Canadian Shipper January/February 2017

JANUARY/FEBRUARY 2017

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HEALTHCARE LOGISTICS Symptoms and Cures

SUPPLY CHAIN FINANCE Factoring in reverse

Adding it Up 2017 SURVEY OF THE LOGISTICS PROFESSIONAL

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CONTENTS

JANUARY/FEBRUARY 2017

DEPARTMENTS

10

5 | Editor’s Forward Of New Year’s resolutions that ring true to self.

COVER STORY

6 | In the News More container capacity for Montreal.

ANNUAL SURVEY OF THE LOGISTICS PROFESSIONAL

34 | Retrospective Approaching transportation management in 2017.

Salaries, budgets, Sa positions, locations posi

35 | Coaching Corner The entrepreneurial spiritwhat it takes.

36 | Inside the Numbers Salient stats on Canada’s transportation industry.

37 | The Bigger Picture 2017 and stepping stones to great change.

©StockFinland/iStock

26 AFRICAN TRADE As an emerging continent, Africa boasts and young demographic and urban growth.

How can exporters make their mark?

FEATURES

HEALTHCARE LOGISTICS | 21 The pain points and top priorities for the healthcare supply chain.

21

GROWTH ENGINES | 23 Pharmaceuticals are a growing market but one full of challenges for operators.

SUPPLY CHAIN FINANCE | 29 New tools for trade promise balance sheet relief.

REQUEST FOR PROPOSALS | 31 The best advice to make RFPs work for you.

www.canadianshipper.com January/February 2017 3

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EDITOR'S FORWARD Julia Kuzeljevich January/February 2017 Volume 120 Issue No.1

EDITOR Julia Kuzeljevich (416) 510-6880 julia@newcom.ca RESEARCH DIRECTOR Lou Smyrlis lou@newcom.ca ART DIRECTOR Ellie Robinson ellie@newcom.ca CONTRIBUTING EDITORS Carroll McCormick, Leo Ryan, James Menzies, John G. Smith, Ian Putzger, Ken Mark.

MARKET PRODUCTION MANAGER Kimberly Collins (416) 510-6779 kim@newcom.ca VIDEO PRODUCTION MANAGER Brad Ling CIRCULATION MANAGER Mary Garufi (416) 614-5831 mary@newcom.ca PUBLISHER Nick Krukowski (416) 510-5108 nick@newcom.ca PRESIDENT Joe Glionna CHAIRMAN & FOUNDER Jim Glionna VICE-PRESIDENT, OPERATIONS Melissa Summerfield 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 NEWCOM BUSINESS MEDIA INC.

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To thine own self be true

N

ew Year’s is the time for setting resolutions. Some may scoff at this, saying they have no need for a once-yearly soul search, but introspection has its place at least once a year, if not more often.

And introspection can lead to new paths.

I read an interesting Schumpeter blog in The Economist recently that discussed the topic of introversion.

Introversion is one of my favourite topics for introspection, as I consider myself introverted and for much of my life it was considered a handicap.

Psychometric tests such as Myers-Brigg Type Indicator show that introverts make up between a third and a half of the population. But, the column suggests, the corporate approach to introverts has been getting worse, favouring more open plan offices and “group work”. Whereas extroverts “gain energy from other people, introverts need time on their own to recharge.”

Also, many companies identify leadership skills with extroversion, and projection of the “ego”, but those who put their company’s interests before their ego may actually be better leaders.

I was amazed by the column’s revelation that Canadian National Railway’s former CEO Claude Mongeau apparently set himself the goal of acting like an extrovert five times a day.

So introverts who make it to the top have usually learned how to behave like extroverts at least some of the time, the column suggests.

Certainly, we live in a world where we cannot hide under rocks, and must interact with the human race.

Good social, interpersonal skills are some of the most highly valued “soft skills” amongst employers today. But as an introvert who has painfully honed these skills over time I can say with some boastfulness that in learning to ask people all about themselves (so that they do all the talking), I remember many facts about people that I can repeat back to them later, sometimes much to their surprise.

In contrast I can’t always say that many of the extroverts I’ve spoken to have remembered very much at all about the conversation.

But for many introverts who successfully develop these skills, there needs to be a “recharge, reset” button that allows them to retreat from too much exposure to people and conversation.

North America is the wrong place for introverts, because Western culture tends to value the extrovert and tends to see quiet as dumb, suspect, invisible.

And yet in certain cultures, specifically in the East, the quiet consideration of facts, the serious demeanour, are revered and respected.

In Susan Cain’s “Quiet: The Power of Introverts in a World that Can’t Stop Talking”, she notes that many executives are introverts who, in their roles, show strength through their ability to take the time to consider all facets of an argument, to debate it more diplomatically than those who may enrage and engage too much.

The Schumpeter blog notes that at Amazon, meetings have been overhauled to make them more focused. Meetings begin silently, and no one may speak before reading a sixpage memo on the subject of the meeting.

Whether you are an extrovert-introvert, who is well able to be the life of the party, to engage many people in conversation, but who needs to relax and recharge away from this, or someone who comes alive through more exposure to people, the more aware you are of what drains you or feeds you, the more you play to your strengths.

In terms of introspection, and resolutions for the year ahead, beyond weight loss, beyond 10k goals, I think that goals aligned with who we truly are, and where we are at our best, make the most sense.

Happy 2017! CS www.canadianshipper.com January/February 2017 5

IN THE NEWS

New Montreal container terminal boosts capacity

By Leo Ryan

The new Viau terminal will boost port handling capacity by 350,000 TEUs.

A new terminal in the sector of the Port of Montreal inaugurated November 18 boosts the port’s handling capacity by 350,000 TEUs. Canada’s second largest port after Vancouver is positioning itself for increased global trade, with North Atlantic shipments a prime target amidst strong competition from the Port of New York/New Jersey in particular.

Termont Montreal Inc., the terminal operator, is part of Logistec Corporation’s extensive network on the East Coast of North America.

“The new Viau terminal will have a considerable impact,” said Sylvie Vachon, President and CEO of the Montreal Port Authority. “Ultimately, it will increase the Port of Montreal’s handling capacity to 2.1 million TEUs and generate significant benefits for the region, province and country as whole with annual spinoffs of

The new terminal was inaugurated November 18.

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IN THE NEWS

continued from p.6

$340 million and the creation of 2,500 direct and indirect jobs.

“The success of this project is the result of a significant collaboration between public and private organizations, including Termont Montreal Inc. and Mediterranean Shipping Company S.A. Moreover, the work was carried out with concern for communities and the environment.”

Taking part in the ribbon-cutting ceremony were Vachon, Laurent Lessard, Quebec Minister of Transport, Jean D’Amour, Quebec Minister of Maritime Affairs, Marc Garneau, federal Minister of Transport, Madeleine Paquin, President of Termont Montreal, and Sakat Shaikh, President and CEO of MSC Canada.

The new terminal, together with the work done previously and the second phase of work to be completed in the years to come, will bring the total handling capacity in the Viau sector to 600 000 TEUs,

The new Viau terminal at the Port of Montreal.

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IN THE NEWS

“The Government of Canada recognizes that port infrastructure plays a key role in supporting economic growth. In addition to making the Port of Montreal considerably more competitive, productive and effective, this project will also help to support economic growth for Canadians in the years to come.”

Marc Garneau, Transport Minister

thereby bringing Montreal’s overall handling capacity to 2.1 million TEUs. Last year, Montreal’s container cargo broke another record, rising 4% to nearly 1.5 million TEUs. The construction of the new terminal is part of a broader port capacity optimization project covering three essential areas: the terminal’s container-handling capacity, marine access and road access.

The Port of Montreal must be active on all

three fronts to establish the right balance between facilitating traffic and ensuring that activities continue to run smoothly, noted a press release.

The federal government is contributing a third of the eligible funding for all three project components to a maximum of $43.6 million under the National Infrastructure Component of the New Building Canada Fund. Of this amount, up to $27.2 million is available to fund the new

container terminal. The remainder of the funding will be attributed to the project’s other two components.

“The Government of Canada recognizes that port infrastructure plays a key role in supporting economic growth,” said Transport Minister Marc Garneau. “In addition to making the Port of Montreal considerably more competitive, productive and effective, this project will also help to support economic growth for Canadians in the years to come.” CS Leo Ryan is a veteran journalist who has reported on key transportation and trade developments in Canada for more than two decades. A former Montreal bureau chief for The Journal of Commerce, he specializes in port and shipping issues and was awarded the Medal of Merit in 1992 by the then Canadian Port and Harbour Association.

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SAL LARY Y SU URV VEY Y

2017 SURVEY OF THE LOGISTICS PROFESSIONAL

ADDING IT UP R

esults are in for our annual Survey of the Canadian Supply Chain Professional, and as usual they shed some interesting light on the state of compensation and satisfaction in the industry. Of the 701 supply chain professionals included in our sample, 46% defined themselves as being in the managerial ranks of their organizations and 66% said they were in transportation. Of the respondents, 59% indicated they manage at least one employee. The vast majority of respondents (56%) were over 35 years of age with the mean age being 45.

59% of respondents hold an undergraduate degree at either the University or college level. Respondents performed a variety of functions ranging from transportation (66%) and purchasing (51%) to training and development (50%) and warehousing (45%). The majority of respondents who are Cana-

10 January/February 2017 www.canadianshipper.com

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SAL LAR RY SURVEY RY EY Brought to you by our survey partner:

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Base salary increases

Size of increase Survey Average

Survey Average

Increased

57%

Remained the same

42%

2.0% or less

45%

2.1% to 4.0%

37%

4.1% to 6.0%

8%

6.1% to 10.0%

3%

10.1% or greater

5%

Approximate size of company’s annual transportation/ warehousing/logistics budget 27% 17% 11%

11%

10%

$100,000 or less

$100,001 to $500,000

$500,001 to $1 million

10%

Over $1 million to $5 million

Over $5 million to $10 million

8%

Over $10 million to $20 million

More than $20 million

www.canadianshipper.com January/February 2017 11

SAL LARY Y SU URV VEY Y

Base salary ranges Survey Average

Less than $40,000

1%

$40,000 to $49,999

4%

$50,000 to $59,999

7%

$60,000 to $69,999

9%

$70,000 to $79,999

7%

$80,000 to $99,999

13%

$100,000 to $119,999

11%

$120,000 and higher

12%

Mean salary by job function Customer Service

88,274

Purchasing/procurement

92,793

Warehousing

94,051

Transportation

91,302

Inventory/Material Control

87,824

Information Technology

89,736

Project Management

94,687

Training and Development

91,836

Demand Planning/Forecasting

94,906

Customs

83,732

Order FulďŹ llment

88,630

Sales/Marketing

99,629

Other

95,447

Experience, Connections, Opportunities

12 January/February 2017 www.canadianshipper.com

SAL LAR RY SURVEY

dian Shipper subscribers had transportadi tion and supply chain responsibilities.

The survey enjoyed wide geographic reach across Canada. While 448% of respondents came from Ontario, aanother 37% were from Western Canada and 12% from Quebec and the Maritimes. The respondents also represented a mix of small, medium and large enterprises with 49% working for large companies employing more than 500 while 28% worked for small organizations employing fewer than 100. E-mail invitations were sent to supply chain professionals across Canada from email lists provided

by Canadian Shipper and our sister publication MM&D. The survey was handled once again by the research firm of G. Bramm Research Inc. After filtering out unqualified respondents and incomplete surveys, data compiled represented a margin of error of plus or minus 3.8 percentage points, 19 times out of 20.

What trends can we see emerging from the survey this year?

More than half of our respondents currently manage a budget, which for a quarter of respondents is between $1 and $5 million dollars a year.

For 27% of respondents their annual transportation/warehousing and logistics budget is more than $20 million.

Cost cutting is top of the agenda in terms of priorities for our respondents in the coming year. A vast majority of respondents (83%) are seeing continued pressure to cut costs in their operations.

While 47% of respondents agreed that their compensation level has been keeping up with their job responsibilities over the last five years, 52% indicated that their compensation has not, in fact, kept up.

Next year, 63% of respondents anticipate receiving a salary increase and 43% expect an increase of 2% or less.

Salaries are expected to rise between 2.1-4% for 40% of our respondents.

Three-quarters of our respondents are not currently seriously looking for work with another company, but a quarter indicated they were. Some 58% of respondents are very or extremely satisfied with their current jobs.

The top reasons that respondents are considering a position with another company are: better money ( for 57%), a better work-life balance ( for 35%), better career opportunities (29%) and geographic location (29%).

Other reasons that led respondents to consider leav-

Mean salary by number of people working in company Total Respondents (Survey Average)

$90,566

25 or fewer

$79,909

26 to 100

$79,386

101 to 500

$87,694

501 to 1000

$89,782

1001 to 5000

$98,138

5001 to 25,000

$97,399

More than 25,000

$101,633

Mean salary by education Some high school

$82,500

High school graduate

$98,111

Some community college

$81,454

Community college graduate

$83,834

Some University

$82,302

Undergraduate-Bachelor’s Degree

$94,088

Some post graduate education

$84,019

Post graduate degree

$119,423

Mean salary by years of experience in supply chain 2-5 years

5-10 years

10-15 years

15-20 years

20-25 years

25-30 years

30-35 years

$60,458

$68,338

$85,840

$86,368

$100,667

$105,102

$105,661

www.canadianshipper.com January/February 2017 13

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Merima Alicajic Trevor Bye Allan Corbett Maria Eugenia D’Aloia Jeffrey Fraser Colleen Jennings Ilona Julia King Cathryn Kirby Adshade Marcia Kobe Elaine Lamb Susan McDonald Steve Spoljarevic Sandra Teed Michael Theodore British Columbia

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Calie Schumacher Cherie Storms Gloria Terhaar Gail Wright Melissa Wright Michael Fraser Wright Manitoba

Wade Barr Bruno Biondi Alan Dewar Donna Fetterly Nyree Menzies Valerie Michaud Barb Miller Kim Ross Hayley Dawn Shirtliffe Corey Tkach New Brunswick

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Kelly Blenkinsopp Ronald Malone Michael Murphy Nova Scotia

Laurie Pasher Joseph Verhaeghe Ontario

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Elizabeth Lorincz John Lowe Yen Ly-Yong Christine Macri Rajesh Mamtora Philip W. Mason Raad Mathyos Colin Maxwell Lorella Mazzotta Vickie McInnis Heather Missouri Usha Mistry Jennifer L. Mitchell John Moccia Penny Moulton Karin Muller Tammy Nanticoke Sumaira Nazir Desiree Norwood Sandra Odorico Adefoluke Odunlami Sherry Parker Rakesh Patel Alice Peres da Silva Virginia Petrenciu Katie Petteplace Vassili Popov Antonella Proietto John Quirke Kristin Renaud Joseph Rose Brian Rowe Labinot Sadiku Amanda Salmond

Naeem Sardar Tariq Shaikh Tammy Shaw Candace Sider Catherine Slater Helen Song Mark Southworth Jerry C. Spooner Harjinder Sra Brian Staples Debbie Stevens David Stockwell Michelle Stokes Susan Subryan Laura Swanson Simona Talasman Michelle Tamburro Raymond Tang Demi Todorov Jonathan Torres Karen Vallee Margaret Valtas Kimberly Van Runt Terri Walsh Ruth Webb-Macleod Meredyth Welsman Ping Ping Wen Rajeev Wijesinghe Lynn Wilding-Fullerton Jeff Willson Tara Wilson David Winkler Dian Wollison Ivy Woo

Amanda Yachuk June Zheng Quebec

Melanie Bedard Karen Blouin Jean-Philippe Carfagnini Carmen Dumitrache François Dupuis Marc Filion Robert Gaboriault Natasha Harper Claire Howarth Paul Hughes Pierre-Yves Lafrance Nadine Lépine Lorin Levine April Martinez Alexandra Mierla Margaret Emma Million Kevin Mooney Suzanne Perkins Ronald Racine Ginette Ste-Croix Sandra Walker David Wallace John Weight A.J. (Tony) Yakubosky Monika Zanacan Michael Zobin Saskatchewan

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SAL LAR RY SURVEY

Mean salary By company sector

Top three reasons for considering a position with another company

Total Respondents (Survey average)

$90,566

Manufacturing

$86,478

Transportation

$90,827

Better money

57%

Better work/life balance

35%

Geographic location

29%

Better career opportunities

29%

Third-party logistics

$95,943

Retail

$91,271

Better benefits

22%

Other

$92,659

Flexible hours

22%

Greater say in management decisions

15%

Reputation of firm

12%

Better rewards program

12%

More responsibility

11%

Industry of choice

7%

Smaller firm

3%

Larger firm

3%

Other

7%

ing were greater say in management decisions, reputation of firm, better rewards program, and more responsibility.

Over three quarters of respondents have completed tertiary levels of education. They also indicated that professional designations are highly relevant to their job performance.

CITT's CCLP designation is held by 33% of respondents, the P.Log by 20%, and SCMP by 16% of our respondents.

Respondents boast many years of supply chain experience, with 19% indicating they've amassed between 15 and 20 years' experience, and 16% between 20 and 25. The mean number of companies at which our respondents have been employed during their career is four, while the mean number of positions held during their career is 6.4.

The mean gross salary reported this year was $90,566, with 13% of readers now pulling in base salaries of $80,000$99,000 and 23% reporting six-figure base salaries. In our previous year's survey we reported $91,761 as the mean base salary for Canadian Shipper readers with 17% of our

readers pulling in base salaries of $80,000-$99,000 and 17% reporting six-figure base salaries. Overall average salary for males was $96,141 and $76,919 for females.

Company size makes a similar difference in base pay levels. Canadian Shipper readers working for companies with fewer than 100 people had a mean salary of $79,386, while those working for companies with more than 25,000 employees earned a mean salary of $101,633.

The supply chain recruitment and hiring process, according to 60% of our survey respondents dents this year, is expected to stay the same, meaning that at it will be somewhat problematic or take longer onger ( for 49% of respondents) or very problemlematic ( for 34% of respondents) to fill vacant acant positions with suitable talent.

Our respondents worked 46.1 hours urs per week with 88% receiving no overertime pay. CS

www.canadianshipper.com January/February 2017 15

SAL LARY Y SU URV VEY Y

Respondent Profile & Methodology Of the 701 supply chain professionals included in our sample, 46% defined themselves as being in the managerial ranks of their organizations and 66% said they were in transportation.

Of the respondents, 59% indicated they manage at least one employee. The vast majority of respondents (56%) were over 35 years of age with the mean age being 45. 59% of respondents hold an undergraduate degree at either the University or college level. Respondents performed a variety of functions ranging from transportation (66%) and purchasing (51%) to training and development (50%) and warehousing (45%). The majority of respondents who are Canadian Shipper subscribers had transportation and supply chain responsibilities .

The survey enjoyed wide geographic reach

16 January/February 2017 www.canadianshipper.com

across Canada. While 48% of respondents came from Ontario, another 37% were from Western Canada and 12% from Quebec and the Maritimes. The respondents also represented a mix of small, medium and large enterprises with 49% working for large companies employing more than 500 while 28% worked for small organizations employing fewer than 100. E-mail invitations were sent to supply chain professionals across Canada from email lists provided by Canadian Shipper and our sister publication MM&D. The survey was handled once again by the research firm of G. Bramm Research Inc. After filtering out unqualified respondents and incomplete surveys, we compiled data from 701 respondents. This represents a margin of error of plus or minus 3.8 percentage points, 19 times out of 20. CS

SAL LAR RY SURVEY

Geographic Distribution Quebec

8% Atlantic Canada

4% Ontario

48%

Manitoba/ Saskatchewan

10%

Alberta

15% Yukon/ Northwest Territories/ Nunavut

British Columbia

1%

12%

Size of Company

Highest level of education

1 to 100

28% 101-500

University degree

College diploma/ CEGEP

29%

17%

20% Post graduate degree

11%

Highschool or less

500 or more

50%

Some university

7%

20%

www.canadianshipper.com January/February 2017 17

SALARY SURVEY

The pathway to successful hiring As a recruiter working in the supply chain vertical I’m deeply involved in the hiring process with a wide variety of clients, from small companies with just a few employees, to multinationals, and the processes that we see range just as greatly. Interestingly I’ve learned just as much from some of our smaller clients about a well-tuned hiring process as I have from companies with thousands of staff.

There isn’t enough room in this column to cover every aspect, but I will highlight those that I believe make the biggest impact.

Clear job description First and foremost, a clear and concise job description must be in place. If the job description is missing or vague, you’re already going down the wrong path. Because organizations are fluid, job descriptions must be current to stay relevant. At the same time, the job description must be realistic.

Many times I’ve encountered four pages of standards that literally no human being can meet. This is just as futile as having no description at all. Realistic and attainable are the words to measure by.

Sourcing decision Secondly, a decision on how to source outstanding candidates must be made with the understanding that sourcing is an investment decision. Whether the company chooses to advertise, use one of the many available tools such as LinkedIn, or employ a recruiter, the decision needs to be made with a long-term view in mind. Occasionally companies who are particularly well networked can find employees without stepping outside the organization. It’s great when it works but I’ve often seen a very shortterm view taken at this point, causing the candidate pool to suffer greatly in both quality and quantity.

Unfortunately, posting a position does not prevent multitudes of unqualified people from applying. Twenty years ago a newspaper advertisement would generate the same number of unqualified candidates. After all, there is simply no downside for people to not apply. Of course, the result is that someone in the organization has to spend considerable time sorting through résumés.

It’s important to remember that a job posting does not tap into the passive network of outstanding people. That’s because typically the best people are already highly engaged in their careers and require a personal approach in order to be interested in

a new opportunity. In the recruiting business we think of this as concierge-style service. For example, if you were in New York City and wanted to take your best client to an outstanding restaurant, years ago you could have grabbed the Yellow Pages and discovered hundreds of restaurants. In today’s world, you could search the Web. But if you truly wanted to find a memorable experience, you would talk to the concierge at an excellent hotel. That’s the value of a well-established network.

The right interview When it comes to interviewing there are a few key areas that will bring success to the hiring process. First, embrace the idea of panel interviews, because several viewpoints make for better hiring decisions.

The panel style gives the interviewers a chance to reflect, take notes and formulate better questions as they participate in the interview. Secondly, a behaviouralstyle interview is the best way to validate the candidate’s previous achievements and whether or not their skill set lines up with the position description. As we all know, résumés can make big claims that need to be validated and clarified with open-ended questions. This is the most important part of the interview; the candidate’s ability to clearly back up what their résumé says is critical.

Cultural fit Ensuring cultural fit with potential new hires is a critical piece in the process. Along with appropriate skills and experience, potential candidates must have values that align with the company’s culture. This is where an honest assessment of company culture is so important. If you know your culture is particularly demanding, with high pressure, long hours, and so on, you need to own that and be clear with potential candidates. Disaster is waiting if you don’t reveal the truth at this point.

Art and science It’s important to remember that hiring isn’t an exact science, and there is no perfect recipe. That said, when we successfully match the science of a well-developed process with the art of interviewing and carefully select the right people, we can greatly influence the outcome in a positive way. When we do this, our actions match our words and we place the proper importance on ensuring people truly are the most important asset in the business.. CS

www.canadianshipper.com January/February 2017 19

Healthcare Industry

Proudly serving the healthcare industry Thanks to our extensive territory, our advanced expertise in transportation and logistics, and our supply management, more than 1,500,000 patients EHQHıW DQQXDOO\ IURP WKH VHUYLFHV RI 'LFRP 7UDQVSRUWDWLRQ *URXS $ WXUQNH\ VROXWLRQ especially adapted to the healthcare industry, an industry ZKHUH HYHU\ GHWDLO FRXQWV

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Healthcare Logistics 603-913-5971 healthcare@dicom.com

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dicom.com

HEALTHCARE LOGISTICS

PAIN POINTS How the healthcare supply chain is evolving COSTS Controlling costs is one of the top issues for healthcare supply chains.

The market is moving from premium to lean.

“You’ve got to cut internal costs-there is more of that than ever before. What we spend more time on than anything else is transportation costs: you have to always introduce competition,” said Paul Steiner, VP of Strategic Analysis for SME, Spend Management Experts, which aims to help companies lower transportation and shipping costs by identifying savings opportunities and building negotiation strategies across all modes of transportation.

Using proprietary cost modeling technology, SME conducts a deep financial analysis of a shipper’s carrier agreements, invoicing and transportation spend to identify hidden costs and improve operational efficiencies. SME works with a variety of companies in the health care sector, specifically related to medical devices and pharmaceuticals.

Sometimes packages are heavier than they need to be so being able to take additional space out of the packages and introduce more competition on the transport side is important.

Canadian and U.S. customers have similar requirements but in Europe, for example, where there are 8 or 9 players in each country, there are more cost pressures on the carrier side, Steiner said.

REGULATORY PRESSURES With stricter temperature control requirements as a result of regulatory tightening of guidelines, customers have taken a more conservative view of the regulations and ensuring that end to end we’re able to maintain the integrity of particular products, said Maria Thomas, vicepresident, Distribution Operations, UPS Supply Chain Solutions.

BY JULIA KUZELJEVICH

The use of biologics is growing.

Typically that is packed out in nonreusable packaging. From a customer experience perspective, the onus is on their customers to deal with that.

Stakeholders are using active temperature control and leveraging specialized carriers for the transportation of goods to maintain integrity. Sometimes the financials are not necessarily cost savings but cost containment.

“There is heightened awareness from a quality perspective. Customers are always interested in programs we are supporting for other customers that may benefit their supply chain. I do believe there is an openness to review alternatives when it comes to cost containment.

In our role when consulting, when customers are looking to enter the Canadian market, we do present value to them based on our relationships with Canadian officials, regarding audits, special licensing, etc.,” Thomas said.

MERGERS AND ACQUISITIONS Over the last 5-6 years on an ongoing basis, there’s been a lot of activity, in the healthcare sector, from a mergers and acquisitions perspective, and what that does is it creates a certain short term IT-driven upheaval from a customer perspective.

“As customers focus more on their portfolios, sometimes it’s not just a full blown acquisition but porfolios diversifying. To drive synergies and efficiencies there can be a mandate to move everything to the same platform. This can cause some upheaval, and potential disruption to the supply chain.

Sometimes there is a shut down period and when the new system resumes, the ramp up and learning can also affect supply chain.

For us, typically there’s often some work effort to re-integrate things. We also feel the impact when customers combine their customer service groups,” Thomas said.

To mitigate that there is robust project management to help customers through the transition.

“We plan our labour and support around that, make sure we have resources for back order and fulfilment,” Thomas said.

REDUCING PRODUCT DAMAGE AND SPOILAGE Keeping healthcare products intact while they are being shipped means “treating a package like a patient.”

This is where tracking, tracing, and monitoring come into place for customers, and having facilities around the world with the ability to intervene, and to supply cold packs when things get delayed, is essential.

MODAL SHIFT Probably about 60% of the market is utilizing ocean containers to move pharmaceuticals. They have better lead times, planning, and WMS systems. There’s lots of technology for tracking things in the air.

“We are beginning to see multiple facets of transportation, intervention services, and specialized services in this market in general,” Steiner said.

Products such as the “Med Pack” offer reusable, sustainable containers and provide cost cutting as well as stewardship.

“We always find product damage and spoilage a big pain point-cost is a big concern for people in this market. Competition reduces prices. The other major piece is product security: digital protection.

There are all sorts of statistics on this.

A lot of times there is poor visibility in the supply chain-things tend to disappear,” Steiner said.

THE GREY MARKET In both the pharma and the grey market world, there are folks that stockpile cercontinued

© artefy/iStock

www.canadianshipper.com January/February 2017 21

HEALTHCARE LOGISTICS

continued from page 21

tain drugs, and this creates product concern around security. “You’re beginning to see more collaboration between pharma and their wholesalers, to address security: technology such as holographs, more advanced bar coding and serialization, and cooperating with law enforcement. Customers are insuring more claims than they ever have. Certainly there is a recognition of the pain points: cameras, better screening of employees, better tracking and tracing, bar coding, etc. In this market, there are a lot of regulatory challenges,� said Steiner.

Europe has its Good Distribution Practices, Brazil has unique item level serialization under its Brazil Serialization Act. HOME HEALTHCARE One of the pain points is how to go more direct to the consumer. How are we going to see our supply chain evolve more when

it comes to pharmaceuticals?

Home healthcare services are growing 8-10% yearly, and Canada and the U.S. are big on that side.

There’s an increase in the delivery of healthcare items to the home, such as oxygen tanks, patients getting in-care services, or set-up services, of medical beds, etc.

Returns are a big piece of that as well.

Traceability concerns are more or less creating standards in this market.

Worldwide standards have been adopted across a number or industries, with manufacturer and distributor using the same barcoding.

Years ago, it used to be expensive to move some of these items. Now, with barcodes, temperature control, traceability, this has become a little more commoditized. “We’re seeing some reduction in cost along the transportation side. It’s a more efficient process today.

As customers get smarter, they are fo-

cusing on cube utilization, and wider use of ocean freight,� said Steiner.

Inventory reduction is also a part of this. “If you’re carrying a couple hundred SKUs and they’re not big items, is it necessary to stockpile them?� he said.

COLLABORATION More and more collaboration is occurring amongst healthcare supply chain stakeholders, especially around the interpretation of “regulatory compliance�-how do they interpret it, sharing ideas about holes in security, but maybe not direct information about the product. CS Editor Julia Kuzeljevich has been writing about transportation issues for 15 years. Her articles have garnered several transportation and Canadian Business Press writing awards.

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22 January/February 2017 www.canadianshipper.com

HEALTHCARE LOGISTICS

ENGINE OF GROWTH PHARMA GROWS IN TIGHTER REGULATORY ENVIRONMENT

BY IAN PUTZGER

Kuehne + Nagel is beefing up its cool chain capabilities. Last year the logistics provider added a new temperature-controlled room to manage pharmaceuticals that require ambient temperatures between 15 and 25 degrees Celsius in its bonded airfreight facility located near Toronto's Pearson airport, and this summer will see the opening of a 203,8000 sq ft GMP facility, manned by a specialized team of pharma experts. Strategically located in "Pill Hill", Mississauga, it is designed to manage multiple temperature ranges, and will be audited and certified by Health Canada.

“We are excited to be launching another new, leading-edge GMP facility to enhance the existing campus and support our growing pharmaceutical and healthcare customers in Canada," comments Jamie Wood, president of Kuehne + Nagel Canada. "We will continue to invest in innovation to support our long term vision and corporate strategy, all under one umbrella, our KN PharmaChain product portfolio, an integrated global supply chain solution for our customers."

Carey Roach, director of strategic customer development, pharmaceutical and healthcare, notes that the forwarder's new facility will improve its immediate capacity needs. "We continue to experience significant growth in 2016 and expect the same in 2017," she comments.

This is echoed by Gary Vince, head of airfreight, Canada at DHL Global Forwarding. He reports “fairly consistent growth” in the company’s existing trade lanes and adds that Air Canada’s expansion to Latin America should help in a promising growth market that has so far been hampered by shortage of direct connections.

While healthcare and pharmaceuticals has been a growth engine, it also keeps getting more challenging for operators. Tighter regulatory requirements keep raising the bar. More than 40 jurisdictions - including the EU, US, South Korea, China and Brazil - are moving to introduce new track and trade regulations, mandating tracing by serial number in a push against counterfeit drugs.

According to industry tracking provider Tracelink, over 75 percent of prescription medications worldwide will be covered by the new rules by the end of 2018.

“Serialization is definitely going to change the game. It requires transparency end-to-end from the time it leaves the shipper’s dock to destination,” remarks continued © iStock

www.canadianshipper.com January/February 2017 23

HEALTHCARE LOGISTICS

continued from page 23

Vito Cerone, director of marketing and sales, Americas at Air Canada Cargo. A major objective for the airline in 2017 is to enhance its service in this sector and elevate it to the next level, he adds.

Tighter regulations are also on the advance in other segments of the healthcare industry. The US Food and Drug Administration is pushing ahead with its ‘unique device identification’ regime for medical devices and officials in the European Union are in the process of formulating a set of rules for these, which are expected to come into effect about three years down the road.

A number of airlines have taken on new containers with temperature control features to beef up their offerings. Air Canada is looking to add containers from va-Q-tec, a provider of passive closed cold chain container solutions that cover temperature ranges from -70 to +25 degrees Celsius, to its arsenal of temperature-controlled devices. It is also mulling the introduction of special units to carry pharmaceuticals from warehouse to the aircraft in some stations, Cerone says.

As his remarks on serialization indicate, monitoring capabilities are another vital element that providers have to keep investing in to stay in this game. “Visibility is very important in this vertical,” he says.

According to Vince, serialization brings more opportunities than challenges. “It comes down to the ability to monitor and track and trace at the serial number level,” he says. DHL introduced a new app with this capability in the past year, which has been well received, he adds.

Air Canada is in the process of implementing RFID technology in warehouses at major gateways, which can be used to further enhance visibility for the healthcare sector, Cerone reckons. “This would be a huge step forward; it would be a big differentiator,” comments Vince.

Drawn by the growth and the higher yields compared to most other types of cargo, a rising number of airlines have deployed temperature-control technology and better tracking capabilities to capture a slice of this traffic. Roach welcomes these moves, saying that airlines' service levels and visibility have improved markedly in recent years, which also supports the continued efforts to improve handling compliance.

Vince stresses that visibility is just as

important as cold chain technology. “It is not just a case of what type of container an airline uses. It is about their ability to offer various solutions, and it is about the carrier’s ability to provide us with a measure of visibility.

For example, we need time stamps when the cargo goes out to the ramp,” he says.

This implies a smooth flow of data between the various parties. Not surprisingly, Tracelink CEO Shabbir Dahod views this as vital, arguing that “implementing serialisation across global operations calls for new thinking about platforms that can not only deliver massive data and processing elasticity, but network connectivity and supply chain interoperability that links businesses together to advance the value of the pharmaceutical ecosystem as a whole.”

Data flow may not be enough. Increasingly operators stress the need for close cooperation within this ecosystem.

“We work with our customers on solutions,” says Roach, adding that this has been a major driver for Kuehne + Nagel’s growth in this segment.

Alan Dorling, global head of pharmaceuticals and life sciences at IAG Cargo, emphasizes the need to include ground handlers in this as well as forwarders and shippers. “There is an emerging trend of preference to routing shipments over certified gateways,” he remarks. “The market is moving to GDP corridors”.

The notion that logistics providers - be they forwarders, handlers or airlines - need certificates to document their capabilities in this sector is gaining ground. “We are looking at getting CEIV and GDP certification at out key stations,” says Cerone “We are going to work with both to make sure we are aligned with the industry.”

Until recently GDP (Good Distribution Practice) has been the lone gold standard for healthcare-related logistics activities, but CEIV (Centre of Excellence for Independent Validators), which has been promoted by the International Air Transport Association, is gaining traction as a second important badge of quality. Airline executives report that it is becoming a standard question in RFPs. Among other things, CEIV marks an effort of the air cargo industry to shore up its credentials at a time when more and

24 January/February 2017 www.canadianshipper.com

more pharmaceuticals shippers glance at ocean transportation as a potential alternative mode of moving their traffic. Faced with mounting cost pressure, they are looking for more cost-effective solutions, notes Roach.

However, while the amount of pharmaceuticals that are shipped by ocean vessels is on the rise, there will always be a need for airfreight, she adds.

Dorling is unfazed by the mounting use of ocean transportation. Speed to market remains a potent factor in favour of airfreight, he stresses. Moreover, globalized production requires airfreight to link pharmaceuticals manufacture with packaging and other elements, he argues.

Air cargo stands to benefit from the emergence of biologics, especially medications tailored to the health profiles of individual patients, largely associated with cell therapy or gene editing. These are expensive to manufacture, and typically highly sensitive to ambient conditions.

According to Dorling, these substances usually have an 18-hour window.

Roach, who anticipates large growth in this sector, expects to see more stringent requirements on handling and packaging of such shipments.

“It is going to be a challenge to meet these requirements,” she reflects.

The more information clients can give their logistics providers about the packaging, the loading options they have available and other aspects, the better equipped the logistics firm will be to ensure the precious shipment reaches its destination without any issues, she notes.

Airlines sense a similar need for more involvement to handle this new type of cargo properly. “That’s one reason why I want discussions not only with forwarders but also with manufacturers. I’d like to understand where they will be in three, four years,” remarks Cerone. CS

Ian Putzger is an award-winning journalist with more than 20 years experience covering transportation and logistics issues. He is a former writer and editor with the Hong Kong-based Asian Sources Media Group, and Airtrade, a British magazine covering the global air cargo industry.

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AFRICAN TRADE

With growth and demand on the rise, it’s a good time to invest in the African continent

By Julia Kuzeljevich

ith its young population and rising consumer demand, the African continent stands to benefit from growth in the years ahead.

The International Monetary Fund says Africa will be the world’s second-fastest growing economy to 2020. Africa will soon have the fastest urbanization rate in the world. By 2034, the region is expected to have a larger workforce than either China or India-and, so far, job creation is outpacing growth in the labour force.

There are key sectors where the needs of African companies and Canadian expertise are good matches. These include the extractive sectors (mining, oil and gas, resources), infrastructure (road and ports engineering), telecommunications, clean technology, transportation and agriculture. Light manufacturing and healthcare/life sciences are other emerging sectors.

In 2015, Export Development Canada (EDC) formalized its representation in Africa with the opening of its permanent office in Johannesburg in order to help Canadian companies take advantage of the growing opportunities in the sub-Saharan region.

EDC aims to link more Canadian companies into the supply chains of upcoming infrastructure, oil and gas, and mining project opportunities on the continent, and has helped facilitate more than USD 7.4 billion in business between African and Canadian companies – many of them small- and medium-sized enterprises (SMEs) – in the last five years and is looking to grow that number to USD 10 billion over the next 5 years.

In conversation with Canadian Shipper, Jean-Bernard Ruggieri, Chief Representative, Africa, with EDC in Johannesburg, said that this is a very good time to talk about Africa.

“Five years ago Africa was booming because of commodities.

Now countries are trying to diversify their economies away from strictly the oil and gas sector. How we describe Africa is that it is the next China or India of 10-15 years ago. There is growth ahead, in terms of population and demand. If you want some good growth 26 January/February 2017 www.canadianshipper.com

it’s time to invest. It takes time to be successful in Africa, to find the right partners, and to be involved in the supply chain,” he said.

Ruggieri, who covers the entire continent of Africa, talks to the buyers, existing or future, of Canadian suppliers of exports.

“We are approaching buyers to help Canadian suppliers-we bring financing to buyers to make the contract happen,” he said.

African markets differ in that there are many state owned companies, and doing business with these can be slightly more complicated than doing so with the corporate world.

In countries like Nigeria, Kenya, and South Africa, however, more and more private companies are being launched.

In terms of impediments it’s like any emerging markets- it’s really understanding the culture and how you can be successful in signing the contract, Ruggieri said.

“Today what I see more and more is a reluctance to buy from North America and Europe and they are more willing to work with other emerging countries, like China, which is a major player in Africa. Canadians are well positioned but maybe not aggressive enough or present enough. You have to come and be present, and come often to the market, because the other competitors show up at least once a quarter or more,” he said.

EDC has been growing its presence, matching buyers and suppliers. Power generation is a huge sector, oil and gas, mining are coming back, and infrastructure and transportation are also key.

“If you ask a company that has already sold in Africa, 80% of the time they will sell there again,” he said.

A September 2016 report from the McKinsey Global Institute, Lions on the Move II: Realizing the Potential of Africa’s Economies, looked at fundamentals on the continent and opportunities for growth in trade.

According to the report, five years ago, growth was accelerating in almost all of the region’s diverse economies, but recently their

©iStock

AFRICAN TRADE

paths have diverged. Some countries have continued to grow fast while others have experienced a marked slowdown as a result of lower resource prices and higher sociopolitical instability.

While fundamentals on the continent are strong, African governments and companies will need to work harder to make the most of its potential. Africa’s real GDP grew at an average of 3.3 percent a year between 2010 and 2015, considerably slower than the 5.4 percent from 2000 to 2010.

Accelerating technological change is unlocking new opportunities for consumers and businesses, and Africa boasts abundant resources.

Consumer and business spending today totals $4 trillion.

Household consumption is expected to grow at 3.8 percent a year to 2025 to reach $2.1 trillion, while business spending is expected to grow from $2.6 trillion in 2015 to $3.5 trillion by 2025. Companies wanting to tap into consumer markets would need to have a detailed understanding of income, geographic, and category trends. Africa could nearly double its manufacturing output from $500 billion today to $930 billion in 2025, provided countries take decisive action to create an improved environment for manufacturers. Three quarters of the potential could come from Africabased companies meeting domestic demand (today, Africa imports one-third of the food, beverages, and similar processed goods it consumes), while the other one quarter could come from more exports. Companies looking to grow across the continent should develop a strong position in their home market, use that as a base for expanding into markets well beyond their immediate region, adopt a long-term perspective and build the partnerships needed to sustain success over decades, and be ready to integrate what would usually be outsourced. They should look for opportunities in six sectors that MGI finds have “white space”-wholesale and retail, food and agri-processing, health care, financial services, light manufacturing, and construction—with high growth, high profitability, and low consolidation, and invest in building and retaining talent.

To better gauge stability at the country level, MGI developed an African Stability Index to help businesses and investors understand their portfolio risk and help policy makers understand and address their own countries’ vulnerabilities. The index highlights the diverging growth and stability trends that economies in the region have been experiencing since MGI published its first report on Africa’s economies in 2010.

Four factors could transform African economies and their pace of growth, said MGI. Africa is the world’s fastest urbanizing region. Over the next decade, an additional 187 million Africans will live in cities-equivalent to ten cities the size of Cairo, Africa’s largest metropolitan area. Between 2015 and 2045, an average of 24 million additional people are projected to live in cities each year, compared with 11 million in India and nine million in China.

Faster penetration of the internet and mobile phones offers Africa a huge opportunity to enhance growth and productivity; Africa’s penetration of smartphones is expected to reach 50 percent by 2020, from only 18 percent in 2015. Previous MGI research estimated that the internet could drive 10 percent of Africa’s GDP

Urban growth on the rise. Top-bottom: Johannesburg, South Africa, Lagos, Nigeria, Nairobi, Kenya.

by 2025. This trend is already transforming a number of sectors, including banking, retail, power, health care, and education. Electronic payments are sweeping across the region and changing the business landscape. East Africa is already a global leader in mobile payments. E-commerce in Africa is growing quickly-revenue has doubled in Nigeria each year since 2010.

Africa contains 60 percent of the world’s unutilized but potencontinued www.canadianshipper.com January/February 2017 27

AFRICAN TRADE

continued from page 27

tially available cropland, as well as the world’s largest reserves of vanadium, diamonds, manganese, phosphate, platinum-group metals, cobalt, aluminum, chromium, and gold. It is responsible for 10 percent of global exports of oil and gas, 9 percent of copper, and 5 percent of iron ore. Even at recent low prices for such commodities, a significant share of African production continues to be cost-competitive, putting the resources sector in a strong position for when demand-and, eventually investment—recover.

Consumer-facing companies will need to make sure they have a meaningful presence in each of Africa’s emerging centers of consumption—Egypt, Nigeria, and East Africa—with a primary focus on the largest cities in those and other markets.

In all consumer markets, companies need to tailor their product and service offerings, and their pricing, to Africa’s distinct consumer segments.

Informal retail channels are an important route to market in many countries, and companies will need to design their sales and distribution models to cater to these.

The rapidly growing business-to-business (B2B) market is an even larger spender. Companies in Africa spent some $2.6 trillion in 2015, 40 percent of it in Nigeria and South Africa.

Africa’s B2B spending is expected to increase to $3.5 trillion by 2025, with half of that total being spent on materials, 16 percent on capital goods, and the remainder on a wide range of services including business and financial services, transportation, and telecommunications. Services consumption is set to grow the quickest at 3.5 percent per year. Companies selling to other businesses—like companies serving consumers—need a detailed understanding of trends at the sector level to be successful. Today, the largest spending B2B sector is agriculture and agri-processing, and the spending largely goes toward input materials. This sector is expected to increase spending by an additional $204 billion over the next decade, reflecting both a growing population and rising incomes that are boosting demand for agricultural output and more sophisticated food products.

The fastest-growing sectors are set to be financial services, construction, utilities and transportation, and wholesale and retail trade. B2B spending in the telecommunications, resources, and manufacturing sectors is likely to grow more slowly than in other sectors.

Smaller businesses predominate in Africa requiring companies to have a clear plan for how to serve them, including tailored offerings, targeted sales forces, and distribution and supply chains appropriate to their needs.

Four categories of products could increase manufacturing output in the period to 2025 by $430 billion so that overall output approaches the $1 trillion mark. The largest opportunity is in a category of goods classified as global innovation for local markets, which includes vehicles and chemicals.

Reflecting the continent’s growing population and rising household incomes, manufacturing of regional processing goods such as food and beverages is a second major opportunity. There is also an opportunity to earn up to $72 billion from resource-intensive products such as cement, and up to $27 billion more from la28 January/February 2017 www.canadianshipper.com

bor-intensive goods such as apparel and footwear. Three-quarters of the potential could come from meeting domestic demand, and the rest from enhancing exports. Three-quarters of the growth in potential output would come from meeting intra-African demand and substituting imports of manufactured goods, which today are at levels much higher than in peer regions. With consumer and B2B markets growing strongly, and rising sophistication among consumers and businesses, we can expect rising demand for a wide range of manufactured goods, including processed food and beverages, apparel, appliances, cars and trucks, fuel, construction materials, and industrial inputs. The other one-quarter could come from accelerating growth in niche manufacturing exports.

African economies need to boost competitiveness in manufacturing on seven dimensions: labor productivity, electric power, industrial land, movement of goods, business environment, financial systems, and tariffs. Depending on which categories of manufacturing offer the best opportunities for competitive growth in their countries, governments can prioritize specific interventions.

Infrastructure development: poor infrastructure, including electricity provision, and poor transportation links contribute to the lack of scale among Africa’s companies and hinder regional integration. Africa’s spending on infrastructure has doubled from an average of $36 billion in 2001–06 to $80 billion in 2015 in nominal terms but, as a share of GDP, infrastructure investment has remained at around 3.5 percent, less than the 4.5 percent that MGI research said is necessary each and every year until 2025. In absolute terms, this means doubling annual investment in African infrastructure to $150 billion.

Unlike the large integrated markets of China, Brazil, and the United States, Africa is a patchwork of more than 50 mostly small economies with only a limited degree of economic integration and political collaboration.

That helps explain why so many large African companies have focused their expansion on their immediate regions. Africa’s economic fragmentation has domino effects on companies’ ability to source or sell inputs along supply chains in multiple sectors.

There are few manufacturing and services hubs as production is highly dispersed across the continent, hindering the formation of new businesses, limiting companies’ ability to specialize, and reducing their international competitiveness. African governments can act on three fronts to strengthen regional integration: (1) help corporate Africa to build scale by reducing the time it takes for goods to cross borders, continuing to lower tariffs between countries, and implementing double taxation agreements; (2) drive closer integration of regional capital markets to help attract FDI; and (3) encourage the movement of business people between African countries through simplified visa requirements.

Integrating local industries into global supply chains: countries will also need to attract international manufacturing companies and investors to help develop manufacturing clusters with capital and skills that can then be integrated into global supply chains. To achieve this, governments need, for instance, to actively market African capabilities and products, bolster investmentpromotion agencies, streamline imports of partially manufactured goods (typically components), and offer special economic zones backed by reliable infrastructure. CS

SUPPLY CHAIN FINANCE

FINE TUNING FINANCE Supply chain invoicing sees some revolutionary changes

BY KEN MARK

W

hen exporters hear the word, FinTech – techbased financial services -- they dismiss it as just another digital tool that might one day make their jobs easier.

That day has now arrived. FinTech solutions have revolutionized supply chain financing by converting long-dated invoices into cash faster. The breakthrough enables executives to manage their accounts receivable more adroitly. Most firms, especially smaller ones, live or die by their cash flows. But until recently, many finance folks were left waiting for corporate customers to pay their bills which were being stretched out well beyond 60 days.

According to Priyamvada Singh, New York-based head of product management, GTRF HSBC Bank USA, supply chain finance (SCF – AKA approved payables finance or reverse factoring) emerged after the financial crisis. Lack of credit availability created an incentive for buyers to support suppliers by establishing SCF programs.

The era of “reverse factoring” began when financial institutions changed the

global payment system by introducing new rules. They gave birth to buyer-led or buyerinitiated programs, under which suppliers can access finance and receive early payment for receivables at a discount. Early payment is possible since it is based on the buyer’s irrevocable commitment to pay, since the financing cost is now based on the buyer’s, not the seller’s, credit risk.

That occurred after invoice issuers agreed to add a “commitment to pay” notice to invoices. The greater difference between the buyer’s credit rating compared to that of the supplier reduced the financing cost of the SCF transaction. Before, without such an issuer’s irrevocable commitment to pay, when sellers holding the invoice approached a bank or factor, the finance provider calculated their risk on the seller’s creditworthiness which would often be much lower than the buyer’s, resulting in higher risk premiums.

A recent Harvard Business Review article explains how the process works: “Financial technology companies … act as intermediaries in facilitating transactions between a company and its suppliers.

"They enable both the buyer and sup-

plier to improve their working capital by making it possible for the former to extend its payables and at the same time accelerate payment to the latter. This provides both sides with benefits, including greater liquidity and less variability in the timing of payments.”

Driving the new services are cloudbased software platforms linking both purchasing management and accounts payable functions into tighter “procureto-pay” systems. Closing that loop simplifies and eliminates past processes that in turn speed up invoice payments.

Many of these new-breed financial intermediaries are Silicon Valley startups.

The HBR article also states, “They are internet companies that streamline financial systems and make funding the supply chain more efficient. These include new enterprises such as Orbian, Prime Revenue, C2FO, Taulia, and Ariba. As well, traditional players such as Citi Group, HSBC, BNP Paribas, Deutsche Bank and others also offer similar services.

According to Tom Roberts, PrimeRevenue senior vice-president of Global Marketing, such supply-chain financing (SCF) or continued

©dashadima/iStock

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SUPPLY CHAIN FINANCE

invoice financing services opened the door to “reverse factoring”. In essence, it was a short-term loan from the borrower who charged fees based on current interest rates and the risk related to the borrower’s credit rating.

PrimeRevenue’s SCF transactions are conducted on its OpenSCi platform that includes analytical and onboarding tools.

Serving as a hub for both invoice sellers and buyers, it enables suppliers to trade their receivables for advance payment without changing their existing invoicing processes. Suppliers can receive payment within days in exchange for the receivable and paying relevant interest charges and fees until it is processed.

Roberts says, “The service we offer is cheaper than traditional sources because we can leverage the lower cost of capital that global multinational corporations enjoy. Such financial strength reduces the risk of non-payment. And the faster cash flow enables exporters to manage their finances more effectively.”

“The system is very easy to use,” says Pieter Dorsman, CFO of Atima Software Inc. “It may take a few days to set up the necessary documentation to use the system or much faster if you use the cell phone app.

Depending on the payment period, the cost of the service can be less than one percent of the receivable’s value. The system helps us manage our cash flow better.”

Fundthrough, a Toronto-based startup, has been offering such services since 2014. Says CEO and co-founder Steven Uster “About 60 percent of our customers offer services and 40 percent sell products.

The Fundthrough application gives new meaning to the term, “click & collect”. Users simply click on the invoice or invoices listed on their online accounting software system such as QuickBooks they want to negotiate and link them into the Fundthrough platform. After accepting the invoice, Fundthrough typically charges the seller a fee of $5 per $1,000 per week until the invoice is paid.

Exporters can also participate since Fundthrough accepts foreign currency invoices covered by Export Development Corp. (EDC) Accounts Receivable Insurance.

In fact, EDC should be every Canadian exporter’s first stop. It is a government agency whose mandate is to boost the overseas sales of Canadian goods and services. It

offers a wide range of financial and insurance products and services that assist Canadian firms in winning overseas contracts and mitigate the risks involved in dealing with foreign customers.

These include accounts receivable insurance that makes sure that exporters get paid for the products and services they sell.

Says Shawn Cusick, Director, Financial Institutions and Political Risk Insurance,EDC, “This not just for overseas buyers in obscure markets. The greatest number of defaults involved U.S. buyers. That’s because of sheer volume. Almost 75 percent of Canadian exports are sold there.”

As well, for major Canadian capital goods producers EDC will also arrange financing and possibly credit facilities for buyers and insurance in case a foreign firm fails to deliver or pay as a result of bankruptcy, natural disasters or nationalization of private-sector firms by the local government.

In addition, EDC also offers foreign buyer financing assistance options which may also eliminate the need for letters of credits (LCs). Says the HSBC’s Priyamvada Singh, “Although volumes for documentary letters of credit (L/Cs), continue dropping, they are still necessary, especially in emerging markets.

“Sellers, especially MSMEs (micro, small and medium enterprises) may still rely on letters of credit as collateral for pre-shipment financing needs since SCF enables access to finance only at the post-shipment stage and post-acceptance of an invoice by the buyer. Banks in such countries will not accept electronic notices of payment as collateral for pre-production loans for exporters to buy raw materials, etc.”

Foreign exchange (FX) hedging is another tool that can make life easier for exporters. Today’s political and economic uncertainties can suddenly rattle currency exchange rates which can reduce the number of Canadian dollars they receive when they convert invoices denominated in a foreign currency, i.e. U.S. dollars, pounds sterling, euros etc. Before, in more settled times, most of them did not consider FX hedging overseas invoices but simply let FX markets decide how many Canadian dollars they would bank after converting their foreign-currency invoices.

Says Dev Dabas, Winnipeg-based senior vice-president, EncoreFX Inc. “Exporters should not try to outguess FX markets.

They should simply try to lock in the value

30 January/February 2017 www.canadianshipper.com

of their contract when it is signed and eliminate the guesswork and other risks.”

That approach makes sense to EncoreFX client, Peter Boda, president of Bodefide Auto Ltd. in Headingly, Manitoba. He says,” We sell about 100 used cars per month to the U.S.. Our U.S. dollar-Canadian dollar receivables take about 90 days to clear. Before, we used to hedge about 50 percent of them. Now, it is closer to 75 percent.

“Hedging gives us more control over our receivables by locking in our revenues, margins, and profits. I sleep better at night knowing how much I take home in Canadian dollars is not left to chance.”

Exporters may also need to be aware of other financial risks to their overseas receivables. Says David Butler, business development executive at AFEX, a multiservice cross-border payment advisory firm, “We try to find out as much as possible about each of our customers’ needs and objectives – they are all different and most deals are not the same.”

Through its experience and connections, AFEX has been able to help clients avoid disaster by suggesting they denominate contracts in a different currency. “We told one exporter to denominate an invoice with a Chinese client in its local currency, renminbi (RMB), not U.S. dollars because the firm had a reputation for padding its U.S.-dollar invoices to cover potential swings in FX rates.

We saved our client between five percent to 10 percent of the contract’s value.

“For another client that was importing sophisticated drones into Canada, we proposed that the contract be denominated in Euros rather than U.S dollars.

That increased his margin on the basic seven-figure deal by about four percent.

The HSBC’s Priyamvada Singh concludes, “Many ‘FinTech’ platforms have entered the market offering improved digital tools, simple integration with buyers ERP systems with easy access to multiple liquidity providers compared to the limitations of individual banks.” CS Ken Mark is a veteran technology expert, who has covered supply chain management since it was called distribution and has documented its legitimization as a critical business function. He holds an MBA from York University.

REQUEST FOR PROPOSALS

POINT OF INTERFACE RFPs can be great tools linking shippers and carriers-here’s how to approach them.

BY JULIA KUZELJEVICH

A

t CITT’s fall Canada Logistics Conference, Laurie Turnbull, CCLP, Supply Chain Consultant with Cole International Inc., and Larry Mitchell, director, government services and corporate accounts with United Van Lines, discussed the use of RFPs as tools that can, when properly used, enhance the shipper-carrier relationship.

The RFP is one of those great tools that’s the first point of interface between many shippers and carriers.

“We see a fair number of these documents. It’s often a point of contention and it’s increasingly important that we get the process right. I have some strong biases when it comes to RFPs. Process is the key word. Traditionally, RFPs have been focused as a tool to look at cost and service.

I’m not suggesting that we no longer do that, but globalization has broadened the spectrum for the RFP discussion, so today

we have shippers that increasingly want carriers that are more agile. They want to have the ability to change points of origin around the world,” said Turnbull.

They want carriers that can provide increased visibility, sometimes with technology tools.

“It’s all about process. Yes, cost and service are important, but it’s becoming much broader. That’s an important factor for me because it speaks to the value add in our relationship. The simple reason for that is if you extend your supply chain from 500 kilometres to 5000 km, you’re going to have a hard time convincing me that price is the most important part of that relationship,” he said.

As he pointed out, when you are importing from places where your source of supply is 1500 km inland from a foreign origin port, in some countries it can take as long as three weeks to move from inland to the port, let alone from the port

across the Atlantic or Pacific.

“Whether you have to write one, or you have to respond to one, there’s that intuitive question of ‘Ugh’. I don’t think the person who has to write one or respond to one really gets excited. They are laden with fines. You’re busy already, and the distraction for your team to have to pull people to deal with the RFP is real,” said Larry Mitchell, Director, Government Services and Corporate Accounts, with United Van Lines Canada Ltd. “There’s no guarantee you’re actually going to get something from it as well. The RFP tool is often just used as a mechanism for a price war, so that’s why in the carrier world we often get frustrated,” he added.

When discussing RFPs, it helps to begin with a brief reference to RFQs, Turnbull noted.

“There are a lot of things about RFQs that are good: large companies with sophisticated procurement departments do continued

©iStock

www.canadianshipper.com January/February 2017 31

REQUEST FOR PROPOSALS

continued from page 31

this well. But small and medium sized companies don’t do it as well-I think they do better with the RFP process. The other thing is that oftentimes people on the procurement side of the industry are increasingly taking responsibility for logistics as part of the overseas procurement piece. Now, more often we find those people leading the RFP team for the shipper. Sometimes they can bring some new dimension to the process but other times they look at it from a procurement perspective and they don’t give it the same weight that you and I might give it from a logistics perspective. The key for me is long term relationship,” he said.

But if you are tightly tied to a budget, some of the concepts around relationship building do not work as well.

The purpose of the process is not to come up with the lowest price, but to come up with the foundation for a long lasting relationship between the shipper and the carrier.

from the issuer.

The assumption is, that person is the decision maker or controls all the information.

At the very least, that that person has brought all of the information to the table for the discussion. Oftentimes that is not true.

Who do you bring to the table for an RFP discussion?

These days, operations, finance, sales, dispatch, and even an IT team would be logical people to include in the discussion, maybe not all meeting at the same time.

“Shippers have done a good job in spec’ing out their IT requirements, but invariably their IT requirements are much greater than they thought was worthy of a mention,” Turnbull said.

Distribution/warehousing is another group you could bring in. While the teams can get a little unwieldy, it helps to form a pool of resources and can be a rewarding experience.

“The overall objective is to get as much information as possible. I might think I

The purpose of the process is not to come up with the lowest price, but to come up with the foundation for a long lasting relationship between the shipper and the carrier.

Replacing suppliers, in a case where you’re shipping from Hong Kong, can be complicated vs. if you’re shipping from somewhere local, he said.

The value add that we bring to that relationship has taken on a lot more importance as well.

Turnbull said he favours the RFP process because it does more than talk about price. It invites discussion of the value add, as well as discussion of things like ancillary charges, that no one likes to pay.

One of the challenges of RFPs is that there is only one point of contact

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REQUEST FOR PROPOSALS

have a lot of good questions to ask a shipper, but certainly the other parts of the team will have questions I wouldn’t have thought of, ” he said.

It’s the RFP that helps you qualify who the carriers are that you are speaking with.

But the real objective goes to your ability to contribute to your competitive advantage. Otherwise, why have the relationship?

Data culled from the technology being used, once in a format that can be presented in the RFP, can be instrumental.

Always make sure you understand volume, capacity, seasonality (in shipments, manpower and labour).

Part and parcel of that is seasonality of receivables.

“I always say give your prospective carrier 6-12 months’ data,” he said.

Develop specific clauses. As much as possible, tailor these contracts to the specific process that you’re looking at, instead of getting a template done, and never updating it so that five years down the road you’re using it and the business needs have drastically changed.

Get as much information in there as possible, target potential suppliers, and check references.

“It’s still amazing to me today how many companies do not check references,” said Turnbull.

“I always ask for four to six weeks’ time. Prepare for questions from carriers.

How are you going to respond to them?

Are you going to share info with everyone in the RFP process? Some companies like to do it one way, some another. Lately, I’ve seen the introduction of a pilot project once the company is rewarded. Upon successful completion, then they’ll award the contract (after say 60 days).”

The contract should have a clear start and end date, and demonstrate a clear opportunity for synergies, profitability, etc.

If you get the RFP, how does it affect existing relationships?

Beware contract language in the RFP. Turnbull recommends reading every single clause, even if it’s eight pages long.

Look for KPIs. Some will be implied, some will be stated.

There is significant ‘freedom of contract’ for the parties to come up with their own contract terms to complement – or even substitute – those terms prescribed

Develop specific clauses. As much as possible, tailor these contracts to the specific process that you’re looking at, instead of getting a template done, and never updating it so that five years down the road you’re using it and the business needs have drastically changed. by legislation. In some cases, shippers are increasingly aggressive when drafting contract language that shifts liability to carriers/intermediaries.

Shipper-carrier contracts should be clear in terms of their content and intent, particularly with respect to the obligations and liabilities of the parties, or the courts may interpret them to one party (or the other’s) disadvantage if a dispute results in litigation.

All shipper-drawn contracts should be carefully scrutinized to ensure they do not included “hidden” risks for carriers/ intermediaries. For example, Force Majeure clauses are typically limited to events beyond the parties’ control: “No party will be liable for any delay or failure to perform its obligations under this Agreement if that delay or failure is caused by any event beyond its reasonable control, provided that party promptly gives written notice of fact and circumstances of that event to the other parties and uses all reasonable endeavours to mitigate its effects” These now may include additional stipulations like: “… provided, however, that nothing in this Section shall relieve Broker or a Selected Carrier from its liability to Shipper for the full actual loss, damage, or injury to the freight shipped.”

“That’s my classic definition of a hidden risk…the iceberg beneath the surface,” said Turnbull of the additional clause.

“In my experience though the force majeure clause is the more common experience. As bad as that is, that clause now has an additional clause for broker or freight forwarder….holding their carriers liable. This is my walkaway point,” he said.

The clause: (Requiring intermediaries to do the same with their agents: “Broker shall require each Selected Carrier to agree as a Carrier Requirement that no force majeure, as described herein, shall relieve Selected Carrier from its liability to Shipper for the full actual loss, damage, or injury to the freight shipped.”

(K.E. Stoll, Fernandes Hearn LLP) The big point here is ask lots of questions.

Identify why the previous service provider failed, and whether or not you can improve the service. Were there inaccuracies in the RFP conditions, unidentified customer expectations, unidentified endcustomer expectations, was there an unwillingness to pay for ancillary services?

The RFP process can be a “land of opportunity”, said Mitchell.

“My firm has embraced it. We have developed a functional team internally that respond in all of the areas. Like many of you that do this on a daily basis, we’ve developed a library. Why it’s a real opportunity for us is that the RFP gives you that opportunity to say, you’ve asked us to respond to the freight move, but we want to talk about the entire cycle,” he added.

Sometimes, for example, you can get RFPs structured in a way that benefits you more, as well as the opportunity to help to develop service level agreements.

“One of the most exciting things we’ve done recently for our contracts is survivorship based on KPI. If we meet all your KPIs we want our extended agreement to kick in,” Mitchell said.

But even when you don’t get the contract, Mitchell said the debrief process offers insight.

“It’s very valuable to go in after the fact and find out, where did you do well, where you didn’t and why they chose another option? I have always found this very helpful,” he said.

And when you don’t want to respond in the first place?

“Just offer a simple ‘thanks for the opportunity, we don’t think we can add value to the process’,” said Turnbull.

“We do respond politely. We appreciate the opportunity, we’d love to do business. We enclose a generic pricing proposal that doesn’t shut the door, but we’re honest that ‘this is what we can provide with this general tariff ’,” Mitchell said. CS

www.canadianshipper.com January/February 2017 33

RETROSPECTIVE

Produce or Perish A

s the old year closes and a new one begins, we revisit, in our Retrospective page, the August 1965 edition of Canadian Transportation for Scrooge’s view on how to apprach transportation management.

“Cratchit, let me put it this way…produce or perish!”

It’s once again time to shed some light on what’s ahead for the industry mode by mode, and for the economy in general.

Maintaining good shipper-carrier relationships goes without saying.

Carriers are having trouble increasing, and in some cases even sustaining, rates because there’s an abundance of capacity.

Forward-thinking shippers will want to build partnerships with carriers to ensure they have capacity available in the long term. Shippers with a longer-term view are more likely to be serviced when capacity tightens.

Shippers and carriers can work together by driving waste out of the system.

More shippers should be planning for capacity to tighten in 2017 when electronic logging devices (ELDs) are mandated in the U.S.. At the October 2016 Surface Transportation Summit, trucking economist John Larkin, managing director and head of research with Stifel Financial Group, said the legislation could pull 3-5% of U.S. trucking capacity out of the market due to an inability or unwillingness to comply. CS

34 January/February 2017 www.canadianshipper.com

COACHING CORNER

Chasing the dream Successful entrepreneurs must have the grit, vision to make the dream reality Dreams can be fantasies. It is wonderful to daydream of one day being your own boss….or wish for the dream job of owning your own business. Successful entrepreneurs rarely dream, they envision, they solve problems, add value, create, most of all they believe in their product and just do what needs to be done.

Q/ I have been an executive for most of my career and find myself disenchanted, unfulfilled and most of all tired of what feels like “the machine”. All of a sudden, my job began to taste like dust. All of the motivators that once engaged me no longer seem to matter. I have been thinking of going at it alone. Starting my own consulting practice has always been my dream. I am hesitant to discuss it with colleagues or friends, as they see only the perks and benefits of my role, not the everyday reality of it, and will think I am crazy or having a mid-life crisis. Is there a way to ease into it or figure out the best time to try before it is too late?

A/ The best time to start your own business is the present. There is no such thing as the perfect time, however there is such a thing as the least imperfect time. But before you decide to quit your job or make any kind of monetary investment do take the time to consider the following: • What is the primary reason you want to start your own business? Is it the dream of being an entrepreneur/consultant/sole practitioner or is this a dream to follow your passion?

• What is your current reality? Do you have time commitments i.e. are you a primary caregiver? Do you have a secondary source of income? Succeeding at getting a

©id-work/iStock

By Carolina Billings, CPCC, CHRL, MA-IS

business started requires a lot of time. It is often said that “entrepreneurs are willing to work 80 hours a week for themselves so they do not have to work 40 hours a week for someone else”. How will you or your household do without your existing income? How will you pay the bills until your business gets rolling?

• Will your consulting practice be within the same field you are currently working in? Is it possible to make the transition from employee to consultant while keeping your existing employer as a client?

“The best time to start your own business is in the present.

There is no such thing as the perfect time, however there is such a thing as the least imperfect time.”

• About the “job tasting like dust”? Is it that what you are doing all of a sudden does not inspire you? To be a successful consultant you must be a master of your field. This means it must become your brand, your everything. Gladwell’s 10,000 hours comes to mind. That is where passion comes into play. If you are going to be doing consulting on something that you are passionate about, chances are you will succeed at it. Passion typically becomes a bit of an obsession. To succeed as an entrepreneur your task will be: to be passionate and to ensure your commitment to your brand becomes an obsession.

• If you are not staying within the same field, is it possible to start your practice at

night or part-time? Many networking events occur in the morning - breakfast sessions are usually at 7:30 a.m. or alternatively, evening networking events may fit your schedule too. This is a great way to get your name out there and to begin making contacts. Also content marketing can be great. Social media allows the world to get to know the caliber of your expertise and it gives you a chance to master your pitch and your unique value proposition.

• Lastly, to be successful in business you need mastery of two things: The actual product or service you are offering AND being good at business - which are two different skills. There are a lot of future entrepreneur programs at various boards of trade and start-up think tanks, to name a few. An internet search of your area would be an ideal place to start. They are great at helping you put your business plan together as well as providing market research for the viability of your offering.

Launching your own consulting practice or business is hard work, but the amazing thing is that it does not feel like it. There is a freedom and commitment to self that seems to take over. Personally I think it is “a must” experience in a lifetime. Fasten your seat belt and enjoy the ride. CS Carolina M. Billings is CFO-CHRO of a business conglomerate and has 15+ years' experience in the fields of Business Development, Human Resources and Finance. She champions leadership initiatives as well as empowering and coaching/mentoring others to lead. For more information please visit www.nlilabel.com or email info@thecoachingcorner.ca

www.canadianshipper.com January/February 2017 35

INSIDE THE NUMBERS WITH LOU SMYRLIS, MCILT

IN DEMAND OUR INDUSTRY MAKES UP 5% OF TOTAL EMPLOYMENT IN CANADA Almost one million people are employed by the Canadian transportation and warehousing industry, according to government data gathered by Canada Cartage for an infographic, part of which is reproduced here. Truck drivers on their own make up 1.5% of the Canadian labour force.

90% of consumer and food products are transported by truck.

= 100k People

896,000 PEOPLE

1.5% of the Canadian labour force are employed as truck drivers.

worked in the Canadian transportation and warehousing industry in 2014.

5%

24 305 of total employment

36 January/February 2017 www.canadianshipper.com

1.6% from 2013

Class 8 trucks were bought in Canada in 2015

THE BIGGER PICTURE

2017 “stepping stone” to great change Here are the top stories in freight transportation that caught my attention over 2016.

Brexit and the Election of Donald Trump as President of the United States These were the two biggest political events of 2016. The Brexit vote had an immediate impact on the value of the British pound. The impact of these two stunning developments on trade, economics and transportation will be felt for years to come. NAFTA and the Trans-Pacific Partnership will certainly come up for review early in 2017.

The entire world will be watching to see how these stories play out.

In an otherwise flat year, these two political stories were the biggest events of the past twelve months. The year 2017 is shaping up as stepping stone to great change in North America and around the world.

The Tepid Economy The North American economies underperformed the global economy and the economies of emerging markets in 2016. Business investment, a key driver of the economy, was down in 2016, driven in large part by the big drop in fortunes of the oil and gas industry. Consumer spending and employment levels remained solid in the United States and somewhat less so in Canada. U.S. manufacturing activity increased.

U.S. imports began an uptick as did U.S. imports of Canadian goods, driven in part by ©iStock

the strong U.S. dollar and drop in the value of the Canadian dollar. The strong U.S. dollar depressed export activity.

E-Commerce/The Last Mile Home Delivery Market Continue to Grow E-Commerce has had a compound annual growth rate of CAGR of 3% (2000-2015).

By Dan Goodwill

Amazon and Uber Set the Pace in the Freight Industry Amazon and Uber have identified two unique elements of freight transportation and are triggering a tidal wave of activity. They have created a unique blend of predictable logistics services, pricing options and marketing. On demand deliv-

“To improve financial performance, companies are linking collaborative inventory planning, distributed order management, integrated order management with their TMS system and RFID technology.”

While final mile parcel companies continue to gain traction, UPS, FedEx and USPS still appear to control 94% of the USA parcel market.

Omni-channel distribution has been gaining in importance over the past few years as consumers seek more options and greater flexibility. The bad news, as reported at the recent Surface Transportation Summit, is that nobody appears to be making money with it.

The need for multiple inventories and the challenges of demand planning are eroding the financial benefits of this method of distribution. To improve financial performance, companies are linking collaborative inventory planning, distributed order management, integrated order management with their TMS system and RFID technology.

ery services are sprouting in major markets throughout North America. Whether it is DoonDash, Sprig or Instacart in food deliveries, Washio in dry cleaning or Shyp, Roadie, Cargomatic or Deliv for carrier procurement or Transfix or Freightera for freight brokerage, there are a host of appbased delivery services that are a variation on the Uber concept. This is just a sample of the start-ups that have entered and continue to enter the industry on an almost daily basis.

Trucking/Rail Equipment Purchases Decline This was a tough year for transportation equipment providers, a direct result of the slow economy. Class 8 truck production was down 30% in 2016 while semi-trailer production outperformed.

With rail car utilization be-

low 70 percent and significant overcapacity, North American orders for rail cars were at very low levels.

The Ongoing Driver Shortage Driver recruitment and retention remained one of the major problems in the trucking industry in 2016. While many companies have been raising driver wages the past few years, this is still of limited benefit in retaining qualified drivers. The major carriers continue to try a range of other approaches to address the problem: driver surveys, driver loyalty programs, efforts to improve work life balance, driver mentorship programs, driver training programs and a range of other measures.

The Hanjin Bankruptcy The August bankruptcy of Hanjin shipping line, the world’s seventh largest container line, threw ports and retailers around the world into confusion, with giant container ships marooned and merchants worrying whether tons of goods would reach their shelves. The financial struggles of Hanjin Shipping were attributable to an ongoing downturn in the container shipping industry that is the result of numerous interrelated factors such as weak global GDP, overcapacity on container vessels, “bloated” U.S. retail inventories, changing consumer spending patterns, Chinese economic slowdown, and muted demand for container shipping. The downturn dentcontinued

www.canadianshipper.com January/February 2017 37

THE BIGGER PICTURE

continued from page 37

ed profits and crippled the financial health for most of the top twenty ocean carriers.

Cost Management 2016 was supposed to be a year when truckload capacity tightened and rates skyrocketed. It was supposed to be a year when higher truckload rates pushed shippers to move freight over to intermodal transportation. It was supposed to be the year when shippers had to face the music of higher driver wages and pay their carriers accordingly. It wasn’t. For much of the year, the economy was the softest it had been since 2011.

The slow economy and high inventories sent spot market rates in a downward direc-

tion. Carriers were taking rate decreases.

This caused many carriers to rethink their operating strategies. Truckload carriers reined in capacity, parked trucks and/or curtailed buying new ones. LTL carriers focused on yield management and the utilization of dimensioning equipment to improve pricing accuracy.

Understanding Total Cost of Ownership (TCO) of fleet equipment became a priority for fleet owners.

IoT, Big Data and Analytics The Internet of Things and Big Data are trendy labels for a fundamental change that will revolutionize manufacturing, distribution, and hence transportation. Applying advanced analytics to big data can solve supply chain problems. Three ingredients are key to getting an advanced analytics initiative underway: having the right people; collecting high quality data and; obtaining the best tools at the right price.

TMS Market Continues to Expand Certain TMS providers are now going to market with solutions that are easy to get up and running and easy to use, many of which are cloud based with global capabilities.

In the past, shipper networks tended to be application specific. Today, the leading TMS providers are building interfaces into multiple networks of transportation providers for rail, trucking and international shipping. CS

Dan Goodwill, president of Dan Goodwill and Associates, has more than 30 years of experience in the logistics and transportation industries in both Canada and the US. Goodwill is currently a consultant to manufacturers and distributors, helping them improve their transportation processes and save millions of dollars in freight spend. He has held several executive level positions in the industry. He can be reached at dan@dantranscon.com.

38 January/February 2017 www.canadianshipper.com

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