JULY/AUGUST 2016
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Why apparel logistics players should be concerned
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When it comes to shipping cargo, our network reaches further. With a growing network providing direct cargo service to over 150 cities and over 450 worldwide through interline partnerships and a vast trucking network, Air Canada Cargo offers countless possibilities for shipping freight quickly around the globe. New in 2016: Direct service to Brisbane, Lyon, Budapest, Prague, Warsaw, Glasgow, London Gatwick, Casablanca. Plus, dedicated freighter service to South America, Mexico and the US.
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CONTENTS
JULY/AUGUST 2016
DEPARTMENTS
14
6 | Editor’s Forward Lunchtime learnings on leadership.
COVER STORY
10 | In the News Maritime coalition legally challenges U.S. Coast Guard pilotage fee, Air Canada Cargo, Cargojet celebrate launch of new South America freighter service, UPS Canada WLD committee celebrates 10th year.
Latin Lift
50 | Inside the Numbers
Air carriers look to increase lift to boost markets and yields in South America.
Supply Chain Managers wear many hats, according to our Annual Survey of the Canadian Logistics Professional.
51 | Retrospective The early days of intermodal, and celebrating the lofty container. 52 | Coaching Corner Working relationships-are they for a season, a lifetime, or for a plain and simple reason?
2016
SHIPPER’S CHOICE
22
SHIPPER’S CHOICE
Celebrating the carriers who have gone above and beyond industry benchmarks for performance excellence.
©Gary Tognoni/iStock
54 | The Bigger Picture The Verified Gross Mass weight amendment, coming into force July 1 for weighing containers, is mired in controversy.
Cityscape view of Cartagena, Columbia.
FEATURES APPAREL LOGISTICS | 18 Harnessing data to drive sustainable apparel supply chains. An illustrative look at how much brands disclose about their supply chains. | 20
ITF REPORT | 40 News from Leipzig, Germany and the OECD’s annual International Transport Forum Summit. continued
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WHAT’S ONLINE
continued
INTERMODAL SNAPSHOT | 43 An economic outlook and an update on volumes.
SUPPLY CHAIN COSTING | 46 Case studies and tips on reducing supply chain costs from our Cargo Logistics Canada panel.
PHARMA LOGISTICS | 49 Air cargo carriers aim to bring back market share on pharma through certification.
WEB TV
46
Transportation Matters
OUT OF THE BLUE Planning for the “unexpected” in supply chain
BLOG BITS Search our blog archives at ctl.ca
Dan Goodwill Registration is Now Open for the 2016 Surface Transportation Summit The 2016 Surface Transportation Summit will take place at the International Centre in Toronto on October 13. The event will be co-hosted by Newcom Business Media and Dan Goodwill & Associates in partnership with the Ontario Trucking Association and the Freight Management Association of Canada. In addition to the great educational content, there will be two extended networking breaks, an extended lunch hour and a post-Summit reception so the attendees can meet friends and colleagues and visit the sponsors of the event.
49
A Lack of Routing Guide Compliance Dooms Many Freight Bid Projects Many shippers don’t achieve the cost savings they expect from their freight bid exercises. Based on our work with shippers over the past twelve years, these are the main reasons why this happens.
Find us on Twitter at: @CanadianShipper
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EDITOR'S FORWARD Julia Kuzeljevich July/August 2016 Volume 119 Issue No.4
EDITOR Julia Kuzeljevich (416) 510-6880 julia@newcom.ca
Of lunches, learning and leadership
T
he jaded, peckish journalists among us can perhaps be forgiven for thinking that the speaker scheduled over lunchtime at an industry event won’t have much worth recording. But at the Toronto Transportation Club’s recent Ladies, Lunch and Learn, held June 14 at Toronto’s Palais Royale, keynote speaker Annette Verschuren brought some key advice from her book, Bet On Me, that talks about ‘Leading and Succeeding in Business and in Life’. (Proceeds of the book go towards mental health.) A farmer’s daughter from Nova Scotia, Verschuren (a recipient of the Order of Canada) is Chair & CEO of NRStor Inc., an energy storage technologies venture. She was formerly the president of The Home Depot Canada and Asia and President and Co-owner of Michaels of Canada. Verschuren noted that her goal in life has always been to give back-“This was something I learned at a young age.” Her father had a heart attack and was in hospital, and a family friend used his own holiday time to help bring in the hay. “That man saved our family. His generosity helped me understand giving back.” Helping out with the family farm when her father was sick made Verschuren realize she could do anything-“I didn’t know I was a girl until I got to University.” At a certain point in her career, she got a reality check . During a 360 degree feedback process (a system or process in which employees receive confidential, anonymous feedback from the people who work around them), “the people who worked for me told me the truth: I wasn’t listening fairly to the team. I favoured some of my teammates. I think it was the most embarrassing thing I ever went through in my entire life. Today I sit around the table with 12 people and they tell me immediately when I screw up,” she said. “The message from that chapter is you can’t be perfect at everything. Find the one or two things that are important for you to get better at.” Always remember your network is your net worth. “I have been blessed with people who have helped me become a better leader and a better person. I work hard letting people know where I am, what I’m doing, what my family is doing, and maybe more importantly, asking how their families are doing.” Of the people that are just difficult to deal with? “Don’t waste your energy on that. Don’t hang out with them. Sometimes you need them, but move forward. Don’t get hung up on the negative stuff. It eats away at you,” she said. Instead, “when you build people you create positive results. It’s amazing how all of that works,” she said. Leadership means you celebrate your success publicly, and criticize privately, (with people who need that motivation). “If you want to go fast go alone, if you want to go far, go together. I believe that in the great successful companies the stars aren’t driving the businesses-the star teams are,” she said. You should never be afraid of the word power. Take the experience of diminishment, and turn it around. Verschuren once had a boss tell her she would never amount to anything in business. “The power that guy gave me, and he thought he was diminishing me!” “It doesn’t matter which position you’re in. Get over that! Find that lane and wherever you are try to differentiate yourself and be the best in whatever lane you take. You’ll grow, but never leave your family behind,” she said. CS
RESEARCH DIRECTOR Lou Smyrlis lou@newcom.ca ART DIRECTOR Ellie Robinson ellie@newcom.ca CONTRIBUTING EDITORS Carroll McCormick, Leo Ryan, James Menzies, John G. Smith, Ian Putzger, Ken Mark. MARKET PRODUCTION MANAGER Kimberly Collins (416) 510-6779 kim@newcom.ca VIDEO PRODUCTION MANAGER Brad Ling CIRCULATION MANAGER Mary Garufi (416) 614-5831 mary@newcom.ca PUBLISHER Nick Krukowski (416) 510-5108 nick@newcom.ca VICE-PRESIDENT PUBLISHING Joe Glionna PRESIDENT Jim Glionna HEAD OFFICE: 80 Valleybrook Drive, Toronto, ON M3B 2S9 Canadian Shipper is written for Canadian transportation and logistics professionals who manage product flow from manufacturer to point-of-sale. Editorial is focused on reporting, analysis and interpretation of Canadian logistics trends and issues. It is published by NEWCOM BUSINESS MEDIA INC.
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IN THE NEWS
MARITIME COALITION LEGALLY CHALLENGES U.S. COAST GUARD 58% PILOTAGE FEE INCREASE ON GREAT LAKES
Foreign-flag multipurpose vessel at Duluth on Lake Superior.
The U.S. Coast Guard’s recent decision to dramatically increase pilotage rates on the Great Lakes by 58% over two years prompted a broad coalition of U.S. Great Lakes ports, vessel operating companies and maritime trade associations to file a suit in Washington at the U.S. District Court for the District of Columbia. In an unprecedented legal challenge on May 31, the plaintiffs urged the Court to remand the rulemaking back to the Coast Guard for revision, declare the new rates “unlawful” and to reduce the 2016 Great Lakes pilotage rates “by at least 20.6 percent for the duration of the current navigation season.” A 24% increase took effect in early April, shortly after the opening of a new commercial shipping season on the Great Lakes/St. Lawrence Seaway system following the annual winter closing. The remaining 34% is to be implemented in 2017. By comparison. Canada’s Great Lakes Pilotage Authority earlier this year increased its tariffs by just 2.5% for 2016. In filing the complaint, the American Great Lakes Ports Association, the Ship-
ping Federation of Canada, and the U.S. Great Lakes Shipping Association were joined by Montreal-based Fednav International Ltd, Canfornav Inc., Polish Steamship Company, Spliethoff Transport, Brochart Shipping, and Wagenborg Shipping. “Pilotage is currently one of the single largest costs to vessel operators engaged in international trade on the Great Lakes. On average, the daily cost of a pilot now exceeds the cost of chartering the entire cargo ship and its crew,” said Steve Fisher, Executive Director of the American Great Lakes Ports Association. Will Friedman, President of the Cleveland-Cuyahoga County Port Authority explained, “Great Lakes pilotage costs have gone up 114 percent over the last ten years. The Coast Guard wants to increase them another 58 percent by 2017. These increases are unsustainable and will ultimately erode the viability of international trade through Great Lakes ports.” Much maritime trade flows to Great Lakes ports via the St. Lawrence Seaway which last year saw its cargo volume plunge by 10% to 36 million metric tons
due mainly to a global decline in commodity shipments. Marine pilots are navigators familiar with local conditions. Under federal law, all ocean-going vessels operating on the Great Lakes Seaway System must hire local pilots to assist with navigation. The U.S. Coast Guard regulates all aspects of Great Lakes pilotage and has granted three private companies a monopoly to provide these services. Rates are set annually by the Coast Guard through a federal rulemaking. In its 2016 rate-setting, the Coast Guard decided to expand the number of pilots from 34 to 54 (to arguably avert ship delays in peak periods), increase pilot compensation to US$326,000/year, and ensure that pilots have 10 days off each month during the nine-month shipping season.The U.S. Coast Guard has argued that substantial additional revenues are required to offset problems in recruiting and retaining pilots in the Great Lakes. The plaintiffs deplored that the Coast Guard failed to address any of their suggestions to improve recruitment efforts. CS
10 July/August 2016 www.canadianshipper.com
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IN THE NEWS
AIR CANADA CARGO, CARGOJET CELEBRATE LAUNCH OF NEW SOUTH AMERICA FREIGHTER SERVICE Air Canada Cargo held a reception in Toronto June 7 at the Royal Woodbine Golf Course to celebrate the launch of its new freighter service. The new freighter service starts June 10 and will be operated with a Cargojet Boeing 767-300ER freighter aircraft with a 52 tonne capacity. Service begins with a flight to Bogota, Columbia and Lima, Peru Friday the 10th via Atlanta, Georgia, and the following day from Toronto to Mexico City. The new service offers great opportunities to capitalize on the network already
Left to right : Lise-Marie Turpin, Vice President, Air Canada Cargo, Jamie B. Porteous, Executive Vice President at CargojetAjay Virmani, President, CEO Cargojet airways, Marcel Forget, Senior VP, Commercial Strategy, Air Canada, Gord Johnston, Senior Vice President, Sales.
continued
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IN THE NEWS
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in existence, said Lise-Marie Turpin, Vice President, Air Canada Cargo. Shipments can be booked as are all other shipments with Air Canada Cargo, including online with the e-Booking tool and the Cargo Portal Services. “We hope we will be adding more frequency on these routes as traffic builds. It’s not just about in and out of Toronto but you can connect through any point in Canada through the Air Canada network and through our extensive truck network as well. We have trucking across the border as well, across the East, Central and Western U.S. border, and it also connects to our international service. We also wanted to build beyond the South America capability. So we have established agreements with other partners extending our reach into South America,” Turpin said. “So for me this is really about providing Canadian shippers, manufacturers and producers a great opportunity to meet your needs. We expect to broaden our reach as
the markets mature. We will be listening to you should you have any suggestions for any opportunities, and we are looking forward to your support,” she added. In April 2016 Air Canada and Cargojet Airways Ltd., a subsidiary of Cargojet Inc., announced they had finalized a commercial arrangement that will result in Air Canada Cargo introducing dedicated freighter services from Canada to Latin America and Europe with Boeing 767300ER freighter aircraft operated by Cargojet. Air Canada Cargo becomes the only provider of direct scheduled freighter service between Canada and Latin America. Under the arrangement, Air Canada Cargo said it also plans to introduce dedicated freighter service to Europe from Toronto in the second half of 2016. “This new arrangement builds on Cargojet’s long-standing relationship with Air Canada Cargo and is a win-win for both parties,” said Ajay K. Virmani, President and Chief Executive Officer of Cargojet. “It al-
lows us to optimize our overall freighter aircraft utilization and to expand our range of services and customer base with Air Canada.” CS
UPS CANADA WLD COMMITTEE CELEBRATES 10TH YEAR On Friday, May 27 UPS Canada’s Women’s Leadership Development (WLD) committee hosted a breakfast panel event in Mississauga. To honour the WLD’s 10th year anniversary at UPS, the theme of the panel was “Celebrating Women in Business” with the objective to host a discussion that encourages and enables the attraction, development and retention of women through networking, mentoring, education and communitybased involvement.
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Left to right: Victoria Lennox, Romaine Seguin, Grace Moores, Angie Wagenaar.
The 100 attendees had the opportunity to hear from a dynamic group of panelists that included Romaine Seguin, president, UPS Americas Region, Grace Moores, corporate account manager, Mompreneurs Canada and Angie Wagenaar, owner and health and leadership coach, Isagenix. The panel was moderated by Victoria Lennox, co-founder and CEO, Startup Canada. For the past 10 years, the WLD program has worked in harmony with other development programs at UPS. It is designed to provide an integrated and aligned series of tools and practices that brings talented women from before they join the company all the way to executive suite. Designed around building connections, the program is comprised of three interconnected components (UPS connections, business connections and community connections) that support internal networking sessions and membership in external business and community organizations. CS
12 July/August 2016 www.canadianshipper.com
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IN THE NEWS
KELLI SAUNDERS WINS OWIT WOMAN EXPORTER OF THE YEAR Kelli Saunders, President of Morai Logistics Inc., an independent business owner of Mode Transportation, was the recipient of The Woman Exporter of the Year Award from OWIT-Toronto (Organization of Women in International Trade-Toronto) on Thursday, June 9th 2016. Nominees had to have at least 50% ownership of a profitable business registered and operating in Ontario for more than 3 years. Nominees also had to have earned their primary income from the business and must have been responsible for its daily operations. A significant portion of Kelli’s company’s business had to have come from exporting products or services, said the release. The Woman Exporter of the Year Award honors an outstanding woman en-
trepreneur who, through her exporting endeavors, is advancing women and the image of Canadian business women in the international community. Saunders was presented this award for her company’s work with major fast-moving consumer goods companies as a third-party logistics provider with expertise in cross-border intermodal logistics in the US and Mexico. Jim Damman, President of Mode Transportation, said: “We are all very excited for Kelli. She is an outstanding businesswoman, and she and her team do a great job of providing the best export solutions to her valued customers. This award is very well deserved. Her hard
work in receiving this award is something that makes all of us very proud.” CS
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LATIN AMERICA TRADE
SEAMLESS LINKS Air cargo carriers fortify South America networks with additional lift BY IAN PUTZGER
A
ir Canada is back into the freighter business, this time with a different compass. Eight years ago the airline got rid of the last of its leased MD-11 freighters that had been flying east and west to China and Europe, and now it is fielding B767Fs to serve Latin American markets. The new venture, which kicked off in June, comprises two weekly flights to Mexico City via Dallas/Fort Worth and a weekly service to Bogota and Lima. The aircraft are operated by Cargojet, flying out of the cargo airline’s base in Hamilton. For customers, the link between Hamilton and Air Canada’s Toronto hub is seamless, says Vito Cerone, director of marketing and sales, Americas. Lise-Marie Turpin, vice president of cargo at Air Canada, re14 July/August 2016 www.canadianshipper.com
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veals that the partners intend to step up the frequencies by one additional weekly flight each before long, if the start works out as anticipated. “We know there is demand to Bogota, Lima and Mexico,” remarks Cerone, pointing out that a lot of cargo has been trucked from Canada to U.S. gateways, especially Miami, to catch flights to Latin America. “There is significant demand. Otherwise we wouldn’t start with three frequencies off the bat,” he adds. However, the new venture is not purely in response to Canadian forwarders’ long-standing complaints about lack of lift to the region. Air Canada is leveraging its entire network, feeding traffic from Asia as well as Europe to its southbound flights, and vice
© Gary Tognoni/iStock
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LATIN AMERICA TRADE
versa. “It is about the whole network, not just origin and destination traffic,” says Cerone. This may well be necessary, given that Latin America has lost some of its appetite for imports. Air cargo flows to Latin America have weakened across the board, reports Carmen Taylor, managing director for Latin America at American Airlines Cargo. This applies both to shipments from North America and traffic originating in Asia, she adds. Brazil, the former poster child of the region’s growth, has been hit the worst. Its GDP dropped an eye-watering 3.8 percent last year and the currency fell almost 50 percent against the U.S. dollar, sapping consumers’ and businesses’ appetite for imports and prompting foreign investors to look elsewhere. “We’ve definitely seen a decrease in traffic into Brazil. There has been a decrease overall, but with Brazil more than the other markets,” observes Joe Lawrence, president of Toronto-based airline GSA Airline Services International. With imports stifled by the steep drop of the real and its economic downturn, and hopes for reforms dashed by a political scandal that has paralyzed the legislature, Brazil offers little hope for a turnaround in the foreseeable future. “The situation we have in Brazil is the worst we have in the region,” comments Cristian Ureta, executive vice president of cargo at LATAM Airlines, the region’s largest carrier, adding that he sees no improvement on the horizon. Venezuela has also been challenging, notes Lawrence. Several airlines have pulled out recently. On the bright side, Argentina appears to be improving. “If I see one market changing, it’s Argentina. We see more cargo there,” remarks Ureta. “We see some signs of activity into Argentina,” concurs Lawrence but adds a note of caution. “There are a lot of restrictions in Argentina and also high duties.” Peru and Chile have been relatively stable, but overall the region is suffering from the end of the commodities boom that had fuelled their growth and the ensuing loss of buying power as their currencies declined. According to the International Monetary Fund, Latin America as a whole suffered an economic contraction of 0.3 percent last year. For local forwarders the going has been tough. Carlos Rios, general manager of Grupo Panamerica, which has offices in Colombia and Chile, says that higher costs mean his company works harder to maintain its level of income. To meet its objectives for this year, it will have to boost productivity and gain new clients but keep costs at last year’s levels, he says. The drop of local currencies has helped exports from the region. Outbound flows are overwhelmingly perishables, from flowers and fish to fruit and vegetables. While this traffic enjoys growing demand, it does not carry the yields that airlines need.
June 26 inaugural launch of Panama Canal expansion Grupo Unidos por el Canal SA, the consortium designing and building the Panama Canal’s new set of expanded locks, says they are at full operability and can receive their first ships. The inaugural launch of the $5.25 billion canal expansion was planned for June 26. Originally, the Canal was supposed to be completed in October 2014. China COSCO Shipping won the draw for the first transit through the Expanded Panama Canal during the waterway’s inauguration on Sunday, June 26. The shipping line’s container vessel Andronikos was to make the inaugural transit. The vessel, which has a maximum capacity of 9,400 TEUs, is 8.25 meters in beam and 299.98 meters in length. Panama Canal says that more than 100 Neopanamax ships have already made reservations for commercial transit through the new locks, which will begin on June 27, 2016, following the inauguration. “We are excited and prepared to continue providing the same reliable and efficient service within the Expanded Panama Canal that our customers have come to expect through the years,” said Panama Canal Administrator, Jorge L. Quijano. The Panama Canal invited its top customers to participate in the draw. Of the invited customers, those interested in participating were required to indicate the Neopanamax vessel’s name, type and dimensions that it planned to deploy on the inauguration day of the Expanded Canal. The Executive Vice Presidency for Operations verified that each submission complied with the Panama Canal’s requirements. The proposed vessels were required to not surpass a maximum beam of 49 meters and a maximum overall length of 366 meters. In addition, the maximum draft or point of immersion for the inaugural transit is 12.5 meters. On April 18, 2016, the Panama Canal began accepting transit bookings for Neopanamax vessels for commercial transits through the Expanded Canal, which will begin on June 27, 2016. The Canal will offer four additional slots per day for Neopanamax vessels, in addition to the existing 25 slots for the existing Canal. The first commercial transit reservation was granted to a liquefied petroleum gas (LPG) tanker LINDEN PRIDE of Nippon Yusen Kaisha (NYK Line), represented by shipping agent Norton Lilly International (Panama), S.A. The vessel has a length of 754.59 feet and a beam of 120.08 feet.
continued
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LATIN AMERICA TRADE
continued from page 15
shrunk its freighter fleet to align capacity better with demand. Over the past two years it has taken four B767 freighters as well as a larger B777F out of the network. The merger of LAN with TAM has shifted the focus of the cargo division more to the bellyhold capacity of the amalgamated carrier, notably the international widebody
“Those are commodities. We cannot charge high rates for them,” comments Ureta. “We need to balance this with return cargo. Without enough cargo coming into the region from Europe and the U.S., the situation is bad.” As elsewhere, freighter operators have been hit particularly hard. LATAM has
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flights, but the decline of the market has intensified the need for capacity reduction. To the frustration of Ureta and other cargo executives, bellyhold capacity has been building up in the region, especially passenger flights from external players, such as Middle Eastern airlines like Qatar Airways, Etihad and Emirates, but also US carriers like American. There have been a few reductions and outright cancellation of individual routes. This summer flights to Rio are set to increase for the duration of the Olympics, but this is likely going to be purely a temporary rise in capacity. “This is driven by passenger demand for the Olympics. It’s tactical,” comments Cerone. Even without these additional flights, the market is saturated, carriers and forwarders agree. Ureta notes that the number of international routes into Latin America has kept growing, most pointedly to Brazil. Until about three years ago, most international belly lift was concentrated on a small number of major gateways, but many new flights have been placed outside the major trunk routes since, building up international connections for second-tier cities in the region and direct links to up and coming US gateways like Dallas/Fort Worth, he remarks. Moreover, it is not only the direct capacity into the region that is depressing rates and yields. Lawrence points out that some Canadian exports to Latin America are leaving this country on aircraft headed for Europe, as European airlines fly the cargo to Europe and feed them into their own departures to Latin America. With yields across the Atlantic well south of the 50 cent per kilo mark, they offer prices to Brazil and Chile that are lower than his own rates on direct services from Canada to the region. Among other carriers, Airline Services International markets the capacity of the Avianca group, which operates the second-largest network in Latin America. It also sells space on UPS. This combination allows the GSA to offer direct lift to Latin America for small parcels on narrowbody flights out of Canada, widebody belly capacity out of New York and freighter capacity from Miami - all on Avianca - plus an indirect freighter routing on UPS via Louisville and Miami. Here and there the passenger flights have been cut in response to the downturn. One of those casualties was Ameri-
16 July/August 2016 www.canadianshipper.com
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LATIN AMERICA TRADE
can Airlines’ route from Miami to Viracopos airport in Sao Paulo. Until the liberalization of Brazil’s major airports in preparation for the rise in traffic due to the soccer world cup two years ago, Viracopos was the freighter gateway for Brazil’s commercial hub, while passenger flights were going to Guarulhos airport, which is closer to downtown Sao Paulo. In the wake of the liberalization, the new management at Viracopos built a passenger terminal and pursued passenger links. For the cargo side, this brought the prospect of becoming a regional hub, utilizing a growing route network, but the downturn has put the brakes on these ambitions. The airport suffered a 20 percent decline in cargo volume last year. Nevertheless management is continuing its efforts to elevate its capabilities. Last year a new warehouse management system was phased in, and this April saw the opening of a ‘supersafe’ with footprint of nearly
1,600 sq m that was deployed with the aid of security specialist firm Brinks. According to Adam Cunha, assessor of the airport’s cargo business, the high-security structure is the only one of its kind in Latin America. To attract a growing share of the healthcare and pharmaceutical traffic, Viracopos is working to burnish its credentials. It is in the process of obtaining certification of its processes and set-up under the Centre of Excellence for Independent Validators for pharmaceuticals scheme championed by IATA, the international airline organization. Pharmaceuticals are one segment of air cargo that have maintained their growth momentum, and commandd higher yields, owing to the special equipment and expertise required to handle them. LATAM Cargo is also looking to boost its share of the pharmaceutical traffic to and within the region. The airline is in the process of building up
some special services for cargo that requires special handling, and the first product that was announced is for pharmaceuticals and medical equipment. While carriers and airports are working to up their game, Brazil’s customs organization has shown little enthusiasm for reforms to facilitate the business for carries, forwarders and shippers. “Brazil is still pretty much status quo with documentation. If you haven’t made sure that you dot your Is and cross your Ts, you will face delays. This has not changed,” remarks one industry executive.. 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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APPAREL LOGISTICS
The ‘inexorable march’ of transparency HARNESSING DATA TO DRIVE SUSTAINABLE SUPPLY CHAINS BY JULIA KUZELJEVICH
T
im Wilson, co-founder and Director, Historic Futures, has been involved in supply chain mapping for over 20 years,
and is an expert in product integrity and traceability, all of which have become paramount in apparel supply chains. Wilson worked for a company that wrote software for farmers at the time of the mad cow disease outbreak in the UK (which began in 1986). The country spent 3.6 billion pounds resolving that problem, Wilson said. That was the beginning of his involvement in how you get the data to move in supply chains in concert with the flow of goods, and not just finished goods. In an interview with Canadian Shipper, Wilson discussed transparency “blind spots” and how Historic Futures aims to address the problem. 18 July/August 2016 www.canadianshipper.com
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or anything-it wasn’t about consumer messaging, it was about corporate performance. And the issue was, how were they going to collect the data to demonstrate how much organic cotton had ended up in Wilson: It turns out that problem is their finished goods? In order to be prevalent everywhere-it’s one of the able to make verifiable statements data types that is almost completely Tim Wilson they needed to be able to collect absent from life. You can’t Google data. We’d never done any work with fash‘where did my table come from’. Culturally ion-we are accidental participants in the it’s become kind of a blind spot for most fashion industry. people. You’d have to go back three or four generations where it wasn’t a problem. Globalization kind of hadn’t happened-we Canadian Shipper: Do you foresee more or hadn’t had the big logistics unbundling/ less collaboration in future in terms of what telecom unbundling that allowed massivecompanies will be willing to share? ly distributed manufacturing to happen. The causative event for setting up HisWilson: My view is that the march of toric Futures 13 years ago was a phone call transparency is inexorable. I can’t see any with Nike. At the time they were launchcultural trends, notwithstanding personal ing a range of blended organic cotton privacy, but I can’t see any corporate wear, sourcing organic cotton from organtrends that are against the tide of transic farms and blending it with conventional parency or any regulatory trends. My ascotton. They weren’t labelling the product sumption is that the regulatory trends will Canadian Shipper: What happens prior to products becoming a ‘finished good’, and how do we collect that data?
©iStock/Thinkstock
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APPAREL LOGISTICS
continue to grow that require increased disclosure. So therefore if you are now my supplier, I have not just a legitimate reason to collect information from you and potentially from your supplier, but as the regulatory frameworks become more sophisticated, better monitored, and more wide-ranging, then I actually say to you, these are my data disclosure requirements for you as a supplier, so unless you can sign up to those then I can’t buy stuff from you. So my guess is that is the process that starts to unlock this stuff. At the moment you just want the business, but in a slightly more nuanced future (it could become a situation of) yes, I will buy this from you but there are conditions attached. Canadian Shipper: What will it take to get participation in this from more fashion supply chain players, especially those concerned about competition? How is the documentation recorded/retrieved in the system and what can they actually report on if necessary? Tim Wilson: Over the last ten years we have
worked with some of the world’s largest brands and retailers to collect accurate data about millions of items from thousands of businesses throughout hundreds of value chains - from finished product back to raw material. We developed an online solution, called String 2, that allows organisations throughout the value chain to share selected information related to the products they make with the customers who buy them. Many organisations are using String 2 to manage their data right now. Our learnings from String 2 led us to create something much simpler in String 3. Questions like “which country did the raw materials come from that are in my product?” are very difficult to answer - many people in many organisations need to be involved to get reliable answers. String 3 makes it simple - just ask your question to the organisation who supplied your product, and the system will do the rest - moving the question along, getting answers and keeping you informed of progress. My thesis has always been that we need to get better, more transparency into global supply chains and the reasons for that are manyfold: there are straightforward, good commercial practices, for example the ability to manage quality, and velocity and wastage, but I have always been driven
by a triple bottom line, sustainability-related motive, and actually 80% of the impact of most of the stuff we buy happens back in the supply chain somewhere, and we don’t actually know where it is. We don’t know who is doing it or how it’s happening-we won’t have any meaningful impact if we don’t start collecting that data. String 2 was a really big march forward that said we can deliver radical transparency into global commodity supply chains. And really it was a case of pushing back against the existing narrative which just said it couldn’t be done. Using String 2, with a retailer, we tracked 12.5 million items back to country of origin through 700 third party production sites off 6.5 thousand PO’s in just over 12 months. And that was just to give a sense of, you really could do this. What we discovered as we went through it was that the costs of collecting the data were higher than the customers were prepared to pay for. So we stopped doing the String 2 thing having proved that it was technically possible to do. String 3 was a case of going back to the drawing board and saying, ok, we can’t do that, we can’t go from the situation we have today you could describe as “radical opacity”, where most people know nothing about most things most of the time. And we were trying to get to, most people know some things about most things most of the time. So we said where could you move the slider to? We still believe the direction of travel is towards more transparency. With String 3 we are writing business cases that say, it currently costs you $40 to do the inquiry and we’ll do it for $30, ( for example). The work that we’ve done we estimate that it takes between 3-4 hours per inquiry. If you’re sat in a brand or retail headquarters in Canada and someone says I need to know where the fibers came from that ended up in this garment, and you’ve got that job, it’s a minimum of three to four hours of your time to get those answers. You don’t have to change your business process, you don’t have to train a lot of people. It’s really radically reduced barriers to entry for people getting started on this journey of getting more data. Canadian Shipper: What about documentation and the elements that you require from users of the product, in order to gather data? Tim Wilson: In order to make this propo-
sition work we have zoomed in on the one
area that doesn’t require you to have extensive coverage of the network and that is risk management. So if you’re sat there in your brand or retail headquarters and you’re saying we’ve got some reputation and/or regulatory risk associated with the products we’re importing and selling (that could arise from import duty, illegal deforestation, etc.) we apply this risk framework to the product portfolio and say we’re going to focus in on these 20, because these are the 20 we believe are the highest risk. Supply chain mapping is only relevant at the product level. There is no general supply chain map. Once you get beyond Tier 1, you can take that same product off the shelf, and six months later the primary producers will be different. So the supply chain map isn’t about the product. It’s about the shipment of goods, if you want to do it accurately. Do a risk assessment process, and then dig deep on specific products. So we take our 20 products and then in String 3 we send the questions to the suppliers of those products about specific instances of supply. We can then correlate that with our risk assessment and say, was it low or high risk? If it’s flagged as high risk and then we have to revert to a manual process, where we probably then pick up the phone to "Bob" and say, that’s flagging up red on our risk dashboard, we’re going to have to do collect some additional information from the supply chain in order to satisfy ourselves that it’s ok. Canadian Shipper: Where are the holes in the system? What more can we potentially be asking? Tim Wilson: In terms of the development of the String 3 platform we have a backlog of things we want to build. Some of it is about making it easier, some of it is extending capabilities.The issue is that most people in the world are not engaged in this process at all. The biggest issue we have is getting people to think about it in the right way. CS
Editor Julia Kuzeljevich has been writing about transportation issues for 15 years. Her articles have garnered several transportation and Canadian Business Press writing awards. www.canadianshipper.com July/August 2016 19
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APPAREL LOGISTICS
Talking about a Revolution An illustrative look at how much brands disclose about their supply chains Fashion Revolution Day has grown to become a week of events and activities ending on the 24th of April, the anniversary of the Rana Plaza disaster in Bangladesh. The objective of the week is to get a commitment from the whole fashion supply chain towards transparency across the length of the value chain. The team behind Fashion Revolution Week this year launched the Fashion Transparency Index. They surveyed 40 brands from Prada to Primark about their supply chains. Out of the 40 brands, only 10 answered their questionnaire, with some stating that competition was an issue for their reluctance to reveal how and where they manufacture. According to Carry Somers, who compiled the top 10 Fashion Transparency Index FAQ, the Index comes as a result of the partnership between Fashion Revolution and Ethical Consumer. The Index ranks companies according to their level of transparency based on a questionnaire and publicly available information about supply chain issues. In terms of methodology, the Transparency Index uses a broad brushstroke approach. It has been designed to give an illustrative look at how much brands disclose about their supply chains, what kind of policies they have in place and, importantly, how much they share with the public about their practices and products. The Index uses a ratings methodology, which benchmarks companies’ publicly facing information against basic best practice in supply chain transparency in five key areas. The areas were: policy and commitment (standards and goals the company sets itself for the protection of workers and the environment across its supply chain), tracking and traceability (how well does the company know its supply chain, what information do they share publicly about who and where products are made), audits and remediation (how does the company go about checking its supply chain for compliance with its policies, international standards and local laws? How does the company deal with its
suppliers that fail to meet these obligations? How much information do they make public about these activities?, engagement and collaboration (to what extent does the company work with multistakeholder initiatives, NGOs, unions and civil society to tackle social and environmental issues in its supply chain? and governance (what checks and balances does the company have in place and who is responsible within its own organization for ensuring initiatives that address labour standards are implemented? Ethical Consumer were the lead researchers and have been designing indices of this kind for 25 years. What is meant by transparency? Transparency means companies know who makes their products – from who stitches them right through to who dyed the fabric and who farmed the cotton. When companies are working in a transparent way, this also implies openness, communication and accountability across the supply chain and with the public too. To be clear, some brands’ high scores doesn’t mean that they have fully transparent supply chains. They still have a long way to go in working with suppliers down the supply chain right through to raw materials and communicating with the public about their practices and products. The index was commissioned because the vast majority of today’s fashion brands do not own their manufacturing facilities, making it difficult to monitor or control working conditions throughout the supply chain. A brand might place an order with one supplier, who carves up the order and subcontracts the work to other factories. This happens regularly across the industry and presents a great challenge for brands themselves as well as the people working in the supply chain who become invisible in this process. Brands were chosen by their large annual turnover, and on information that could be found publicly. Brands definining themselves specifically as ‘Fashion Brands’, not as supermarket or other
20 July/August 2016 www.canadianshipper.com
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By Julia Kuzeljevich multi-channel brands and which are selling globally were chosen. A cross-section of different sectors – high street, luxury, accessories and footwear, sportswear and denim, was queried. The Transparency Index aims to inspire brands and retailers to publish more about their policies, practices, products and the people making their clothes – answering the question #whomademyclothes. The Index revealed that in terms of the strongest areas, the majority of the companies scored well on having policies on environmental and labour standards but an absence of long-term thinking in sustainability strategies. When it comes to auditing and remediation, while most companies provide information on audit procedures and schedules publicly, the index found that roughly 28% of companies “don’t communicate about taking any special measures to monitor the more difficult issues in the supply chain, nor disclose in detail how they work with factories that show noncompliances in order to ensure they improve working conditions. Weakest areas, meanwhile, were in tracking and traceability. While just over half of companies surveyed (60%) seem to be making efforts in this area, such as holding internal databases of their cut-make-trim suppliers, or first tier of the supply chain, the ‘second tier’ of the supply chain, and third, fourth, etc. seems to remain “largely unknown territory” for most companies surveyed, the Index revealed. Only 11 companies in the Index, meanwhile, showed evidence of working with trade unions, civil society or NGOs on the ground in supplier countries to improve working conditions. The aim of Fashion Revolution going forward is to encourage brands to publish more details about the suppliers they work with, to encourage them to put in place sustainability strategies with clearer long-term goals including timelines and quantifiable targets. CS ©Iamnee/iStock
2016-06-28 12:36 PM
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2016-06-29 7:21 PM AM 16-05-24 4:25
2016
UP TO THE CHALLENGE
SHIPPER’S CHOICE
Our 15th Annual Shipper’s Choice Awards Survey sets industry benchmarks for performance excellence and identifies the 40 carriers who exceed them
T
he economy may be up; the economy may be down. Shippers may be feeling optimistic about future freight volumes or fretting about their inventory levels. Carriers may be growing and investing in new equipment or hanging tight and sweating their assets. The only thing that seems constant when it comes to transportation is that shipper expectations about carrier performance will most likely continue to be higher year after year no matter what the circumstances and that a select group of carriers will do whatever it takes to meet those expectations. These constants have been borne out once again this year with our research showing that the bar for carrier performance has risen for almost every mode compared to the previous year. This despite the fact the Canadian economy remains sluggish and shippers remain fixated on competitive pricing. Clearly some carriers are finding the sweet spot between being lean enough to provide competitive pricing and providing excellent service. This report reflects the research we conduct annually in an attempt to provide buyers of transportation services with consistent, national and scientifically derived benchmarks of excellence for carrier performance in each mode. This year 40 carriers managed to surpass the Benchmark of Excellence in our 15th Annual Shipper’s Choice Awards Survey. Particularly impressive are the
Geographic distribution of respondents
20%
48%
32%
Western Canada
Central Canada
Eastern Canada
carriers who have scored above the benchmark of excellence for five years in a row to be awarded our special “Carrier of Choice” designation. To see these winners, turn to the final page of this report. Our survey provides shippers, 3PL service providers and freight forwarders across Canada with the opportunity to set benchmarks for carrier performance on eight key performance indicators (KPIs) and to rate their top carriers against those benchmarks. Aside from identifying the best carriers across all modes through this process, survey respondents also provide clear indications of the different values Canadian buyers of transportation services place on each key performance indicator (KPI) based on mode as well as a comparison of how high these standards are set for each mode. (For example, transportation buyers set their highest standard on information technology for couriers while expecting TL carriers to live up to the highest standard for competitive pricing.) The importance survey participants place on the KPIs for each mode (based on a five-point scale) is used as a weight in calculating carrier evaluations. Survey participants then rate up to three of their main carriers in each mode (again on a five-point scale.) The final weighted score for each carrier is derived by multiplying the carrier’s average performance score by the average importance rating for each continued
Importance Of Performance Criteria Mode
On-time performance
Quality of equipment & operations
Information technology
Competitive pricing
Customer service
Leadership in problem solving
Ability to provide value-added services
Sustainable transportation practices
LTLTrucking
4.768
4.377
4.104
4.689
4.723
4.445
3.662
4.079
TL Trucking
4.850
4.518
4.154
4.733
4.645
4.439
3.893
4.178
Ocean Carriers
4.637
4.452
4.384
4.761
4.641
4.494
4.068
4.207
Couriers
4.866
4.418
4.599
4.751
4.682
4.417
3.914
4.197
Air Carriers
4.899
4.560
4.614
4.684
4.673
4.559
4.024
4.205
Rail Carriers
4.586
4.430
4.331
4.745
4.601
4.345
3.921
4.248
22 July/August 2016 www.canadianshipper.com
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OA
All-Connect and Shuttle Express would like to extend our sincerest gratitude to all of our customers for helping us raise & achieve the industry standard in the LTL & Truckload categories for the 6th consecutive year
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value in motion
2016-06-28 12:44 PM
2016
SHIPPER’S CHOICE
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. As a result, of the hundreds of carriers rated in our survey, only a very few are deemed by participants’ evaluations as providing a service so superior that it warrants a Shipper’s Choice Award. Carriers receive the Shipper’s Choice Award when their total score meets or surpasses the total benchmark of excellence for their mode. Only those carriers who exceed this benchmark have their names and scores included in the following tables. Average shipper satisfaction ratings for each KPI are shown by mode. The final
column on the right shows the total benchmark of excellence set for each mode. The benchmarks for each of the eight KPIs per mode are indicated with each modal table on the following pages. Invitations were sent to more than 6,000 of our readers who are buyers of transportation services in the manufacturing, retail and other sectors as well as to individuals responsible for managing shipments within the freight forwarding and 3PL sectors. Carriers must receive a minimum number of evaluations in order to qualify for the award. It should be noted that this year winning was made all the more difficult because we once again raised the number of evaluations necessary to qualify for the award for almost every mode. In order to boost response, carriers were given the opportunity to forward the survey to their own customer lists. Not all carriers chose to do so, however. To prevent tampering, we check for multiple cases submitted by known respondents. If continued
Shipper Satisfaction Ratings By Mode Mode
On-time performance
Quality of equipment & operations
Information technology
Competitive pricing
Customer service
Leadership in problem solving
Ability to provide value-added services
Sustainable transportation practices
Total satisfaction score
LTLTrucking
20.55
18.67
16.46
20.05
20.11
17.99
14.63
16.61
145.068
TL Trucking
21.34
19.59
16.40
20.42
20.16
18.49
15.63
17.17
149.208
Ocean Carriers
19.47
18.47
17.57
19.95
19.23
17.59
15.16
16.43
143.851
Couriers
20.88
18.71
19.16
19.44
18.40
16.47
14.46
16.45
143.962
Air Carriers
21.86
19.90
19.53
19.73
20.00
19.03
15.91
16.81
152.772
Rail Carriers
17.93
17.75
16.95
19.03
17.08
15.29
13.53
16.16
133.712
24 July/August 2016 www.canadianshipper.com
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OUR EFFORTS CROWNED ONCE AGAIN!
For the 5th consecutive year, Transport Guilbault has received an excellence award from the Shipper’s Choice Awards surveyed by the Canadian Shipper Magazine. We have surpassed the benchmark of excellence performance in the LTL mode and have distinguished ourselves in the following: • Customer service; • On-time delivery;
• Quality of equipment and operations;
• Problem solving;
• Information technology.
With this special recognition, we are now honoured with the title Carrier of Choice.
Thanks to our customers for their trust year after year as well as our employees' efforts! 1.888.880.3801
www.groupeguilbault.com
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2016
SHIPPER’S CHOICE
lion. Their annual supply chain budgets range from less than $100,000 up to more than $25 million. More than a third spends over 70% 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, two associations whose members are responsible for the purchase of transportation numbering 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.
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.) About 10,000 evaluations of carriers from all modes providing services in the Canadian market were cast. As with past years, survey participants represent every region across Canada and buy transportation services for companies with annual sales ranging from less than $5 million up to more than $2 bil-
Sectoral distribution of respondents
Annual supply chain budget
Third-party logistics
Retail
12%
17%
More than $20M Freight forwarding
Manufacturing
42%
15%
7% $5M - $10M
22%
13%
$10M - $20M
8%
Less than $100,000
21%
8%
$100,000 $500,000
Other sectors $1M - $5M
21%
15% $500,000 - $1M
Gross annual sales
28%
21%
12%
11%
8%
9%
6%
7%
5 million or less
Over 5 million to 15 million
Over 15 million to 30 million
Over 30 million to 60 million
Over 60 million to 100 million
Over 100 million to 500 million
Over 500 million to 2 billion
Over 2 billion
26 July/August 2016 www.canadianshipper.com
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Hercules
Leading performance
2016
SHIPPER’S CHOICE
T
their LTL carriers, ranking this mode’s performance on that KPI better than any other mode other than TL trucking. Seventeen carriers surpassed our Benchmark of Excellence this year, up from 13 who did so last year. LTL winners and their scores for each of our eight KPIs are shown in the table below. The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right. The winners are shown in alphabetical order and only those scoring above the total Benchmark of excellence are included.
here were more than 3,600 evaluations cast by Canadian shippers for the LTL category. Customer service is considered highly important for shippers purchasing LTL transportation, ranking just behind on-time performance and followed by competitive pricing. In fact, the customer service expectations for LTL are the second 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 competitive pricing performance of
LTL Motor Carrier Award Winners
Total no. of shippers evaluating carriers in this mode: 2,392 Total carrier evaluations: 3,671 Benchmark of Excellence: 145.068 Carriers
On-time performance
Quality of equipment & operations
Information technology
All Connect Logistical Services
20.96
19.36
16.48
Armour Transportation Systems
20.70
18.78
16.23
Competitive pricing
Customer service
Leadership in problem solving
Ability to provide value-added services
Sustainable transportation practices
21.57
22.69
20.19
20.38
20.41
15.89
17.49
18.36
15.68
17.16
Bourret Transportation
21.00
19.76
18.69
20.34
20.93
19.16
15.65
16.96
Cavalier
22.58
20.94
18.55
21.86
22.98
20.85
17.69
18.81
CCT Canada
21.84
18.54
16.42
20.72
21.48
19.11
15.56
16.90
Dicom
20.85
19.55
16.35
19.69
19.52
18.22
15.09
16.32
Guilbault Transport
21.55
19.08
16.97
19.95
21.45
19.42
15.00
17.24
GX Transportation
22.89
20.35
18.70
21.45
22.91
21.22
16.78
19.09
Hercules
22.34
19.96
18.29
21.49
22.59
20.22
16.15
18.08
Minimax Express Transportation
21.83
19.50
16.91
20.92
21.02
19.36
15.81
17.53
Normandin Transit
21.46
21.50
14.61
18.89
20.84
20.88
14.22
16.14
Polaris
21.41
20.12
18.49
21.39
21.14
19.49
15.37
18.25
Robert Transport
20.38
19.25
17.29
18.86
20.39
18.00
15.45
17.40
Seaway Express
23.29
20.43
17.52
21.94
23.02
20.60
16.91
18.74
Spring Creek Carriers
22.72
20.77
17.38
20.65
22.41
20.14
16.06
17.86
Trans-pro
22.42
20.44
18.21
21.45
22.78
20.32
16.86
18.36
Van Kam
22.04
18.77
16.42
18.13
21.31
18.65
13.81
16.19
Benchmark of Excellence
20.55
18.67
16.46
20.05
20.11
17.99
14.63
16.61
28 July/August 2016 www.canadianshipper.com
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Hercules New Carrier ad-CDN Shipper.qxp_Layout 1 2016-06-23 4:43 PM Page 1
There comes a time in every traffic manager’s life when they want to start seeing other carriers. That’s us — nice to meet you! Learn more at youtube.com/user/herculesfreight
herculesfreight.com
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Leadership quality
2016
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. Once again, 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 – quality of equipment & operations; customer service; leadership in problem solving; ability to provide value-added services; and sustainable transportation
practices. And to top it off, buyers of transportation services score the TL mode highest when it comes to satisfaction with competitive pricing. More than 1,500 shippers cast more than 2,100 carrier evaluations for the TL category. Eleven carriers surpassed our Benchmark of Excellence this year. TL winners and their scores for each of our eight KPIs are shown in the table below. The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right. The winners are shown in alphabetical order and only those scoring above the total Benchmark of excellence are included.
TL Motor Carrier Award Winners
Total no. of shippers evaluating carriers in this mode: 1,518 Total carrier evaluations: 2,122 Benchmark of Excellence: 149.208 Carriers
On-time performance
Quality of equipment & operations
Information technology
Competitive pricing
Customer service
Leadership in problem solving
Ability to provide value-added services
Sustainable transportation practices
All Connect Logistical Services
21.92
19.86
17.58
22.11
22.55
20.59
16.68
18.12
Armour Transport
21.68
20.20
16.95
20.51
20.66
19.06
17.12
17.48
Cavalier Transport
23.67
21.19
19.14
22.06
22.67
20.98
18.90
19.41
Hercules Freight Forwarding
23.29
21.44
19.85
22.69
22.67
21.15
18.18
19.42
IFS - Interstate Freight Systems
21.63
20.39
16.73
19.70
19.21
18.24
15.35
18.18
Keltic Transportation
22.60
19.73
16.47
20.32
19.49
19.47
16.14
17.69
MacKinnon Transport Inc.
23.00
21.13
18.48
20.92
21.72
20.19
17.91
18.01
Midland Transport
21.97
19.68
17.45
20.25
19.92
17.93
16.56
18.05
Penner Truck Lines
23.00
21.33
17.97
21.91
22.31
19.72
16.71
18.64
Transpro Freight Systems
23.16
21.10
18.31
21.89
22.18
20.49
18.38
19.00
XTL Transport
22.70
20.21
17.80
20.13
21.95
20.39
16.90
18.27
Benchmark of Excellence
21.34
19.59
16.40
20.42
20.16
18.49
15.63
17.17
“
30 July/August 2016 www.canadianshipper.com
shipersch p22-38 CdnShipper JulyAug2016_ShippersChoice.indd 30
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OUR PROMISES GET DELIVERED... C O N S I S T E N T LY
RECIPIENT OF CANADIAN SHIPPER’S “CARRIER OF CHOICE” AWARD
Over 350 Power Units
Operating from seven terminals in Canada and the USA, we offer swift and reliable truckload service to most of North America. That, combined with our no nonsense commitment to customer service has helped Penner become the transportation provider of choice for customers who need to keep their promises, wherever they need to ship in North America. As a Canadian Shipper “Shipper of Choice”, our promises do get delivered....consistently.
and 800 Trailers
Fully EDI capable Up to date Technology Single point of contact 93 years of experience Cross border TL carrier
TERMINAL LOCATIONS Mississauga, ON Winnipeg, MB Saskatoon, SK • Regina, SK • Calgary, AB • Edmonton, AB • Vancouver, BC • Fargo, ND •
•
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2016-06-17 2:50 PM 2016-06-28 12:44 PM
Mastering faster
2016
SHIPPER’S CHOICE
M
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 e-commerce sales. Keeping up with on-time 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 Canada where less populated city centres are separated by greater distances than is the case in the U.S., excellent courier service must meet many obstacles.
Still, there are couriers who prove more than capable of managing this tightrope of expectations. Eight companies surpassed the benchmark this year. There were 1249 shippers who provided more than 2,100 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. The winners are shown in alphabetical order and only those scoring above the total Benchmark of excellence are included.
Courier Award Winners
Total no. of shippers evaluating carriers in this mode: 1,249 Total carrier evaluations: 2,110 Benchmark of Excellence: 143.962 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
TNT Express Worldwide
21.65
18.84
19.61
22.11
19.40
16.86
15.14
15.55
Armour Courier Services
22.17
19.44
18.71
21.33
20.60
19.39
16.27
17.73
Schenker
20.47
18.43
17.76
19.66
19.70
17.52
15.97
15.19 17.45
Midland Courier
22.44
20.10
19.24
20.85
20.48
18.41
16.16
Cardinal Courier
21.13
18.90
17.99
21.47
19.68
18.58
15.35
17.95
Fed EX
21.63
19.48
20.33
19.11
18.79
16.76
14.57
16.57
Dicom
20.63
18.63
18.71
20.06
18.07
16.63
14.88
17.09
Tiger Courier
21.04
18.07
17.30
22.15
19.21
15.73
14.75
16.06
Benchmark of Excellence
20.88
18.71
19.16
19.44
18.40
16.47
14.46
16.45
Experience what our customers are talking about.
6
Superior Quality Service Flexible Solutions Value for your transportation spend 1-888-MIDLAND
www.midlandcourier.com
8
CONSECUTIVE YEARS
32 July/August 2016 www.canadianshipper.com
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2016-06-28 12:44 PM
2016
Sky-high results
SHIPPER’S CHOICE
A
irfreight is a high cost business for both the buyers and the providers of the service. And in this game on-time performance is definitely king. That’s followed by the 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 Cargojet, Cathay
Pacific and KLM Cargo/Air France Cargo. Airfreight carrier winners and their scores for each of our eight KPIs are shown in the table below. The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The winners are shown in alphabetical order and only those scoring above the total Benchmark of excellence are included.
Air Carrier Award Winners
Total no. of shippers evaluating carriers in this mode: 351 Total carrier evaluations: 526 Benchmark of Excellence: 152.772 On-time performance
Carriers
Quality of equipment & operations
Information technology
Competitive pricing
Customer service
Leadership in problem solving
Ability to provide value-added services
Sustainable transportation practices
Cargojet
23.12
21.15
19.70
20.84
22.20
20.64
17.31
18.36
Cathay Pacific
22.05
19.76
19.42
19.71
20.83
19.38
14.08
18.22
KLM Cargo/ Air France Cargo
21.65
20.13
19.50
21.08
21.19
20.18
14.90
17.66
Benchmark of Excellence
21.86
19.90
19.53
19.73
20.00
19.03
15.91
16.81
THREE CONSECUTIVE YEARS AS THE SHIPPER’S CHOICE IN... COURIER
•
LTL
•
T RUC KLOA D
Armour Transportation Systems is the only carrier in Canada to win the Shipper’s Choice Award in all 3 modes for the last three years. From all of us at Armour, we would like to say thank you for your continued support!
34 July/August 2016 www.canadianshipper.com
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Riding the wave
2016
SHIPPER’S CHOICE
P
rice is repeatedly the top criteria in selecting a marine carrier in our survey. Yet the many newbuilds leave investment costs that have to be recovered. The industry’s major players have been forming alliances in an attempt to shore up freight rates as well as raise ROI and reduce high-capital investments. Buyers of marine services however remain concerned about the impact on customer service and
on-time performance. Marine winners and their scores for each of our eight KPIs are shown in the table below. The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right. The winners are shown in alphabetical order and only those scoring above the total Benchmark of excellence are included.
Ocean Carrier Award Winners
Total no. of shippers evaluating carriers in this mode: 503 Total carrier evaluations: 585 Benchmark of Excellence: 146.188 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
NYK
20.29
19.34
19.18
20.09
20.16
17.98
16.43
16.55
Oceanex
19.75
18.84
17.28
18.77
19.23
17.85
15.50
17.08
Benchmark of Excellence
19.55
18.86
17.72
20.13
19.57
17.94
16.00
16.61
36 July/August 2016 www.canadianshipper.com
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CARRIERS OF CHOICE
2016
SHIPPER’S CHOICE
Consistency of performance deserves a special award
C
arriers are presented with this prestigious award if they have demonstrated the consistency necessary to attain the highest levels of service by surpassing the industry Benchmarks of Excellence set in the Shipper’s Choice Awards Survey for a minimum of five consecutive years. This is a particularly difficult task because aside from having to maintain consistent excellence
in their operations, carriers will have to meet a likely rising standard set by shippers from year to year while also responding to changing priorities. To remain part of this exclusive fraternity, carriers must requalify each year by having surpassed the Shipper’s Choice Awards Benchmark of Excellence for five consecutive years. Congratulations to the 2016 Carriers of Choice.
Congratulations to the 2016 Carriers of Choice
CARR OF CH IER OIC E
• All Connect Logistics Services
• MacKinnon Transport
• Cardinal Couriers
• Midland Courier
• Cargojet
• Penner International
• Cavalier Transportation
• Polaris Transportation
• FedEx
• Groupe Robert
• Guilbault Group
• Tiger Courier
• GX Transport
• TransPro Freight
• Hercules
CCT Canada, proud recipient of the 2016 Shippers Choice Award!
System
1.866.576.4CCT(4228) WWW.CCTCANADA.COM
In making the move to CCT Canada, you will be not only choosing a carrier but a business partner who believes that your success directly benefits our business. CCT Canada is committed to providing consistent quality customer service day in and day out.
38 July/August 2016 www.canadianshipper.com
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CONSECUTIVE
YEARS OF
AWARD WINNING
PERFORMANCE
THANK YOU FOR YOUR SUPPORT
1.800.409.2269 info@polaristransport.com
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INTERNATIONAL TRANSPORT FORUM
International Transport Forum Summit celebrates 10th anniversary
T
he Organization for Economic Cooperation and Development’s annual International Transport Forum is celebrating 10 years of existence this year with continued funding and a renewed mandate. This year’s ITF summit, held in Leipzig, Germany, examined Green and Inclusive Transport. Transport is a key enabler of trade but also of welfare for people worldwide, noted Jose Viegas, Secretary-General of the ITF, at the kick-off press conference May 18. Transport activity is responsible for over a quarter of fossil fuel related CO2 emissions. It is the one major sector that has not achieved a downward pathway, but still has CO2 emissions rising, he noted. This year’s summit saw 1077 participants from over 71 countries. Today the ITF has 57 member countries. Several dozen ministers attended for the deliberations; from ITF member countries but also from non-members such as South Africa, Thailand
Canada's Transport Minister, Marc Garneau, congratulates the ITF Summit on its 10th anniversary. (All photos courtesy International Transport Forum)
or Mongolia, Viegas said. Mr. Kitack Lim, Secretary General of the International Maritime Organiza-
International Transport Forum Head of Communications and Media Michael Kloth (centre), poses with the Media Travel Program at the conference gala in Leipzig. Canadian Shipper's Julia Kuzeljevich was invited to attend the 2016 ITF, joining a group of nonEuropean journalists in covering the event.
tion, attended the Opening Plenary session and spoke on the panel. In December 2015, in Paris, France, governments of some 180 nations agreed on a framework to achieve carbon neutrality. “Transport is not mentioned in the Paris agreement. It is referenced in some of the national commitments, but mostly in a very general way and with a lot of wishful thinking,” Viegas said. “So COP21 has thrown the transport sector a big challenge-a twin challenge in fact. Our challenge is to reduce transport CO2 without sacrificing the access and opportunities offered by transportwhich keep our societies together and make our economies turn,” he said. While technology is an important part of the answer, it will not suffice. “We must look at other things to make the progress we need. Some of them are outside the traditional transport sector,” Viegas said. CS
40 July/August 2016 www.canadianshipper.com
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2016-06-29 12:59 PM
INTERNATIONAL TRANSPORT FORUM
Transport sector unites to launch global Decarbonizing Transport project
T
he International Transport Forum (ITF) at the OECD officially launched a major global initiative towards carbon-free transport at its May 19 meeting. Transport activity currently contributes 23% of global CO2 emissions from fossil fuels, with the share expected to rise, said the ITF. “The COP 21 Paris Agreement created a political pathway for global CO2 mitigation efforts. The key is to close the gaps between commitments and delivery. It is now up to the transport sector to demonstrate how carbon-free mobility can be achieved. That is why we are launching the Decarbonizing Transport project”, said Secretary- General José Viegas at the project inauguration event during the Annual Summit of transport ministers in Leipzig, Germany. “This is a very ambitious project. But ambition is what the world needs to stop climate change. Ambition is also something that has characterized the transport sector throughout its long history of innovation. Our challenge is to reduce transport CO2 without sacrificing the access and opportunities offered by transport, keeping our societies together and making our economies turn,” said Viegas. The project aims to: • Provide a common assessment tool based on a comprehensive modelling framework supported by dialogue with key stakeholders. This is essential for “clarity, transparency and understanding” of Intended Nationally Determined Contributions as required in the Paris Agreement for carbon emissions. This approach will enable the ITF and its partners to evaluate the impacts of different sets of measures on carbon reduction. • Enable countries and other stakeholders to translate roadmaps into actions that deliver results grounded in quantitative data.
The ITF Decarbonising Project was officially launched at the ITF's 2016 Summit on Green and Inclusive Transport.
• Support actions to achieve the UN Sustainable Development Goals along with the decarbonization of the transport sector. The Decarbonizing Transport project is supported by a wide range of stakeholders, including private sector companies, multilateral development banks, intergovernmental organisations, sector associations, NGOs and research institutions. It is anchored in the ITF’s Corporate Partnership Board, the organization’s platform for discussions with the private sector. “The inclusive nature of this project is a central feature and key factor for success of this project,” said Viegas. “It makes me proud that in only four months more than 40 partners and supporting organizations are committing to bringing knowledge, data, networks and financial contributions to the Decarbonizing Transport project. I welcome other organizations, companies and institutions to join.” Christiana Figueres, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC) applauded the Decarbonizing Transport initiative:
“Governments must have the tools to understand whether or not policy is working as intended, and robust, responsive tools give policymakers a better sense of what can be accomplished. I welcome the launch of the Decarbonizing Transport project. This common assessment tool […] should unite the transport sector worldwide in the push towards climate neutrality.” European Commissioner Maroš Šefˇcoviˇc, Vice President of the Energy Union, also hailed the ITF initiative: “Our generation will be remembered as the one who made the giant leap in clean transport. The European Commission is driving the transition to a low-carbon mobility system, and I warmly welcome the support of the International Transport Forum in this undertaking. The transition to clean energy and mobility is in full swing; we should move fast. On the road to decarbonization of transport there is no speed limit.” The preliminary results of the project will be presented at the next ITF Summit in May 2017. The work will be completed by 2018/19, in time for the first round of reviews of the COP21 decarbonization targets in 2020. CS continued
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INTERNATIONAL TRANSPORT FORUM
continued from page 41
Global transport ministers release declaration on green and inclusive transport
T
he Council of Ministers of Transport at the 2016 Summit of the International Transport Forum in Leipzig, Germany, officially released its declaration on green and inclusive transport May 19. Transport that is environmentally responsible, inclusive, efficient and economically sustainable will be central to implementing the commitments made at the United Nations Framework Convention on Climate Change (UNFCCC) 21st Conference of Parties (COP21) in Paris in December 2015 and achieving the UN Sustainable Development Goals, the ministers said. “Recognition of transport’s leading role comes with the duty to make the sector greener and more inclusive. Our challenge is to ensure affordable access for all and provide services for the trade and mobility on which our economies and wellbeing depend, while reducing impacts on the environment and public health,” the declaration said. Demand for transport is growing rapidly, with particularly strong growth coming from trade-driven freight transport and rapid or persistent motorization in urban areas. Most of this growth is CO2 intensive. The Paris Agreement on Climate Change opens a new era of initiative to secure a low- carbon future for transport. This will be essential to address the growing share of transport in global energy-related CO2 emissions. A combination of advances in renewable power generation and propulsion technology, managing demand along with changes in behaviour, as well as novel approaches to rationalizing mobility and land use, will be necessary to address these challenges. At the same time, exogenous factors such as changing demographics, rapid urbanization, new trade patterns and digital connectivity need to be factored in. Our ability to respond to these challenges and opportunities will determine the effectiveness of the shift to green and inclusive transport. “We, the Ministers responsible for transport in the member countries of the International Transport Forum, have assembled under the Presidency of Denmark 42 July/August 2016 www.canadianshipper.com
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to seek mutual understanding of, and orient our response to, these challenges. We acknowledge the dramatic increase in motorization in countries and its impacts on climate change, air pollution, and public health, and underline the need to adjust transport operations and policies to reverse these impacts; we recognize that the Paris Agreement on Climate Change and the UN Sustainable Development Goals will support integration of low-carbon transport policies in national and local initiatives to reduce the adverse effects of climate change and foster sustainable development across the ITF membership,” they said in the declaration. The ministers promised to undertake actions to promote initiatives and effective mechanisms that foster more sustainable transport: “We encourage enhanced coordination of transport and environmental policies across ministries and among all levels of authority, in order to better promote the shift to both green and inclusive transport, through aligned, cost-efficient and coherent policies; and we actively support the ITF’s analytical work to help
countries reduce transport-related carbon emissions and improve fuel efficiency, while enhancing transport safety and security,” the Declaration stated. The ministers agreed that transport plays a central role in providing access to jobs, education, goods and services as well as opportunities for all, with public transport playing a vital role in delivering inclusive access and in reducing the carbon intensity of the transport sector. Ministers recognized the need to coordinate transport and land-use planning and policies to foster social inclusion; in particular, the development of integrated transport and social housing policies that increase access to employment through proximity and affordable, high quality transport services. They advised all relevant authorities and operators to intensify efforts to make transport infrastructure, equipment and services accessible, and to promote a continued focus on assessing the economic, environmental and social benefits of inclusive and accessible transport for incorporation in project and policy appraisal. CS ©iStock
2016-06-28 12:56 PM
INTERMODAL
BLOWING FAIR THE CANADIAN INTERMODAL SECTOR IS HUMMING WITH ACTIVITY By Carroll McCormick
T
rains are moving faster, intermodal volumes are variously way up and flat, depending on which coast you look to, huge port intermodal terminal expansions are underway, and the economic breezes are blowing fair. The first quarter of 2016, from an intermodal point of view, was a mixed bag for the mainline railways. Compared to Q1 2015, CP reported a $23 million drop in domestic intermodal revenues, to $171M, and a $3M decrease in international intermodal revenues, to $142M. Carloads were down 5,000 for domestic, to 98,000. For international intermodal, carloads were unchanged, at 135,000. Overall, coal, potash, fertiliser and sulphur, crude, metals, minerals and consumer product carloads were down for the quarter. The total decrease in carloads, across all types, was 28,000, down to 642,000. CP reported a Q1 increase of 4mph in average train speed for all types of freight, to 23.5mph, over Q1 2015. CN reported that it enjoyed a 50% increase in international volumes through the Port of Halifax in Q1 2016, while international volumes through the ports of Vancouver and Prince Rupert were down. For the rest of this year, CN has high hopes for Halifax, and expects flat volumes on the West Coast. CN’s weekly rail speed this May hit 31 mph, compared to 29.8mph a year ago. “CN’s network is fluid and no segment of its business, including intermodal, is experiencing congestion,” says Mark Hallman, director of communications and public affairs, CN. Looking to the rest of 2016, CN ex©Serjio74/iStock
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pects to see strengthening its door-todoor service in Canada and the expansion of its cold supply chain reefer project. CN will add a new third morning transcontinental service from Toronto to Calgary, and new fourth morning transcontinental service from Toronto to Vancouver. CN notes that container handling capacity is being increased at several ports it serves; e.g., 650,000 more TEUs at the Port of Vancouver by mid-2017; an additional 125,000 TEU capacity at the Port of Mobile this year, and an additional 100,000 TEUs of capacity at the Port of New Orleans this year. The state of the economy for the rest of this year, and into 2017, will affect domestic and international intermodal volumes. This is what Paul Ferley, assistant chief economist at RBC, offers by way of an economic forecast. “We are assuming that overall GDP growth will strengthen moderately next year, to 2%, from the 1.4% for 2016. The strengthening is due partly to further gains in exports, in the expectation that U.S. growth will continue, and what we expect will still be a weak Canadian dollar. This would imply increase flows of goods from Canada and to the U.S.. “The increased trade activity will provide a lift to the manufacturing sector with strong regional implications. We are already seeing that in Ontario. We are expecting the strength to start becoming more evident in provinces such as Quebec and Manitoba, benefitting from the weak Canadian dollar and U.S. growth.” Ferley predicts that the Canadian dollar will drop to 75 U.S. cents by the end of
this year, before returning to 80 U.S. cents by the end of 2017. The Halifax Port Authority recorded a 28% increase in containerized cargo volume in Q1 2016, compared to Q1, 2015. “There is opportunity for continued cargo growth through Halifax thanks to the new routes and expanded services. Our rail partner, CN, is very receptive to increasing cargo volumes and has shown tremendous willingness to make that happen. We have seen an increase in intermodal between Canada and the U.S. Midwest,” says Lane Farguson, communications advisor, Halifax Port Authority. Backing up this ambition is the fact that the Port of Halifax could triple its containerised throughput with no significant changes to the port infrastructure. “In terms of infrastructure we have been focusing on extending berths, truck gates. That excess capacity has been in place since the terminals were designed,” Farguson notes. Meanwhile, the Port of Montreal has been working since June 2015 to build the first phase of a Viau container terminal development. Its completion by year’s end will add 350,000 TEU of capacity. To cite just one example of the optimism of the marine shipping community about container shipping, Hapag-Lloyd announced it would bring into service four replacement container ships by the second quarter of this year, for its MontrealMediterranean service. Each ship can hold 400 TEUs more apiece than its old ships. To reduce traffic congestion, waiting continued www.canadianshipper.com July/August 2016 43
2016-06-28 12:56 PM
INTERMODAL
continued from page 43
time at terminal entrances and GHG emissions, the Port of Montreal is also launching an app for container trucking companies this year that will turn realtime traffic information collected in the port into information truckers can use to better plan their routes. Complementing this, road work is being done to make more direct routes between the Autoroute 25 and the Port, to speed truck turnaround times. “On the competitive side, this is very important for fluidity. Just coming into the Port it will save some 13 minutes,” says Matthieu Charbonneau, executive director, CargoM. Improved access and egress from the Port should save truckers 15-20 minutes, at least. While past performance is no guarantee of future performance, the work on Phase II of the Port of Prince Rupert’s intermodal terminal speaks to a powerful optimism about the future of container shipping. Container volumes jumped 26% in 2015, to 776,412 TEUs, and the Phase II project, scheduled for completion in 2017, will increase throughput capacity to 1.3M TEUs. Deltaport is working on a $280 intermodal yard reconfiguration, which includes the delivery this year of two megamax ship-to-shore cranes capable of handling the largest container ships in the world. They will be ready for action next year. Deltaport’s GTC Canada also ordered eight other cranes to increase train handling speed. A rail densification project will increase intermodal year capacity by over 50%, to 1.9M TEU within the existing footprint. And if and when the Canada and European Union Comprehensive Economic and Trade Agreement, is ratified, many thousands more TEU are expected to enter into the intermodal system – as many as 250,000 TEU from Central Canada eastward, according to Shannon Blanchard, manager of cargo development, Port Saint John. Says Tony Boemi, vice-president, growth and development, Montreal Port Authority, “Obviously, we are going to see a benefit.” CS
Securing Your Supply Chain HOW DOCKS CAN HELP MINIMIZE CARGO THEFT, CONTAMINATION
Protect the supply chain at the loading dock. (Photo Rite-Hite)
D
Carroll McCormick is an award-winning writer who has been covering transportation industry issues and technologies for more than a decade. He is based in Quebec.
espite the recent expansion of the cargo theft reporting program to the western provinces of Canada and other efforts, cargo theft is $5 billion annual problem in Canada that isn’t going away easily. According to Walt Swietlik, director of customer relations and sales support for Rite-Hite, as cargo theft continues to evolve into a more organized form of crime, thieves are looking for any holes they can find in supply chain security. An increasing number of thefts are happening in seemingly secure areas, like warehouse yards and loading docks. One common practice that puts companies at
risk is when the security seal on a trailer is broken, or put in place by non-company personnel on the approach. Security or surveillance may not be as present on the drive approach, which means goods can more easily be stolen. With the Panama Canal expansion expected to be completed by the end of June, facility managers of warehouses, 3PLs and virtually any building with a loading dock should start preparing for an influx of these intermodal containers, Swietlik noted. Because intermodal containers use a different type of chassis than traditional semi-trailers (often with an obstructed rear-impact guard, or RIG),
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INTERMODAL
securing these trailers to a facility is more challenging than conventional trailers. He offered the following tips for establishing better supply chain security in shipper facilities: 1 | Use automatic vehicle restraints. Restraints that automatically secure a trailer or vehicle when it backs up to the dock are the first step in establishing supply chain security. Automated restraints enhance employee safety by ensuring the trailer can’t be mistakenly pulled away when a forklift is still inside, and they also help prevent theft and reduce contamination, Swietlik said. An automatic restraint wraps around a trailer’s RIG, securing the trailer to the loading dock. The most advanced automatic vehicle restraints offer a RIG/restraint vertical engagement range of 22 cm to 76 cm, with some models having the capability to secure intermodal overseas container chassis. Some automatic restraints can be integrated into building management or security systems, providing another level of security. These automatic vehicle restraints will also re-fire into a locking position if the trailer begins pulling away from the building or there is external tampering.
place or remove the trailer’s seal from inside the building – greatly reducing the chance of theft or tampering.
2 | Bridge the gap from dock to trailer. When linking the gap between the loading dock floor and the trailer bed, the “gold standard” is considered to be a vertical-storing dock leveler. Unlike a pitstyle leveler, a vertical leveler (when in the stored position) allows the loading dock door to close directly on the pit floor – rather than the leveler itself – minimizing points of entry at the loading dock. This helps maintain security and improve environmental control. The vertical design makes it easy to clean or wash down the pit floor when the leveler is in the upright and stored position, as well. A “drive-thru” application, which allows trailer doors to be opened inside the facility, is one of a variety of specific features facility managers should consider before committing to an installation. Opening and closing trailer doors inside the loading dock, rather than on the drive approach, allows loading dock staff to
3 | Properly seal the dock perimeter. The connection of a dock seal or shelter between the back end of a semi-trailer and the inside of a loading dock provides an environmental barrier to keep wind, rain, dust, bugs and other contaminants outside the building. Besides environmental benefits and energy savings, the best systems can also contribute to theft deterrence by sealing gaps that could otherwise be passageways for thieves to move product. For maximum protection, it is important to equip all dock door openings with a system that closes the gaps that are created when a trailer is backed in for loading or unloading – top, sides and bottom. Foam compression dock seals, or full-access dock shelters that seal trailer door hinge gaps, along with a full-coverage, under-leveler sealing system are recommended in most applications. Some of the newest dock shelters
A vertical-storing dock leveler can help bridge the dock to trailer gap. (Photo Rite-Hite)
have been specifically designed for drivethru applications, which complement vertical storing dock levelers. This allows the trailer doors to be opened inside the building for security purposes, while still maintaining a tight, consistent seal on all four sides of the trailer. Special design features ensure tight sealing against trailer sides, across the full width of the trailer top and at the corners, without interfering with trailer doors being opened and closed after the trailer has been parked at the dock. 4 | Protect the supply chain at the loading dock. In most instances, a systematic approach that incorporates automatic vehicle restraints, vertical dock levelers, appropriate seals/shelters, and the proper sequence of operation is the best way to secure a loading dock. These products – working together as a system – enhance cargo security, protect employees, reduce contamination and improve environmental conditions within a building and throughout a given supply chain, Swietlik said. CS www.canadianshipper.com July/August 2016 45
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SUPPLY CHAIN COST REDUCTION
Cutting Costs
Reducing supply chain costs is paramount in improving the bottom line. What elements are involved in the equation? A panel of supply chain industry experts discussed the key components of supply chain network costs and audits at this spring’s Cargo Logistics Canada show in Montreal. Moderated by Canadian Shipper Editor Julia Kuzeljevich, the panel featured Ashcroft Terminals’ Vice President, Projects & Development, Kleo Landucci, Corrie Banks, President, Triskele Logistics Ltd., and Ann Pompilio, Chief Financial Officer of 3PL Links. Protocols and processes According to Triskele Logistics’ Corrie Banks, “we typically will find 7-10% of savings for any organization we work with. It’s quite often a lot higher than that. We evaluate supply chains and identify ways they can eliminate waste. Our team comes from operational backgrounds so we don’t just look at the data, but understand goods movement at an actual tactical level. What is your system doing, what errors are you experiencing, that kind of thing. When you’re doing an audit, the input components include data, invoices, (what you were rated, and what you were actually charged). We also like to look at what your business processes are doing. The more you touch something in your supply chain, the more it costs. When you have those things going on, it ends up costing you an awful lot of money,” she said. Your network design can affect your supply chain costs. Are you using a lot of warehousing, are you storing a lot of inventory, and why? 46 July/August 2016 www.canadianshipper.com
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“Finally, we look at your operations,” said Banks. “My favourite thing to do is to get the sales team, the operations team and the supply chain team all in the room at the same time-those competing priorities and decisions can significantly revise your costs. Once they understand each other they can come up with solutions that are effective and efficient for the whole entire process.” It’s highly recommended to standardize your processes, Banks said. “Use photographs and keep it really, really simple. Don’t put a lot of words into things. We process visual information faster than we do written info. With the diversity we have in the supply chain sector now, photographs tell you a lot more when you’re somebody trying to learn a new job-and ten step visual photographs actually break down your operations so they’re easier to follow. Map the value chain: Customers won’t pay you for the errors in your supply chain, but they will pay you for goods movement. “You want to look at how much time you are spending processing paper and talking to the sales team about transit times/interdepartmental conflict. You also want to look at bringing in the people who are outside of your team. Downstream and upstream processes offer a lot of information and education. Challenges happen because of bad communication. Including all stakeholders offers much
BY JULIA KUZELJEVICH
higher value,” Banks said. According to Banks, supply chain waste happens in: overproduction, defects, inappropriate processing, unnecessary motion, transportation, unnecessary inventory, and in wait times-anytime you’ve got people at the ready and they’re waiting. She cited an example of truck congestion in the Calgary region where 10 minutes of congestion for truck drivers translated into $1.7 billion dollars passed on to the consumer. “When you’re trying to tell a story about why people need to care about supply chain costs, and what it does, all those costs that we have in our supply chains get passed on to the costs of the goods sold and the materials that we are personally purchasing,” she said. Reducing costs involves creating a common understanding of expectations, “and I like to assume nobody knows anything until you’ve had an integrated conversation with everyone. If you go in assuming people know what the process is, you’re going to have some communication challenges. One person’s interpretation of a document or a conversation could be completely different from another one’s. So having everybody in the room and setting an expectation, making sure that everyone says yes, I understand, creates accountability as well, and it makes sure that people are paying attention to the information you are providing to them,” Banks said. ©iStock
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SUPPLY CHAIN MANAGEMENT
By documenting and standardizing your processes in the most simple form, using photographs and white boards, you avoid spending days and days writing big huge manuals, or spending a lot of time analyzing or trying to capture information that you don’t necessarily have. “Investigate the root cause of what an issue is, understanding the problem and all of the issues that are contributing to it. I find that we have problems in supply chain where we have rush or special deliveries because there is more than one problem that has happened throughout the life cycle of that issue. So making sure you know what all the issues are and then (look at) existing processes. Create a standard operating procedure but it doesn’t mean that it’s now written in stone. It might be that that process was really good at a certain point in time and that it needs changes or revisions. It needs to be flexible-you need to be able to change it. You need to be able to hear the feedback from the people who say, I’m confused and this doesn’t make sense to me,” Banks said. The whole point of continuous improvement is you start, even though it might not be a perfect start. If you wait until the sun, the moon and stars align you might be potentially missing out on opportunities to save yourself big money. My other favourite thing to do is create accountability and visibility. The first time that you forget to do something I assume that you don’t know. The second time I assume that you’ve forgotten. The third time there’s a consequence. The third time usually means I’ll nail you with a penalty of some kind. We know some big box retailers who like to do that kind of stuff. The reason that they do it is as a deterrent. It’s not because they’re trying to gouge people but they’re trying to make sure their supply chain is efficient. I also like to get the entire team togetheryou can create accountability and you can make sure that everybody understands. But it can’t be a finger pointing exercise or a blame game,” Banks said. Most people show up to work every day because they want to do a good job, so you have to assume it’s the process that isn’t clear, she pointed out. “Try and create systems that get it right the first time but plan for when it doesn’t. If you’re going to build standard operating procedures don’t build proce-
dures that say the truck gets there on time every time. Build a SOP around what happens if you have a dumped load, or an accident, or if a truck goes missing for whatever reason. Get your data and then stick to the facts. Data can be as simple as a white board.” There’s a point where you need big data and where you need small data. And you just need to figure out where you’re at. “Focus on fixing one issue at a time. If you’re’ trying to fix too many things at once, your team will have a very hard time remembering what the new process is. Continuously build on your starting point-the thing that makes continuous
Reducing costs involves creating a common understanding of expectations, "and I like to assume nobody knows anything until you’ve had an integrated conversation with everyone." Corrie Banks, President, Triskele Logistics Ltd. improvement a lot harder for most people is that there is no destination. You have to make sure that you recognize the milestone points and that you’re making progress along the way.” Who is in charge of the documentation? “When you are pulling all the stakeholders together, it’s important to identify who the point person is, especially when you have multiple or interdepartmental challenges. Many organizations will have someone who is the lean manufacturing specialist. In other organizations, you don’t necessarily have that with smaller teams. I would say the person who has the most to lose or the most to gain should be the person who is leading the charge. There has to be some pre-work before you start having those conversations. You need alignment at the senior levels about
what those SOPs are. Once you have that alignment then you have those actual conversations and they can designate whether it’s an IT person, a sales person or a supply chain person,” she said. Streamlining the inland gateway Ashcroft Terminals, an inland rail terminal located 3.5 hours’ drive/200 miles from the Port of Vancouver, was acquired with the intent of reducing costs to supply chain stakeholders using the gateway. According to Kleo Landucci, Ashcroft terminals’ Vice President, Projects & Development, enhancing this West Coast gateway is crucial to trade. “We have both mainlines on site, and every single product going into and out of the lower Mainland has to pass through Ashcroft terminals’ property to go into or out of the rest of North America,” Landucci noted. “We currently have 32,000 feet of rail track. When we acquired the facility we only had 2000 so we’ve been building over the last ten years. We operate on just under 10% of our geographic footprint,” she said. Ashcroft Terminals services all centres of the natural resource industry in the country with transloading services for various bulk products from railcar to truck and truck to railcar, fleet management, rail car storage, search supply solutions for customers, railcar repairs, and a railcar cleaning facility that will be brought onstream for the next year. Intermodal business is the third leg of the Ashcroft stool. “The vision was to containerize product closer to source, closer to where it was being extracted, and to streamline the product by amalgamating it and avoiding congestion in the lower mainland. When we started there was very little activity-just one customer doing a small amount of coal transloading. As we went we saw that the demand for cost-effective solutions, for doing things outside of congested areas, was taking precedent. That’s why we focused on the bulk side. It really took off over the last ten years. For the last two-three years we’ve seen terrific demand on the fleet management side, primarily in the oil and gas sector-to amalgamate and build full trains for them to better hit their facilities in and out,” Landucci said, An open employment model aims continued www.canadianshipper.com July/August 2016 47
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SUPPLY CHAIN MANAGEMENT
continued from page 47
to give control of certain costs back to the customers. “We have a management team and crew and we are happy to provide any of the services I mentioned. But if you are a customer and you’d like to control your costs-as long as you are adhering to our safety protocols we will allow you to come in and operate on a daily basis,” Landucci said. The master plan is built around fluidity for the rail lines. “Everything we do has to be completely efficient for both CN and CP to come in and out and operate as efficiently and safely as we can. We have 40 km of internal track and we intend to build much more than that. The twinned loop track is key to efficient, direct hook and haul east or westbound to take full trains right off the main line, and to keep the flow. It’s the basic structure that is really the key to this. With source loading, we take the empty cans, put them on a chassis and drive them
to the mill. We allow the mill to source load those containers themselves using the existing labour they have. They are the last person to shut the container door before it gets to China. On our site we would also weigh it-all aspects covered, or they can ship us the lumber and we will transload it. We’ve done everything to create the most flexible model possible and the highest quality rail product,” she said. Reliable data is key Ann Pompilio is Chief Financial Officer of 3PL Links, a non-asset based supply chain solutions provider. She noted that when you take into account most typical customer invoices, 5-8% of them have errors on freight total spend. While “real time visibility” provides all the decision makers a tool from which to make decisions, “real-time” is what is important to the customer. So you must establish, with you external customers, and
π
also internal customers, what you want to capture, and what are the data requirements around capturing this? “Make sure your KPIs on the dashboard match. Without defining these, it leads you down a path that’s not necessary. It’s work, but it will come back to you in spades,” Pompilio said. Now you have a database, now you have accuracy, now you can break down inventory turns, accessorial breakdowns, etc. Now you’re fishing in the pond where the fish are. “In summary, business rules are the key to getting information. It allows you to work collaboratively. Data must be accurate. You have to have a database that you can trust. When working around proprietary issues, "set parameters around confidentiality. Understand the client’s end game, and give them the confidence it’s protected information-we find then the issues go away and now they are a partner." CS
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PHARMA LOGISTICS
A GROWING SEGMENT
Air cargo carriers aim to bring back market share on pharma through certification
T
he International Air Transport Association, IATA, has collaborated with supply chain stakeholders to define industry-wide standard requirements for temperature sensitive pharmaceutical products in the air, aiming to raise the bar in the transport of pharmaceuticals by implementing IATA’s CEIV Pharma Certification. In a seminar focusing on pharma supply chain trends and best practices at Cargo Logistics Canada’s Montreal meeting this spring, Ronald Schaefer, Project Lead with IATA, said that a concentrated effort to improve the level of competency as well as operational and technical preparedness amongst air cargo carriers is urgently required to stop the alarming decline of air cargo’s market share of global pharmaceutical product transport. “The industry has identified a need to build a network of certified pharmaceutical trade lanes that meet consistent standards and assure product integrity. As a result, IATA has taken a leading role in supporting the air transport industry to comply with pharmaceutical manufacturers’ requirements,” he noted. The program aims, among other things, to understand the risks/gaps along the cool chain for its 240 airline members. Air cargo carriers handle some 48 million freight/tonnes per year, equivalent to about $6 trillion dollars. “Aviation is critical for world trade, and air cargo represents a 12-15% value to aviation,” Schaefer noted. Pharma is a growing segment, with sales on an upward trend, heading to 6% per year through 2019. Drivers of the market include the continued development, approval, and market penetration of biotech-derived drugs, and the expansion in both usage/production of these drugs in emerging markets. The effect on transportation has been that the global transportation industry
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spent 10.1 billion on cold chain logistics in 2015. The USA is the biggest pharmaceutical importer on a worldwide basis. The “Pharmerging” countries, meanwhile, include China, Brazil, Russia and India. These countries had a total of $1 billion (USD) in incremental sales over the last five years. IATA, as a standard-setting organization, requires strong industry cooperation. Temperature sensitive products play an important role in air cargo. So IATA is the “executing” organization for the industry, which according to Schaefer, comes to the association for its assistance in addressing the need for standardization and protocol. A temperature task force group meets twice a year and disseminates its standards through different means, such as publications. Challenges today in the air cargo sector include air freight’s loss of market share to ocean freight. There have been 5.4 million tonnes experiencing modal shift over the last 13 years. Outbound trade lanes from Asia have seen the strongest shift. The industry expects a moderate shift to ocean on no specific trade lane, driven by transportation costs, but also by operational reliability. Air cargo is seen as complex and lacking transparency. “A majority of temperature excursions occur in the hands of airlines and airports. Deviations denature the product, render it worthless and harmful to the patient,” said Schaefer. Why do the excursions occur? Handovers to cargo handlers constitute the highest risk occurrences of temperature differences. The air cargo supply chain involves too many stakeholders. How can this be managed? Air cargo carriers are heavily regulated but there are no global standards,
BY Julia Kuzeljevich
and no certification for handling pharmaceutical products. Increasingly, shippers expect air carriers to comply with global standards, have more visibility into the shipments and a common audit format. CEIV represents the Center of Excellence for Independent Validators in Pharmaceutical Logistics. Its objectives are to prevent sanitary issues. Targeted in the program are all stakeholders. The concept has been tested before for cargo security. Companies are certified and registered in a database. Industry stakeholders are trained on standards and regulations. The CEIV standard compares against best practices, offers recommendations for change, identifies and mitigates risks, and develops implementation plans. Good Distribution Practices standards, such as those used in Europe, said Schaefer, were made more for wholesalers. “In some cases it’s very region-centric, and not supported by shippers for the air cargo industry. It focuses on storage, not transportation,” he said. The CEIV certification process involves assessment, training, validation, and certification, with recertification every three years through an online refresher course. CEIV puts a strong emphasis on stakeholder advocacy. Who audits? IATA qualifies and manages independent validators (IVs). They must undergo IATA training. They can become instructors after taking the train the trainer course. A CEIV pilot ran from November 2013 to February 2014 at Singapore’s airport. In August 2014 the CEIV program was officially launched. “IATA expects to have assessed and certified a minimum of 80 entities by the end of 2016. The majority are ground handlers, freight forwarders. The European Shipping Council is supporting the initiative as well,” Schaefer said. CS www.canadianshipper.com July/August 2016 49
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INSIDE THE NUMBERS WITH LOU SMYRLIS, MCILT Main job functions involved with
WEARING MANY HATS Our annual Survey of the Canadian Logistics Professional shows that supply chain managers wear many different hats. While three-quarters are involved with the transportation function within their organization, many also have responsibilities for warehousing and inventory/material control and customer service. The majority are in the 46 to 55 age range and have around 18 years of job experience. They lead small teams with almost a third supervising fewer than 10 people and 36% having no one reporting to them.
Supply chain management
52%
Purchasing/procurement
38%
Strategic sourcing
20%
Logistics
71%
Warehousing
47%
Transportation
76%
Inventory/Material Control
38%
Information Technology
18%
Corporate social responsibility
29%
Marketing and Sales
32%
Customer Service
58%
Training and Development
42%
Project Management
50%
Demand Planning/Forecasting
36%
Order Fulfillment
30%
Position on staff
Years of experience 18%
Engineering/professional
45%
Executive
24%
Managerial
41%
Operations/Tactical
30%
Analyst
18%
Strategic
21%
Supervisor
17%
Clerical/administration
20%
Other positions
2 to 5 years
Less than 2 years
Consultant
More than 35 years
21%
6% 30 to 35 years
5 to 10 years
6% 3%
10 to 15 years
14% 9%
61%
15%
21%
15 to 20 years
3%
25 to 30 years
20 to 25 years
Number of people supervise 5 to 10 10 to 20
1 to 5 people
9% 10%
Influence at C-level of organization
22%
Yes, I am at the C-level
Don’t know 21% 4%
No, I don’t need to have influence
20 to 35
Yes, I have influence at the C-level
21%
7%
40%
11% 35 to 50
3%
13%
36%
50 to 75
None
No, but I would like to have influence
10% 12% 13%
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RETROSPECTIVE
The lofty container Canadian Transportation’s June 1965 issue examined industry goals around rail carriers’ transportation of containers. Highlights? More pooling of facilities and equipment, and more intermodal exchange of traffic.
M
eanwhile, on the marine side, containerized shipping has turned 60 this year. The seaborne container was transported on
board Malcolm McLean’s Ideal-X on April 26, 1956. The man credied with being container shipping’s true pioneer was Malcolm McLean, a trucking magnate, who used a converted tanker to move the first containerized cargo by sea 60 years ago from New Jersey to Houston. Four years later, Sea-Land introduced the first transatlantic service, and in 1969, in the UK, Overseas Container Lines launched its first service. Containerization enabled the standardization of port handling equipment, increased the speed of cargo handling and the flexibility of stowage location and unpacking, which together transformed the way manufactured goods were shipped around the world, said Clarkson Research in a report documenting containerization’s 60th anniversary. Over the last 40 years the compound annual growth
rate of global container trade volumes stands at nine per cent, and this year the total box volume worldwide is expected to tip 180 million TEU, research said.
For an update on intermodal trade in Canada see Carroll McCormick’s feature on page 43.
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COACHING CORNER
A Season, A Reason, or a Lifetime.
By Carolina Billings, CPCC, CHRL, MA-IS
Q | WHAT WOULD YOU DO IF A PREVIOUSLY GOOD WORKING RELATIONSHIP BREAKS DOWN?
Relationships are in fact the result or the effect of shared values and common objectives. Oftentimes relationships are seen as the cause for the reason two people interact when in fact a relationship is the result of what you share. A/ Someone once told me that people come into your life for a Reason, a Season or a Lifetime. Professional relationships are often due to shared circumstances working for the same company or being at the same conference or in the same industry. That puts you in the same place. Once in the same place you begin to find and identify with people who share your views, values, objectives. When a good working relationship ends or breaks down it is often because the circumstances or framework in which that relationship existed changed. What to do when this happens? How do you know what led to the breakdown? And most importantly what was the foundation that the relationship was built upon? That is where the Reason the Season or the Lifetime comes into play. Reason: What was making the relationship work before? What brought you together in the first place? What about the relationship do you miss? Season: Some relationships exist only for a short period of time...e.g. while on the same team or at the same company perhaps. Lifetime: Lastly, some relationships, which begin with common reasons and under shared circumstances transcend their origins and develop deep roots that
are not going to be harmed by the other person and you are willing to be vulnerable to some extent towards the person you are in a relationship with. are able to withstand changes ...and obstacles usually, become the core values shared which are authentic and part of the natural state of the individuals in the relationship. Relationships – both professional and personal that become long term or last a lifetime often share the following cornerstones below. If you wish to find out what happened or repair a relationship that is not working any more try examining any of the following cornerstones and you are likely to find out where it got off track. Values. Values -(not the moralistic type)but the core values that bring about your best and come naturally to you. Perhaps the value of hard work and career commitment that was previously shared ended when one person in the relationship became a new parent and all of a sudden, they have other responsibilities rather than work to occupy their mind. Or perhaps comraderie and the sense of having “been in the trenches together “is broken when one person gets promoted. Even simple shared values can change when one person goes on a diet or stops smoking. When the shared values change, it often puts a strain on the relationship. Respect. Being valued and respected is one of our greatest human needs. Respect encompasses honesty, integrity and appreciation but most importantly, it touches on our sense of worthiness. Trust. Trust is actually quite easy to define in my opinion. When you trust someone, you have a genuine belief that you
52 July/August 2016 www.canadianshipper.com
Communication. I left this one for last because it is truly the be all and end all of all relationships. Communication actually encompasses all of the above. It is through communication we find out what our shared values are, it is often how we express our respect and trust for others and for self. Without communication, there cannot be a relationship ...at least not a good relationship. To try to work through difficult times to heal the relationship you feel has broken down. Ask questions without assuming the answers. Let them know how the changes are impacting you. If this is a professional relationship, with one whom you must continue to work with, then perhaps having a third party mediate would be a good idea. After all is said and done, if you feel this relationship is not bringing out the best in you and it is not a positive influence in your life, the one person you must trust and respect above all is yourself. Be honest with yourself and accept and respect others’ decisions. And ask yourself whether this relationship is due to a reason a season or was it meant for a lifetime? If the latter, then find ways to focus on what you do have common in the present and the possibilities for the future... letting the past go with gratitude and closure. CS For more information, please visit www.nlilabel.com or email your questions to info@thecoachingcorner.ca Your questions. Your solutions. Your results. Let transformation & empowerment begin!
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THE BIGGER PICTURE
Service providers missing the big picture with VGM Few issues have resulted in as much finger-pointing in the marine shipping industry as the VGM (Verified Gross Mass weight) amendment to SOLAS (International Convention for the Safety of Life at Sea) adopted by the IMO (International Maritime Organization). Coming into force on July 1, 2016, VGM has been widely reported over the past few months, but still seems to be mired in controversy. Basically, the VGM rule states that shippers are responsible for certifying the VGM of loaded ocean containers (with some exceptions) tendered to ocean carriers. The VGM includes the weight of all packages and dunnage loaded in the container, as well as the weight of the container itself. Shippers have two choices for obtaining the VGM. They can either weigh (or arrange to have weighed) the loaded container, or, weigh all the packages and dunnage going into the container, and add the tare (empty) weight of the container. Sounds straightforward, right? After all, this is an industry that relies on “weight”, both for operational efficiencies and revenue. Shippers and carriers are generally familiar with the concept of gross and tare weights – shippers know the weight of the packages they ship, carriers know the weight of the containers they provide, add them both together and you have the gross weight. The critical difference with VGM however, is that now the
gross weight must be “verified”. Very few shippers have the (scale) capacity to weigh a loaded container, and many carriers have, over the years, come to expect, shall we say, a certain “tolerance” with shipper-declared weights. Compounding this stand-off, many ports do not have the capacity to weigh every loaded container, so the big question becomes “who is going to weigh the container”? The scope of this issue might surprise you. To begin with, since most shippers are not expected to be able to weigh loaded containers, option 2 is expected to be the most common method of obtaining the VGM. In this case, the IMO has stated that shippers must use a certified method “approved by the competent authority of the State in which packing of the container was completed”. This requirement invokes the individual certification methods of more than 160 countries that have adopted SOLAS. Add to this scenario the fact that, according to e-marketplace provider INTTRA, almost 300,000 containers per day will have to be certified globally, and you could potentially have a lot of ocean carriers waiting for a shippercertified VGM. From a security standpoint (i.e. post 9/11) it is amazing that it took this long for the industry to tighten up supply chain processes by insisting on accurate container weights. With the majority of world trade moving by sea,
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By Laurie Turnbull, CCLP, P.MM
there are obvious security advantages in being able to verify what shippers declare in loaded containers. There is an equally valid argument to be made in terms of safety. In its 2014 report on the containerized shipping industry, the U.S. Department of Commerce made reference to the 2007 sinking of the MSC Napoli regarding the importance of accurate shipping weights. In that instance, shipping weights of 20% of the containers stored on deck were under declared, some by as much as 20 metric tonnes. In rough seas, variances of this magnitude can have a significant impact on the integrity of container stacks, as well as the ability of the crew to maintain vessel stability. Given that the newest generation of container vessels is approaching 20,000 TEUs, many with individual payloads of approximately 30,000 kg, the potential magnitude of weight discrepancies becomes apparent. Recently a number of port authorities announced plans to provide weighing stations for loaded containers, and several technology companies have developed software tools for shippers to record and transmit VGM data. For intermediaries who are just
discovering that their customers are still unaware of the VGM requirement, CIFFA has made a template letter available on its website for members to notify customers. IMO have been developing these guidelines to minimize container losses since 2011, but as so often happens when it comes to regulations, the parties most affected are scrambling to comply at the 11th hour. U.S. based OCEMA (The Ocean Carrier Equipment Management Association) recommends shippers, intermediaries and carriers “work together” to come up with a solution that ensures VGM does not become a bottleneck. The final remedy may not be the easy-fix many imagined, but VGM represents a significant opportunity for service providers, in a competitive industry, to help their customers develop a process for VGM. While many of the players involved are arguing over who should pay for the cost of weighing containers, the big picture surrounding VGM is that it gives ports, intermediaries and carriers a chance to provide a value-added service for their customers by providing solutions at a time when the industry is struggling with over-capacity. CS
Laurie Turnbull, CCLP, P.MM is a supply chain consultant with Cole International, a leading Canadian logistics company providing Customs brokerage, warehousing and worldwide transportation services. He can be contacted at laurie.turnbull@coleintl.com ©xubingruo/iStock
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