal table on the following pages.

Invitations were sent to more than 6,000 of our readers who are buyers of transportation services in the manufacturing, retail and other sectors as well as to individuals responsible for managing shipments within the freight forwarding and 3PL sectors.

Carriers must receive a minimum number of evaluations in order to qualify for the award. It should be noted that this year winning was made all the more difficult because we once again raised the number of evaluations necessary to qualify for the award for almost every mode. In order to boost response, carriers were given the opportunity to forward the survey to their own customer lists. Not all carriers chose to do so, however.

To prevent tampering, we check for multiple cases submitted by known respondents. If there is more than one case, then only the newest one is considered. Likewise, we check for similar IP addresses. As a final check on tampering, we separate and check the evaluacontinued

Shipper Satisfaction Ratings By Mode Mode

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

Total Satisfaction Score

LTL Trucking

20.27

18.15

15.96

19.55

19.53

17.46

14.17

16.28

141.369

TL Trucking

21.43

19.53

16.59

20.02

20.22

18.35

15.61

17.37

149.123 143.833

Ocean Carriers

19.51

18.40

17.56

19.43

19.22

17.43

15.71

16.57

Couriers

20.79

18.17

18.71

18.73

18.06

16.25

14.27

16.15

141.136

Air Carriers

20.87

19.17

18.35

18.82

19.19

17.76

15.30

16.42

145.878

Rail Carriers

16.59

16.64

16.17

18.05

15.80

14.36

12.23

15.32

125.172

Thank you for choosing XTL as your 2014 Shipper’s Choice Award winner!

Telephone: 416-742-2345 • Toll Free: 800-665-9318 www.xtl.com SM

24

July/August 2014 www.canadianshipper.com

p21-39 CdnShipper JulyAug2014_ShippersChoice1.indd 24

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All-Connect and Shuttle Express would like to extend our sincerest gratitude to all of our customers for helping us set & achieve the industry standard in the LTL & Truckload categories for the 4th year in a row

Thank You!

NORTH

AMERICA 4-Time Shipper’s Choice

AWARD WINNERS

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value in motion

14-07-03 9:56 AM

2014

SHIPPER’S CHOICE

Sectoral distribution of respondents

Annual supply chain budget

Third-party logistics

Retail

12%

14%

Less than $100,000

More than $20M Freight forwarding

13%

$10M - $20M

7%

15%

5% $5M - $10M

22% Manufacturing

supply chain budgets on transportation.

The Shipper’s Choice Awards Survey was undertaken once again in partnership with CITT and the Freight Management Association of Canada (FMA), two associations whose members responsible for the purchase of transportation number in the thousands.

And, as in previous years, the research was conducted by an independent research firm (the same research firm that conducts our industry-leading Annual Survey of the Canadian Supply Chain Professional).

Winning carriers are listed alphabetically, and not by their total score. Those wanting to compare the scores among the winners should keep in mind the high probability that these carriers, although they are being compared to an industry benchmark, have been evaluated by different shippers. This survey is intended as a measure of which carriers exceed industry expectations and not a ranking of the carriers involved.

tions submitted by participants from our own e-mail list versus the e-mail lists of carrier customers. Winners must have evaluations submitted by transportation buyers from our own e-mail list to qualify for the award.

More than 2,000 buyers of transportation services participated in our survey, which makes Shipper’s Choice the largest of the several surveys we conduct annually.We thank all those of you who took the time to complete our survey. (Participants receive an advance electronic copy of the results.) About 10,000 evaluations of carriers from all modes providing services in the Canadian market were cast.

As with past years, survey participants represent every region across Canada and buy transportation services for companies with annual sales ranging from less than $5 million up to more than $2 billion. Their annual supply chain budgets range from less than $100,000 up to more than $25 million.

More than a third spend over 70% of their

10% 27%

Other sectors

45%

$100,000 $500,000

18% $1M - $5M

12% $500,000 - $1M

Annual expenditure on transportation

26

5%

14%

10%

29%

10%

18%

7%

8%

Less than $10,000

$10,000 $49,999

$50,000 $99,999

$100,000 $449,999

$500,000 $999,999

$1M $4.999M

$5M $9.999M

More than $10M

July/August 2014 www.canadianshipper.com

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p21-39 CdnShipper JulyAug2014_ShippersChoice1.indd 27

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No less than excellence expected

2014

SHIPPER’S CHOICE

O

cult. Smaller carriers in particular are having a tough time updating their aging fleets. In the US trucking bankruptcies had increased for seven consecutive quarters by the end of 2013. While bankruptcies have not proven a major concern this side of the border the LTL space remains ripe for consolidation.

More than 2,200 shippers cast more than 3,500 carrier evaluations for the LTL category. Eighteen carriers surpassed our Benchmark of Excellence this year.

LTL winners and their scores for each of our eight KPIs are shown in the table below. The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right. The winners are shown in alphabetical order and only those scoring above the total Benchmark of Excellence are included.

n-time performance remains the top KPI but buyers of truck transportation also have high expectations for competitive pricing and customer service. In fact, the customer service expectations for LTL are the second highest among all the modes in the survey.

LTL carriers were particularly hard hit during the Great Recession when they were caught with excess capacity. The LTL terminal footprint is harder to right size quickly during economic downturns and upturns and LTL carriers, which have been holding back on adding capacity during a lukewarm recovery are faced with the unsavory challenge of running an older fleet, which translates into lowered productivity. Rate increases have also been slower to materialize than LTL carriers would have hoped which makes investment in new equipment more diffi-

LTL Motor Carrier Award Winners

Total no. of shippers evaluating carriers in this mode: 2,247 Total carrier evaluations: 3,592 Benchmark of Excellence: 141.369 Carriers

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

All Connect Logistical Services

22.77

Apps Transport

21.02

20.28

18.58

21.93

22.43

20.22

16.98

18.38

18.90

16.43

21.12

21.22

18.87

15.45

16.98

Armour Transportation Systems Cavalier

20.09

18.36

16.05

19.46

20.07

17.83

14.88

16.85

22.08

19.93

17.25

21.21

21.77

20.13

16.58

17.99

CCT Logistics

20.37

18.49

15.91

19.11

20.98

17.23

13.51

16.89

Guilbault Transport

21.36

18.87

16.87

20.28

20.72

18.85

14.27

16.80

GX Transport

21.83

19.65

18.17

20.86

22.12

20.40

16.33

18.12

Sustainable Transportation Practices

Hercules

22.12

19.06

17.46

21.45

21.88

19.73

15.78

17.98

Maritime Ontario

19.85

18.27

16.07

20.98

19.53

18.41

14.06

17.45

Minimax Express Transportation Inc.

21.04

18.52

16.62

20.70

19.20

17.93

14.66

17.07

Normandin Transit

20.77

19.78

16.77

18.62

20.57

19.06

15.21

17.38

Old Dominion

20.63

17.65

17.77

20.94

20.54

16.98

12.97

16.83

Polaris Transportation

20.70

19.02

17.77

21.28

20.14

18.15

14.56

17.54

Robert Transport

20.79

19.21

17.56

18.83

20.43

17.97

15.62

17.67

Rosenau Transport

21.07

19.24

15.70

17.58

21.23

18.67

16.08

15.75

Seaway Express

23.19

20.27

17.11

21.26

22.53

19.03

14.97

19.22

Trans-pro

22.63

20.47

17.91

21.33

22.68

20.40

15.83

18.68

Wheels MSM

22.14

19.42

17.17

20.45

21.86

19.72

16.21

17.84

Benchmark of Excellence

20.27

18.15

15.96

19.55

19.53

17.46

14.17

16.28

28

July/August 2014 www.canadianshipper.com

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Road hammers

2014

Y

SHIPPER’S CHOICE

ou’ve got to be at the top of your game to make it into the exclusive club of TL carriers bestowed with a Shipper’s Choice Award. Every year of our survey this is the most hard-fought category with the benchmark set the highest. It’s no different in 2014 with carriers needing a Total Satisfaction Score of 149.123 to qualify – considerably higher than other modes.

On-time performance is the top KPI for buyers of TL services and it’s third highest of all modes, surpassed only by that set for couriers and airfreight carriers.

Competitive pricing is the second most important KPI in terms of importance according to our shipper survey, followed closely by customer service. It’s interesting to note that sustainable transportation practices continues to gain in importance, scoring 4.2 out of 5 this year in the minds of TL service purchasers. In addition TL is held to the highest standard when it comes to providing sustainable transportation practices.

Like their LTL countersparts, Canadian TL carriers are challenged by the need to replace their aging fleet. Yet lacklustre rate increases are making it difficult to do so, particularly among the industry’s smaller carriers. Aging equipment along with a continuing driver shortage are having an impact on productivity and consolidation has been forecasted for several years now but has yet to materialize to the large extent expected.

More than 1,500 shippers cast more than 2,000 carrier evaluations for the TL category. Sixteen carriers surpassed our Benchmark of Excellence this year.

TL winners and their scores for each of our eight KPIs are shown in the table below.The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right. The winners are shown in alphabetical order and only those scoring above the total Benchmark of Excellence are included.

TL Motor Carrier Award Winners

Total no. of shippers evaluating carriers in this mode: 1,545 Total carrier evaluations: 2,094 Benchmark of Excellence: 149.123

30

Carriers

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

All Connect Logistical Services

23.00

21.37

19.69

22.75

22.53

20.79

17.38

19.34

Armour Transport/ Polestar

21.85

19.80

17.19

20.60

20.93

19.49

17.09

17.93

Big Freight Systems

20.78

19.79

18.58

19.87

20.35

18.58

15.64

17.16

Bison Transport

20.74

19.54

17.89

19.51

19.94

18.32

15.26

18.11

Cavalier Transport

23.25

21.38

18.81

22.49

22.69

20.38

18.14

19.88

Guilbault

22.35

20.16

17.89

20.43

21.13

20.22

16.06

18.28

Hercules

23.17

20.28

19.09

21.99

22.07

20.63

17.76

18.91

Kriska Transportation

21.74

20.14

16.93

20.29

20.85

17.12

15.87

17.75

MacKinnon Transport Inc.

22.13

21.14

18.70

20.79

21.50

20.50

17.91

19.54

Maritime Ontario

21.46

19.73

17.37

20.90

20.82

19.23

17.19

18.36

Midland Transport

21.31

20.20

17.70

18.96

20.10

18.17

16.10

17.64

Penner International

23.15

21.58

19.20

21.78

22.51

20.70

17.30

19.18

Robert Transport

21.21

20.07

17.73

18.57

19.90

18.14

16.72

17.81

Transpro Freight Systems

23.17

21.53

18.81

21.88

22.52

20.84

17.47

18.89

XTL Transport

21.30

19.93

17.81

18.29

20.64

18.31

16.13

17.10

Wheels MSM

23.00

19.99

16.33

20.07

21.74

19.03

17.18

17.95

Benchmark of Excellence

21.43

19.53

16.59

20.02

20.22

18.35

15.61

17.37

July/August 2014 www.canadianshipper.com

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THANK YOU

TO OUR CUSTOMERS AND EMPLOYEES!

For the third year in a row, the shipping industry has recognized the excellence of our services with awards in both the TL and the LTL categories.

Thanks to our advanced technologies, such as the exclusive i3G mobile tracking system, our know-how, and above all- your contribution, we are a carrier that proudly goes the distance.

1.888.880.3801

www.groupeguilbault.com

p21-39 CdnShipper JulyAug2014_ShippersChoice1.indd 31

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Masters of faster

2014

W

SHIPPER’S CHOICE

hen shippers purchase courier services, on-time delivery is an obvious must along with customer service and a sophisticated technology platform that provides customers with visibility.The challenge for couriers is that these high-cost KPIs must line up with the reality of shippers’ second highest priority when choosing one courier over another: price.

This holds particularly true for the growing market of online sales, a distinct growth area for couriers which is hotly contested. Maintaining competitive rates and service for online sales is even more challenging in Canada where less populated city centres separated by greater distances than is

the case in the US are definite obstacles.

More than 1,300 shippers provided more than 2,200 carrier evaluations for the courier category, one of the most challenging modes when it comes to meeting shipper expectations. Seven companies surpassed the benchmark this year. Courier winners and their scores for each of our eight KPIs are shown in the table below.

The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right. The winners are shown in alphabetical order and only those scoring above the total Benchmark of Excellence are included.

Courier Award Winners

Total no. of shippers evaluating carriers in this mode: 1,332 Total carrier evaluations: 2,317 Benchmark of Excellence: 141.136

Carriers

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

Armour Courier Services

22.37

18.93

19.26

20.29

20.58

19.04

17.16

17.86

Cardinal Courier

21.63

17.18

16.31

20.94

18.41

16.82

16.09

16.59

DB Schenker

20.51

18.10

18.64

18.17

19.20

17.64

15.86

16.16

Dicom

20.92

18.59

19.06

21.19

18.85

17.98

16.31

17.46

FedEx

21.27

18.90

19.83

18.40

18.70

16.66

14.43

16.54

Midland Courier

22.48

19.19

19.17

20.33

20.36

18.28

15.88

17.41

Tiger Courier

21.36

17.21

17.19

20.22

20.44

17.89

16.79

17.26

Benchmark of Excellence

20.79

18.17

18.71

18.73

18.06

16.25

14.27

16.15

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July/August 2014 www.canadianshipper.com

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WE DID IT AGAIN! Thank You to our loyal clients and our valued employees!

Outstanding Results delivered

by Outstanding People.

We are proud to receive the 2014 Shipper’s Choice Award for Performance Excellence for the third consecutive year.

Thank you GX Customers for your continued support. We will continue to go the extra mile for you.

Thank you GX Employees for surpassing industry benchmarks of excellence once again.

1-877-740-3940 | www.gxts.com | gxinfo@gxts.com

LTL • DEDICATED • TL • DIRECT • EXPEDITED • DRY VAN • REEFER • LOGISTICS • DISTRIBUTION ROAD • RAIL • AIR • OCEAN

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2014

Flying high

SHIPPER’S CHOICE

A

irfreight carriers, battling chronic overcapacity and deteriorating yields, have been contracting their fleet size.Yet on-time performance and customer service are the two most important KPIs for buyers of airfreight services. Walking this tightrope is a definite challenge.

Airfreight carrier winners and their

scores for each of our eight KPIs are shown in the table below. The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI.The total Benchmark of Excellence is indicated on the top right.

The winners are shown in alphabetical order and only those scoring above the total Benchmark of Excellence are included.

Air Carrier Award Winners

Total no. of shippers evaluating carriers in this mode: 652 Total carrier evaluations: 371 Benchmark of Excellence: 145.878

34

Carriers

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

Cargojet

21.36

19.26

16.90

18.55

19.91

17.98

15.71

16.60

Cathay Pacific

21.28

19.90

18.67

17.92

21.41

19.02

16.52

17.71

Korean Airlines

22.65

20.39

18.19

20.68

18.41

15.93

14.84

16.08

Lufthansa

22.16

20.67

20.89

17.71

21.54

18.94

16.28

17.62

Benchmark of Excellence

20.87

19.17

18.35

18.82

19.19

17.76

15.30

16.42

July/August 2014 www.canadianshipper.com

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FREIGHT SYSTEMS LTD.

DECORATED CARRIER FOR TRANSBORDER LTL & TL SHIPPING Thank you for voting us as your 2014 SHIPPER’S CHOICE!

SERVICES

p21-39 CdnShipper JulyAug2014_ShippersChoice1.indd 35

Cross Border LTL and Truckload Freight Management Logistics Warehousing and Distribution

14-07-03 9:56 AM

2014

Current of content

SHIPPER’S CHOICE

C

ompetitive pricing drives decision making in marine services, for both shippers and carriers. Price is repeatedly the top criteria in selecting a marine carrier in our survey. The industry’s major players on the other hand have been forming alliances in an attempt to shore up sagging freight rates as well as raise ROI and reduce high-capital investments.

Marine winners and their scores for each of our eight KPIs are shown in the table below.

The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right. The winners are shown in alphabetical order and only those scoring above the total Benchmark of Excellence are included.

Ocean Carrier Award Winners

Total no. of shippers evaluating carriers in this mode: 541 Total carrier evaluations: 562 Benchmark of Excellence: 143.833

Carriers

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

Evergreen

18.35

16.90

19.21

19.79

22.75

18.98

16.98

19.26

NYK

18.66

18.85

18.06

19.84

19.43

17.60

15.69

16.45

Oceanex

20.04

18.52

17.98

19.24

19.21

17.89

15.28

16.59

Benchmark of Excellence

19.51

18.40

17.56

19.43

19.22

17.43

15.71

16.57

Y C

D S

36

July/August 2014 www.canadianshipper.com

p21-39 CdnShipper JulyAug2014_ShippersChoice1.indd 36

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Thank you for naming Cavalier as your Shipper’s Choice!

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1979 - 2014

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For 35 years Cavalier has provided a vital link between Canada’s busiest traffic lane, Ontario-Quebec and Canada’s largest trading partner, the USA. Today this family owned and operated business provides a full array of transportation services and strives daily to accomplish its vision of expanding customer service through innovation, creativity and teamwork!

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p21-39 CdnShipper JulyAug2014_ShippersChoice1.indd 37

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2014

CARRIERS OF CHOICE

SHIPPER’S CHOICE

Consistency of performance deserves a special award

C

arriers are presented with this prestigious award if they have demonstrated the consistency necessary to attain the highest levels of service by surpassing the industry Benchmarks of Excellence set in the Shipper’s Choice Awards Survey for a minimum of five consecutive years. This is a particularly difficult task because aside from having to maintain consis-

tent excellence in their operations, carriers will have to meet a likely rising standard set by shippers from year to year while also responding to changing priorities.

To remain part of this exclusive fraternity, carriers must requalify each year by having surpassed the Shipper’s Choice Awards Benchmark of Excellence for five consecutive years.

CARRIER

Congratulations to the 2014 Carriers of Choice

38

OF CHOICE

Big Freight

Hercules

Robert Transport

Cardinal Couriers

Kriska Transport

Tiger Courier

Cargojet

Mackinnon Transport

Wheels MSM

DB Schenker

Midland Transport

FedEx

Polaris Transportation

July/August 2014 www.canadianshipper.com

p21-39 CdnShipper JulyAug2014_ShippersChoice1.indd 38

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THANK YOU FOR NAMING POLARIS

ONCE AGAIN YOUR CARRIER OF CHOICE

Polaris AD

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info@polaristransport.com

p21-39 CdnShipper JulyAug2014_ShippersChoice1.indd 39

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INTERMODAL REPORT

IN A PINCH Intermodal is offering a wealth of new options for shippers but can carriers get past “pinch and pain” points?

Courtesy CN Rail

BY JULIA KUZELJEVICH

CN Intermodal Terminal in Montreal

F

ollowing the almost interminable winter of 2013/2014, intermodal traffic in North America is responding to pent up demand, with intermodal freight loadings rising 10.6% to 173,000 units in March, according to Statistics Canada’s re-

cent railway car loadings report.

From a tonnage perspective,traffic advanced 8.8% to 2.6 million tonnes, a gain that stemmed from both increased containerized cargo shipments and trailers loaded on flat cars.

Rail traffic received from the United

40 July/August 2014 www.canadianshipper.com

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INTERMODAL REPORT

expecting there to be a value-it has been branded as a lower cost alternative. They are probably less concerned about price vs. capacity. Many opportunities exist in the shorter haul, eastern US lanes.

Intermodal was born based on transcontinental moves-the distances are greater, as well as the savings opportunities, but those routes are more saturated, he said.“We’re finding opportunities as low as 400 miles-shippers are adjusting to the transit. When you’re in a closer proximity, truck is a better opportunity transit-wise. Our job is to balance the equipment-we don’t ever want to give equipment back to the rail yard-we want to create capacity and velocity. We’re working on an all-rail option with UP and Ferromex which would allow freight to move in bond-cleared at destination. There has to be a better way to provide quicker border crossings-that’s the number one priority,” said Golich.

As railways start to drop more secondary terminals, Gross said intermodal share could rise from a range of 17-18% range up to as high as 25%.

“As you try and get to shorter lengths of intermodal haul the amount of highway miles you can support goes down. There are fewer low cost rail miles to work with, so you need a denser terminal network to bring the intermodal network closer to where the freight is,” Gross said.

He said that he expects to see an acceleration in rates.“We would not be surprised to see door to door rates increase in the low single digit to mid single digit range.”

At the end of May, CN Rail announced it was changing its domestic intermodal open tariffs CN 7290 and CN 8383 with price increases effective July 1st, 2014. These changes reflect the prevailing market conditions, the company said.

Speaking at the Translog Conference this spring, Gordon Graham, Director of Business Development, with Canadian National Railway, said that the winter of 2013/14 highlighted many things for the rail industry.

“A couple of the things became evident: winter was really tough on all railways in North America-the farther north you go it became even harder. It had a big impact down through the supply chain. It highlighted where the choke points are, where the concerns are, and the importance of planning in advance to address those,” he said.

To resolve these choke points, said Graham, from CN’s perspective process, technology and infrastructure are the strategies.

“We’re looking at opportunities to shift traffic off peak windows.

CN is looking at providing rate incentives for Sunday-Monday. From a rail perspective and intermodal perspective there is more traffic on a Friday. CN has been trying to incent those shippers who are able to ship Sunday or Monday to reduce the amount of congestion on its own rails, and interface with the highway network,” Graham said. ©George Doyle/Stockbyte/Thinkstock

States fell 3.7% to 3.4 million tonnes. The decrease was the result of a drop in non-intermodal shipments, Statscan noted.

Larry Gross, senior consultant with freight transportation forecaster FTR, commented that intermodal was growing “because of pent up demand from a slower operating perspective over the winter”, and this was reflected by an 8.5% rise in international intermodal shipments out of the US, he said in a webinar looking at intermodal recovery following the harsh winter season.

“We think 2014 will otherwise look at lot like 2013, after a relatively rough start and despite the service issues. 2014 indicates there is robust demand for intermodal potential for gains if they can get the service issues under control,” Gross commented.

“The intermodal pipeline is wide open and volume is flowing in.

There is robust growth in the intermodal demand picture, but service issues remain,” Gross noted.

Based on average intermodal train speeds that are published on a weekly basis by all the Class 1 railways except CP, Gross noted there was a terrific decline in these speeds over the course of the winter.

Not only were speeds down but crew and assets reduced.

“So you still had these issues that were difficult to overcome unless you throw more crew and locomotives at them,” he said.

Addressing long-term bottlenecks will mean creating more reliance on other gateways.

“I think there are things that are ongoing, huge capital investments in intermodal and track infrastructure, but it is hard for the railways to ramp up quickly because of the lead times in locomotives and crew,” said Gross.

Cargo rail yard Problems were evident before the winter, and that situation just left the railways trying to play catchup.

“The industry has been struggling to recover, but it’s hard when volume keeps coming at them the way it has.”

As the railways gradually reduce their terminal dwell times and get their container fleets up to speed, domestic container fleets can fulfill their full capabilities. Gross noted this as particularly critical because of capacity issues on the over the road side.

“It’s also a great opportunity for intermodal to convert volumes,” he said. Leading the charge in intermodal offerings becoming more attractive to shippers is the driver shortage in North America, but we won’t see the full impact of this shortage until 2016, said Steve Golich president, Celtic International.

“Intermodal is a place lots of folks are looking at that can pick up capacity. The market for new shippers coming to intermodal is huge-the Class 1 railways estimate there’s an opportunity to convert some 11-12 million loads per year,” he said. Shippers are also

continued

p40-45 CdnShipper JulyAug2014_Intermodal.indd 41

www.canadianshipper.com July/August 2014 41

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INTERMODAL REPORT

He said that technology offers a lot of opportunity as well for trucking and rail to communicate with each other on the progress of the loads.

“You can always put more money into the ground and build it but if you can solve your problems another way it’s nice to be able to give your money back to the shareholders,” Graham said.

With the higher cost of fuel, and reduced access potentially to drivers, the pricing gap between intermodal and truck has been expanding.

“In the old days 800 was kind of the number where if your cities were closer than 800 miles apart rail didn’t seem to have the competitiveness. That number is coming down, particularly in the eastern US where the population density is higher and you see intermodal services between cities starting to bite into what was traditionally a highway market,” Graham said.

Graham suggested there is also more room for better relationships between stakeholders in the supply chain who may not be directly related.

“In the intermodal business CN moves containers to ports. Traditionally all the parties aren’t related. The steamship lines will choose a port and hire a party to move inland.

The railway and the port don’t have a commercial relationshipthey have a relationship with the steamship company but not with each other. It’s an example of how we could improve efficiency and make our joint customer more efficient in the marketplace. All of the Canadian ports have signed agreements with CN outlining their responsibility toward each other. I think there’s still more that can be done in that range,” Graham said.

Labour woes As Canadian Shipper was going to press, the International Longshore and Warehouse Union (ILWU) contract faced expiration at the end of June, threatening to affect West Coast port operations, While there is every indication there won’t be a strike,“It doesn’t mean there won’t be slowdowns or other labour actions,” Gross said.“Shippers are understandably nervous with regard to the situation,” he added.

Gross said drayage could be a real flashpoint this year in terms of the intermodal situation.

“Drayage drivers have not been not getting the kinds of turns they need. They have a number or options available with over the road carriers, who are hungry for experienced drivers. The balance of power will change in a dramatic way between dray carriers, shippers and ocean carriers. Capacity will be king. The dray carriers will be in a position to raise rates this year, and in a differential manner. If a shipper isn’t treating the driver time with respect that shipper will have a hard time finding dray capacity this year. Dray carriers may also shift to international handling to avoid port issues,” said Gross.

Chassis in short supply A long-lingering issue in the intermodal segment is consistent access to lightweight, quality chassis when and where shippers need them, as demand for chassis in shared pools often outstrips supply.

Last December Schneider National created a company-owned and managed chassis fleet, aiming to offer “truck-like” service in its intermodal segment.

“Establishing a company-owned chassis fleet gives Schneider

complete control of assets used in an intermodal move and makes our service even more efficient for shippers,” Bill Matheson, president of Intermodal Services at Schneider, noted.

The chassis will offer more freight capacity per load at 500 pounds less per unit, and Schneider will maintain control over the maintenance of its chassis units.

The company expects to convert its entire North American intermodal operation to an owned-chassis model over the next two years.

Jim Filter, senior vice president, of Schneider’s Intermodal Commercial Services, said the rollout of the new chassis started last December, and the company will place 2800 chassis over the remainder of this year, focusing on the eastern half of its network and moving north from there.

Having a standard piece of equipment, he said, will be an improvement for shipper customers who were frustrated with loading and scaling equipment themselves.

“We can integrate our equipment with our own system to understand what chassis the driver will be assigned. When we implement at a ramp we only use our chassis.We continue to add boxes to our fleet-at this point it’s difficult to say when we’ll be done. We’re just going to continue to buy them and take this on one ramp at a time.When you use out of a pool, every chassis is a little bit different in weight.With our own design we are seeing fewer breakdowns. So far the shipper response is exactly what you would want it to be. It’s transparent to them,” he said.

The need for transparency is heightened after the extra long winter experienced across the continent this year.

“55% of our freight touches Chicago at some point.When things were really bad 6800 was the average number of units processed (versus 11,000 in a typical winter season) and that caused some issues for us,” said Filter.

“It’s amazing how cold it stayed and for how long.The cold went so far south we were seeing train restrictions we had never seen before,” he added.

Canada-Mexico is one of the fastest growing lanes for intermodal, which allows for a much more streamlined border crossing at both the Canada-US and US-Mexico borders, Filter said.

“There’s a pretty big cost savings crossing intermodal,” he said.

There is also growth from southern California/the Pacific US to Toronto and Montreal, and from shippers looking at other opportunities from Mexico to Chicago, eliminating transfer costs at the border.

Driven by a lack of truck capacity, shippers are starting to look at intermodal lanes they would not have looked at before.

“You’re getting into small and medium-sized customers choosing intermodal,” Filter said.

“There are still opportunities to convert freight. We are converting freight from Toronto to Chicago. It really is broad support based, for retail and automotive, and more recently food and beverage have CS been growing faster,” he said.

Associate editor Julia Kuzeljevich has been

A a

A b G

W a

writing about transportation issues for more than a decade. Her meticulously researched articles have garnered several transportation and Canadian Business Press writing awards.

F

42 July/August 2014 www.canadianshipper.com

p40-45 CdnShipper JulyAug2014_Intermodal.indd 42

L d b

14-07-03 10:08 AM

Long hauL doesn’t have to be a Long road.

At CP, we know our customers want a service that provides the greatest assurance their goods will be on shelves, not stuck en-route.

As part of the strengthening of our domestic intermodal service, businesses are benefitting from our direct and faster service between Calgary and Vancouver.

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p40-45 CdnShipper JulyAug2014_Intermodal.indd 43

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INTERNATIONAL TRANSPORT FORUM

to really blend and share the message with folks at an early age that there are some amazing careers in transportation,” she said.

When transportation companies get people in the door, next, the key is to figure out how to make the place attractive to advancement.

The rail industry has evolved tremendously, and Jean Pierre Loubinoux, Director General of the International Union of

continued from p. 12

for new pilots.We need a new training system for the new generation to make sure that all people interested get a chance. We need new momentum for this industry,” he added.

As a trading nation, Minister Raitt said, there is a significant amount of export and import taking place in Canada, “and there is a lot coming in through our ocean ports,” she said, noting that at the same time there is a need for general labour, there is also the

“In Canada’s long-haul trucking industry, by 2020 there will be a gap of 25,000 between supply and demand. Drivers don’t want to be away from their homes. Although the salary can be quite good, no one aspires to be a truck driver.

We need to move those containers inland-it is a difficulty for us.”

The Honourable Lisa Raitt, Canada’s Minister of Transport Railways, said its complexity presents a challenge to advancing personnel.

“I think every country is facing the generation gap: in the second part of the 20th century the rail industry was not very sexy.

In the 21st century it has become a complex industry with lots of technology. We need to attract more people. We have a big challenge in the transfer of knowledge and also to attract a new generation,” he said.

Part of the union’s recruiting strategy is to offer three levels of professional training, management skills, and academic research, including launching a new rail MBA in its regional training centres and global workshops.

Attracting new personnel to aviation is less a gender issue than an overall general problem of many jobs being limited through licensing, said the ICAO’s Daniel Azema.

“It’s very comprehensive and complex.

The costs of education play a big role-there is also a difficulty when it comes to training. Plus governments in many countries gave up their vocational training centres, and for pilot training many aspects have been privatized,” he said.

“Only in North America do we have pilot training capacities matched to the demand 44

July/August 2014

need for training up to the skills required.

“In Canada’s long-haul trucking industry, by 2020 there will be a gap of 25,000 between supply and demand. Drivers don’t want to be away from their homes. Although the salary can be quite good, no one aspires to be a truck driver. We need to move those containers inland-it is a difficulty for us,” she said.

“We see these mass retirements (of transportation workers.) So we’re trying to work more with universities and community college programs. We’ve been focusing on the IT worker or general labour but transport encompasses so much more. We need to be very broad in our approach to getting people into transport and we have to do it early, and make it part of early education and examples,” Kurland said.

It also helps if stakeholders in the transportation industry can do a better job of showing how dynamic it is.

“In shipping we’ve done a project on career path mapping for seafarers,” said Chagas.

“Once you go on board a vessel it doesn’t mean you’ll end up with long white beard and pipe in your mouth. There are plenty of other opportunities available and it’s important to promote them,” he added.

Miller cited an example of how a wellmeaning strategy in transportation safety training can actually backfire.

“Everybody is concerned about safety.

There are companies out there where safety is part of one’s culture. In 1999 I graduated, left school, and I could get trained and drive the brown UPS vehicle after a 30-day safety training. What happened in 1999 here in Europe was that the categories of licences changed-now when you get a licence you can drive up to 3.5 tonnes, but most of our vehicles are 7.5 tonnes. Well, the training is to get a C1 licence costs 4000 Euros ($5800 CAD). So at the age of 21 I have to come up with 4000 Euros to be able to drive that larger vehicle, and on top of that I have to go to a 140 hour professional driver training course, which costs 2000 Euros ($3000 CAD). So I need to find 6000 Euros just to be eligible to drive for one of these companies in Europe. I’m sure the end goal is safety from a legislative perspective. Why this is important is that in 2008 110,000 people in Germany applied to get a C1 licence. In 2012 it’s down to 70,000. It’s tough to attract people when they don’t know if companies will do that for them, and it may be contributing to the shortages we’re seeing,” Miller added.

In the US, UPS has a complete simulation training school, offering everything from actual driving to tech-based simulation, and is looking to bring that to Europe.

“It would be very beneficial if we worked with some of the members in the EU. How does this stack up against what costs 4000 Euros? Would this be an equivalent? The rest of the industry is struggling with those same conditions,” Miller said.

Minister Raitt noted that without human resources, you’re not going to have any infrastructure that is worth running.

“Now we are faced with a new world where people want to connect with their work and feel validated vs. a vision of the past when people worked at the same job for 40 years. My vision for Canada is jobs, growth and long-term prosperity. The work we ask for people to do is to help us create these jobs so families can have an economy. We see in this forum that there is a commonality of issues that are very similar-perhaps you can look at the issues in a different way and come up with a solution that does work in your country that you hadn’t thought of before,” Raitt said. CS

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CHEMICAL REGULATIONS

POISED FOR

GROWTH CANADA’S CHEMICALS SECTOR LOOKS AHEAD TO INCREASED INVESTMENT AMIDST REGULATORY CHALLENGES

BY JULIA KUZELJEVICH

C

anada’s chemical shippers face a busy time ahead.The industry is poised for growth - with the potential to attract up to $10 billion in new investment over the next decade, according to the Chemistry Industry Association of Canada.

Relying on feedstock from the oil and gas, electricity, mining and biomass sectors, Canada’s chemistry industry is the world’s largest exporter of sodium chlorate and sulphuric acid, the second-largest exporter of ethylene glycol, and the fourth-largest exporter of polyethylene. It’s also Canada’s third-largest exporter of manufactured goods – exporting $30 billion worth of products in 2012, the association noted.

Fiona Cook, Director, Business and Economics, with the Chemistry Industry Association of Canada, said that with the safety, liability and compensation issues that have emerged from the Lac Mégantic train derailment almost a year ago, “I don’t think we’ve ever seen it this busy before.”

In April the association, part of the Coalition of Rail Shippers, called on the government, following its introduction of the Fair Rail 46 July/August 2014 www.canadianshipper.com

p46-51 CdnShipper JulyAug2014_CHEMICAL.indd 46

for Grain Growers Act, to address broader issues faced across the system, versus favouring a sector-by-sector approach to rail transport.

The Canada Transportation Act was set to be examined in 2015, but earlier this year the federal government pledged to move the timeline up.

On June 25,Transport Canada named the arm’s length review committee whose job it will be to dissect the legislation. Chairing the committee will be former MP and cabinet minister David Emerson.

“I think we’re going to ask for some definition around service level agreements. We hope that rail gets a focus. Our key concern is that Transport Canada is severely under-resourced at the moment-do they have the capacity to deal with this in a thorough way?” said Cook.

The association has also urged the rail industry to work collaboratively with shippers.

A railcar shortage this winter saw chemical plants slow down or shut temporarily over the winter, and Cook said that association members like to have a collaborative approach with rail on the improvement of services.

“Some companies have no complaints and others do.The issues are ©Richard Jemison/iStock/Thinkstock

14-07-03 9:58 AM

CHEMICAL REGULATIONS

particularly concentrated in the west where there is a focus on agriculture right now. There is still difficulty getting the railways to commit to service agreements or to measure service levels. We have a general commitment to keep working and improve this,” Cook said.

Dave Saucier, Manager, Regulatory and Government Affairs, with the Canadian Association of Chemical Distributors, said the CACD is closely involved with the federal government’s Regulatory Cooperation Council, set up as part of the broader Beyond the Border Action Plan, with aim to align regulations between Canada and the US. The CACD counts some 46 member companies operating 171 sites across Canada, who are significant importers and exporters of chemical substances between Canada and the US. CACD has applauded the inclusion of the harmonization of the Workplace Hazardous Materials Information with the US’s Hazcom 2012, that ushers in alignment to the Globally Harmonized System (GHS), and alignment efforts on nanomaterials are also moving along on track and on time, noted Saucier.

“The second initiative is the next iteration of WHMIS which sets the table for alignment for the future transport of dangerous goods.

We’re hoping the RCC will get involved with regulations forthcoming from the Lac Mégantic disaster.There are similar approaches in Canada and the US but I think Canada is taking a much more aggressive approach. Transport Canada has used their Protective Directions power permitting them to take action without having to go through the regulatory process. So they put through protective directions that have certainly some consequences to the chemical supply chain,” Saucier said.

Emergency response assistance plans, a system unique to Canada, will be expanded upon. On June 20, Transport Canada announced forthcoming amendments to the Transportation of Dangerous Goods Regulations which include provisions to harmonize placarding requirements with the United States while at the same time providing more accurate information on the types of Dangerous Goods being transported, primarily for the purposes of first responders.

Federal Transport Minister Lisa Raitt made the announcement at a press conference held at the headquarters of the Canadian Trucking Alliance-Ontario Trucking Association. The Regulations will require safety marks to be displayed on large trucks, rail cars and bulk containers used to transport dangerous goods such as pool chemicals and propane. Additionally, new safety marks will be used to identify organic peroxides, marine pollutants and other dangerous goods.

“One of the UN dangerous (goods mechanisms) they’ve incorporated is UN 1993. which could include more companies than intended,” said Saucier, Transport Canada Protective Direction No. 31, released on October 17, 2013 and requiring classification testing and reporting on crude oil (UN 1267 and UN 1993) is for importers and distributors rather than trucking companies.

The Direction requires “any person engaged in importing or offering crude oil for transport to immediately test the classification of crude oil being imported, handled, offered for transport or transported as UN 1267, or UN 1993, if the classification testing has not been conducted since July 7, 2013, and to provide those test results to Transport Canada upon request.”The Direction also requires submission of a Safety Data Sheet for the shipment, with additional re-

quirements for crude oil shipped by rail.

Saucier said Transport Canada’s concern was that shippers would use UN 1993 as way of not having an ERAP in place.

“CACD’s direction is to incorporate that number to existing plans and to get your ERAP up to date,” he said.

Protective Direction no. 34, meanwhile, addressed the identification of tank cars of CTC 111, DOT 111 or AAR 211 specification; with an April 23 deadline for getting these off the rails, cleaned, purged and marked with the words “Do not load with dangerous goods in Canada” or similar words to that effect.

This is creating a challenge, as there are thousands of these cars being used right now, Saucier noted.

“The capacity to upgrade those to meet the new standards is impossible.They cannot upgrade all the cars that are in people’s fleets and they can’t keep up with the demand for rail cars.”

New insurance requirements are also going to significantly impact the cost of moving dangerous goods, and the consumer will at the end of the day absorb the cost.

“Industry is working closely with Transport Canada to develop national emergency response capabilities, which is a positive thing.

Consumable products used for firefighting will be staged across the country so fire departments will have the necessary tools and will be supported by industry through a network of technical supporters and advisers,” said Saucier.

TEAP III, (the Transportation Emergency Assistance Program), has been in place for many years and it’s in its third iteration, said Saucier.

TEAP III aims to maintain a national emergency response network capable of safely and efficiently mitigating the impacts of a chemical transportation incident anywhere in the country. It also provides a forum for transportation companies and emergency response service providers to share information and successful practices, and to encourage continuous improvement around chemical transportation emergency preparedness and response.

Through TEAP III, CIAC and its partner organizations have established two standards: the CIAC Transportation Emergency Response Standard, and the TEAP III Transportation Emergency Response Service Provider Standard.

The Liquefied Petroleum Gas Emergency Response Corp. has also indicated it will be providing Flammable Liquids ERAP services under a separate division of the LPGERC, as per Transport Canada Protective Direction 33 within the LPGERC. “One of the problems Transport Canada has had is they are a little behind in amendments to the regulations. We are going to see an acceleration of the regulatory process but in the interim we may see more protective directions until the regulations can be passed,” Saucier said.

“I think we would agree with the protective directions issued so far. We don’t expect that to really slow things down. I think the concern right now is the uncertainty around rail tank cars. What does it mean in terms of retrofit? The railway supply industry is very constrained right now. It can take up to two years to get a tank car. In the meantime you’ve got people sitting on their hands right now waiting for what the new standard will be. It’s the same story in the US as well.

I do think Transport Canada and the Ministers understand you can’t do something without alignment with the US,” said Cook. CS

p46-51 CdnShipper JulyAug2014_CHEMICAL.indd 47

www.canadianshipper.com July/August 2014 47

14-07-03 9:58 AM

CHEMICAL SHIPPERS

Outpacing Capacity “DYNAMIC CHANGES” IN TRANSPORTATION CONTINUE TO CHALLENGE CHEMICAL SUPPLY CHAINS

BY JULIA KUZELJEVICH

T

he global recession of 2009 created many drastic changes in North America’s transportation industry.

For chemical shippers, trends now point to shrinking carrier capacity, fewer rail cars, new government regulations and tightened competition from other shippers.

“We’re entering an interesting period.

During the last few years production and capacity were falling off, and there’s been a steady return on the production side, but the capacity side has lagged. Recovery on the production side has outpaced the re-

turn of equipment. Some companies went out of business, some companies did not bring on as much equipment,” said Mike Challman, vice president, North American Operations for ChemLogix.

“With chemical production projected to grow annually over the next five years, increased attention to safety in transporting of chemicals and tightening of capacity means companies shipping these goods may be subjected to sizeable rate increases in coming years,” said Satish Jindel, president and principal consultant of SJ Con-

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sulting Group, Inc., and a speaker at DHL Global Forwarding’s first ever Chemicals Supply Chain Conference this May. As the economy picks up, the chemical industry picks up right along with it, noted Frank McGuigan, president of transportation management, with Transplace.

“We see the sector speed up and slow down. We are seeing an uptick in the chemical business but carrier capacity is becoming an issue.We’re working to switch modes of transport so we’re not as bulkdependent. The first thing we do from an engineering standpoint is to understand their consumption points and can we mode convert them?” McGuigan said.

For the last 6 months to a year shippers have also been very focused on trying to grow their rail car fleets, Challman said.

“There is a long lead time now on rail car manufacturing and production. Those late to the game are going to suffer. We do sizing studies on how big of a railcar fleet a customer should have-in the past a customer might turn in cars at the end of a lease. Now we’re seeing them holding on to rail cars, adding to the complication of mode shifting,” he said.

A volatile market demand will also impact both inbound and outbound material flows, and given these factors, smaller quantities are being shipped, with shorter transit times and greater flexibility requirements, said Brett Penfield, DHL’s new Regional Sector Head for Life Sciences, Healthcare & Chemicals for the Americas.

DHL Global Forwarding is ramping up its Less-Than-Container-Load (LCL) and air

48 July/August 2014 www.canadianshipper.com

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14-07-03 9:58 AM

CHEMICAL SHIPPERS

Capacity will continue to plague chemical shippers

freight product offerings to meet this demand, as well as its global network to support expanded supply chain requirements, he said.

“Price pressure also continues in commoditized market segments. That results in a sensitive pricing environment and pressure to shift from air freight to ocean freight whenever possible,” he added.

In the past, chemical shippers could be relatively inefficient in planning and executing on the transportation side and it didn’t really hurt them. But now those kinds of inefficiencies can really hurt.The more shippers and manufacturers can work up their

supply chain and increase their predictability about what is going to happen they won’t be running around last minute to get a hot load covered, Challman said.

“The issue for chemicals customers is how to move dangerous goods cost-effectively, securely and timely, in an environment of increasing levels of compliance, regulation and handling costs for dangerous goods materials,” said Penfield.

An ongoing driver shortage has also created its own set of issues.

“One carrier we spoke to said they find they are stealing drivers from other carriers. They are not getting as many entrants anew and they are dealing with the same limited resources. There is a lot of pressure on chemical shippers to get equipment and to get shipments moved at the right price,” said Challman.

In some cases carriers, looking to ensure business, are overbooking by as much as 120%, leaving some shippers without transportation at the last minute, Challman said in a white paper on the challenges for chemical shippers. In recent years, shippers have had to engage as many as 15-20 additional carriers just to satisfy daily freight requirements. In the foreseeable future, the situation will not get better as many drivers from trucking companies who left the market during the recession simply are not returning. And with the average age of truckers at 50, not enough young drivers

are available to replenish these soon-to-be vacant spots, he added.

Drivers transporting certain chemicals also require certain hazmat certifications, restricting chemical shippers to hire only top-tier drivers that may be difficult-or expensive-to contract, he added.

Some carrier strategies are to recruit with more pay.

In May, Schneider announced it was increasing compensation for company tanker drivers. Most company tanker drivers will earn an additional 8-10 percent per mile (both loaded and unloaded) for an average increase of $4,000 per year. Schneider’s tanker division is aggressively growing its chemical transportation business, the company said, and the company driver pay increase came on the heels of Schneider’s $0.10½ per mile compensation increase in April for tanker owner-operators.

Challman also noted a lot more emphasis on mode conversion, though an intermodal conversion is more challenging to do in chemicals vs. consumer package goods.

“With chemicals, you are talking about converting to ISO tank. We are working closely with a number of our customers to get into rail. Obviously it has to be on a lane that makes sense and transit takes significantly more time. But it can shift the focus for trucks onto where you absolutely need them,” he said.

In an industry already concerned about continued

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14-07-03 9:58 AM

CHEMICAL SHIPPERS

“responsible care” practices, what seems to happen is that some of the efforts intended to do good things have unintended results, Challman said. One of these is a restriction on totes ruling coming into effect July 1 in the US, for tank vehicles hauling a load of over 1000 gallons, which will require the driver to have a tanker endorsement.

“It will force van carriers to decide if they want to be in the tote business. If they quit hauling totes this may force more product out of totes and into tanks, so there is pressure on industry that way,” he said.

“I think it’s getting a lot better but I think compared to some industries like automotive parts-there’s a level of sophistication that isn’t well developed in chemicals yet. But I think it’s moving that way now because it has to,” he said.

Just this year, said Challman, there has been a significant amount of engagement on the part of chemical shippers in terms of looking at TMS, and that level of interest has been trickling down into smaller manufacturers.

Remaining current on the latest technological developments, regulatory changes and carrier activities is also a full-time job.

With limited resources and staff already performing multiple tasks, most chemical companies are just trying to keep up, he said.

“The pressure on getting the next generation of drivers in is one of the biggest problems to solve. In the past one of the things people would do is look at a shorter horizon on problem solving, such as pay more for the truck. Now they look at how they are doing business overall: sourcing, visibility, investing in longer term solutions,” said Challman.

The rise of the oil and gas sector has had an impact on chemical as more product is shipped in and out of the drilling sites, and resulting in a limited pool of tankers and drivers.

“If you can’t move rail direct, we encourage shippers to move by rail to a transload facility then ship bulk locally in certain markets, so they don’t have to move a

long haul bulk truck. Intermodal is another alternative. Moving away from bulk into a more packaged scenario is least preferred, and moving upward into railcars is a preferred path,” said McGuigan.

Regulations around information sharing about loads have not necessarily become more onerous, and every chemical shipper understands the rules and does not in any way ask anyone in their supply chain to own that process for them, he said.

“When we’re bringing on a new customer we work with their compliance team on how they want to present that information to the marketplace. It ties in to their capability to do that from an IT standpoint,” he said.

With capacity issues unlikely to subside, “we’re working to see shippers be more carrier friendly, with more flexible shipping hours, and to look at their internal operations. Every day they are more receptive as they see the pressure on rates and capacity,” said McGuigan. CS

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28

28

INSIDE THE NUMBERS

T

THE STATE OF LOGISTICS IN THE US

W

US business logistics rose 2.3% in 2013 to $1.39 trillion, up $31 billion from the previous year, according to the CSCMP’s annual State of Logistics Report. That reflects a 2.3% increase, a significant drop from the 3.4% rise shown the previous year, the report, authored by Rosalyn Wilson, points out. The

O

logistics costs calculation includes transportation, inventory carrying and administrative costs.

you one-d bec

Transportation costs on their own were up only 2% in 2013 because of weaker shipment volumes and a lack of growth in rates. On their own, transportation costs make up 5.1% of US GDP.

US business logistics costs ($trillions)

sh

$1.04

$1.20

$1.34

$1.42

$1.36

$1.12

$1.24

$1.31

$1.35

$1.39

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

R

Cost of US business logistics in relation to GDP

8.4%

9.1%

9.7%

9.8%

9.3%

7.8%

8.3%

8.4%

8.3%

8.2%

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

For m www

US ports performance

9

Port

2012 TEUs

2013 TEUs

Percent Change

Los Angeles

8,077,714

7,868,582

-2.6%

Long Beach

6,045,662

6,730,573

11.3%

New York

5,529,908

5,467,347

-1.1%

Savannah

2,966,213

3,033,727

2.3%

Oakland

2,344,392

2,346,528

0.1%

Norfolk

2,105,887

2,223,532

5.6%

Houston

1,934,845

1,950,071

0.8% 10.5%

Tacoma

1,711,289

1,891,568

Charleston

1,514,587

1,601,367

5.7%

Seattle

1,885,680

1,592,753

-15.5%

The c for 1

Modal indicators

Sh TRUCKING

RAIL

AIR

UP 6.1%

DOWN 4.5%

UP 8.1%

UP 10.6%

UP 1%

Tonnage

Class 8 registrations

Carloadings

Intermodal volumes

Revenue ton miles

DOWN 30+ AIRCRAFT Cargo jet fleet

52 July/August 2014 www.canadianshipper.com

p52-53 CdnShipper JulyAug2014_InsideNumbers2.indd 52

Last ye Manufa aries, r

pharma

14-07-03 9:59 AM

28th Annual Transportation Innovation and Cost Savings Conference2.pdf

1

14-07-02

1:34 PM

28 th

Annual Conference on Transportation, Innovation and Cost Savings WWW.TRANSPORTCONFERENCE.ORG Wednesday, October 8th, 2014 On

you are invited to attend a

one-day conference that has become the largest educational event for shippers and supply chain practitioners in Canada.

Location

FEATURED SPEAKERS: Murray Hamilton, Managing Director Merchandise Marketing & Sales, Glenn Etchegary, VP Operations, Oceanex, “Short Sea Shipping: The Third Link in Intermodal Transportation” Doug Harrison, President & CEO, VersaCold, “Creating Value in the Cold Chain” Peter Harrison, Associate Vice President and Multimodal Practice Leader, CPCS, “Transportation Trends; Latest Insights and Opportunities” Garland Chow, Director, Bureau of Intelligent Transportation Systems and Freight Security and Associate Professor, Operations and Logistics Division, UBC, “Sustainability in the Transport Industry” Mike Riggs, CEO, Jack Cooper Transport “Developments in the North American Automotive Industry” John Orr, Vice President, Eastern Region, CN Rail

Royal Botanical Gardens Keith Mussar, Vice President Regulatory Affairs, I.E. Canada, “New Food Safety 680 Plains Road, West, Regulations in Canada” Burlington, ON L7T 1J1 Heather Devine, Gowlings, “Rail Safety Regulation and Transport Brokers’ Liability”

For more information, please visit www.transportconference.org or call Richard Lande at 905-319-1244, or email rlande@cogeco.ca.

The cost of the event is $950 for 1 person, $1,850 for two (plus HST).

If you are interested in booth space, please call Richard Lande.

Focus Sessions

Dr. Sabatino Nacson, CTO, TeknoScan Systems Inc., “New Technology to Uncover Contraband in Sealed Trailers” Tom Tomovic, Vice President Saputo,” Sustainability and Collaboration between Shippers and Carriers” Domenic Tesone, President, Epic Risk Improvement, “Evaluating Liability Exposure for Shippers Using Third Party Carriers” Brian Sterling, Managing Director, Global Food Traceability Centre, “Food Traceability: The Key to Inter-connected Segments of the Supply Chain” Dennis J. Kusturiss, Vuono & Gray, LLC, Pittsburgh, “New Motor Carrier Law and Issues in the US” Lisa Petelka, Sr. Program Advisor, Canada Border Services Agency, “E-Manifest- New Requirements for Inbound Freight” Tim Knight, Director and Solicitor, Tim Knight Transport Law Ltd, London, England, “Comparison of Trucking Liability in Europe and North America” Kevin Roberts, Manager, PricewaterhouseCoopers LLP Mark Feduke, Director of Operations, VLM Foods Inc.

Food Safety FEATURED MODERATORS: Transportation Law Bill Kerrigan, Owner, KGI Global Logistics Consulting Automotive David Gatti, VP Marketing & Business Development, Trimac Shipper - Carrier Breakout Jim Thomson, President & CEO, Thomson Terminals Doug Munro, President M-O FreightWorks Dave Corcoran, Director, National Transportation & Distribution, Nestle Canada Christine Brown, Consultant Last year, over 300 companies attended the event in order to learn and exchange views on logistics innovation and cost savings.Manufacturing companies from the consumer goods, automotive, grocery industries, as well as trucking, railways and intermedi aries, receive an overview of the solutions to a number of current problems in the transport industry. This year we will be focus pharmaceutical logistics requirements for carriers. There will also be discussion about the new customs changes to E-Manifest.

p52-53 CdnShipper JulyAug2014_InsideNumbers2.indd 53

14-07-03 9:59 AM

THE BIGGER PICTURE

“

GLOBALIZATION HAS LOCAL CHALLENGES TOO The recent trucking disruption at Port Metro Vancouver is another reminder of the importance of risk management practices for supply chain managers. Granted, it would have been difficult to see this one coming as it was initiated by mostly non-union drivers who are members of the United Truckers Association (UTA). The dispute was between those drivers and their employers, the companies that carry cargo to and from the Port on behalf of importers and exporters. Drivers had been complaining about compensation related to waiting-

tract directly, with drivers.

The dispute was between the UTA drivers and the trucking companies they work for. Port Metro Vancouver just happened to be the place where drivers stopped going to work in order to make their point.

And they certainly made their point. Port Metro Vancouver is Canada’s busiest port, whose operations extend over 600 km of coastline and include four separate container terminals. Last year Port Metro Vancouver handled more than 135 million

If port operations play a role in your company’s ability to achieve competitive advantage, risk management best-practices would imply that it makes sense to try and identify the potential bottlenecks at a particular port.

time at the Port, specifically time spent waiting to pick up, or discharge, containers. Makes sense when you consider that drivers who are paid by the trip, rather than by the hour, can spend the better part of a day waiting around without compensation.

According to various news reports on the disruption, approximately 1,000 UTA drivers withdrew services (i.e. walked off the job), on February 26th. That drew lots of attention to a rapid slowdown in operations, leaving Port Metro Vancouver to declare they were caught in the middle. That also makes sense when you consider that the Port does not employ, or con-

tonnes of cargo, including almost 3 million containers, the conveyance of choice for consumer goods. In other words, it’s a busy place, and getting busier every year, which makes Port congestion an ongoing challenge for everyone involved. And that meant a lot of importers and exporters were also caught in the middle.

Things ramped up considerably on March 12th when the UTA drivers were joined by about 400 unionized drivers who were members of Unifor. On its website, Unifor describes itself as Canada’s largest private sector union, representing more than 300,000 members working in

©Thinks

tock

telecommunications, transportation, resources, manufacturing and service industries.

In other words, lots of potential clout.

A lot of players were at the table trying to find a speedy resolution, including drivers, their employers, the Port Authority and the provincial government. The federal government also played a role as mandated by the Canada Marine Act, which requires federal oversight of 18 Port Authorities across the country designated with strategic importance. Everyone had a vested interest in resolving the issue, and to everyone’s credit, it was resolved relatively quickly, with Port Metro Vancouver announcing on March 27th that the 28-day labour disruption had ended.

But there’s a lesson here for importers and exporters.

Many companies have embraced globalization, depending on a much greater number of suppliers to mitigate the effects of extended supply

chains. The labour disruption in Port Metro Vancouver reminds us that some of these challenges can occur close to home. And let’s not forget there are a number of other large ports across the country, including Prince Rupert, Montreal, Halifax, Belledune and Halifax to name just a few, that importers and exporters depend on daily.

How do you prepare for a situation like this in future? If port operations play a role in your company’s ability to achieve competitive advantage, risk management bestpractices would imply that it makes sense to try and identify the potential bottlenecks at a particular Port. In the case of Port Metro Vancouver for example, users can look for information on a number of websites, including the BC Federation of Labour and the BC Bargaining Database.Transport Canada’s website provides an excellent overview of the Port programs in Canada, as do many individual Port Authorities, and the Association of Canadian Port Authorities. Better yet, talk to your suppliers. Sharing information is a large part of supplier relationships. Every once in a while you have to stand back, take a look at the bigger picture, and make sure you can identify all the players in your supply chain. CS

Laurie Turnbull, CITT, P.MM is a supply chain consultant with Cole International, a leading Canadian logistics company providing Customs brokerage, warehousing and worldwide transportation services. He can be contacted at laurie.turnbull@cole.ca.

54 July/August 2014 www.canadianshipper.com

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