Canadian Shipper July 2018

JULY 2018

PUBLI

OR BUYERS OF TRANSPORTATION SERVICES

WHEAT KINGS WITH ITS GLOBAL FOOTPRINT, BROADGRAIN COMMODITIES SHIPS CANADIAN CROPS AROUND THE WORLD

INTERMODAL Port of Thunder Bay

E-COMMERCE Shipping in the cloud

www.canadianshipper.com

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CONTENTS

JULY 2018

DEPARTMENTS

8

5 | Editor’s Foreword Last-mile transformation.

COVER STORY

6 | In the news

WHEAT KINGS

Canadian Shipper announces staff changes; B.C.’s Ashcroft Terminal expanding; Quebec City hosts international ports conference

With its global footprint, BroadGrain Commodities ships Canadian crops around the world

49 | Inside the Numbers Relief in sight?

51 | Coaching Corner Generational conflict

54 | The Bigger Picture How to become a preferred shipper

2018 SHIPPER’S CHOICE AWARDS

Celebrating the carriers who have exceeded shipper’s expectations

Photo: BroadGrain Commodities

12

BroadGrain Commodities is a global marketer and handler of grains, oil seeds, by-products and specialty crops for the feed and food markets. (Pictured: BroadGrain's Dafoe, Sask. processing plant.)

FEATURES AIR CARGO | 30 Carriers are facing a capacity crunch

2018ER’S

SHIPPOICE CH

E-COMMERCE | 34

54

Industry pioneer eShipper stays ahead of the curve

INTERMODAL TRANSPORT | 38 The Port of Thunder Bay

ITF REPORT | 43 The latest from this year’s International Transport Forum

www.canadianshipper.com July 2018 3

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BUILDING CONNECTIONS WHEREVER WE GO. CP prides itself on building partnerships. We work with our customers, wherever they are, to identify their needs and help meet their objectives, while providing the best service along the way. CP is your full supply-chain solution provider that gets your goods to where they need to be.

Learn more at cpr.ca

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EDITOR'S FOREWORD John Tenpenny July 2018 Volume 121 Issue No. 4

EDITOR John Tenpenny (416) 510-6880 john@newcom.ca MANAGING DIRECTOR, TRUCKING AND SUPPLY CHAIN GROUP Lou Smyrlis lou@newcom.ca ART DIRECTOR Ellie Robinson CONTRIBUTORS Carolina M. Billings, Mark Cardwell, Tim Fraser, Dan Goodwill, Carroll McCormick, Ian Putzger, Roger Yip PRODUCTION MANAGER Kimberly Collins (416) 510-6779 kim@newcom.ca DIRECTOR, BUSINESS DEVELOPMENT Delon Rashid (416) 459-0063 delon@newcom.ca REGIONAL ACCOUNT MANAGER Anthony Buttino (416) 458-0103 anthonyb@newcom.ca WESTERN EDITOR Derek Clouthier (403) 969-1506 derek@newcom.ca CIRCULATION MANAGER Mary Garufi (416) 614-5831 mary@newcom.ca PRESIDENT Joe Glionna CHAIRMAN & FOUNDER Jim Glionna HEAD OFFICE: 5353 Dundas Street West, Suite 400, Toronto, ON M9B 6H9 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 MEDIA INC.

SUBSCRIPTIONS: Contact us at: mary@newcom.ca Tel: (416) 614-5831 Fax: (416) 614-8861 Website: canadianshipper.com (click on subscription button)

SUBSCRIPTION RATES: Canada: $65.95 + applicable taxes, per year; $107.95 + applicable taxes, for two years.

U.S.A.: US$107.95 per year. All other foreign: US$107.95 per year. Single copies $8 except for the annual Logistics Buyers’ Guide (Aug) $60.95 + applicable taxes, (not including HST) plus $2.00 for postage. USA: US$68..95, Foreign: US$68.95 ISSN 2292-2490 (print), ISSN 2292-2504 (Digital), (Canadian Shipper.) Indexed by Canadian Business Periodicals Index.

Printed in Canada. All rights reserved. The contents of this publication may not be reproduced either in part or in full without the consent of the copyright owner.

Head in the cloud

A

s e-commerce transforms the retail landscape it’s easy to forget that the rise of this phenomena wouldn’t be possible without a capable transportation and logistics component.

According to a recent report from Armstrong & Associates, while e-commerce sales in the U.S. reached $452 billion by the end of 2017, e-commerce logistics costs topped $117 billion and are estimated to hit $196 billion by 2020. E-commerce accounted for 6.9 per cent of logistics costs last year, up 1.7 per cent from 2016.

The $117 billion figure accounts for the key costs associated with e-commerce logistics, such as inbound and outbound transportation, including last-mile delivery. eShipper, a Canada Worldwide company, has found its niche in this ever-changing environment helping online merchants on their last-mile journey by harnessing he capacity of larger courier operators, as well as trucking companies (“Shipping in the Cloud” page 35).

“We’re the Expedia for shipping,” says eShipper’s director of strategy and planning, Mo Datoo, discussing how the company caters to the small and medium-sized businesses that make up the e-commerce universe.

The company also aids online retailers by offering them space in their 30,000-squarefoot secure and bonded warehouse as well as pick and pack and fulfillment services.

About 10 to 15 per cent of eShipper’s traffic moves through this warehouse, according to Datoo, who adds that they also offer some clients free short-term storage.

“We allow small businesses and start-ups to enjoy lower fulfillment rates and free storage for some time so they are able to compete and see if the outsourcing model works for them,” he says.

After 17 years, our annual Shipper’s Choice Awards survey (page 12) continues to provide buyers of transportation services with a consistent, national and scientifically derived method of benchmarking carrier performance across all modes.

Since the survey’s inception, the importance of things such as on-time performance, competitive pricing and customer service to shippers has endured and forms the basis for holding carriers accountable. The relevance of the survey in today’s marketplace is as strong now as it was in 2002 when it debuted.

Transportation service providers constitute a critical link to the supply chain and their ability to meet shipper demands for constant improvement is crucial to supply chain effectiveness. CS

POSTMASTER: Please forward forms 29B and 67B to: 5353 Dundas Street West, Suite 400, Toronto, ON M9B 6H9 Second Class Mail Registration Number 0721.

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John Tenpenny, Editor john@newcom.ca

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IN THE NEWS

Canadian Shipper family is growing Newcom Media announces reorganization of Supply Chain Group Canadian Shipper and Inside Logistics magazines, part of the Newcom Media family of publications (Supply Chain Group), announced several new staff appointments.

Delon Rashid has been ap-

pointed director of business development. Rashid joins Canada’s leading supply chain publications after more than a decade with Newcom’s publications serving Canada’s forhire and private trucking industry. He will be responsible for sales development across the Canadian, U.S. and international markets for both publications as well as their digital and video properties. Rashid is based out of Newcom’s head office in Toronto.

ince in Quebec. Buttino has more than 20 years sales experience in the Canadian, U.S. and international publishing industry. Buttino is particularly experienced in leveraging his creativity to put together creative multi-media packages. Fluent in French, Buttino is based out of Newcom’s Montreal office.

Lou Smyrlis, who served

as editorial director of Canadian Shipper from 2000 to 2013, returns to the supply chain fold as managing director of the Supply Chain Group, responsible for the sales, editorial and research teams.

Anthony Buttino has been appointed re-

Derek Clouthier joins the Supply Chain

gional account manager for Canadian Shipper and Inside Logistics for the prov-

Group of magazines as western editor.

Based out of Calgary, Derek will report on

supply chain events from Manitoba to British Columbia. An award-winning writer, Derek has over eight years of journalism experience, including nearly three years covering the transportation industry.

Canadian Shipper and Inside Logistics also want to sincerely thank Nick Krukowski for his many years of leadership as publisher. Krukowski guided Canadian Shipper through the Great Recession and the eventual upswing, as well as spearheading significant adjustments along the way to maintain both publications’ leadership and relevance among Canada’s transportation and supply chain professionals. Evidence of this last endeavour is seen in the redesign and rebranding of MM&D to Inside Logistics. Krukowski will be missed and we wish him well in his new endeavors. CS

Western inland terminal makes inroads B.C.’s Ashcroft Terminal engineers Federal funds for infrastructure improvements Federal Transport Minister Marc Garneau travelled to British Columbia to announce the government’s $9.2 million investment in Ashcroft Terminal, a 320-acre privately owned inland transload and storage terminal, located 340 kms west of Vancouver.

The funding represents one-third of the expected development cost of $28.2 million, and according to Kleo Landucci, managing director of Ashcroft Terminal, the construction will create more than 250 jobs. “There will be shovels in the ground within the next six months, and we will be complete by the summer of 2021.”

During his remarks, Garneau emphasized the importance of rail transportation to the economy.

“Our government is investing in Canada’s economy by making improvements to our trade and transportation corridors,” he said.

The project is broken into several areas.

(L to R): Jati Sidhu, MP for Mission-MatsquiFraser Canyon; Kleo Landucci, managing director, Ashcroft Terminal; and Marc Garneau, Minister of Transport

In one area, a new rail link will be built from Ashcroft Terminal to Canadian National Railway’s main rail line. This expansion will provide producers and shippers additional options at Ashcroft Terminal to improve efficiency in shipping their goods to market.

In another area, extra rail track will be built to allow rail cars to be parked and as-

sembled into longer trains to serve Canadian producers and shippers. The additional track infrastructure will support the movement and storage of rail cars to enhance fluidity through Canada’s Pacific Gateway Corridor.

An internal road network will be built that includes a two-way road under the rail line. This grade separation will ensure that rail and truck operations do not interfere with each other thereby increasing safety. This grade separation will also increase the operational efficiency of Ashcroft Terminal. The construction of a multi-commodity and storage warehouse will support natural resource producers, allowing them improved access to domestic and international markets.

Other works will include increasing electrical capacity, installing water treatment infrastructure, and installing lighting and security enhancements to provide safe and secure operations. CS

6 July 2018 www.canadianshipper.com

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IN THE NEWS

Fences don’t always make good neighbours: AIVP Quebec City hosts international ports and cities conference As chief executive officer for the Port of Quebec, Mario Girard says it is crucial for facilities like his to maintain open lines of communication with the surrounding city in order to deal effectively with mutual challenges and create sustainable projects that benefit both.

That’s why Girard is a big fan of a unique forum like the biennial conference of the Worldwide Network of Port Cities (AIVP), which was held last month in Quebec City.

The four-day event brought together some 450 port and municipal leaders from across Canada and more than 50 countries around the world.

“This is great place to exchange ideas on best practices and get inspiration for the reconciliation of the port/city relationship,” Girard told Canadian Shipper at the conference.

According to Girard, most ports are both the raison d’être and the principal source and/or conduit of wealth for the cities they are embedded in.

But, he says, over the years many have become physically and administratively cut off from their surrounding cities.

“We need to come out from behind our fences and be active partners and participants for the good of neighbouring cities and regions,” said Girard.

That was a common refrain heard at this year’s conference, the 17th put on by the Le Havre, France-based AIVP since its inception in 1988.

Organized under the title ‘Next Generation,’ the event featured several keynote speakers and a half-dozen roundtable discussions that revolved around the theme of how port authorities can respond to human aspirations. It also included a gala and visits to Quebec City port installations.

Discussion topics included why and how ports can and should combine residential property and public spaces with industrial activity and how they can develop waterfront projects jointly with citizens to help make cities greener and healthier.

Other issues included why and how ports can help cities recruit and retain top talent and how they can help guide industry towards more carbon-free practices and participation in circular regional economies.

Molly Campbell, director port department at the Port Authority of New York and New Jersey, headlined the biennial Worldwide Network of Port Cities conference.

“These are crucial questions and issues for ports today,” said Alberto Cappato, director general of the Port of Genoa, Italy.

Cappato’s main job is to liaise and work with municipal authorities on development projects that have reshaped both the commercial and urban faces of the Roman-era port and hometown of Christopher Columbus.

Those projects include the construction of a museum, a conference centre, an interactive exhibit and the largest aquarium in Europe.

“It’s important that ports and cities work together for the collective good of their communities,” said Cappato. “This conference is important because it brings together decision makers from both groups to discuss these issues.”

In addition to Girard, who traded goodnatured jabs with Quebec City Mayor Règis Labeaume during the opening roundtable event—a session dubbed ‘The waterfront Next Generation? I’m living and working here!’—other Canadian port and municipal participants at the conference included Jacques Dubé, chief administration officer of Halifax, Lois Jackson, mayor of the Vancouver suburb of Delta, and Robin Silvester, president and chief executive officer of the

Vancouver Fraser Port Authority.

Molly Campbell, director port department of the Port Authority of New York and New Jersey, headlined a half-dozen keynote speakers discussing everything from major port/city development success stories to futuristic smart-city trends and the potential impacts on ports and coastal communities from global warming.

“Today successful development and redevelopment of transportation infrastructure requires balancing many competing and complicated factors,” Campbell said at the outset of her 20-minute talk.

Campbell, who is the International Association of Ports and Harbors’ vice president for North America, provided updates on the development of a master plan to guide the growth and development of her port—the third largest in the United States and a gateway to one of the most concentrated and affluent consumer markets on Earth—for the next 30 years.

“We aren’t working in a vacuum,” said Campbell. “Over the past year, we had hard conversations with our host communities, multiple environmental justice organizations, regional planners, and other external stakeholders to solicit ideas and genuinely collaborate.

Campbell added that taking the concerns, interests and ideas of the surrounding city into account is crucial to drawing a road map for future growth and development.

“If we do our job right, steadily and without fanfare, we will quietly prepare the region for economic challenges that aren’t yet even on our doorstep,” she said.

AIVP president Phillipe Matthis, who was recently re-elected to a second threeyear term at the helm of the 200-member organization, said the citizen-focused theme of the global get-together in Quebec City was both a draw for quality participants and fodder for the substantive discussions that were held.

“Ports need to and are opening themselves more to the cities that in most cases they founded but have grown away from over time,” said Matthis, deputy general manager of the Port of Bruxelles. “That is a big and growing concern.”

Matthis added that by actively engaging with municipal authorities on development issues and projects, ports can alleviate and even avoid tensions that arise when cities recuperate port land or undertake infrastructure programs that will directly impact port operations. CS — Mark Cardwell www.canadianshipper.com July 2018 7

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FOOD LOGISTICS

WHEAT KINGS With its global footprint, BroadGrain Commodities trades in wholesale grains and foods, moving them around the world with ease

BY JOHN TENPENNY

8 July 2018 www.canadianshipper.com

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BroadGrain co-founder and CEO Zaid Qadoumi.

2018-07-04 9:44 AM

FOOD LOGISTICS

E

arlier this year, as Canadian grain farmers were sitting on a record yield of grain, unable to get their product by rail to market because of a combination of extreme winter weather and a shortage of rail cars, Zaid Qadoumi, sitting in his office in downtown Toronto, wasn’t overly concerned.

As CEO of BroadGrain Commodities—a leading global marketer and handler of grains, oil seeds, by-products and specialty crops for both feed and food markets—Qadoumi and his team were prepared. Been there, done that.

In 2013-14, when the same issue— too much grain and not enough rail cars—first appeared, BroadGrain sought an alternative shipping method to avoid costly missed shipment periods.

The answer they came up with was source loading.

“From our perspective as an originator of the product, [source loading] is the better way of doing things because we control the quality of the product—it is packed at our facility—instead of sending it by rail where some may be lost while being transloaded,” explains Qadoumi in an interview with Canadian Shipper.

“You also have better control of the schedule because once we’ve put something in a container we have contractually fulfilled our obligation as opposed to rail/transload where if it is delayed, we’re still on the hook.

“It created a new option that exists today in our supply chain.”

As part of the plan, BroadGrain upgraded some of its Western Canadian operations to include a machine that is able to tilt the container such that it is vertical, fill it, close the doors and put it Dan Wainwright (left) and Garett on a flatbed. Then it’s sent to a container yard,PACRIM close Distributors to their facilSenez founded ity, so that the railway is able to put the container on aofmuch in 2016 with the goal helpinglarger, shuttle-style train configuration. local craft brewers find foreign markets for their product.

What also happened four years ago was the beginning of a conversation between BroadGrain and the ocean carriers.

“We said to them, ‘You guys have so many containers that come inland filled up with things like electronics and appliances and those containers are empty, so it’s more cost effective for you to send them back full.’”

“We incentivized the ocean carriers to pull more containers inland to the western provinces because of the rail limitations we were facing at the time,” says Taimy Suarez Cruz, BroadGrain’s director of logistics. “That allowed us to develop the program of positioning empty containers in our yards, being able to continue the flow of bringing product in, cleaning it, bagging it and loading it.”

Keeping it in the family You could say Qadoumi was born into the business. His family began in the grain-trading business in the 1950s in Jordan, where he is originally from. He immigrated to Canada in 1992, graduated in commerce from McGill University, then returned to Jordan to learn the family business.

He and his father, Ghazi, founded BroadGrain in 2003, buying a grain elevator in Seaforth, Ont., near Stratford, to establish a domestic division while simultaneously developing a global trading

unit. Today BroadGrain has more than 100 employees in Canada and abroad, with more than $700-million in sales and two million tonnes of grain shipped annually. Its commodities come mostly from North and South America and Eastern Europe, with demand worldwide but focused in the Mediterranean basin and Red Sea, covering North Africa, the Middle East and the Arabian Peninsula.

After the Seaforth acquisition, BroadGrain grew its domestic business, which was primarily focused on Ontario and the U.S. Midwest (Michigan and Ohio), using rail to ship product from the U.S. to Ontario and distribute for feed, ethanol and farm use.

In 2009 the company launched its international division, where it traded product that came from North and South America and the Black Sea, by vessel load to the Mediterranean basin and Red Sea. Eventually, in 2010, a food division was added to focus on the sale of pulses and specialty crops, which includes lentils, peas, chick peas and mustard and flax seeds from Saskatchewan, where they buy from the farmer, process in their facility and trade within Canada, the U.S. and internationally. In contrast to its international division, the food products are not shipped as dry bulk, but in containers in bulk or bagged.

Since 2010, BroadGrain has seen a 13 per cent compound annual growth rate (CAGR) in revenue and an 11 per cent CAGR in tonnage.

BroadGrain is involved in the supply chain from the farm side, which goes out to various supply chains, whether it's consumption here, in the U.S. or around the world. Cruz adds, “On the food side, product gets processed so it can be packaged or distributed to wholesalers. On the feed side of the equation, which includes corn, soybeans, soybean meal and wheat, where the volumes are much higher, we originate again at the farm level and move our product through our facilities before arriving at their final destination.”

Where products are sold into countries in much larger quantities (up to 50,000 tonnes), BroadGrain charters bulk vessels through its freight arm—Everdere Logistics—a vessel operationg wholly owned subsidiary based in Amman, Jordan. The company operates vessels ranging in size from 7,000 to 65,000 metric tonnes to move approximately one million metric tonnes of bulk cargo annually.

A dangerous world With offices around the world, including in China, Nigeria and Argentina, BroadGrain has experienced many challenges, some unique to the areas where they deliver.

In 2011, during the Arab Spring uprisings, one of BroadGrain’s ships was scheduled to unload a shipment of Brazilian wheat in Libya, but the chartered vessel’s owner and captain were reluctant at first to make the delivery.

Qadoumi says he advised them to cut ropes and leave if they felt the danger was too great. The ship reached Libya on March 9, “smack in the middle of all the trouble,” Qadoumi recalls, and it safely unloaded and left on March 24, five days after NATO bombs began falling in the region. continued

Photo: Tim Fraser Photography

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FOOD LOGISTICS

continued from p. 9

“You need to resolve the problem of how you’re going to discharge your vessel once you reach the port if there is a security issue,” he says matter-of-factly. “We have a deep customer list in the MENA region and were prepared to divert the cargo to another customer if the security situation proved too difficult in Libya.”

Security issues are more prevalent on the drybulk side, adds Cruz. “Containers and product that moves in smaller lots is more controllable. Once it’s placed on the ship, the carrier has the responsibility to deliver it as opposed to bulk, where we charter the vessel, so the product is our responsibility until it reaches its destination.”

On the international side whether it’s China, Argentina or Nigeria, each of those countries has their own supply chain options, according to Cruz. “In China, for example, we ship some of the product we ship to the U.S. for distribution, and some of it we keep there for local distribution. It’s the same for our other international hubs.”

What gives BroadGrain a very unique view of the ability to move product is the fact that the company is in so many different countries at the same time, moving the same product. For example, BroadGrain sources dry beans out of Argentina, Canada, China and the United States. “Sometimes, what you learn in China, for example, you take that and apply part of it here or open up the market to the people who are involved in that supply chain to an idea,” says Cruz.

The same thing applies here at home. “We could resolve a

problem here that we haven’t thought of in Argentina or Nigeria.

“It’s that diversification of information throughout our supply chain that gives us the opportunity to be able to change how things are being done within a normal structure in a country to take advantage of our costs.”

Logistically-speaking Making sense of the supply chain or as BroadGrain views it “making as efficient as possible the process of taking a product from the farm to the final destination,” is key to the company’s continued success.

Logistics are an extremely important, large segment of the cost required to take agricultural commodities from their origin to the final destination. BroadGrain’s philosophy is that it’s easy to sell something and it’s easy to buy something, but to take it from A to B—that is where a lot of the money is.

Accordingly, the number you get from a 3PL or a freight forwarder will never be competitive if you are not able to dissect that supply chain into different parts.

“We have a capability to originate. We have a capability to sell.

And those exist because of demand and supply. What we have really invested in over time is our logistical capabilities,” Cruz explains, adding that the bulk of BroadGrain’s staff move product, as compared to those who buy and sell it.

“We’ve invested a lot in these segments of our supply chain to

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FOOD LOGISTICS

continue to communicate, and to continue to think about how can we move the product in a more cost-effective manner and that has given us a competitive edge as time goes by.”

Some companies silo or isolate the origination, logistics and sales groups, Cruz continues. “What we try to do is bring them together. As our people are buying and selling from different parts of the world they are discussing this through this logistics bridge that we’ve built.

“We can now arbitrage our buys and sells for the next six months.”

With all of that knowledge came the need to put it to use across the company, so a few years ago BroadGrain began investing in automating its information to give it the ability to plan capacity and foresee its ability to move product. The company began to implement ERP software to better manage trading, positions, risk, P&L, inventory, costs and logistics. The system has been implemented in its dry bulk operations and BroadGrain is currently implementing and testing it for the domestic and container side.

Containers as commodities Source loading containers with agri-commodities began before the first rail/grain crisis in 2013.

Before 2008 many industry players wouldn’t consider containers as a mode of transportation for agriculture products. But when bulk rates increased that allowed the container world to get into bulk

agriculture product movement and that increased the supply of containers and container ships. When bulk rates eventually dropped that supply didn’t evaporate. So that forced containers to continue to compete with bulk rates and that changed the dynamics of the market.

In the beginning, it was BroadGrain who approached carriers about their willingness to allocate containers for source loading, giving the company an advantage, but that has changed as the carriers began offering source loading to BroadGrain’s competitors.

In terms of container availability, North America is a relatively stable market because there is a strong two-way flow, but China is a different story altogether.

“Because China is such a big seller of containers, sometimes they just don’t exist. And if they don’t exist, you have to pay up,” says Cruz.

“There is a direct relationship between ocean rates and container inventory. Containers are a commodity.”

While using containers to source load has given BroadGrain more options when it comes to shipping their agricultural products around the world, sometimes you don’t look a gift horse in the mouth, according to Qadoumi.

“At Christmastime when North America is seeing a huge influx of small consumer goods from Asia, the result is a larger-thanusual number of empty containers, which in turn opens up an opportunity for us to leverage that overcapacity into our sourceloading strategy.” CS

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2018-07-03 1:55 PM

Some things never go out of style For 17 years the Shipper’s Choice Awards survey has been setting benchmarks for carrier excellence and shipper’s demands haven’t changed much at all

he more things change, the more they stay the same. Since the Shipper’s Choice Awards were launched in 2002, we’ve endured a recession, and seen technology alter the transportation and logistics industry landscape.

When Canadian Shipper introduced the Shipper’s Choice Awards, shippers were asked—as they still are today—to rank the importance of eight criteria when it comes to selecting carriers. Back then the top three criteria were on-time performance, competitive pricing and customer service. Fast forward to 2018, and nothing has changed, those three criteria are still Nos. 1, 2 and 3 respectively.

In his editorial, marking the debut of the Shipper’s Choice Awards, Editorial Director Lou Smyrlis, currently Newcom Media’s

managing director of the Supply Chain Group, stated: “Transportation service providers constitute a critical link to the supply chain and their ability to meet shipper demands for constant improvement is crucial to supply chain effectiveness. We believe the time has come for easily accessible, scientifically based and nationally relevant benchmarking for the quality of service provided by transportation providers.”

Those words carry the same weight today.

Canadian carriers and the behest of shippers do their best to live up the standard of on-time delivery at the best price and some do it better than others, according to our Annual Shipper’s Choice Awards Survey, which provides buyers of transportation services with consistent,

national and scientifically derived benchmarks of excellence for carrier performance in each mode.

This year 34 carriers managed to surpass the Benchmark of Excellence this year. Particularly impressive are the carriers who have scored above the benchmark of excellence for five years in a row or more, thus earning our special “Carrier of Choice” designation. Turn to the final page of this report to see which 15 companies were honoured.

Our survey provides shippers, 3PL service providers and freight forwarders across Canada with the opportunity to set benchmarks for carrier performance on eight key performance indicators (KPIs) and to rate their top carriers against those benchmarks. Aside from continued

Im mportance Of Perfforma ance e Criteria Mode

On-time performance

Quality of equipment & operations

Information technology

Competitive pricingW

Customer service

Leadership in problem solving

LTLTrucking

4.78

4.40

4.15

TL Trucking

4.86

4.53

4.17

Ocean Carriers

4.63

4.47

Couriers

4.91

4.46

Air Carriers

4.86

4.48

Rail Carriers

4.52

4.37

Ability to provide value-added services

4.72

4.76

4.48

3.73

4.12

4.74

4.67

4.47

3.89

4.19

4.48

4.74

4.62

4.51

3.98

4.22

4.60

4.75

4.71

4.50

3.94

4.23

4.56

4.62

4.70

4.52

3.96

4.20

4.27

4.70

4.51

4.27

3.72

4.11

Sustainable transportation practices

12 July 2018 www.canadianshipper.com

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2018-07-03 1:43 PM

COURIER ӂ LTL ӂ TRUCKLOAD VOTED AS THE SHIPPER’S CHOICE FIVE YEARS IN A ROW IN ALL THREE MODES OF TRANSPORT MAKING ARMOUR TRANSPORTATION SYSTEMS YOUR CARRIER OF CHOICE.

2014

2016

2017

2015

Armour Transportation Systems is the only carrier in Canada to achieve this recognition and we could not have done it without the outstanding support of our valued customers.

Thank you for your continued commitment.

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2018-07-03 1:43 PM

continued from p. 12

2018

SHIPPER’S CHOICE identifying the best carriers across all

modes through this process, survey respondents also provide clear indications of the different values Canadian buyers of transportation services place on each KPI based on mode as well as a comparison of how high these standards are set for each mode.

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

Because survey participants are first asked to rate the importance they place on each of the eight KPIs when making their carrier selections, and that data is used as a weight on their carrier evaluations, we feel that the benchmarks set are truly standards of excellence. In other words, carrier performance is judged against an ideal of what shippers expect and the areas given the most weight are the ones that matter most to buyers of transportation services.

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

Average shipper satisfaction ratings for each KPI are shown by mode. The final column on the right shows the total benchmark of excellence set for each mode. The benchmarks for each of the eight KPIs per mode also are indicated with each modal table on the following pages.

$5 million up to more than $2 billion. Their annual supply chain budgets range from less than $100,000 up to more than $20 million. More than a third (36 per cent of respondents spent over 60 per cent of their supply chain budgets on transportation.

The Shipper’s Choice Awards Survey was undertaken once again in partnership with CITT and the Freight Management Association of Canada (FMA), two associations whose members are responsible for the purchase of transportation number in the thousands. And, as in previous years, the research was conducted by an independent research firm.

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

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

Carriers must receive a minimum number of evaluations in order to qualify for the award. It should be noted that this year winning was made all the more difficult because we once again raised the number of evaluations necessary to qualify for the award for almost every mode.

In order to boost response, carriers were given the opportunity to forward the survey to their own customer lists. Not all carriers chose to do so, however. To prevent tampering, we check for multiple cases submitted by known respondents.

If there is more than one case, then only the newest one is considered. Likewise, we check for similar IP addresses. As a final check on tampering, we separate and check the evaluations submitted by participants from our own e-mail list versus the e-mail lists of carrier customers. Winners must have evaluations submitted by transportation buyers from our own email list to qualify for the award.

More than 2,000 buyers of transportation services participated in our survey, which makes Shipper’s Choice the largest of the several surveys we conduct annually. We thank all those of you who took the time to complete our survey. (Participants receive an advance electronic copy of the results.) More than 9,000 evaluations of carriers from all modes providing services in the Canadian market were cast.

As with past years, survey participants represent every region across Canada and buy transportation services for companies with annual sales ranging from less than

G i f t C a rd Winner!

Canadian Shipper is pleased to announced that the winner of the draw to receive a $500 gift card for participating in 2018 Shipper’s Choice Awards survey is Brad Bethell of Pictou County, NS. Bethell is director of Big 8 Beverages, owned by Sobeys Inc. Bethell has been with the grocer since 1988, holding several positions, including area manager and director of retail operations.

Sh hipper Sattisfac ctio on Ra ating gs by Mode Mode

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

LTLTrucking

20.55

18.82

16.87

20.37

20.40

18.31

Ability to Sustainable provide value- transportation added services practices

15.15

Total Satisfaction Score

17.04

147.52 150.22

TL Trucking

21.40

19.71

16.49

20.49

20.36

18.71

15.75

17.32

Ocean Carriers

18.81

18.05

17.71

19.40

18.50

17.31

14.08

16.24

140.10

Couriers

21.16

19.00

19.34

19.62

18.70

17.05

14.82

16.84

146.54

Air Carriers

21.20

19.42

19.13

19.28

19.77

18.34

15.69

17.13

149.96

Rail Carriers

16.08

16.79

15.67

17.73

15.51

13.85

12.30

14.49

122.41

14 July 2018 www.canadianshipper.com

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2018-07-03 1:43 PM

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2018-07-03 1:43 PM

61%

SURVEY DEMOGRAPHICS

2018

SHIPPER’S CHOICE

of respondents spend under 50% of their budget on transportation

A deeper dive into our Shipper’s Choice Awards respondents Industry sector distribution of respondents

Geographic distribution of respondents

42%

34%

24% 43%

12%

15%

9%

20%

Manufacturing

Third-party logistics

Retail

Freight forwarding

Other

Western Canada

Central Canada (Ontario)

Eastern Canada (Quebec and Atlantic)

54% 4%

po of respondents had an annual ply chain supply et under budget mill $1 million

Percentage of budget spent on transportation

Gross annual sales

41-60%

29% 5 million or less

21-40%

14%

Annual supply chain budget

11%

61-80%

23%

18%

Over 5 million to 15 million

19% Less than $100,000

25%

39%

12%

18% 81-100%

Over 15 million to 30 million

1-20%

$100,000 - $500,000

12%

12%

Over 30 million to 60 million

$500,000 - $1M

19% $1M - $5M

8%

Biggest annual expenditures in mode of transportation Transport

$100,000 - $449,999

27%

Air Cargo

$10,000 - $49,999

32%

$5M - $10M

9% $10M - $20M

9% More than $20M

Marine

$10,000 - $49,999 & $100,000 - $449,999

27%

Rail

$100,000 - $449,999

23%

Courier

$10,000 - $49,999

26%

6% Over 60 million to 100 million

10% Over 100 million to 500 million

5% Over 500 million to 2 billion

4% Over 2 billion

16 July 2018 www.canadianshipper.com

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2018-07-03 1:43 PM

AS THE SHIPPER’S CHOICE FOR LTL We’ve been serving your LTL, Truckload & Dedicated requirements to/from Canada, AL, GA, TN and KY for more than 20 years. We are so proud that for the last 7 of those years, the GX Team has been recognized by our customers as The Shipper’s Choice.

THANK YOU FOR ONCE AGAIN RECOGNIZING THE GX TEAM

p12-29 CdnShipper July2018_ShippersChoice_3.indd 17

2018-07-03 1:43 PM

2018

Customer service is job one

SHIPPER’S CHOICE

T

this mode’s performance on that KPI tops amongst modes, coming in just ahead TL trucking.

Fourteen carriers surpassed our Benchmark of Excellence this year, down two from last year, including one new entry: Bourassa Transport.

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

here were nearly 4,000 evaluations cast by Canadian shippers for the LTL category. On-time performance is considered highly important for shippers purchasing LTL transportation, ranking just ahead of customer service and followed by competitive pricing. In fact, the customer service expectations for LTL are the highest among all the modes in the survey, but LTL carriers appear to be delivering on that score—the LTL mode receives the second highest customer service ratings of all the modes.

The buyers of transportation responding to our survey were quite satisfied with the customer service performance of their LTL carriers, ranking

LTL Motor Carrier Award Winners

Total No. of shippers evaluating carriers in this mode: 2,257 Total No. of carrier evaluations: 3,524 Benchmark of Excellence: 147.52 Carriers

All Connect Logistical Services

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

22.14

20.16

17.95

21.90

23.32

21.28

17.27

18.50

Armour Transportation Systems

20.57

18.77

17.05

20.62

21.08

18.77

15.94

17.08

Big Freight Systems

20.22

19.86

18.00

21.05

22.37

19.88

16.18

17.45

BourassaTransport

21.49

19.33

16.42

19.51

20.74

19.09

15.20

17.08

Transport Bourret

20.43

18.67

18.32

19.80

20.85

17.92

15.56

16.69

Cavalier Transportation Services

23.27

21.16

19.05

22.45

23.15

21.30

18.05

19.01

CCT Canada

21.62

19.74

17.97

21.34

22.57

20.57

16.59

18.35

Guilbault Transport

20.56

19.25

17.25

20.10

21.23

19.50

15.54

17.68

GX Transportation

23.12

21.23

19.84

22.65

23.66

21.99

18.17

19.85

Hercules Forwarding

22.53

20.26

18.66

21.97

22.86

20.77

16.93

18.89

Polaris Transportation

21.00

20.10

18.91

21.86

20.82

19.35

15.89

18.57

Seaway Express

22.03

20.27

17.59

20.31

22.58

20.40

17.11

18.27

Spring Creek Carriers

21.92

20.06

16.77

21.36

21.50

19.74

16.62

17.99

TransPro Freight Systems

22.42

20.00

18.17

21.11

22.84

20.86

16.69

18.16

Benchmark of Excellence

20.55

18.82

16.87

20.37

20.40

18.31

15.15

17.04

18 July 2018 www.canadianshipper.com

p12-29 CdnShipper July2018_ShippersChoice_3.indd 19

2018-07-03 1:43 PM

2018

Quality over quantity

SHIPPER’S CHOICE

T

his has traditionally been the most hotly contested mode in our Shipper’s Choice Awards. You have to bring your A game to please Canadian buyers of TL services and the carriers that make the cut really deliver an excellent service offering based on the survey results.

The TL category has the highest satisfaction score, making it more difficult to be named to the circle of winners in this modal category than any other. The TL mode leads all other modes in satisfaction scores for six of our eight KPIs—ontime performance; quality of equipment and operations; competitive pricing; leadership in problem solving; ability to

provide value-added services; and sustainable transportation practices.

Nearly 1,300 shippers cast almost 2,000 carrier evaluations for the TL category. Ten carriers surpassed our Benchmark of Excellence this year, down four from last year.

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

TL Mo otor Carrier Awarrd Win nners

Total No. of shippers evaluating carriers in this mode: 1,243 Total No. of carrier evaluations: 1,847 Benchmark of Excellence: 150.22 On-time performance

Quality of equipment & operations

All Connect Logistical Services

22.79

20.53

17.61

22.43

23.01

Armour Transportation Systems

21.20

19.62

17.08

20.60

20.75

Bourassa Transport

21.45

19.56

16.13

20.24

20.61

19.52

16.12

17.79

Cavalier Transportation Services

23.20

21.15

18.37

22.00

21.68

20.14

18.43

18.73

Guilbault Transport

22.03

20.41

17.37

20.22

21.03

19.56

16.34

17.50

Hercules Forwarding

23.46

21.64

19.64

22.86

22.89

21.51

18.21

19.89

Carriers

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

21.31

17.65

18.52

19.00

16.54

17.55

Midland Transport

21.92

19.91

16.66

19.99

19.70

17.87

16.47

17.69

Penner International

22.77

21.53

17.68

21.79

21.43

19.73

17.02

19.05

TransPro Freight Systems

21.88

20.45

16.83

20.32

21.03

19.07

16.15

18.04

XTL Transport

22.56

20.49

18.28

20.46

22.72

21.22

16.96

18.84

Benchmark of Excellence

21.40

19.71

16.49

20.49

20.36

18.71

15.75

17.32

20 July 2018 www.canadianshipper.com

p12-29 CdnShipper July2018_ShippersChoice_3.indd 20

2018-07-03 1:43 PM

p12-29 CdnShipper July2018_ShippersChoice_3.indd 21

2018-07-03 1:43 PM

The information highway

2018

SHIPPER’S CHOICE

M

Couriers ranked in the top three in satisfaction amongst carriers in three categories: information technology; on-time performance; and quality of equipment and operations.

Five companies surpassed the benchmark this year, three less than in 2017, including newcomer, Purolator. Over 1,000 shippers provided more than 1,800 carrier evaluations for the courier category.

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

anaging competitive pricing, excellent customer service, and time constraints is an ongoing challenge for couriers and buyers of these services have high expectations, especially to meet the growing market of ecommerce sales. Keeping up with ontime performance demands requires sizeable investments in both fleet assets and information technology, which can be a real hurdle to providing the competitive pricing courier service buyers demand. In shipper satisfaction ratings by mode, couriers has the highest score for the information technology KPI, just ahead of air carriers.

Courier Award Win nner

Total No. of shippers evaluating carriers in this mode: 1,079 Total No. of carrier evaluations: 1,806 Benchmark of Excellence: 144.28

Carriers

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

Armour Courier Services

21.27

18.44

18.48

20.83

20.72

19.11

16.38

17.69

Cardinal Couriers

22.86

19.04

19.19

22.04

19.54

18.40

13.67

17.02 16.65

FedEx

21.74

19.51

20.26

19.18

18.64

17.11

14.22

Midland Courier

22.21

19.29

18.37

20.91

19.54

17.20

15.36

17.22

Purolator

21.25

18.96

19.66

18.77

18.52

16.52

14.21

16.46

Benchmark of Excellence

21.10

18.80

19.19

19.42

18.47

16.72

14.21

16.38

Helping Canada’s Top Carriers to Service Eastern Ontario since 1990 ‡ (DVWHUQ 2QWDULRœV PXOWL DZDUG ZLQQLQJ WUDQVSRUW FRPSDQ\ QRZ &DUULHU RI &KRLFH

‡ 5DWHG ³([FHOOHQW´ VLQFH E\ 072

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www.seawayexpress.ca

&251:$// ‡ 277$:$ ‡ %52&.9,//( ‡ 02175($/ 22 July 2018 www.canadianshipper.com

p12-29 CdnShipper July2018_ShippersChoice_3.indd 22

2018-07-03 1:43 PM

Start your business day earlier with Cardinal’s Pre 8am transportation solutions.

We understand the value of time, and that’s why Cardinal’s unique night network provides a competitive advantage where first-to-market comes standard.

Optimize your sales, improve customer service, loyalty and increase profitability through Cardinal’s unique night network with unattended pickups and deliveries.

Complete customer satisfaction and exceeding expectations is all about time!

Cardinal is proud to be recognized with the 2018 Shipper’s Choice award for the 10th consecutive year and as the Canadian Shipper Carrier of Choice for the 5th consecutive year.

1 800 387-3199 s www.cardinalcouriers.com

p12-29 CdnShipper July2018_ShippersChoice_3.indd 23

2018-07-03 1:43 PM

Soaring above the crowd

2018

SHIPPER’S CHOICE

A

Despite the emphasis on on-time performance and customer service, air carriers also excelled in other areas, ranking second in satisfaction from shippers in the information technology and leadership in problem solving categories.

Air freight carrier winner and their scores for each of our eight KPIs are shown in the table below. The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI.

ir freight is a high-cost business for both shippers and carriers. And in this game on-time performance is at the top of the list with shippers rating it third-most important amongst modes.

That’s followed by the third-highest customer service expectations of all modes.

Not many can make the cut against such high demands but every year a few select air carriers do, in this case only one—Cargojet—managed the trick.

Air Carrierr Award d Win nne ers

Total No. of shippers evaluating carriers in this mode: 351 Total No. of carrier evaluations: 414 Benchmark of Excellence: 149.96 On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

Cargojet

23.08

21.07

19.53

20.73

21.41

20.83

17.21

19.12

Benchmark Excellence

21.20

19.42

19.13

19.28

19.77

18.34

15.69

17.13

Carriers

24 July 2018 www.canadianshipper.com

p12-29 CdnShipper July2018_ShippersChoice_3.indd 24

2018-07-05 6:55 AM

p12-29 CdnShipper July2018_ShippersChoice_3.indd 25

2018-07-03 1:43 PM

Welcome to the club

2018

SHIPPER’S CHOICE

P

the competitive pricing category.

Four carriers surpassed our Benchmark of Excellence this year, double the number from last year, including three new entries: Hapag-Lloyd, Oceanex and ZIM Container Service.

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

rice is repeatedly the top criteria in selecting a ocean carrier in our survey. Buyers of ocean carrier services however, remain concerned about the carrier’s execution of customer service and ontime performance.

Those concerns showed up in shippers’ rankings of key performance indicators, as ocean carriers ranked first in the categories of competitive pricing and ability to provide value-added services, while ranking third for sustainable transportation practices. Carriers met the challenge, as they ranked third in shipper satisfaction ratings by mode in the information technology category and fourth in

Ocean Carrie er Aw ward d Winn nerss

Total No. of shippers evaluating carriers in this mode: 329 Total No. of carrier evaluations: 459 Benchmark of Excellence:140.10 On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Hapag-Lloyd

18.80

Oceanex

19.15

18.73

17.80

19.44

18.37

17.97

18.00

18.87

18.95

OOCL

19.49

18.85

19.21

19.72

19.56

ZIM Container Service

19.09

17.52

17.84

21.44

Benchmark of Excellence

18.81

18.05

17.71

19.40

Carriers

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

17.46

13.41

16.16

17.50

15.75

16.71

18.14

14.53

17.08

17.82

17.15

14.27

16.32

18.50

17.31

14.08

16.24

83<&£@ 9'8=-2+ !2!&!

and USA since 1985

- Over 400 power units and 1,200 trailers - Satellite equipped & full EDI capability f 3&'82 *''; 3( ;'16'8!;<8' $32;83££'& ;8!-£'89 - Bonded warehouses with full rail accessibility f 38;, 1'8-$!2 £3+-9ধ$9 { &-9;8-#<ধ32 93£<ধ329

26 July 2018 www.canadianshipper.com

p12-29 CdnShipper July2018_ShippersChoice_3.indd 26

2018-07-03 1:43 PM

A great country needs a great shipping line For more than 126 years Hapag-Lloyd proudly serves the Canadian market. With 15 direct services calling Canada we are the leading shipping line for the country.

Your cargo is our passion. Today and in the next 126 years as well.

www.hapag-lloyd.com

p12-29 CdnShipper July2018_ShippersChoice_3.indd 27

2018-07-06 11:39 AM

CARRIERS OF CHOICE

2018

Consistency of performance deserves a special award

SHIPPER’S CHOICE

C

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

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

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

Congratulations to the 2018 Carriers of Choice

CARR OF CH IER OIC E

All Connect Logistical Services Armour Transportation Systems Cardinal Couriers Cargojet

Cavalier Transportation Services FedEx Guilbault Transport GX Transportation

Hercules Forwarding Midland Courier Penner International Polaris Transportation

Seaway Express TransPro Freight Systems XTL Transport

28 July 2018 www.canadianshipper.com

p12-29 CdnShipper July2018_ShippersChoice_3.indd 28

2018-07-03 1:43 PM

AWARD WINNING

T H A N K

YO U

F O R

YO U R

C O N T I N U E D

S U P P O R T !

1.800.409.2269 info@polaristransport.com

p12-29 CdnShipper July2018_ShippersChoice_3.indd 29

2018-07-03 1:43 PM

AIR CARGO

TAKING OFF OFF With air cargo momentum on the rise carriers are looking to increase capacity

BY IAN PUTZGER

C

onstruction cranes are permanent fixtures at Edmonton International Airport, and a good chunk of their activity is on the cargo side. Between 2014 and this year, five logistics facilities opened at the airport, most recently a 30,000-squarefoot warehouse and office building. They filled up quickly, so the developers are contemplating additional venues, according to Alex Lowe, the airport’s manager of cargo business development.

They are about to be joined by an 800,000-square-foot building on a 30-acre parcel of land nearby propelled by a new breeze. Aurora Sky, a licensed producer of cannabis, is going to set up a production facility at the airport to capitalize on future opportunities for export of product and genetics.

Over on the eastern side of Canada, Halifax Stanfield International Airport 30 July 2018 www.canadianshipper.com

p30-47 CdnShipper July 2018_Features-2.indd 30

has plans for a logistics park on a 25-acre lot. Stanfield opened a new apron for widebody aircraft in 2016, but at peak times warehouse capacity is “a little bit of a challenge,” particularly with regard to cold chain facilities, says Glen Boone, director of cargo and real estate. “We have temporary storage facilities, but these are not for long term.”

The airport had hoped to obtain some funding from the National Trade Corridor Fund, but this did not get the green light from Ottawa, so Stanfield is going to take a phased approach through alternative sources of funding, says Boone.

Technologically-speaking At Canada’s largest air cargo gateway, Air Canada is looking to almost double its capacity through the overhaul of its Toronto hub. According to Tim Strauss, vice-president of cargo, 99 per cent of the design is

completed. The expansion is going to be driven in equal parts by the handling system, the facility itself and the use of technology.

“The system makes decisions based on how much time it takes to get everything done in time for departure, and for loading the plane,” says Strauss. It also takes external factors into account, such as rain in perishables growing regions, which signals that more lift should be allocated to other commodities on the day.

The airline can do with the additional capacity. Having clocked up 27 per cent growth last year, its momentum inevitably slowed down in 2018 in the wake of the end of the joint freighter venture with Cargojet, but its belly cargo is up over 20 per cent— more than management had budgeted.

“Canada is very stable right now. Forwarders are predicting a very solid year,” says Strauss.

“The first quarter was very good, very

Photo: Edmonton International Airport

2018-07-04 7:42 AM

AIR CARGO

Edmonton International Airport has seen seven consecutive years of cargo volume growth.

strong,” concurs Gary Vince, head of air freight, Canada at DHL Global Forwarding.

Rodair International has enjoyed probably the strongest first quarter in its history and the momentum shows no sign of letting up, reports CEO Jeff Cullen.

Growth has been across the board, with international forwarding and project business the strongest drivers.

Halifax, which handled 34,000 tonnes last year, up 2.2 per cent from 2016, has been going strong this year, with additional flights in four out of five months so far. At Edmonton volumes were up 11 per cent in the first quarter, driven by a substantial increase in charter tonnage.

Cargojet saw revenues climb 13.9 per cent in the first quarter. “We’re definitely seeing the benefits of online shopping and e-commerce business driving volumes,” notes executive vice-president Jamie Porteous. He is referring to the line-

haul for the express industry, which is Cargojet’s core business.

E-commerce is also beginning to have an impact on flying patterns. In addition to the usual Monday through Friday schedule, Cargojet has started a regular weekend flight from its Hamilton hub to Calgary and Vancouver.

Perishables have been another major driver of air cargo volumes, from produce at western gateways to meat in Alberta and seafood and fish from the Maritimes.

Much of the charter activity involving large freighters at Halifax is driven by lobster exports, which are enjoying rampant growth in Asia, especially China.

As a result, the airport authorities in Halifax and Edmonton are eager to beef up their cold chain capabilities. In Edmonton, where exports to Asia are dominated by perishables, Lowe reports that efforts are under way to build a substantial cooler. In Halifax, Boone has trained his sights on the large volumes of lobster that are trucked to the U.S., of which a substantial portion is flown from U.S. airports to destinations further afield. Flying this directly out of Halifax would mean shorter transits resulting in fresher lobster at the ultimate destination, he says.

DHL Global Forwarding recently added another dedicated round-the-world freighter flight to its line-up. Some of these flights are routed through Halifax to pick up lobsters. “Perishables is something we can’t ignore,” remarks Vince.

Other verticals that have fuelled demand for airfreight are life sciences and pharmaceutical, as well as, the aerospace and automotive sectors. The rise in fuel prices has also breathed some life back into the oil and gas sector, although this is still a far cry from the level of activity before the downturn.

Trading places The free trade agreement with the European Union is also beginning to have an impact. Some of the tariffs have yet to be dismantled, but the eight per cent levy on Nova Scotia lobster disappeared last September.

Flows from Europe have been robust for some time, which has put a strain on

capacity and driven up inbound pricing.

The extent of this came as a shock. “The capacity issues out of Europe were something I’d never seen in my career,” says Cullen.

If anything, inbound traffic from Asia has been even more challenging, particularly during last year’s peak season, which left shippers and forwarders scrambling for capacity, aircraft loaded to the rafters at rates airlines had not seen for ages, and airports buckling under the volume of cargo passing through.

Ken Singh, president of Atlas International Forwarding, vividly recalls the experience—the severe backlogs, particularly from the Far East, resulting in delays of six to 11 days and price increases of 40 per cent. He doubts that the memory of that frantic scramble will lead to a change in approach this year, though.

“We are never prepared. Buyers always look for a last-minute J-I-T inventory situation,” he says, adding that this has been reinforced by expectations shaped by e-commerce of ordering goods today and receiving them tomorrow.

As imports traditionally dominate Canadian airborne trade flows, finding space for exports has not been a problem, and pricing has not seen a serious uptick as witnessed on the import side. “We have not seen that type of increase,” says Joe Lawrence, president of Airline Services International (ASI). Overall rates have either held or decreased slightly, he adds.

In some cases imports are casting a shadow over export lift. Cullen reports that some airlines have informed Rodair that if it requires additional lift out of Europe beyond its current allocations, it should commit to some capacity in the outbound direction, which is something he had not come across before.

Air Canada is increasingly looking to two-way or multi-lane arrangements as it seeks to leverage its network more, rather than concentrate on individual markets, says Strauss. This type of corporate selling usually happens with large forwarder customers, though.

Many forwarders find that the dialogue with the airlines is on the wane as interaction is increasingly shifting to automated channels. “The way we deal with carriers is continued www.canadianshipper.com July 2018 31

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2018-07-03 2:09 PM

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AIR CARGO

continued from p. 31

changing,” comments Ashok Thomas, CEO of Global Supply Chain Logistics.

“We see it in seafreight, and it’s coming in airfreight. Carriers seem to push away from service business to an interactive platform to serve us. Shipping lines don’t want to talk us, airlines are going that way,” he says.

Autopilot Forwarders are also ramping up automation, led by the large players. DHL Global Forwarding continues to introduce apps for track and trace and related functionality. Last year it launched an on-line quotation tool that produces quotes within minutes. Customers can accept a quote and book it automatically. This has been well received in the market, according to Vince.

Like Air Canada, Airlines Services International is increasingly looking to leverage its network. “We look at markets that we want to expand into to identify carriers that we want to work with,” says Lawrence. Last year Egyptair signed up, which gave ASI’s general sales agents direct access to the carrier’s home market and destinations in the Middle East and Africa.

With United Airlines among his airline clients, Lawrence is looking forward to working with Lufthansa and All Nippon Airways, both of which have formed joint ventures with the U.S. carrier.

The Canadian carriers continue their international expansion. Air Canada is launching routes to Porto, Zagreb and Bucharest as well as a Montreal-Tokyo flight. It is also boosting its frequency to Melbourne and has split the route that used to serve Buenos Aires and Santiago into two separate services.

After the end of the joint venture with Air Canada, Cargojet has continued to fly to Bogota and Lima. It did not continue the Frankfurt freighter run, but added a second weekly frequency to Cologne instead. Support has been good in all directions, reports Porteous.

One of the Cologne flights originates at Cargojet’s Hamilton hub, which allows transfers of cargo between Europe and South America, which has met with lively interest.

These network moves are not scrimping lift for Canadian customers, both carriers stress. Air Canada’s capacity is too large for its home market, says Strauss.

He sees a different issue on the horizon. “The big one right now is probably what happens with fuel,” he remarks.

Thomas is bracing himself for an impact on pricing. “I predict in the near future we will probably see some upward pressure on rates because fuel is showing signs of changing.” 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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2018-07-04 7:42 AM

E-COMMERCE

Canada Worldwide founder and president Rizwan Kermalli (seated right), with eShipperâ&#x20AC;&#x2122;s Imtiaz Kermali (left) and Mo Datoo.

34 July 2018 www.canadianshipper.com

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Photo: Roger Yip

2018-07-03 2:09 PM

E-COMMERCE

Shipping in the Cloud Industry pioneer eShipper has been ahead of the curve in automating the booking process for its entrepreneurial customer base

BY IAN PUTZGER

C

anada Worldwide Services’ expanding customer base is changing, as e-commerce draws in new entrants. “We are serving more and more people who are not entrepreneurs. Before you were selling to an entrepreneur, now you help build an entrepreneur,” quips Imtiaz Kermali, vicepresident of sales and business development.

The Brampton-based company is perfectly positioned to attract aspiring online merchants. It harnesses the capacity of the large operators in the courier business—from Purolator and Canpar over FedEx and UPS to DHL and Aramex—and markets it via its online platform to SME firms below the radar of these carriers.

E-commerce is largely made up of traffic from small shippers, who need discounted rates to compete in the market, but the large carriers are not geared to serving this clientele, notes Canada Worldwide founder and president Rizwan Kermalli. His outfit leverages its volume to obtain lower rates from the carriers and passes most of this on to the SME shippers it deals with.

Kermalli, who started out in the industry in the 1980s as a courier driver in New York, pitched his concept to FedEx and UPS back in 2002, when e-commerce was in its infancy. FedEx immediately saw the benefit of using an intermediary to serve a customer base beyond its own reach. Over time the other large players also came on board.

“They realize we are not here to bastardize the market, we can perform customer service for them,” Kermalli says.

This is in stark contrast to Europe, where the concept has failed to gain significant traction. Some operators are trying, but the large carriers have been very conservative with discounting, reports Horst Manner-Romberg, principal of parcel logistics research and consulting firm M-R-U. In the past, larger players like the integrators have swatted such middlemen aside by scrapping discounts for them or by offering lower rates to shippers, he adds.

Dialing-up business From the outset, Kermalli was bent on using technology to facilitate the process and enable customers to use Canada Worldwide’s

system. In the early days the company shouldered the dial-up charges for customers to communicate via modem. In 2005 eShipper was launched as a cloud-based platform to allow instant rate comparison and to automate the entire booking process.

In addition to the major courier companies, the system holds rates from over 100 trucking companies as well as from Canada Post.

“We’re your Expedia for shipping,” says Mo Datoo, director of strategy and planning.

Upon entering their shipment information, customers receive quotes and proceed to book shipments, print labels and schedule pick-ups. They can track over the system and receive a single invoice for all charges. eShipper also provides free plug-ins to all major shopping carts like Shopify, Magento and Big Commerce.

The U.S. is the biggest trade lane for the company, but Australia and the European market—especially the U.K.—have shown a lot of growth, according to Kermali. India has also come on strong, he reports. Outside its home market Canada Worldwide has an office in Florida and works with agents in overseas markets as well as in the U.S. Over the past 18 months China has been a major target. Canada Worldwide has been able to get access to a program from Canada Post to take advantage of international mail rates. As a preferred vendor of Canada Post, Canada Worldwide can provide an enhanced level of service to Chinese e-commerce businesses looking for faster transit times to Canada with a tracked service that can be scaled and sustained over time.

Another China program is designed for vendors in China who ship to Amazon under the e-commerce giant’s Fulfillment by Amazon program. This traffic moves to Canada Worldwide’s bonded facility, where it is consolidated, custom cleared, audited and inducted to UPS, Amazon’s preferred carrier, for distribution.

Canada Worldwide has a 30,000-square-foot warehouse in its new headquarters, which includes a secure and bonded area.

About 10 to 15 per cent of its traffic moves through this warehouse, where the company performs pick and pack and fulfillment services. continued www.canadianshipper.com July 2018 35

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2018-07-03 2:09 PM

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E-COMMERCE

continued from p.35

Canada Worldwide performs pick and pack and fulfillment services in its 30,000-square-foot warehouse, which handles approximately 15 per cent of its traffic.

Some start-ups have been granted free storage in the building for three or four months.

“We allow small businesses and start-ups to enjoy lower fulfillment rates and free storage for some time so they are able to compete and see if the outsourcing model works for them,” says Datoo.

All-inclusive Educating shippers has become a growing part of the interaction with clients. “Conversations three years ago were about cutting cost. Now I spend more time educating customers,” says Kermali.

“Education is a big part in the growth of this industry.”

The eShipper website harbours a host of instructional videos and blogs covering issues from what CETA means for clients’ ecommerce business to how to deal with ‘serial returners.’ The company has produced webinars and worked with business organizations like the Retail Council of Canada and the Toronto Board of Trade to create instructional programs for businesses and young entrepreneurs.

One of the projects that is currently in the pipeline is the development of a duties and tax calculator. This should forestall frustration for consumers who thought they had paid an all-inclusive price only to be faced with a subsequent extra bill for such charges. “We hope to have it done before this year’s Black Friday,” says Kermali.

Small online merchants typically need to charge for these items up front. If a customer rejects a shipment, those charges are their loss, observes Datoo.

At this time much energy on the technology side is geared to a broad update of the eShipper platform. “We are still using version one of eShipper,” remarks Datoo.

Photo: Roger Yip

p30-47 CdnShipper July 2018_Features-2.indd 37

Version two will offer a greater degree of e-commerce integration and the tracking capability will extend to mobile applications to enable the system to text a customer when a shipment is delivered or is having an issue.

These features will probably also strengthen eShipper’s appeal to larger customers. While its focus remains on small shippers, Canada Worldwide is not averse to dealing with larger corporate clients. It is working with a multinational auto manufacturer that was looking for cost savings and faster transit in the logistics processes for its dealership network. It streamlined the process and created an out-of-the-box solution that saved the client over 40 per cent in costs and cut transit times from 14 days to eight.

Without a doubt, though, small shippers will keep Canada Worldwide busy. The momentum of e-commerce promises a continuing stream of new entrants into the market who look for simple and affordable shipping solutions with easy integration into major online sales platforms.

Kermalli has no doubts about the trajectory of online shopping. “Now that e-commerce is here there’s no way to go back and drive to the mall and buy a shirt,” he remarks.

Over the past four years the company has clocked up growth of at least 33 per cent a year. It handles north of one million shipments a year and boasts a customer base of over 17,000.

It is hard to estimate how big the market potential actually is, as e-commerce enables private individuals to embark on a business, notes Kermali. Many businesses have started from a basement or a storage facility, he adds.

“There’s a whole new market emerging with drop shipping. It’s growing like crazy,” he says. “Students are now drop shipping items from [Alibaba’s] Ali Express.” CS www.canadianshipper.com July 2018 37

2018-07-03 2:09 PM

INTERMODAL TRANSPORT

THE SUPER WHILE GRAIN SHIPMENTS CONTINUE TO DOMINATE THE P

C

onstruction has begun on a 50,000-square-foot project cargo storage and fabrication facility by the Thunder Bay Port Authority (TBPA), enhancing the Port’s position as the “Superior Way West,” as the TBPA puts it.

To be completed in 2019, it is just the latest piece in a package that allows the port to gobble up grain and other commodities as fast as the mainlines can deliver them, and feed a variety of commodities and cargo into their capable rail corridors.

The Port of Thunder Bay, 22 miles long, is at the western end of Highway H2O, which stretches 3,700 kilometres from the mouth of the St. Lawrence River through the Great Lakes. In that portly way, it does 38 July 2018 www.canadianshipper.com

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the handoffs between the rail lines of both the CN and CP western rail systems to Highway H2O, its many Canadian and U.S. ports, and international destinations. Inbound, it functions as the mainlines’ railhead for products smaller than a breadbox and as large as oil patch pressure vessels, wind turbines and or even unusual items such as a modular motel shipped from Poland through to Calgary last year.

Three hundred and ninety-three ships visited the port last year. The tonnage tally was 8,819,270 tonnes of cargo in seven categories: grain, coal, potash, dry bulk, liquid bulk and general cargo. On CP’s contribution, a spokesperson said, “Last year, CP handled 67,000 carloads through the port. The commodities we

move to the Port of Thunder Bay are mainly bulk commodities: grain and other agricultural products, potash, and coal. Agricultural products come from across the Canadian Prairies, potash from mines in Saskatchewan, and coal from the metallurgical mines in southeastern British Columbia.

“Moving from the port, CP is well-positioned to handle shipments of steel coils, beams, and plates, imported and domestic, bound for western Canada. We also handle dimensional cargoes through the port. We can handle a wide variety of dimensional shipments through the port, including wind power components, transformers, and other power generation equipment.”

Photo: Thunder Bay Port Authority

2018-07-03 2:09 PM

INTERMODAL TRANSPORT

ERIOR WAY E PORT OF THUNDER BAY, PROJECT CARGO MAY BE ITS FUTURE

BY CARROLL MCCORMICK

Grain shipments represent over 80 per cent of the Port of Thunder Bay’s annual tonnage.

The largest single item on the TBPA’s tonnage list is grain, a catch-all term for 11 products, such as canary seed, lentils, mustard and Canada’s venerable wheat.

Grain accounted for 82.5 per cent of the port’s tonnage in 2017. The port’s eight terminals have a total capacity of 1.2 million tonnes—the largest in North America, according to the TBPA. Its loading rates of 1,000 to 3,400 tonnes/hour and the rail performance are such that, “... it is almost live loading to ships,” according to Tim Heney, CEO of the TBPA. “The railways have gotten to the efficiency level where they pretty much flow the grain right to the ship.” CP notes that it serves the major port terminals in Thunder Bay, although it does not operate its own

loading and unloading terminals.

This grain is a bonanza for the revenues it brings to the port and critically, grain provides a backhaul opportunity for inbound ships—tonnage that has grown by about 25 per cent since the Canada Wheat Board lost its monopoly in 2012, according to Heney. “We are the biggest grain exporter on the Seaway. We make it a [marketing] point that the grain is there for the backhaul.”

This virtual assurance that ships need not bob away empty from the port’s wharves feeds into a growing business sector—project cargo—for which the TBPA has made major investments at its Keefer Terminal. “We have done a lot to make Thunder Bay more efficient for

project cargo, and general cargo. There are more laydown areas, more rail track loading spots. In the steel business we’ve been getting into, the number of rail loading spots is key. We only have a limited amount of loading time before we incur demurrage. We have reconfigured track and built warehouses. We’ve spent about $15 million over 14 years and will spend another $15 million in the next couple of years,” says Heney.

Keefer Terminal, where project cargo is handled, was established in 1962 and was originally intended for packaged freight. It is the main landholding that the TBPA administers, and currently occupies 80 acres as what the TBPA calls a “full-service facility.” The port first began continued ww www w www. ww w w.canadianshipper.com

p30-47 CdnShipper July 2018_Features-2.indd 39

July 2018

39

2018-07-03 2:09 PM

INTERMODAL TRANSPORT

continued from p. 39

Above:The Port of Thunder Bay’s large laydown area is particularly attractive for large project cargo, such as wind turbines.

Left: The distance between ship and rail couldn’t get much closer at the Port of Thunder Bay.

using it for project cargo 14 years ago.

“Keefer was built for side-loading ships, to move everything from liquor to groceries,” says Heney. “It was our initiative to bring back marine cargo, which had dwindled to near nothing. It has ex40 July 2018 www.canadianshipper.com

p30-47 CdnShipper July 2018_Features-2.indd 40

panded from mostly project cargo and structural steel.

“The attraction of Thunder Bay is the speed of getting it to the customer—to distribution centres in western Canada, such as Edmonton, Regina and Winnipeg.”

CN and CP are a big presence at Keefer Terminal, right out to the dock and in a 10acre intermodal yard with a 200-railcar marshalling yard. The work TBPA has done to improve the interface between the port and the mainlines includes upgrading its rail lines to match the carrying capacity of the mainlines’ rail beds, work around a heavy lift track that allows a lot of heavy cargo, and the purchase of a Lieber 320 mobile harbour crane. Rolling on 64 rubber tires, it can lift 104 tonnes and has an 18-metre reach. TBPA located it for sale on the internet. “We bought it in California. It had never been used. It was sitting in crates on the dock,” recalls Heney.

Another TBPA purchase was CP’s intermodal yard after CP shut it down. “We use it for WTGs [wind turbine generators],

Photos: Thunder Bay Port Authority

2018-07-03 2:09 PM

INTERMODAL TRANSPORT

steel coils ... it has a reinforced concrete pad for the top lifters, and it has come in handy for project cargo,” says Heney.

He believes wind turbines are a growing part of the TBPA’s business. “They are not the backbone of Keefer, but they are what put [Keefer] on the map. Thunder Bay is a major entry point for wind turbines in western Canada. We’ve built our business on wind turbines. Wind has been a bigger volume to us over the years than any other single cargo. We’ve sent WTG machines as far north as the Diavik Diamond Mine in the Northwest Territories. The far north is a major destination for them. We get a certain number of wind turbines a year, but the big wave will be next year.”

While wind turbine components are often moved with special trucks, the mainlines are also expert wind turbine transporters. According to the CP spokesperson, the company “has extensive experience moving dimensional loads and wind components.

We move wind components across our network on a regular basis and are happy to grow volumes through the port.”

The proven expertise of the TBPA and mainlines in handling wind turbine components eases the burden of proof they must bear when looking for business.

“Regular project business is hard to get, but we have good relations with a lot of the wind turbine manufacturers. They know us and the routes,” explains Heney.

“We don’t have to chase every last order.

Too, they are very careful about damage to the wind turbines. They want people who are very experienced at it.”

Other commodities that the TBPA is working to grow include structural steel.

“That is something where we are seeing growth. That steel originates in Luxembourg for office buildings, hospitals, stadiums,” says Heney. And even though the pace of CAPEX projects in Alberta’s oil patch have slowed, “It is not as slow as people think it is,” notes Heney. “There are a lot of projects that are underway. Components for those are moving through ports as well.

It is always going to be there.”

The TBPA has a lot of projects it intends to spend its next $14 million on, according to Heney, including rail upgrades and a heated storage building.

On the TBPA’s role of being between the mainlines and the deep blue sea, Heney comments, “You have to interface

between the customer, port and rail, to piece together whether the supply chain works, and monitor to make sure everything is going well. Everyone has to perform, otherwise, the route becomes inefficient for the customer.” CS

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INTERNATIONAL TRANSPORT FORUM

Transport Ministers vow to keep travelers and freight safe and secure A need for strong political leadership in the face of challenges; from road crashes to terrorism and from cyber-risks to climate change

Members of International Transport Forum gathered in Germany to discuss the safety and security critical to the reliable and efficient transport of goods.

M

inisters with responsibility for transport from the 59 member countries of the International Transport Forum underlined the critical importance of keeping transport safe, secure and resilient in order to enable societies and economies to prosper.

“Safety and security are of fundamental concern for transport, both as the basis of a citizen’s right to travel without fear, and as a condition for the reliable and efficient transport of goods”, Ministers stated in a joint declaration agreed unanimously at their annual summit on in Leipzig, Germany.

Specifically, Ministers pledged to join forces against both unintended and malicious disruptions to transport systems

that cause death and injury. They commit to cooperation among public and private entities to combat human trafficking and terrorism involving transport services and infrastructure. In order to reduce crime involving transport networks, Ministers plan with others to foster cross-border cooperation between relevant agencies.

Ministers also emphasized the potential of digitalization for making transport safer and more secure, but call on stakeholders to test, demonstrate and evaluate the effects of these new technologies. They also agree to promote measures for real-time exchange and use of robust data to enhance safe and secure transport, while ensuring cyber security and data protection.

Road deaths are one of the top 10 causes of death in the world. The economic losses caused by traffic deaths and serious injuries are estimated to range from two per cent to five per cent of most countries’ GDP and security incidents are expected to cost the world $6 trillion annually by 2021. All the speakers acknowledged that despite the progress achieved in the field of transport safety and security during the last few decades, there is still much work to be done. This becomes especially challenging as the world today is adapting to new risks such as climate change and terrorism, as the ITF Secretary General, Kim Young Tae noted.

Growing mobility and digitalization create additional challenges. CS continued

Photo: International Transport Forum

p30-47 CdnShipper July 2018_Features-2.indd 43

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2018-07-03 2:09 PM

INTERNATIONAL TRANSPORT FORUM

continued from p. 43

DECARBONIZING TRANSPORT: Towards a catalogue of effective measures

“W

e have lost two decades debating whether climate change is happening and what measures to use” said Martin Frick, senior director for policy and program coordination, United Nations Framework Convention on Climate Change (UNFCCC), when he opened the ITF in Focus Session “Decarbonizing Transport: Towards a catalogue of effective measures.”

This session focused on the ITF Decarbonizing Transport project outputs in four specific areas, namely, cities, freight, maritime, and linkages to other initiatives.

Frick emphasized the need to develop actions and the importance of having a multi-stakeholders approach to implement them. After ITF Secretary General, Young Tae Kim outlined the ITF Decarbonizing Transport initiative, Jari Kauppila, ITF head of statistics and modelling, presented project outcomes. ITF’s modelling results suggest that 70 per cent of global CO2 emissions reduction could come from technological development, such as electric vehicles and fuel technologies, with 30 per cent requiring behavioural change. There were comments that improvements in land-use planning and policies toward housing and commercial building in driving more sustainable urban development are fundamental to greenhouse gas mitigation in the long term. Significant efforts will be needed to induce behavioural changes, “We need to move from having ambitious targets to having concrete actions.” Jari reiterated.

Seven speakers were then invited to provide commentaries on the four themes outlined. For cities, Aoife O’Grady, principal officer, department of transport, tourism and sport, Ireland and Monika Zimmermann, deputy secretary general, ICLEI shared their experience in shifting modes and changing behaviour successfully. Mark Frequin, director-general for mobility and transport, Ministry of Infrastructure and Water Management, the Netherlands and Umberto de Pretto, secretary general, International Road Transport Union (IRU) presented specific innovations and initiatives in the freight sector, such as the Dutch “Lean and Green” program, as well as expressed their support in the ITF Decarbonizing Transport initiative. Mark stated that “This initiative is not just about talking but also about performance.”

For maritime transport, Claes Berglund, director public affairs and sustainability, Stena Line and Thao Pham, associate deputy minister of transport, Canada described the challenges and solutions in decarbonizing maritime transport and how Canada has developed specific measures to address maritime emissions. Pham, together with Nicolas Beaumont, senior vice president sustainable development and mobility, Michelin Group, also believe that the ITF Decarbonizing Transport initiative will provide tools that will help countries develop their pathways and complement other initiatives at the same time.

Several common themes emerged

Thao Pham, Canada’s associate deputy minister of transport, spoke at a session discussing the ITF’s decarbonizing transport initiative.

from the commentaries and subsequent discussions. First, sustained efforts are required. While existing measures are effective but with projected population growth and freight growth, sustained efforts are needed to change behaviours globally. Many technological measures can also save costs and this message can be communicated better to industry. International organizations play a key role to support global actions. For example, the recent work of the ITF can help the Canadian government develop regulations to facilitate adoption of IMO standards, which can indirectly promote adoption of voluntary measures to improve ship design for meeting the mandatory Energy Efficiency Design Index standards. Modelling work can also help develop shortterm and medium-term strategies.

Lastly, all parties must join forces. This includes sharing data, information, knowledge and tools. “Don’t reinvent the wheel,” said de Pretto, when commenting on the need to share information. Governments need evidence from researchers, researchers need data and information from all parties and industries need information and incentives to inform their business decisions. “The shipping sector needs incentives to facilitate decarbonization, including from ports and other actors”, said Berglund. As stated by many speakers, multi-stakeholders approach is essential to ensure the achievement of the global emission target. CS continued

Photo: International Transport Forum

p30-47 CdnShipper July 2018_Features-2.indd 45

www.canadianshipper.com July 2018 45

2018-07-03 2:09 PM

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INTERNATIONAL TRANSPORT FORUM

continued from p. 45

Towards a holistic governance of the global maritime logistics chain

T

he aim of the ITF Global Maritime Logistics Dialogue stakeholder event is to increase the performance of the maritime logistics chain via collaboration and dialogue, considering that there are still many win-win opportunities. This could be achieved by bringing together leaders from five stakeholder groups (shippers, shipping, ports, terminals and freight forwarders) as well as analysts from independent think tanks and international organizations.

By way of introduction, it was mentioned that new technologies also provide new opportunities to further enhance collaboration for the optimization of the maritime supply chain. It was suggested that the following three conditions will need to be met in order to achieve further collabo-

ration and optimization: First, the development of international standards for data and data exchanges; second, ensuring cybersecurity; and third, avoiding potential collusion within competitive markets.

Among the main issues brought up by participants was the low interoperability of different systems and the lack of willingness to share data. The lack of the required collaborative mind-set was lamented by several participants. One speaker observed that in times of crisis, regarding for example an economic downturn, congestion or repercussions from changing alliances and specific local issues, stakeholders showed an increased willingness to engage in negotiations and find ways of improvement through collaboration. Shippers present at the table

underscored that their major concern was simplicity, visibility, predictability and reliability of freight transport. This was also stressed by policy-makers present who aimed generally at improving their country’s competitiveness through better functioning logistics and trade.

Carriers voiced concerns about increasingly intrusive regulation and double reporting requirements. Policy makers asserted that some directions would need to be provided by governments in order to make the sector more efficient.

They agreed that no single system should be provided and imposed by government. Technical solutions should come from the industry and governments should not fix problems on behalf of the industry. Nonetheless, governments felt the need to lead the way and facilitate exchanges in the interest of all. It was mentioned that the EU Commission has for more than a decade developed better regulation that is based on consultations with stakeholders, impact assessments and evaluation. CS

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2018-07-03 2:09 PM

INSIDE THE NUMBERS WITH LOU SMYRLIS, MCILT

RELIEF IN SIGHT?

Major supply chain challenges

New equipment purchases may loosen capacity in the trucking market. Somewhat Class 8 truck sales in Canada picked up considerably through the first quarter, reminiscent of the industry’s boom years during the last economic expansion. That’s giving hope that the new truck purchases will loosen the tight capacity which is currently causing double digit increases to trucking rates. Seven in 10 Canadian carriers plan to purchase new Class 8 trucks this year, according to the preliminary results from our annual Equipment Buying Trends Survey. However, shippers would be wise not to get overly excited about this statistic. Motor carriers have become wise to how loose capacity affects their profit margins and may be merely replacing old iron rather than expanding their fleets.

Reduce costs

44%

Enhance customer service

13%

Improve supply chain execution

7%

Improve supply chain information

7%

Keep up with logistics technology

5%

Expand/improve service to new markets

5%

Planning to purchase Class 8 trucks this year

Yes 71%

29%

of respondents

Class 8 truck trade-in cycle

No

Percentage of fleet looking to replace

1-2 years

More than 30% of fleet

4-5 years

0% of fleet

10 years or more

6%

9% 29%

32%

26%

of respondents

of respondents 10% of fleet

12%

25%

9%

39%

30% of fleet

14%

8-9 years

20% of fleet

6-7 years

Class 8 truck sales in Canada Year

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2017

2018

Trucks sold

4,416

5,750

7,475

8,409

7,099

5,686

3,678

3,984

4,626

7,199

4,894

6,671

Most important factors in choosing a motor carrier (scale of 1 to 5) On-time performance

Quality of Equipment

Information technology

Competitive Pricing

Customer service

Problem solving

Value added services

Sustainable transportation practices

LTL

4.778

4.395

4.154

4.717

4.759

4.479

3.734

4.122

TL

4.863

4.526

4.166

4.742

4.673

4.468

3.887

4.187

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2018-07-03 2:10 PM

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COACHING CORNER

Can’t we all get along?

By Carolina Billings, CPCC, CHRL, MA-IS

ready changing the workplace and the way we do business.

Given that most of the current technology and innovation has occurred during their lifetime it only makes sense to a large degree that Millennials be the ones to steer organizations and develop or maintain competitive advantages. The gig-economy—an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements—has been their ecosystem all along. To them technolo On the other hand, that does not mean older generations are obsolete or redundant. But to ignore that the rules of engagement in career development and advancement have changed would be foolish.

It is imperative that just like organizations, non-Millennials take the initiative to upgrade their skills, and take responsibility for their career development. It means becoming an “intrapreneur,” someone who behaves like an entrepreneur even though they’re a full-time employee.

The term gained popularity in the 1980s when it was used by Apple co-founder Steve Jobs to describe the company: “The Macintosh team was what is commonly known as intrapreneurship; only a few years before the term was coined—a group of people going, in essence, back to the garage, but in a large company.”

Millennials are ready to take over the CSuite and with many Baby Boomers still holding top positions, we are seeing an entire generation potentially missing out on leadership roles.

Q: Every time a new position comes up in the executive suite, our organization wants to hire some newly minted Millennial MBA is completely bypassing internal promotions of people that have been with the company for years. They have no clue about leadership, or experience for that matter. Are middle management no longer in career track to become executives?

A: First of all, we have to stop thinking of Millennials as young and inexperienced.

In fact, older millennials are getting close to 40 years old. In fact, they are having post-millennial children or Generation Z, some of who are already in high-school.

Younger millennials are now graduating university and as a generation represent the face of innovation and rapid change.

According to the Pew Research Center, Millennials are expected to surpass Baby Boomers as the largest living adult generation in North America. (Generation X is projected to pass the Boomers in population by 2028.) The fact is, Millennials are not about to change the face of the workplace as we know it—they are al-

Organizations can also create a culture that not only supports on-going learning but recognizes and rewards employees who take the initiative to upgrade their skills. Promoting from within is a huge morale must, that fosters loyalty and commitment from employees. In a perfect world it is a balanced approach, with some of the leadership growing organically, so the organization is able to maintain continuity and community, and when needed, acquiring outside talent to bring new ideas and innovation to the organization.

No one generation or group of people have all the answers. Organizations are wise to introduce mentorship programs, encourage a culture of innovation and constant learning to retain, develop and attract top talent. CS Carolina M. Billings is Partner & CEO of a business consulting group and has 15+ years of experience in the fields of Business Development & Branding, Human Resources and Finance.

She champions leadership initiatives as well as empowering and coaching/mentoring others to lead. For more information please visit www.thewellnessgroup.ca or email Carolina@thewellnessgroup.ca

THE GENERATIONS DEFINED THE MILLENNIAL GENERATION Born 1981 to 1996 Age in 2018 22 to 37

©iStock

p49-56 CdnShipper July 2018 InsideNumbers_Coaching_BigPic.indd 51

GENERATION X Born 1965 to 1980 Age in 2018 38 to 53

THE BABY BOOM GENERATION

THE SILENT GENERATION

Born

Born

1946 to 1964

1928 to 1945

Age in 2018

Age in 2018

54 to 69

71 to 88

www.canadianshipper.com July 2018 51

2018-07-03 2:10 PM

REPRESENTING CANADIAN SHIPPERS FOR 100 YEARS What do you know about?

• The new Electronic Logging Device regulations for trucks?

• The container decontamination requirements?

• Improvements to the rail shipper protection laws?

FMA members are kept informed on changes to current laws and regulations that will impact their operations. Government relations and information dissemination is an essential part of FMA’s mandate to promote a cost-effective, safe and efficient transportation system.

GOVERNMENT HAS A BIG IMPACT ON FREIGHT TRANSPORTATION you can help shape the future of the freight transportation industry.

FOR MORE INFORMATION CONTACT FMA: (613) 599-3283 | kelsey@fma-agf.ca | www.fma-agf.ca

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2018-07-03 2:10 PM

AD INDEX

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THE THEBIGGER BIGGERPICTURE PICTURE

Time to Become a “Shipper of Choice” Tight freight capacity is being experienced across North America and it is likely to continue for another year or two. There are several reasons for this, including the ongoing driver shortage and the looming ELD mandate.

Year after year, older drivers are retiring with fewer younger drivers taking their places. The work is difficult— it involves working long hours, driving long distances, being away from family for long periods of time and lessthan-ideal pay. Fewer drivers mean fewer trucks on the road to haul this increase in freight, which, in turn, drives up the rates because of the premium placed on securing a truck. It was a good year for the U.S. economy, and this additional freight volume combined with two major hurricanes diverting resources also greatly impacted the ability to secure trucks.

Another factor that is impacting capacity is increased government regulations such as the electronic logging devices mandate which began on December 18. The ELD mandate essentially requires all motor carriers to install electronic devices in their trucks that will automatically track drivers’ hours of service.

By law, drivers are only allowed to drive for 11 hours with a mandatory, continuous rest period of 10 hours, daily. Prior to the mandate, most (but definitely not all) drivers kept manual log books to track their hours of service, while some of the larger carriers already had ELDs. Most smaller carriers have become

compliant, but some are having issues with the cost of installing the devices and even more dislike the automatic tracking of their movements.

For shippers that are experiencing shortages of trucking or rail equipment, there is a series of steps that need to be taken to prevent service failures and loss of market share.

The following are some steps to take to become a preferred shipper.

1. Integrate a freight transportation strategy into the company’s business plan

For companies that have relied on rate quotes and sport market pricing, transition from a transactional to a strategic approach to freight transportation. Select a core group of carriers, negotiate and sign multi-year agreements that include SLAs for price, service, and capacity.

Keep an open mind on modal options. Meet with the leaders of these transportation organizations to ensure they can meet the stated requirements in all three areas. Before awarding freight to these companies, test them over time to verify that they can meet their commitments.

2. Provide carriers with shipping forecasts

Share information with carriers on shipping characteris-

54 July 2018 www.canadianshipper.com

p49-56 CdnShipper July 2018 InsideNumbers_Coaching_BigPic.indd 54

By Dan Goodwill

tics, freight flows, and seasonal fluctuations. Notify carriers of peaks and valleys and variances in equipment requirements.

3. Work with core carriers to remove inefficiencies and costs

Meet with these core carriers and openly discuss all elements of the company’s freight operations. Can the company be flexible with pickup and delivery times?

Can drivers work with the dock schedule? Is there anything that can be done to have the freight and paperwork available more quickly?

Are there lines of trucks in front of the company’s facilities on a regular basis causing delays and lost driver time? Does it take more than 45 minutes to load a truck from gate in to gate out? Is a drop trailer program required? Are drivers penalized by requiring them to pay a fine on the spot for a service failure they did not cause?

4. Speak with partners to remove roadblocks at the receiving dock

Speak with the transportation companies serving the business and obtain frank and complete information on the process of delivering freight to customers. Speak with and if necessary, visit with customers, stores, mer-

chants, replenishment teams and other partners to remove roadblocks. Follow up with the core carriers to verify that that the requested changes have been made.

5. Document SOPs for these cost saving processes and maintain a dialogue with core carriers

Don’t view this exercise as a “one shot” project. View this as an ongoing effort at establishing best practices. Remember that there is a shortage of drivers and equipment. Carriers have choices and are selecting “Shippers of Choice” that operate at the lowest cost and pay the highest price. Rate increases can be mitigated through cost efficiencies and by ensuring the fluid movement of drivers and equipment.

6. Create and sustain a “Shipper of Choice” culture

Treat dispatchers, sales reps, drivers, and customer service personnel with respect. Be fair and reasonable in the demands placed on these partners. Ask for feedback from transport companies and take corrective action to address unprofessional behavior.

These are unique times.

Shippers that make the necessary strategic, tactical, and cultural changes are likely to secure the capacity they need. 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.

©zygotehasnobrain/iStock

2018-07-03 2:10 PM

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REACH FARTHER.

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