Canadian Shipper March 2020

MARCH 2020

PUBLISHED SINCE 1898 | WRITTEN FOR BUYERS OF TRANSPORTATION SERVICES

OFF TRACK PIPELINE PROTESTS SHUT DOWN RAIL CORRIDORS

EASTERN PROMISE Shifting trade patterns spark massive eastern port investments

REVERSING COURSE

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Soaring returns leave integrators scrambling to cope

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CONTENTS

MARCH 2020

DEPARTMENTS

6

5 | Editor’s Foreword A path forward

COVER STORY

6 | In the news Railway blockades interrupt supply chains; SUPPLY STATS; Industry Q&A: Cross-Border Institute; Air Canada Cargo and DDC join forces

OFF TRACK

41 | Inside the Numbers

Pipeline protests shut down rail corridors

The price of uncertainty

43 | Coaching Corner Everyone is in sales 46 | The Bigger Picture Shipper strategies

Photo: THE CANADIAN PRESS/Lars Hagberg

31 EAST COAST GATEWAYS Shifting trade patterns spark massive eastern port investments

A First Nations protester stands in front of a transport in Tyendinaga Mohawk Territory near Belleville, Ontario, on Tuesday Feb. 11, 2020, in support of Wet’suwet’en’s blockade of a natural gas pipeline in northern B.C.

FEATURES

21

CHEMICAL LOGISTICS | 12 Safety is critical to the shipment of dangerous and non-dangerous substances

12

CRUDE-BY-RAIL | 16

SPONSORED Supply Chain Leadership Roundtable

Technology offers safer ways of shipping oilsands bitumen

REVERSE LOGISTICS | 18 E-commerce is pushing returns to record levels www.canadianshipper.com March 2020 3

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EDITOR'S FOREWORD John Tenpenny March 2020 Volume 123 Issue No. 2

EDITOR John Tenpenny (416) 510-6880 john@newcom.ca EDITORIAL DIRECTOR John G. Smith (416) 614-5812 johng@newcom.ca MANAGING DIRECTOR, TRUCKING AND SUPPLY CHAIN GROUP Lou Smyrlis lou@newcom.ca ART DIRECTOR Anita Balgobin CONTRIBUTORS Carolina M. Billings, Mark Cardwell, Dan Goodwill, Lars Hagberg, Carroll McCormick, Tom Peters, Ian Putzger PRODUCTION MANAGER Jwad Khan (416) 510-6779 jwad@newcom.ca SALES MANAGER Anthony Buttino (514) 292-2297 anthonyb@newcom.ca CIRCULATION MANAGER Mary Garufi (416) 614-5831 mary@newcom.ca PRESIDENT Joe Glionna CHAIRMAN & FOUNDER Jim Glionna

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No easy answers

T

he rule of law versus the right to protest. Those are the two sides of the coin that is the stalemate over blockades that have stalled Canada’s railway system and the enforcement of court orders aimed at ending the protests.

It began when the RCMP enforced an injunction that prevented interference with construction of the natural gas pipeline in northern B.C. Soon after, protestors—including Indigenous people and their supporters—began to set up railway blockades beginning near Belleville, Ont. and New Hazelton, B.C. They supported the Wet’suwet’en hereditary chiefs, who oppose the $6.6 billion Coastal GasLink pipeline.

Railways in the country’s most populous area soon became gridlocked. Shortly after the blockades appeared, Canadian National Railway announced it would be forced to shut down “significant parts” of its network. Trains hauling everything from chemicals to wood products and food were soon sitting idle. More than 400 trains were cancelled before the shutdown commenced.

Rightfully, many Canadians and the shippers among them have called for an end to the disruptions. But the issues at the root of the protests go much deeper than the route of one pipeline. Long-term solutions will need to look beyond a single blockade.

A heavy hand in removing the blockades would only serve to inflame tensions, lead to further protests, and further disrupt the supply chain that is vital to the state of the national economy.

But there’s no denying the stalemate that exists. Both sides of the debate need to be encouraged to participate in meaningful dialogue that goes beyond a single pipeline or single Indigenous group.

Rather than siding with one group or the other, we are better served by encouraging governments and protestors alike to deescalate the situation and extricate Canada’s supply chain and economic well-being from the equation. Everyone will need to find some common ground or the disruptions will continue, pop up, repeat.

No, we can’t leave the blockades to continue, but neither can we afford to ignore the concerns that brought them here in the first place.

In the words of Buffalo Springfield, “Nobody’s right if everybody’s wrong.” CS

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@CanadianShipper @ CORRECTION The article “Loaded for Bear” which appeared in our January 2020 issue mistakenly referenced a survey that was attributed to TransCore Link Logistics. As well, David Schrader was quoted and identified as being an employee of the company, which he is not.

Canadian Shipper regrets the errors.

Canadian-Shipper

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March 2020

5

IN THE NEWS

Off Track Pipeline protests shut down rail corridors Transporting goods via rail has never been an easy proposition, what with Canadian winters and a dearth of competition, and the events of February 6 made doing so that much harder for the railways and by extension shippers who rely on them to conduct business. Having already endured an eight-day shutdown of Canadian National Railway’s system due to a strike by 3,200 workers, a wide array of Canadian industries woke up to a doubledose of bad news that effectively closed large parts of the nation’s railway network and left those sections still in operation constrained by a government order mandating slower speeds for many trains.

The days ahead would make clear to all interested parties that there were to be no easy answers and no quick fixes for the issues facing both the railways, its customers and the effects on average Canadians.

The day began with news that protestors, including Indigenous people and their supporters, had set up railway blockades beginning near Belleville, Ont. and New Hazelton, B.C. in support of the Wet’suwet’en hereditary chiefs, who oppose the $6.6 billion Coastal GasLink pipeline in northern B.C. Weeks earlier the RCMP began enforcing an injunction that prevented interference with construction of the natural gas pipeline.

The New Hazelton blockade that halted train traffic to and from the Port of Prince Rupert ended a week later, though other temporary disruptions occurred in Winnipeg and also at CN’s MacMillan yard north of Toronto South of Montreal. Canadian Pacific Railway saw one of its lines blocked by members of the Kahnawake Mohawk community, but CP largely escaped the disruption faced by its larger rival.

Hours after the blockades were erected, the federal government announced that it had ordered lower speed limits for all trains carrying large amounts of dangerous goods after a pair of derailments in Saskatchewan involving Canadian Pacific freight trains carrying crude oil.

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By John Tenpenny

People arrive at the train track blockade in Tyendinaga Mohawk Territory near Belleville, Ontario, on Feb. 11, 2020, in support of Wet’suwet’en’s blockade of a natural gas pipeline in northern B.C.

Within a week of the blockades being set up, Canadian National Railway announced that it was forced “to shut down significant parts” of its network because of the blockades.

“It’s not just passenger trains that are impacted by these blockades, it’s all Canadian supply chains,” said JJ Ruest, CEO of Montreal-based CN. “We are currently parking trains across or network, but due to limited available space for such, CN will have no choice but to temporarily discontinue service in key corridors unless the blockades come to an end.”

CN also temporarily laid off about 450 workers in Montreal, Halifax, Moncton and Charny, Que. According to a spokesperson, Canada’s largest freight carrier had cancelled 400 trains since the blockades began.

For shippers who rely on rail for mov-

ing their products, the disruptions across Canada’s freight rail supply chain have been devasting.

“Given that 80 per cent of our members’ operations are served by only one railway, any disruption to service will have a major impact on everyday operations,” Derek Nighbor, CEO of the Forest Products Association of Canada, told Canadian Shipper.

“We’re already hearing reports from some members who say they aren’t able to guarantee delivery dates to customers, which creates an issue in terms of retaining business. The bigger issue here is the overall reputation of Canada as being a reliable trading partner and being open for business. That’s the overarching black cloud in all this.”

Bob Ballantyne, head of the Freight Management Association of Canada, Photo: THE CANADIAN PRESS/Lars Hagberg

IN THE NEWS

Within a week of blockades being set up, Canadian National Railway announced that it was forced “to shut down significant parts” of its network because of the blockades.

which represents large companies in a range of sectors—including Canadian Tire, The Bay, food processors and miners—said the rail-freight situation is having a “serious effect” on companies’ ability to stock their shelves, reach markets and keep production going. He said the injunctions against the protesters should be enforced.

“The laws of the land have to be upheld. The native people have rights, and peaceful protest is something that should be allowed. But the blockage of private property, the blockages of the rail system and some of the port facilities are really having a serious impact on individual citizens as well as companies,” said Ballantyne.

He indicated that members have told FMA of a number of containers stuck in various parts of the rail system. “One of our grocery retail members said some of their containers that are stuck on the railway have got commodities that have a limited lifespan and that could go bad.”

A coalition of 39 industry associations also wrote a letter to Prime Minister Jus-

tin Trudeau, calling on him to “work urgently” with First Nations and police to bring the blockade to a peaceful end.

“The damage inflicted on the Canadian economy and on the welfare of all our citizens mounts with each hour that these illegal disruptions are allowed to continue,” the coalition said, which represents automotive, mining and numerous other industries.

While the members said they share the government’s commitment to reconciliation with Indigenous groups, the blockades “inflict serious damage on the economy, leaving countless middleclass jobs at risk, many of them in industries that must get their goods to and from market by rail.”

“In addition to disrupting domestic and global supply chains, the blockades undermine Canada’s reputation as a dependable partner in international trade,” they said in the letter.

Canadian ports have also felt the effects of the blockades, with reports that some ships were being turned away and cargo re-routed to ports in the U.S., ac-

cording to the Association of Canadian Port Authorities.

“This continued disruption to Canada’s supply chain is having a significant impact on our economy,” noted association president Wendy Zatylny.

“In addition to its effect on the economy and on people, this service disruption has the potential for long-lasting reputational damage to Canada’s ports and our transportation system as a reliable and efficient means of moving cargo.”

Atlantic Container Line (ACL), which typically berths two ships a week announced it was now docking in New York and Baltimore instead to run cargo inland on American railroads.

In Halifax, officials say they’re running out of space to stack shipping containers, but the bigger concern is that vessels may begin to avoid the port altogether.

“The longer this drags on, the more this hurts our reputation as an efficient and reliable gateway port,” said Halifax Port Authority spokesman Lane Farguson.

“We are working closely with CN Rail and terminal operators to minimize the impact on port operations, but it’s too early to say what it will be.

“Without rail, import cargo destined for inland markets cannot move from the terminals and eventually, yard storage space will be used up. When the Port of Halifax is no longer able to accept import cargo destined for inland markets, carriers may stop calling and this will impact the majority of local cargo bound for international import and export markets.

Simply put, if the ships aren’t calling, cargo isn’t moving, and vice-versa.”

Farguson added that a partial or complete port shutdown would be devastating to the reputation of the port as an efficient and reliable international gateway.

In Montreal, some 4,000 containers sit immobilized on the docks.

“We are obviously concerned about this situation, which has significant impacts on the economy and the transport logistics chain serving the port,” spokeswoman Melanie Nadeau said in an email.

On the West Coast, at least 66 shipping vessels are stalled according to continued

Photo: CN Rail

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March 2020

7

IN THE NEWS

SUPPLY STATS

21 companies So far, 21 companies that either ship goods internationally or carry those goods have signed the Arctic Shipping Corporate Pledge. That means signatories that produce consumer goods—including Nike, Puma, Columbia and Ralph Lauren—will ensure their products aren’t shipped along routes that go through Arctic waters.

Shippers, which include global giants such as Kuehne + Nagel and Hapag-Lloyd, won’t send their own vessels along those lanes or arrange for others to ply them.

15.4MT of grain

1.2 million TEUs The Prince Rupert Port Authority (PRPA) announced another record year in volume, with a total of 29.9 million tonnes of cargo moved through the Port of Prince Rupert in 2019—12% more than the 26.7 million tonnes handled the previous year and the highest total volume to date for the port. DP World’s Fairview Container Terminal handled over 1.2 million TEUs, an increase of 17% over 2018.

Canada’s two largest railways moved a record 15.4 million tonnes (MT) of grain in the final three months of 2019.

Canadian Pacific set a new quarterly record by moving 7.9MT of grain and grain products.

Canadian National says it moved 7.5MT over the last three months.

For the 2019 calendar year, which includes two crop years, CP moved a record 27MT of grain, while CN moved 26.6MT.

Lift 91 kgs without strain $55 million equity investment Ontario logistics and transportation company Hightlight Motor Group received a $55 million capital investment from Crédit Mutuel Equity, the North American private equity arm of Crédit Mutuel Alliance Fédérale, a major banking group in France. Crédit Mutuel Equity will become a minority shareholder of the company.

Delta Air Lines is partnering with Sarcos Robotics to explore new employee technology, which includes a mobile and dexterous exoskeleton—Guardian XO— designed to boost employees’ physical capabilities and bolster their safety. This robotic suit, designed for employees to wear, does the heavy lifting. By bearing the weight of the suit and the payload, the exoskeleton may enable an employee to lift up to 91 kilograms repeatedly for up to eight hours at a time without strain or fatigue.

125,000 kgs of vehicle weight The B.C. provincial government announced that permits for its Project Cargo Corridor are now available. The permits pre-approve travel for commercial trucks between two major Lower Mainland ports (Fraser Surrey Docks and Lynnterm East Gate) and the Alberta border via Highway 16. The trucks are no longer required to complete the traditional extraordinary-load approval process. Commercial vehicles with a gross combined weight up to 125,000 kilograms, with eight to 13-axle superloads are eligible to apply.

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continued from p. 7

Robert Lewis-Manning, president of the Chamber of Shipping, who says at one point there were 48 vessels anchored in Vancouver and 18 in Prince Rupert waiting to get into those ports to either unload or pick up goods.

He says Canadians will eventually notice consequences from the backlog.

“It will hit in the pocket book, it will hit in necessary supplies for key industries and it will take a long time to recover,” he said.

“Those line-ups are only going to increase, of course ships are continuing to arrive,” he added. “Eventually there will be no space and they’ll be waiting off the coast of Canada, which is a situation we’d like to avoid.

“Canadian businesses rely on a predictable, efficient and productive supply chain to move products globally. This action is harming the reputation of Canadian ports and the Canadian supply chain. Even a resumption of service at this stage will take weeks to resolve and impacts the markets that Canadian shippers serve.”

The high value of cargo and the costs of delaying ships mean container ship schedules are of particular importance, says Barry Prentice, a professor of supply chain management at the University of Manitoba.

“Transportation is a service. It can’t be stockpiled. Some blocks of time are more valuable than others. Meeting container ship schedules is particularly important because of the high value of the cargo and the costs of delaying a ship.

Any time lost when the trains are not moving is lost forever. Even when the blockades are finally removed, the pain of this event will take a long time to go away. Delayed shipments will have to be feathered-in with newly arriving traffic.

It might seem simple. It’s anything but.”

A return to full operating capacity will take longer than most people realize, he adds—months, not weeks. “The start-up of operations of any complicated network, including railways, has to be finessed with the utmost skill. Yards, crews and trains need to be synchronized across the whole Canadian network to avoid bottlenecks and congestion.” CS

IN THE NEWS

A timeline on rail disruptions by anti pipeline protesters Dec. 31, 2019 — The B.C. Supreme Court grants Coastal GasLink an injunction calling for the removal of any obstructions including cabins and gates on any roads, bridges or work sites the company has been authorized to use.

Jan. 1, 2020 — The Wet’suwet’en First Nation serves Coastal GasLink with an eviction notice, telling the company workers are “currently trespassing” on their unceded territory.

Jan. 30 — The hereditary chiefs of the Wet’suwet’en agree to seven days of meetings with the province.

Feb. 5 — The talks that were intended to de-escalate the dispute fail after just two days.

Feb. 6 — Protesters in Belleville, Ont., start holding up railway traffic.

Feb. 7 — Via Rail halts service along one of its busiest routes because of the Belleville blockade. All travel between Toronto, Ottawa and Montreal is cancelled.

Canadian National Railway obtains a court injunction to end a demonstration by members of the Tyendinaga Mohawk Territory near Belleville. Protesters also begin disruptions at ports in Vancouver and Delta, B.C. Feb. 8 — Protesters in Toronto disrupt Canadian Pacific Railway traffic moving through the downtown.

Feb. 9 — Kahnawake Mohawk community members south of Montreal erect a blockade on a CP rail line.

Feb. 10 — Demonstrators in the Montreal area disrupt commuter train service on the Exo Candiac line. A shuttle bus service is in effect for affected rail stations.

Feb. 11 — CN stops transport between Prince George, B.C., and Prince Rupert, B.C., because of a blockade near Hazelton, B.C. The company says it has halted more than 150 freight trains since blockades started on Feb. 6.

Feb. 12 — The Manitoba government says it may seek a court injunction to end a blockade on a rail line west of Winnipeg, but CN obtains its own court order.

Feb. 13 — CN shuts down its operations in Eastern Canada. The railway says blockades have ended in Manitoba and may come down soon in British Columbia, but the orders of a court in Ontario have yet to be enforced and continue to be ignored.

Feb. 14 — A rail blockade that halted train traffic to and from the Port of Prince Rupert is lifted as First Nations leaders agree to meet with federal and provincial politicians. A date for that sit-down is to be arranged. CN spokesman Jonathan Abecassis says the blockade was removed overnight.

Feb. 15 — Indigenous Services Minister Marc Miller says “modest progress” was made in talks with the Mohawk First Nation over the rail blockade. But Miller declined to say what progress was made after nine hours of meetings on Tyendinaga Mohawk territory near Belleville, Ont., saying he would deliver that message to Prime Minister Justin Trudeau directly.

Feb. 19 — A group called Cuzzins for Wet’suwet’en set up a blockade on a Canadian National Railway line on the western edge of Edmonton Feb. 24 — Ontario Provincial Police move to enforce injunction aimed at clearing Belleville-area rail blockade.

Source: The Canadian Press

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INDUSTRY Q&A

Tech key to cross-border supply chain integration Dr. William Anderson, director, Cross-Border Institute

The Cross-Border Institute (CBI) at the University of Windsor is dedicated to research, education and public outreach related to the movement of people, goods and services across the Canada-U.S. border.

It takes a multi-disciplinary perspective, incorporating engineering, economics, the social sciences, management and law.

How can technology help improve cross-border travel?

What impact did NAFTA negotiations have on cross-border traffic?

The essence of Canada-U.S. trade is the integration of supply chains across the border. It wasn’t just NAFTA. Over the past five years there have been a number of things that have created uncertainty around cross-border supply chains, including whether there was going to be a new bridge, as well as around things like the tariffs on steel and aluminum. The main impact from those uncertainties is that it has had a dampening effect on investment. In particular, if you wanted to make investments in production facilities where a substantial amount of your market is going to be in the United States or you’re going to be plugged-in to a supply chain that crosses the border, there was some uncertainty if that was going to work. The USMCA agreement is a positive thing for most Ontario industries.

One would hope to see over the next few years an uptick in investment and capital expenditures, which have been slow in the overall North American economy, but particularly in southern Ontario.

What is CBI currently working on in the area of cross-border traffic?

We are looking into methods of artificial intelligence (AI) that might be able to give trucks a heads-up to know when to expect a long delay at the border. The idea is to gather a lot of information, including data on weather and traffic congestion, and put it through a machine-learning algo10

March 2020

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“I don’t think there is anyplace in the world where you have such complex supply chains integrated across an international border as you do between Canada and the U.S.” Dr. William Anderson, director, Cross-Border Institute

rithm and then identify those situations under which you would expect to have to big border delays.

Presently, you can find out the wait time at the border using a website, but what we’d like to do is predict a couple of hours in advance, so that if you’re moving in a supply chain across the border that you would be able to predict whether there is going to be a delay and then act accordingly, either changing the route or notifying others in the supply chain that there is going to be a delay.

We are hoping to commercialize it down the road.

There needs to be a push with technology to get to the next level because most of the trucks crossing the border are the same trucks crossing with the same goods day after day, meaning the risk associated with those trucks are low, though not zero. The question is how do you use technology to minimize the small amount risks associated with those trucks? Currently there is a pilot project at the Ambassador Bridge with an unstaffed lane, which means that the truck driver interacts with technology like facial recognition rather than a human officer. The ideal thing in the long run would be a “green lane” where certain trucks can roll through without stopping at all.

We are headed towards a technological transformation already. If you can harness the technology then you’re going to have a different border, where being in a queue is the exception rather than the rule.

This has to do with communicating in a wireless fashion, ensuring that all of the information about a truck that might have any bearing on risk or compliance is received in advance in time for the border agency to make a decision before they get to the border.

How do our border crossings compare to others?

I don’t think there is anyplace in the world where you have such complex supply chains integrated across an international border as you do between Canada and the United States. By international standards the CanadaU.S. border is one of the best, most-efficient ones in the world.

When I travel and I talk about how we have this problem because sometimes it takes 45 minutes for trucks to get across the border people will laugh because in their local experience it sometimes takes days. CS Photo: Cross-Border Institute/University of Windsor

IN THE NEWS

Sky’s the Limit With Air Canada behind them, Drone Delivery Canada is proving its concept works When he made his first visit to the offices of Drone Delivery Canada (DDC) in the summer of 2017, Tim Strauss admits he was skeptical.

The vice president cargo at Air Canada described himself as agnostic when it come to vehicles.

“What can it carry and what can it do within the regulated environment?

What I’d seen up to that point with drones was lots of cool equipment, but not an intersection with the regulators,” he explained during an interview with Canadian Shipper.

What saw turned him from a skeptic into a fan of the company. “[DDC] were building their equipment in tandem with Transport Canada and Nav Canada so that it was ready to launch inside controlled airspace, which was and is the right approach to take, but something I had not seen that anyplace else.”

That was a launching pad for the signing of a sales agency agreement designates AC Cargo as the exclusive sales channel for DDC’s first 150,000 lanes.

Last fall, DDC signed up a pair of clients in the Greater Toronto Area that will showcase its operations on the sites to promote the drone delivery concept.

The drone operator has completed the proof of concept activities required

by Transport Canada. As a final step before giving it free rein, the regulator has agreed to the suburban operations to see how it intersects with other modes of traffic in the region.

While not the unfettered start of commercial operations for DDC yet, Strass expects that activities will ramp up quickly once these operations are up and running.

The first agreement was with Vision Profile Extrusions Limited to deploy a drone delivery platform for the use of Vision between its properties in Vaughan, Ontario.

The contract with Vision calls for DDC’s ‘Sparrow’ drones, which can carPhoto: Drone Delivery Canada

By John Tenpenny

Drone Delivery Canada’s ‘Sparrow’ drones, which can carry loads of up to 4.5kgs, operate between customer sites, remotely monitored by the drone operator’s commercial operations centre.

ry loads of up to 4.5kgs, to operate between the manufacturer’s sites, remotely monitored by the drone operator’s commercial operations centre. The customer pays DDC a monthly fee for each drone route.

“There are revenues involved, but at this point we’re less interested in making money with this. A lot of potential customers want to see it,” remarked Strauss, who is also a member of DDC’s advisory board.

The second commercial agreement was with DSV Air & Sea Inc. Canada, the Canadian arm of the global transport and logistics company DSV Panalpina A/S, to deploy drones at its new head office and warehouse in Milton, Ontario.

“We are pleased to roll out our first paid commercial projects using our proven Sparrow drone, patented FLYTE system, and newly built commercial operations centre,” said Michael Zahra, president and CEO of DDC. “We have a robust funnel of opportunities and we

expect these will be the first of many to come globally.”

According to Strauss, interest has been steady. Many visits by interested parties have been followed by second visits with senior management personnel and top management in a third round, he reported.

He sees several areas of promise for DDC’s operations, from closed–loop type supply chain service like the Vision and DSV agreements, to distribution activities and the carriage of supplies and medications to remote communities.

Recently, DDC signed a $2.5 million contract to deliver parcels within the Moose Cree First Nation communities in Northern Ontario.

The project is the first stage in the “remote communities” market segment DDC aims to grow over the next few years. The company aims to utilize its Sparrow drones for the transport of goods including letters, general parcels, and medical supplies. CS www.canadianshipper.com

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CHEMICAL LOGISTICS

SPECIAL DELIVERY Safety is critical to the transportation of dangerous and non-dangerous substances MARK CARDWELL

A

s president and CEO of the Chemical Industry Association of Canada (CIAC)—a group that represents the majority of companies that transform raw materials like oil, natural gas, minerals and biomass into substances and materials used to make more than 70,000 everyday products—Bob Masterson knows how crucial the safe and timely delivery of those goods is to the health and well being of the $60-billion industry.

But he also knows how demanding the handling, storage and movement of hazardous and non-hazardous products and substances requiring special care can be in a country as big and diverse as Canada.

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“Getting our goods to market is challenging,” Masterson told Canadian Shipper in a recent phone interview from the CIAC’s offices in Ottawa.

“Shipping is a major cost and concern for our members.”

In addition to transportation bottlenecks that arise from a myriad of economic, infrastructure and regulatory issues and problems, Masterson says the service environment in Canada is also vulnerable to disruptions from extreme weather events or labour strife like the recent CN workers’ strike.

Then there are unexpected interruptions like the blockade in February of much of the 30,000-km-long CN Rail network by protesters in support of the Wet’suwet’en hereditary chiefs, who op-

pose the $6.6-billion Coastal Gaslink route that would move natural gas from northeastern British Columbia to the Pacific Ocean.

The Canadian Chamber of Commerce called for an “immediate end” to the blockades, saying the country’s supply chains “are being severely damaged by the continuing interruptions.”

In addition to its own rail network, CN warned the blockades would also soon affect business at the ports of Halifax, Montreal and Prince Rupert.

“The impact is also being felt beyond Canada’s borders and is harming the country’s reputation as a stable and viable supply chain partner,” CN said in a recent statement.

Photo: AltaGas

CHEMICAL LOGISTICS

A CN train makes the first delivery of propane feedstock—from Alberta—to BC’s Ridley Island Propane Export Terminal (RIPET) for export to Asia.

Chemicals also account for roughly 13 per cent of all Canadian rail network traffic and an equally large percentage of the revenues of both CN and CP. Seventy per cent of that freight rail volume—notably plastic resins, which are used to make everything from food and drug packaging to carpets, wallpaper and car parts, and sodium chlorate, which is used to bleach wood pulp in the pulp and paper industry— is exported to the United States.

In return, Canada imports smaller, higher-priced volumes of sulphuric acids and powerful chemicals for the mining, electronics and refrigerant industries.

Chemical relations

Masterson echoed that concern.

“Investors do pay attention to these issues when making decisions on whether or not to invest here,” he said.

Rail isn’t the only delivery method for Canada’s chemical industry. But it is by far the most important.

According to Masterson, 80 per cent of the corrosives, acids, plastic pellets and other products made by chemical companies in Canada—making it the country’s third-largest manufacturing sector—are shipped by rail.

Based mainly in Alberta, Ontario and Quebec, the chemical industry is also the second or third largest volume supplier by rail in Canada with more than $60 million of product moving daily and $23 billion annually.

Not surprisingly, the cross-border movement of these products require manufacturers, carriers, and thirdparty logistics (3PL) providers to be aware of and adhere to a complex web of ever-changing federal and state regulations aimed at preventing safety hazards such as combustion, contamination, and spoilage.

“A very complete alignment between Canadian and American regulations is critical,” said Masterson.

In addition to maintaining regulatory harmonization, Masterson said there is an urgent need for public policies and investments that will improve Canada’s supply chain networks—by rail, road and ship—and support growing demand and capacity for chemical production.

Masterson pointed to three new private projects worth a total of $13 billion—including a plastic resin plant in Sarnia and two facilities in Alberta, which has massive reserves of lighter chemical-making feed stock like natural gas and ethane—that he says will help put Canada on the Top 10 list of world chemical producers.

He said more projects that will double those investments are in the works. “Plastics industries have grown 8.5 per cent annually over the past 50 years,” said Masterson. “That’s twice the rate of international GDP and continues to grow.”

Rail service, he added, is a key factor in decisions by CIAC members on whether to locate a new facility or ex-

pand existing operations in Canada.

Most, however, are captive rail shippers with no viable shipping alternatives due to factors ranging from access to a single rail carrier to the distance, volume and type of product being shipped.

“Access to a safe, reliable and competitively priced rail service is critical to the success of the Canadian chemistry industry,” said Masterson.

He applauded recent initiatives like the 2018 Transportation Modernization Act, which brought in new data requirements to improve transparency and help shippers better monitor Canada’s freight rail network.

The new legislation also introduced measures like long haul inter-switching (from a 30-km to a 100-km radius) to help captive rail shippers and granted Transport Canada the power and ability to launch investigations into issues related to rail service.

According to Masterson, the changes have helped to improve the industry’s mostly positive albeit sometimes contentious relations with CN and CP. “We all share concern for public safety and work closely together in our commitment to it,” he said.

Safe distribution

One example of this was the recent decision by the CIAC-backed Transportation Community Awareness and Emergency Response initiative to revive the Safety Train with $220,000 in funding from TC. Starting this summer, the converted tank car will travel to communities across Canada that have chemicals moving though them and serve as a mobile classroom to help train emergency responders.

For health and safety expert Jim Bird, chemical manufacturers and distributors are like two peas in a pod when it comes to the chemical supply chain in Canada.

“Distributors play a key role in the chemical industry because manufacturers, due to their size and policies, can’t react as fast as to the needs of end users,” said Bird, a regional director www.canadianshipper.com

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CHEMICAL LOGISTICS

The TRANSCAER Safety Train is a railway tank car that was converted into a classroom on wheels in 1990 to train emergency responders. It was the first training car of its kind in Canada—a concept that has since been adopted by other organizations across North America and around the world.

with Responsible Distribution Canada (RDC), a non-profit trade association for the distribution sector of the Canadian chemical industry.

Before joining RDC five years ago, he spent 37 years with Univar Solutions, a global chemical and fine ingredients distributor, and the leading distributor in Canada. He notably created the transportation safety program for the company, which had a fleet of over 300 rail cars when he retired.

“Whether it’s rolling stock or road transportation, distributors carry a big share of the load in chemical transportation in Canada and account for a majority of shipments,” said Bird.

Due to the special care needed to make, handle, store and deliver the products and substances that account for the biggest volume of chemicals produced and transported by distributors in Canada—including caustic soda (a corrosive commodity substance used in the pulp and paper industry and in the oil sands), methanol (various uses), xlyene (a common hydrocarbon solvent) and chlorine gas (a deadly disinfectant used to treat drinking and swimming pool water and to make hundreds of consumer products, including paints, 14

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textiles and insecticides)—Bird said the relationship between distributors and transporters is extremely close. “They both work with low profit margins and face the same issues,” he said.

According to Bird, one of the biggest issues facing both the chemical and transportation industries is the lack of truck drivers. “The shortage is even worse for the transport of dangerous goods because you need trained drivers willing to expect added risk with no extra premium,” he said.

In addition to knowing their company’s protocol in the event of an incident and what to do on scene, Bird said drivers need to learn through certified training courses everything from the hazardous nature of the substances in the tankers they haul and the pumping rates for those products to the compatibility of transfer hoses and how to protect themselves and others in the event of an accident or incident.

“Some of these flammable liquids in bulk tanker loads and trucks on the road represent explosion and fire hazards,” said Bird. “Some of them also have exposure health issues like cancer, burns and poisoning. Methanol, for example, is highly toxic.”

Though oil and gas are outside the scope of chemical distribution—even though oil and gas companies are the principal end users of substances like methanol, glycol and corrosion inhibitors—Bird said the chemical distribution network is both targeted by and involved in the flammable liquid training programs for fire departments that have sprung up across Canada since the 2013 rail disaster in Lac-Mégantic that killed 47 people and destroyed much of the Quebec town’s downtown core from the fires and explosion of multiple derailed tanker cars.

“The worst incidents usually involve oil and gas, and usually rail and pipelines,” he said. “There are many more incidents on the road, but they tend to be more contained because of the smaller amount of product involved and minor in nature, like a truck skidding off the road.”

He added that other major road-related incidents usually occur as a result of operator error at distributors’ sites, such as massive over spills of rail tankers involving groundwater pollutants like xylene, which can require costly, long-term cleanup work.

“Fortunately, there are lots of protoPhoto: Railway Association of Canada

CHEMICAL LOGISTICS

cols in place and contained material volumes,” said Bird.

Going digital

Improved digital technology—both on board vehicles and through service providers—is also helping to improve the safety and efficiency of the chemical supply chain in Canada and the U.S. “There is a technical renaissance going on in our industry,” said Frank McGuigan, CEO of Dallas-based Transplace, a North American leader in transportation management services and logistics technology.

According to McGuigan, artificial intelligence is helping to enhance the digital tools and platforms his company has on the marketplace by providing the ability to not only predict and better understand shippers’ needs but to provide real-time information and assistance to help manage spills and

other safety issues that arise.

“Trucks have had satellite tracking for 30 years,” said McGuigan. “The big difference now is that our optimized systems can proactively capture, harness, update and transmit information automatically to provide customers with real-time visibility and information on their assets.”

For his part, Doug Kimmerly, who owns a small brokerage company in Toronto called DSN that focuses exclusively on hiring trucks to transport chemicals and hazardous materials— everything from acids to lubricants— between the U.S. and Canada for chemical distributors and manufacturers, sees the rise of the controversial employment model known as ‘Driver Inc.’ as a growing safety issue in the trucking industry as a whole and the chemical transportation industry in particular.

“The vast majority of industry operators are highly trained professionals,” said Kimmerly. But he said the drivers’ shortage, together with a pay-per-mile industry approach that is being torpedoed by long border delays and more lengthy inspection requirements, is leading many fleets to cut costs and manage risks by setting up drivers as independent contractors who are supposedly eligible for deductions enjoyed by corporations—a tax-saving scheme that may soon be challenged by the Canada Revenue Agency. CS

Mark Cardwell is an independent journalist and writer based in Quebec City. He is a correspondent for publications in various fields, including transportation, business, agriculture, medicine and law.

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CRUDE–BY–RAIL Calgary-based Melius Energy recently transported BitCrude bitumen via intermodal rail from Edmonton to Prince Rupert in custom 20-foot containers.

THE BETTER WAY New technologies offer safer ways of moving oilsands bitumen

O

ngoing pipeline project delays and growth in crude-byrail capacity from Western Canada, along with recent derailments that have put the spotlight on the environmental consequences of shipping crude, are leading some oilsands producers to look at alternative methods of shipping bitumen.

Oilsands bitumen is a thick, sticky oil which must be diluted with about half as much light petroleum to flow in a pipeline, but diluent isn’t needed for rail transport because the product can be heated for loading and unloading.

Recently, a pair of Canadian companies, have demonstrated new technologies that offer to ship bitumen, they say, safely and efficiently, by container or rail.

Custom containers

Calgary-based Melius Energy successfully transported 130 barrels of bitumen last fall using the BitCrude process 16

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from Edmonton to Prince Rupert, B.C. in custom 20-foot shipping containers via intermodal rail. From there, the containers travelled by ship to international markets.

“Now that we have tested the intermodal transportation method for exporting bitumen, Melius Energy is focused on scaling the BitCrude transportation solution,” said Melius Energy’s president, Nicole Zhang. “Establishing a transportation solution for Canadian energy that delivers tremendous value for local producers while satisfying the demand for our energy internationally is our priority.”

The BitCrude process developed by Cal Broder, founder and chair of BFH Corp., uses an electrically powered diluent recovery unit to remove lighter petrochemicals, thus producing a product that’s non-flammable for transportation purposes, floats in both fresh and saltwater in custom containers and is non-toxic to marine life.

Melius says the product meets regulatory requirements of the recently passed federal oil tanker ban in northern B.C. and can be exported from Prince Rupert.

“We have now proven that we can ship bitumen to international markets safely and efficiently,” stated Broder.

Melius is establishing relationships with refineries in Asia and is working to provide a long-term, stable supply.

Those refineries plan to turn the Alberta bitumen into products such as asphalt and low-sulphur diesel.

Pellet-ized

CN Rail is also working on a safe way to transport bitumen, with its patented CanaPux, a solid pellet about the size of a bar of soap composed of heavy crude blended with a polymer inside and as an outside wrap. The pellets are turned back into a liquid, separating the polymer for reuse. Like BitCrude, CanaPux is non-volatile, dust-free and Photo: Melius Energy

CRUDE–BY–RAIL

is easily retrieved in the event of a derailment or if the pellets wind up in the water.

Currently in the works is a pilot project, which will see CN and Wapahki Energy, a company owned by the Heart Lake First Nation in Alberta, each will invest $16.7 million.

Under its Advantage Heavy Oil Development Ltd. company, CN plans to build a facility capable of producing 100,000 pellets a day. It will include a recovery unit and rail facility where pellets will be loaded into hopper cars capable of moving an equivalent 650 barrels of oil. That compares to a tanker, costing ten-times more to lease, at 500 barrels. Savings for producers are estimated at about $15 per barrel. The company is targeting Chinese refiners.

Wapahki Energy is looking at a 10,000 pellet per day facility in North-

CN Rail’s patented CanaPux isa solid pellet about the size of a bar of soap composed of heavy crude blended with a polymer inside and as an outside wrap.

ern Alberta that will include a polymer recycling facility and biomass energy plant that will process forest and construction and demolition waste. It plans to supply pellets for non-combustible uses in China and to off-takers in South Korea.

James Cairns, vice-president of petroleum and chemicals at CN told The Canadian Press that CN has signed a memorandum of understanding with an unnamed Asian customer who is interested in importing the pucks to his country and separating the oil and polymer for processing and sale.

Cairns said the pucks can help generate industry profits by allowing Alberta bitumen and other heavy crude a less environmentally risky way to access new markets.

“It’s not going to replace pipelines, not even close,” Cairns said. CS

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REVERSE LOGISTICS

As e-commerce helps push returns to record volumes, shippers and their partners look for ways to slow the tide

BY IAN PUTZGER

he battle with returns is getting longer. On January 7 home delivery specialist ParcelHero declared that peak returns were continuing into the second week of 2020.

Courier firms had braced themselves for an avalanche of return parcel flows, with estimates of US$90-95 billion worth or goods flowing back. UPS was expecting to handle in excess of one million return shipments a day through December into January, anticipating to hit a peak volume of 1.9 18

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million returns on January 2. Steve Vitale, director of communications of UPS Canada, says that returns have ballooned at an annual clip of around 10 per cent over the last four years and are going to continue to rise.

While this has been widely expected in the B2C arena, he notes that returns in the B2B sector are also growing at a rapid rate, albeit from a relatively small base.

“It’s becoming more a B2B play as well,” says Vitale. “For example, com-

panies may send products to workers on a project somewhere and then ship back the unused products,” adding that B2B e-commerce now mirrors the B2C sector in many ways.

In B2C returns are simply part of the course—an indispensable part, for that matter. According to one study, 67 per cent of online shoppers check the merchant’s returns section before completing their purchase. Another survey found that the returns experience impacts the likelihood of a repeat Photo: UPS

REVERSE LOGISTICS According to one study, 67 per cent of online shoppers check the merchant’s returns section before completing their purchase.

As they mean extra cost for the merchant, returns come across as the bane of their existence, an image underscored by return rates north of the 30 per cent mark. Horst Manner-Romberg, principal of mail and parcel logistics consulting firm M-R-U, cautions that this picture is misleading.

Garments may be showing return rates above 30 per cent in the e-commerce segment, but this is due to the fact that consumers order the same item in different sizes and/or colors, shifting changing rooms to their homes. Sectors like office equipment or furniture have much lower return rates, he points out.

“Returns is a channel-specific issue, not e-commerce-specific,” he stresses.

According to him, the image of the e-tailer being a martyr to the cost of returns is also misleading. “Merchants have managed to build an image that they are the battered ones, but they save more on what they would have to pay retail outlets,” he says. “They have a fat enough margin in e-commerce.”

Free shipping

purchase from a merchant for 73 per cent of shoppers.

“Years back returns was the ugly step-child, now it’s a mechanism to increase sales,” comments Vitale.

“If merchants don’t offer don’t offer a simple returns policy, they’ll lose business,” remarks Mo Datoo, director of strategy & planning of eShipper.

Amazon has blazed a trail, making the process simple and smooth, and others have no choice but to follow suit, he adds.

Consumers are not inclined to pay for returns. In one survey 42 per cent named free returns as the strongest factor contributing to a positive returns experience.

Still, it is possible to charge for returns in some cases, says Brian Bourke, chief growth officer of SEKO Logistics.

“You don’t have to offer free returns, you have to offer easy returns. You can monetize returns. It depends on the value,” he comments.

For most online merchants the easiest approach has been to include as return label with the outgoing shipment. This makes it easy for the consumer to send an item back, and the shipment can be traced from the moment it is picked up, which also helps expedite the refund process, another critical interface between merchant and consumer.

“Tracking is extremely important, also to steer the work process,” remarks Manner-Romberg.

However, Bourke sees labels on the way out, being increasingly replaced with online platforms that allow the

consumer to download and print a label. SEKO unveiled a new returns service last spring which utilizes a portal (in the colors of the merchant) that consumers access to initiate the returns process.

“The portal helps. It improves visibility. Customers see right away what’s returned and why, which can help them reduce their returns ratio,” remarks Bourke. “You shouldn’t ship out labels any more.”

Some shippers still employ archaic systems to deal with returns, while others have embraced hyper-modern methods, notes Manner-Romberg. Emerging software providers have spotted an opportunity and unleashed a number of solutions for merchants to manage returns.

He is not too impressed with most of these. “There’s a lot of money looking for investment opportunities,” he remarks. Optoro, a technology company which helps retailers and brands manage, process and dispose returned and excess inventory, raised over US$244 million in several funding rounds.

At least these solutions are not getting in the way of the logistics aspects. They can usually be integrated through APIs or plug-ins, says Vitale. “These tools are not as cumbersome any more to implement.”

Bourke sees benefits in the emergence of tech companies that have solutions for e-commerce “Nobody can do it all alone. We’re more into developing ecosystems with companies like EasyShip,” he remarks.

“Most retailers and brands have not figured out returns management. They rely on someone to take care of it,” he says. “The need for outsourced solutions is only going to increase.”

Datoo agrees. “A lot of people want to outsource the whole process,” he observes.

Disposable goods

This opens up opportunities for logistics providers that extend well beyond the flows of return goods. To begin with, merchandise coming back has to be inspected to determine what will happen with it—can the item be repackaged and put back up for sale straight away, or does it need treatment or repairs? www.canadianshipper.com

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REVERSE LOGISTICS

UPS and TerraCycle developed a system—called Loop—which eliminates the reliance on single-use packaging for consumer goods.

“Most of the time they don’t come in and inspect the goods. We send them photos and ask what they want us to do,” says Datoo.

Imtiaz Kermali, eShipper’s vice-president of sales & marketing, adds that one client let some returns pile up in eShipper’s warehouse and then came in to train staff how to assess and handle the products.

In some cases, SEKO actually performs minor repairs of returned items, but this is not the norm.

“We have embroidery machines in some of our facilities, but this is no our forte. We allow people to enter our facility for refurbishment. There are companies that specialize in refurbishment,” says Bourke.

Often the cost of the merchandise does not justify sending it back for a second sale. A large number of returned online purchases are disposed of through a variety of channels, such as liquidation platforms, discount outlets or charities, while some merchandise is simply destroyed.

“Amazon doesn’t want a lot of goods back. You can keep them or destroy them,” says Manner-Romberg.

Chances that items do not go back to the seller rise exponentially if the consumer is located in another country. For returns of merchandise bought from Chinese suppliers the tenor is “forget it,” notes Manner-Romberg.

“International is much more difficult. A lot is disposed of, or the merchant tells the consumer: ‘You got the wrong color? Keep it! We’ll send you a new one’.

Only high value goods are returned,” says Dean Maciuba, director consulting services at Logistics Trends & Insights.

For returns from U.S. consumers eShipper often looks to move the goods as close as possible to the border to bring them into Canada in consolidations.

For the intra-U.S. leg, often the U.S. Postal Service is the preferred option.

SEKO uses postal agencies in many countries. “We leverage global postal solutions,” says Bourke. “It usually takes the least effort and the postal company comes every day.”

Another key element of cost containment is the use of access points.

These are overwhelmingly used for returns, says Maciuba. “Their biggest purpose is to manage undeliverable

shipments. The second reason is returns,” he remarks.

As a cost item they have to swallow, merchants are eager to keep the cost of returns as low as possible, so the pressure is on their logistics providers. Returns programs are rarely contracted separately, though. They are usually part of a package built around fulfillment. “We rarely do just returns for clients. We offer end-to-end bundled solutions where returns are part of it,” says Bourke.

“The only time returns are separate is when a business needs a bit more help, for example if they look for a consolidation point for returns. It depends on a bunch of things,” notes Vitale.

Sustainable practices

Consolidation of returns is a major lever for cost containment. It has the additional benefit of reducing the environmental impact, a theme that is rising in prominence, Vitale says. In the U.S. UPS leverages Coyote Logistics, a tech-based truckload brokerage to maximize consolidation that it bought a few years back. It has also partnered with Optoro to help retailers determine whether to continued

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Photo: UPS

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PEOPLE POWER Supply chain leaders share their insights on the recruitment, retention and diversity strategies that deliver results in the midst of the talent shortage THE PANEL (clockwise from top left)

Ross Reimer, president, Reimer Associates Pina Melchionna, president & CEO, CITT Anna Petrova, director supply chain Canada, Conagra Brands Neil McKenna, vice president transportation projects, Canadian Tire Elias Demangos, president, Fortigo Freight Tracy Clayson, director of client development, In Transit/CPC Logistics Canada Perry Lo, managing director, Canaan Transport Group

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Q. After the strong industry growth of 2017 and 2018 how are the return to slower growth and greater economic uncertainty influencing hiring and retention strategies in the logistics industry? And what’s the impact on salary increases?

LO: Recruiting new talent is tough, retaining it even tougher. Our industry is not one that is looked upon favorably, especially by millennials. We’ve always looked at three main things to try to ensure we get the right people. One is making sure that we pay fairly, but also being performance based. Second thing is we want to make sure that there’s work-life balance and really executing on that.

And lastly, giving educational opportunities such as a professional designation like a CCLP or further training so that we can move talent along and make sure they’re going along a career path that they enjoy and at the same time contribute to the company.

PETROVA: We continuously plan for growth because as a supply chain we need to make sure we support on a consistent basis all the growth plans the company has. I think there is a supply chain talent shortage right now. It has been going on for quite some time because supply chain has evolved. The expectations for entry level positions are no longer the same as they were five or 10 years ago, largely because of outsourcing and automation. When you hire talent you want to make sure you create a very favorable environment for the talent to flourish and develop. So individual development plans are a very important part of everybody’s career planning. And really, we have to make ourselves very competitive to retain supply chain talent right now.

REIMER: Talent is in short supply, there’s no question about that.

This economy weakening somewhat probably releases some of the pressure but what I see consistently is our phone rings because there isn’t a senior management talent to move into a spot when a retirement happens. There’s a cohort that is retiring and companies have not invested enough towards this, I don’t think. And let’s face it, we’re in a tight margin industry, so it’s tough to invest, hence the phone rings for having to go outside and that talent is in short

“There will come a day where the terms diversity and inclusion will be irrelevant because those conditions will just exist”— Tracy Clayson

supply. There’s a bit of a reprieve perhaps right now, but when you look at how the GTA has grown with warehousing bricks and mortar in the last five years, talent supply hasn’t kept up with that.

DEMANGOS: Within the non-driving staff we’re shifting a lot more to a technology based employee; to folks who understand

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day. Now we send them from Montreal or Toronto and they meet in Kingston and they’re both home for that night. And we save two hotel rooms. So there are things that can make driving easier.

You can have more part-time opportunities, you can have teamdriven opportunities where husbands and wives can travel together, for example.

Less jobs available puts downward pressure on wages. So I see a downturn, at least in the truck driving community, probably resulting in flat to no increases in wages and maybe one to one and a half in the traditional supply chain roles. But as long as technology gets introduced into the supply chain, the skill sets necessary to manage that technology are required and universities and educational programs just have to adapt.

“Often I'm seeing when I present four candidates and two are women and two are men, that it's the woman that's chosen for the role. ”— Ross Reimer

technology, even programming. Even some of our traditional dispatchers are in a lot of cases technologically trained. Hiring for your traditional trucking folks is very, very different now. And it’s hard to find them. It’s hard to find someone who understands the trucks, the drivers, the operation piece, but also has the technology mix. Otherwise you need to double up on people. You need a person who understands transportation and right beside them someone who knows IT. Most of our folks are more technical and so they’re commanding a higher salary. Now, the expectations are far greater. So we increase salaries, but a lot of it is based on performance. From the driver side, 2017, 2018 and 2019 was a run-up that I think most of us had not seen in quite some time. I think we’ve hit a plateau. But if you look at the responsibility drivers have on the road, there’s a lot resting on their shoulders. I think we should be compensating them well.

McKENNA: In terms of attracting truck drivers, trucking is not easy. I got my AZ license 15 years ago just to see what I was managing. I was “undercover boss” before there was an “undercover boss”.

And I’ll tell you that’s tough work and they don’t get a lot of respect.

So things have to change in our industry if you’re going to attract drivers. They don't want to be away for long periods of time.We can do things to change that. We used to send a driver from Toronto to Montreal and he would stay overnight and come home the next

CLAYSON: We have the benefit of being a third-party HR solution, so we know who’s paying what. It’s confidential information, we don’t exchange that information, but we certainly have a great lab of analysis to work with and it’s easier to go after opportunities where the brand is strong, the culture is great, and opportunities for growth and advancement exist. Wages are important, but so is who they work for and who they report to on a regular basis.

I think the younger folks are very attuned to things such as sustainability and diversity. They really want to feel like they’re a contributor and that their actions and their participation has a bigger contribution than just moving product from A to B. I think that’s the game changer where we can really leverage what we do and make the industry attractive to the new entrants, whether they’re already in Canada or they’re coming in from other places.

Q. Women are still lagging about 20+ percent behind their male counterparts in terms of pay. Do you see pay equity as an important issue? And what works in attracting more women into trucking and supply chain?

MELCHIONNA: Certainly gender diversity and pay equity are important issues companies have to be addressing. One of the things that I’m certainly seeing within our membership base is gender diversity at the lower and mid level management positions. But we’re suffering from what I think a lot of industries suffer from, which is the pyramid effect. Female talent is not getting up to the C-suite level. And the research that I’ve seen is that companies that have executive boards and management teams with gender diversity are more profitable than companies that do not.

From the pay equity perspective, it’s very important obviously to address that issue. Because it’s the right thing to do, but also because there’s a compelling business case. If pay equity issues are not addressed and women are feeling unmotivated at work, unappreciated at work, which leads to retention and turnover, we’re not going to get the talent we need to meet the talent gap.

So companies that have very strong diversity and inclusion, and that goes beyond gender, are the ones I think will get above the curve and be able to get the best talent in the industry.

DEMANGOS: From the truck driver perspective, since we are in the final mile business, I think it’s easier to attract females. www.canadianshipper.com

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I think will go a long way into slowly increasing the number of women in the business.

REIMER: I’m actually very hopeful about attracting more women into supply chain. My lens is a pretty narrow lens with the clients we’re working with but I can tell you that for middle and senior level management positions 15 years ago there would have been quiet but clear instructions to me to make sure it’s a man. Such words are almost never said anymore. Often it’s the reverse. Often I’m seeing when I present four candidates and two are women and two are men, that it’s the woman that’s chosen for the role. Competent, strong, intelligent supply chain people. I’d say this has really been changing in the last five years. Now, there’s a shortage of great talent, period. But it’s a new world I think, at least with some of the clients that we’re working with, so I’m hopeful.

“In the end you want to hire the best and the brightest and intelligence has no gender or skin tone”— Neil McKenna

The traditional long-haul driver is gone for days. In our business they go home every night. In fact, I would argue, they are more customer service people than they are drivers. And so we’re starting to spin the messaging around saying, look, it’s not a traditional driving job. Yes, there’s some driving involved, but you’re driving in the city. You’re dropping off in some cases boxes to a customer. With some of our accounts you’re actually physically interacting with the freight. You might be restocking a shelf. We’re actively trying to assist women in growing with us but I agree at the senior level, whether it’s with us or others, it’s a challenge. Safety and compliance is now being led by a female in our organization. But there isn’t enough of that. Part of it is the industry itself does not attract a lot of females. We need to change that. And I think when you start putting technology into it, it starts to open up the lens a lot.

LO: I agree with everything said but getting a more diverse trucking community is going to take time. We’ve taken some steps I think to try to encourage more females into the truck cab. They want us to be flexible. One thing we found that has been really successful is flexibility with issues like truck maintenance. We make it a regular part of the schedule so they don’t have to worry about it at all. Little things like that 24

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PETROVA: I feel very passionate about the subject. It does feel very lonely sometimes when you look at the heads of CPG supply chains in Canada. I think there are reasons why we’re in this situation. If we look at the ‘80s and ‘90s, the key profile for a supply chain practitioner was an engineer by trade or an IT specialist, which are traditionally male dominated backgrounds in education. The other factor is that once people get into supply chain, they tend to stay in supply chain for decades. Unlike sales and marketing where you can see some cross pollination of careers, supply chain practitioners are typically very true to their field. And I think that has created some blocking situations but I agree there are a lot of women who have been entering supply chain over the past 10 years. It will take time for everybody to develop the comparable level of seniority when it comes to skills, and especially leadership skills. What we can do is first of all recognize we’re lacking in gender diversity.

There is training we can offer to women. We can offer women temporary assignments to demonstrate what they’re good at. There are all kinds of individual development plans that we can put in place to foster that culture of diversity because it is very important.

The reason I joined Conagra is because we have a very diverse board of directors. We have a lot of strong, powerful women here who I personally found very inspirational. And I myself sit on the diversity and inclusion advisory council for Conagra. If I see that as a part of the organization, this is a company I want to work for.

McKENNA: With large retailers such as Canadian Tire, I think if you walk the halls of their supply chain offices, you’ll see the diversity reflected in their whole supply chain. In the end you want to hire the best and the brightest and intelligence has no gender or skin tone. So I think it’s changing, but I think you’ll see it in the larger companies first, more so than in the medium size to small.

CLAYSON: I watched my mother in the 70s hire truck drivers and place them in the industry. She was fearless. She opened her own doors. She never batted an eye over the fact that she didn’t happen to be male; she had to feed her family. It was a great advantage to see that was also possible for me as a female entrepreneur. There are already more women than men at university getting a post secondary education. So with that you would think there would be more women entering into supply chain. So is

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So if they don’t value it, they should be. Small and medium sized companies become larger by recognizing the value of their supply chains very early in their development.

REIMER: We had an experience with a customer who was in manufacturing that was instructive. They had an individual in charge of the warehouse and when this person retired we came in to do a little bit of consulting work for them first and then find the right hire. The individual that we brought in to do the consulting work found about $1 million in savings in the first nine months because supply chain had just literally been pushed to the back. The owner of course was thrilled but at the same time realized that he had missed the boat on what could have been for all those years. That business today runs like a Swiss watch.

That lesson has taken hold and, like Amazon has taught us, it’s all about supply chain.

“Certainly some of the technological advancements happening can attract that younger generation”— Pina Melchionna

there a lack of talent or is there a lack of ability to access talent?

I’ve been a supplier to Canadian Tire for 20 years and I have seen them promote women to senior roles. It’s great to go to meetings and sit down with them and they know the business.

They know fleets, they know freight, they know expectations, they know deliverables. So there have been trail blazers. There will come a day where the terms diversity and inclusion will be irrelevant because those conditions will just exist.

Q. One thing that our research shows year after year is that the more companies value the importance of supply chain, the more they prioritize supply chain positions and the more they’re willing to pay well for them. Do you think companies as a whole understand supply chain’s role and do they give it enough strategic importance?

McKENNA: The head of supply chain at Canadian Tire is a C level appointment. I think larger, more established businesses recognize the value of supply chains. And the reason I know that is because that’s why they’re older and established. Because they wouldn’t be if they didn’t. Supply chain is usually the second or third largest expense item on your P&L. If you don’t have control of that, you’re not going to be competitive for very long. It’s the backbone of any business and it’s where the game is won or lost.

MELCHIONNA: I entered the industry only a couple of years ago and my first impression was that as a whole the industry has a PR issue. It’s an invisible industry. It’s completely invisible and the better you are at it, the more invisible you become. It’s only when a supply chain goes wrong that it comes to the forefront or if suddenly costs are out of whack. At the end of the day, Amazon, one of the biggest global brands that we have, is a logistics company. And the companies I think that look at supply chain as a potential for competitive differentiation will be the winners. And the ones that continue to ignore it, I think do so at their peril.

LO: It goes back to how you define supply chain. Supply chain is not just the trucking or warehousing piece. Look at Dell computers when they flipped the model on computer making. The computer business 20 years ago when you had a whole bunch of competitors in it was a very tough business in which to compete. And yet Dell did so incredibly well just by flipping their supply chain around. Under the old way, computers would be built, shipped and then sold. Dell turned that around completely. They sold it and then manufactured it and shipped it. The importance of supply chain to the success of a business is huge.

Q. Our research shows that trucking employees are older than the national average for Canadian workers. One of our recent surveys found that 42% plan to retire within 5 years. That’s a staggering amount of retirements. It’s not as acute on the supply chain side of things but there we are seeing supply chain managers retiring as early as age 55. As an industry have we adequately prepared to absorb these losses from the labor pool? And is a more diverse workforce a critical part of the answer?

McKENNA: I don’t think we’re in danger of being wiped out by a retirement tsunami. At least from a Canadian Tire point of view, I don’t see that as a huge issue. Retiring at 55 is one thing but good managers plan for their succession. They plan to have two or three people ready, and if they don’t, they failed in their job. So if I have a manager who’s leaving and there’s nobody to backfill him or her, I got a question: why is he/she my manager to begin with? www.canadianshipper.com

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SPONSORED

“When you hire talent you want to make sure

“There are personality and cultural fit tests that

you create a very favorable environment for the

we perform very early on to make sure that

talent to flourish and develop”— Anna Petrova

individual fits”— Elias Demangos

MELCHIONNA: I don’t think we’re alone, right? Every industry in Canada is struggling with the aging demographic and the risks that poses. The industry is not sexy enough currently to attract the younger generation. We have to get better about telling our success stories and I think we have to start younger. No child today grows up to say I want to be a logistician someday.

It’s not even a word many of them know. So clearly education and awareness, maybe at the high school level, needs to start happening. Perhaps with social media campaigns so that we can better tell our stories. Certainly some of the technological advancements happening can attract that younger generation.

guages. So we are very diverse. The question is are we diverse at all the levels within supply chain? The answer is no, we aren’t. There is a lot of work still to be done. The other question I would ask is what do we do about the new Canadians? I was a new Canadian myself in 2001. I came here from Denmark.

As part of the hiring process, every organization is looking for Canadian experience. And there’s a reason for that because clearly if you’re dealing with customers and you’re dealing with transport companies and 3PLs, you do need to know the market. But there are roles where Canadian experience is not that important. So if you used to work for a large multinational company as a demand planner or a supply chain planner in India or Hong Kong or the United Arab Emirates, and language is not an issue, chances are you could start immediately. For some supply chain positions it’s very archaic thinking that you should only hire somebody who has "Canadian" on the job description.

REIMER: I think we’re doing really well in attracting a more diverse workforce. As I walk through client offices and freight docks and see the collection of drivers, I think we’re doing really well, particularly Toronto. Maybe I woke up on the right side of bed today but I’m hopeful because I’m seeing lots of diversity and I’ve seen that diversity not just in the driver ranks, but pushing nicely up through into management and ownership of companies. It’s quite representative of the multi-cultural country we have.

PETROVA: Diversity is a big term. About 10 years ago I had a team of 20 supply chain people and I asked them how many languages do you speak? That team of 20 people spoke 18 lan26

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CLAYSON: The other thing that I think successful companies are doing is expanding the definition of talent they’re looking for. So rather than hiring strictly for a specific skillset or subject matter expertise, there is an openness to looking for leadership skills, generally because you can then train for the subject matter expertise. It certainly has changed my hiring

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around that community and it attracts that community and it keeps that community.

Q. In trying to create diverse workforces, how do we guard against bias in the hiring process?

PETROVA: I was interviewing a fantastic lady for a logistics role. She came from Mexico and she had a couple of years of working in Canada, but she hid from her resume that she had worked for Mexican Customs for five years. When she told me that during the interview, I said, wow, I could just hire you with that experience because clearly you understand logistics and you understand risk management and you have the global understanding of logistics. She hid her Mexican Customs experience because her recruiter had advised her against putting that on the resume.

There needs to be more training at senior levels on diversity and inclusion training. I’ve gone through it. It’s eye opening. I would’ve considered myself a person free from any kind of ethnic bias. And the eye-opening part is that we all have bias. Being aware of the bias is the strongest thing that you can do.

“You have to be able to be open to new immigrants; we are an immigrant country. ” — Perry Lo

practices. I now hire for ability to learn, adaptability, openness to coaching and feedback rather than ticking the boxes on skill sets. It’s more important to find the right attitude; the rest will come with good training.

LO: You have to be able to be open to new immigrants; we are an immigrant country. You walk into any other country in the world, into any other office, you have a homogenous office. Everybody in Japan is Japanese pretty much, but you come into any office in Canada, we’re like the UN. In Vancouver, for example, there’s a very large Sikh population. They knew each other through the Temple. So if you are a good employee to one, he’s going to refer you to his cousin and to his brother.

And we’ve seen a lot of momentum that way. They’re very entrepreneurial as well so instead of telling them we’ll hire you as an employee, we say why don’t we help you finance a truck and you’ll be your own boss. That tweaks a lot of interest.

McKENNA: Engagement is critically important but so is accommodation, especially with the South Asian community.

Companies have to adapt to the needs of their employees. At Canadian Tire we have put prayer huts in our trailer yards, and prayer rooms in our buildings. If you’re accommodating the special needs of a particular community, that gets

REIMER: To that point I have a couple of clients who have dramatically opened up their eyes to that because I was able to get some resumes in front of them from people who are highly educated from other countries and literally working at maybe a third of their capacity. They quickly moved through the ranks.

So it’s been fun to watch that happen. One of the pieces of advice I was given early on as a recruiter to deal with bias was that when you’re in an interview with somebody and you find yourself really liking them right away, go hard. Ask the hard questions. And the flip side is if you really don’t like someone right away, go easy, give them a chance, just develop some rapport. Ten minutes in, maybe in both situations, you end up in the same place. It is important to remember when you hear an accent that we all have one.

CLAYSON: You have an open mind about what you’re looking for and that is somebody who possesses the talent and the aptitude and the agility. If you look at our roster of employees, there’s very few Smiths and Browns and Joneses. We are a global company in many ways. But even within that cultural space, we would also love to have Indian female drivers, for example.

I think all communities need to start looking at their biases.

Bias could come from many places. It’s not about blaming, it’s about how we all evolve culturally.

DEMANGOS: Our hiring is a multi-step process. There are personality and cultural fit tests that we perform very early on to make sure that individual fits. We do panel interviews so you get different people from different parts of the business.

We even have people who would be reporting into that person interview the candidate. So we do try to give it a really good 360 view. There’s never been anyone that’s been hired off of just one person’s interview. CS www.canadianshipper.com

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continued from p. 20

move returned items back on the shelf, to inventory second markets, recycle or—as a last resort—dispose them.

“The impact ranges greatly. For a retailer with no reverse logistics who was throwing out a significant amount of product, it diverts more than 90 per cent from a landfill,” says Vitale.

For the most part, though, sustainability is not addressed directly in the returns arena but as part of the fulfillment mandate. Ultimately it is driven by the merchant’s preferences on the outbound sector, and much is determined by the approach to packaging.

Shipping nail polish in a 12x6x8 box does not make sense other than in the context of using a standard size box for all the merchant’s shipments to simplify the process, remarks Kermali “Others want the unboxing experience to be special, like when you get an iPhone. Then you have clients who look for the cheapest way and use the simplest boxing strategy. Now you also get a new type of seller who is all about sustainability. They don’t want Styrofoam pellets and the least amount of carbon footprint,” he continues.

UPS and TerraCycle developed a system—called Loop—which eliminates the reliance on single-use packaging for consumer goods. Consumers will be offered a variety of products in customized, brand-specific, durable packaging that is delivered directly to customers, then collected, cleaned, refilled and redelivered. Customers will receive durable, reusable or fully recyclable packaging made from materials such as alloys, glass and engineered plastics. Even the outer shipping container is part of the design innovation; a state-of-the art shipping tote will eliminate the need for single-use boxes that reduces waste.

“Loop is being piloted in the midAtlantic U.S. and Paris, with plans to expand to other cities through 2020,” Vitale remarks.

Arguably the best strategy to reduce the carbon footprint would be to reduce returns volumes. Fashion retailers are leveraging new technologies to measure consumers’ sizes to come up with matching fits before an

REVERSE LOGISTICS

order is placed, and some furniture merchants offer simulation to give buyers’ an idea what their item would look like in their homes. For the most part, though, people seem resigned to the idea that returns volumes will continue to rise. CS

Ian Putzger is an awardwinning 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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P RO U D PA RT O F

EAST COAST GATEWAYS

EASTERN PROMISES

Improvements to the Suez and Panama Canals and free trade deals CETA have fuelled big growth-sustaining projects like the Port of Montreal’s planned Contrecoeur container terminal.

Shifting trade patterns spark massive eastern port investments

T

he old adage to head west has been reversed as increased cargo volumes to Canada’s East Coast have resulted in a corresponding uptick in infrastructure upgrades and other investments by ports from Montreal to Halifax.

The reasons for market share gains made by East Coast ports have been credited to improvements to the Suez and Panama Canals and free trade deals like the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), which in turn have fuelled big growth-sustaining projects like the Port of Montreal’s planned Contrecoeur container terminal and the Laurentia intermodal container terminal—a partnership between CN, the Port of Quebec and Hutchison Ports— opening in the Spring of 2024.

“It’s all about the cheapest way to get it to destination,” says Michael Broad, president of the Canadian Shipping Federation, whose organization represents some 250 shipping lines worldwide. “Money is a prime driver. Everything is cargo driven and shipping costs drive cargo. At the end of the day freight goes where it costs less.”

The proof is in the numbers.

In Montreal, the port has enjoyed a 17 per cent compounded increase in volume since 2017, and 2019 saw a sixth consecutive year of growth in the total volume of goods handled, surpassing 40 million tonnes for the first time in its history.

“We’re expanding and investing heavily in infrastructure because of what Photo: Port of Montreal

we’re seeing and experiencing,” says Tony Boemi, vice president growth and development at the Port of Montreal.

The port is also investing $55 million to add six kms of track to its own 12-km, on-site railway network infrastructure and adding another 250,000 TEU capacity to its Viau container terminal—not to mention the planned Contrecoeur project, which will add 1.1 million TEUs if and when it opens as planned in 2023.

That growth has also seen the port step up its investments on the technology side, including a fully public portal on the Internet that provides real-time information on traffic in Montreal and the port. In December, a new version of the portal was activated that features 24hour, AI-driven predictive models for traffic, which helps to optimize service to the port by helping truckers avoid areas of traffic congestion in the city. (page 35) One hundred and seventy nautical miles up the St. Lawrence a partnership between CN, Hutchison Ports and the Port of Quebec claims it will pioneer new import/export supply chain routes between Asia, the Mediterranean and Europe and central Canada and the U.S. Midwest with the construction of a 700,000-TEU deep-water container terminal According to CN, the $775 million Laurentia terminal project will have direct access to its mainline rail network that reaches a combined population of 125 million people in the U.S. Midwest and regions of Ontario. From Quebec, rail transit times and supply chain costs

to central hubs like Chicago and Toronto will be advantageous compared with those from New York and New Jersey.

“In an economy driven by consumer spending derived freight, long haul supply chains need to be modern, cost effective and reliable. We are confident that we are partnering with a group that can make the project a success,” said CN president and CEO JJ Ruest, when the project was launched last Spring.

At the Port of Halifax, where cargo volumes increased 48 per cent from 2013 to 2018, a terminal extension project—scheduled for completion this month—will allow the port’s South End Terminal to simultaneously handle two vessels of 14,000 to 15,000 TEUs. The Canadian-European trade agreement has given Halifax in particular, a boost in marine cargo and the recentlyhired Halifax Port Authority president and CEO Captain Allan Gray says he sees more opportunities in Europe that will help the port reach its goal of becoming Canada’s Ultra Atlantic Gateway. (page 38) Not to be left out is the New Brunswick’s Port of Belledune, which has seen its cargo volumes grow more than 25 per cent since 2016. It is currently in the midst of $34 million expansion project that will improve the port’s ability to move cargo between its four terminals and to and from ships.

“It essentially gives us more space to bring in more materials,” claims CEO Denis Caron. “We’re actually running out of space to store that material on so this project gives us more space.” (page 32) www.canadianshipper.com

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EAST COAST GATEWAYS

THE PORT WITH A PLAN Buoyed by a new expansion project, New Brunswick’s Port of Belledune sets sail for its next 50 years

BY CARROLL MCCORMICK

I

n the four years since Denis Caron became the Port of Belledune’s new CEO, port tonnage increased 27 per cent, to nearly three million metric tonnes (MT). “We’re under new management,” he says, and plans are in play to improve the port’s position.

To remedy structural inefficiencies in how the port handles cargo, made more evident by the increase in bulk traffic, the Belledune Port Authority launched a $34-million capital program last year. It will address on-site bottlenecks, enable better use of underutilised equipment and shock proof the port against the most dire consequence of climate change to a seaside business: The rise in sea level.

Located deep inside the Chaleur Bay, off the Gulf of St. Lawrence in northern New Brunswick, the port facility celebrated its 50th anniversary in 2018, exactly eighteen years after the Belledune Port Authority was created.

Belledune is a deep-water, yearround port with four terminals that specializes in bulk commodity products.

Terminals 1 and 2 are connected by con-

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veyors and pipelines to warehouses and tank farms. Terminals 3 and 4 have a combined 67.4 acres of outside storage space for ro-ro, break bulk, project cargo, and bulk commodities, plus warehouse space for element-sensitive products. Sitting pretty on the shore of Chaleur Bay, there are no obstacles between it and the Atlantic Ocean. “It really is a gem of a port,” Caron enthuses.

According to the Port Authority, the port is approximately a day’s sailing closer to Europe than Halifax or Saint John and it is plugged into the continent’s rail system via CN’s Newcastle Subdivision, and to the world via the nearby Bathurst and Charlo airports, which are vital in supporting business operations.

Port revival

Caron, who grew up in the area, returned home after a 30-plus-year career as a public servant with the New Brunswick provincial government.

The region, once a booming resource area, has endured its fair share of challenges. Just last year the region lost

hundreds of jobs and the port lost business with the shutdown of the Glencore Brunswick Smelter.

“In the 1970s the area was booming. It was an industrial hub for the province. But through the years, [and] a lack of technology and investment, many industries pulled up stakes and left,” Caron says.

But to Caron, the port is ripe with potential. With a view of the port from his office window, he told Canadian Shipper about how he has kicked the port into a higher gear.

“Our business model here at the port had to change. [I asked] what are some of its features and benefits? We run a year-round operation. We have the rail service. We have over 1,600 acres of land, with the possibility of acquiring more.

“I also thought to myself, we can lay claim to be the entry and exit port in Canada. What products do we have, what products can we buy? We looked at four key sectors: energy, such as coal and pet coke; forestry, like lumber and wood chips; mining and minerals; and Photo: Belledune Port Authority

EAST COAST GATEWAYS

agriculture, such as grain and fertilizer.

Looking at it that way you can zero in on sub-products and be more focused.”

Caron decided that the port should strengthen its relationship with Quebec Stevedoring Company Limited (QSL), whose Eastern division is the terminal operator for Terminals 3 and 4, and the provider of stevedoring services to three terminals. “They know what their clients are looking for. We suggested we work together and position ourselves as one of the key ports in their business.

[We asked,] ‘What are your needs in working, going forward and developing opportunities?’ We established a rapport,” Caron explains.

The result so far has been positive: QSL’s tonnage is up, and the products the port handles has increased from fewer than a dozen in 2015, to 26 today. They range from armour stone to lead concentrate to wood chips. Jobs-wise, the Belledune Port Authority reports that by 2018 its activities were supporting 3,058 direct, induced and indirect jobs, compared to just under 2,000 jobs in 2014.

The capital program is jointly funded by a $5 million grant and a loan of up to $2 million under the Northern New Brunswick Economic Development and Innovation Fund from the provincial government, a $17-million federal government contribution under the National Trade Corridors Fund, and a $10 million investment from the Port Authority.

“The Port’s focus is on the fluidity of the supply chain, as this is essential in developing competitive business models for global exporting,” read the statement announcing the project. “The project will help in creating greater access to international trade for Canadian businesses by offering a more efficient and effective port experience for clients through improving the current capacities.”

The work began last year with the preloading of Terminal 4 with a 250,000 tonnes of rock fill to compact and stabilize it. “Terminal 4 was conceived for equipment, windmill parts, but our development has occurred around bulk products. They are much heavier. If you

The infill between Terminals 3 and 4 at the Port of Belledune will improve operational efficiency and increase capacity for cargo handling.

have a terminal that is not stable or even this is a problem,” explains Caron.

The Terminal 4 laydown area was also raised by an average of 1.25 metres (it was a metre lower than Terminal 3.)

“We noticed in the last number of years, when we have major storms, we get a lot of wave action and water up onto Terminal 4. We are taking immediate action on that,” says Caron.

Transport Canada has granted the Belledune Port Authority $80,000 to carry out a Climate Risk Assessment for all port infrastructure, which is expected to be completed this year.

The contractor completed the stabilization work last October, and the laydown area was immediately paved. One of the next steps will be to raise the wharf deck by one metre.

Next up, a 3.7-acre water lot, currently the tug wharf berth area separating Terminals 3 and 4, will be filled in to create one continuous berth. “Cargo is unloaded at Terminal 3, then the material is brought to Terminal 4. The handling and loading and unloading become very costly,” says Caron.

“The infill between Terminals 3 and 4 will improve operational efficiency and safety as well as increase capacity for cargo handling,” notes Alysha Elliot, a spokesperson for the New Brunswick Regional Development Corporation.

Terminal 3 will be expanded by infilling nearly 20 acres of harbour between it and the shore to accommodate ongoing and future increases in bulk cargo traffic. The current plan is to carry out this work at the tail end of the overall project, however the Belledune Port Authority acknowledges that the sequence in which the work will be carried out may be revised due to various circumstances.

Real estate reality

The terminals stand between the water and the port’s huge Modular Fabrication Facilities, situated about a kilometre inland. They are close to the rail line and right beside the highway. The Belledune Port Authority is considering selling it, as well as some of their other above-asphalt facilities, but retaining ownership of the land, with the goal of further increasing efficiencies and cost-savings.

“Is it wise for us to own that real estate and cover the costs, or look to someone to attract and use that building for their business needs, and us look at our core competency?” asks Caron. “The buildings have been underutilized. Major firms have been unaware of them. It is a marketing issue that will be resolved. We are looking at optimizing and maximizing our existing infrastructure.”

Then there are the conveyors owned

by Glencore and NB Power on the port property. “The NB Power conveyor system is about two kilometres long. It is used at 20 per cent capacity. We are looking at ways to use that infrastructure to the benefit of ourselves and our tenants and clients,” says Caron.

The Belledune Port Authority is also looking to increase its transshipment activities. It is already transshipping products such as pyrophyllite, silica sand, and bauxite across the Chaleur Bay to Port Daniel, located in Port-Daniel–Gascons, Quebec, and Caron sees no reason why Belledune cannot be a bigger player in transshipments destined for the Great Lakes, or down the East Coast, for that www.canadianshipper.com

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EAST COAST GATEWAYS

matter. “We can handle vessels of 60,000 to 70,000 tonnes. We are looking at transshipment opportunities,” he says.

Then there is the main CN rail line running approximately 3.5 kms from the terminals, and which serves the port via a spur line. While CN’s 2019 revised three-year rail network plan lists its Newcastle Subdivision sections from milepost zero to milepost 173 as “retain,” the line has been in jeopardy several times in the past few years and the New Brunswick government has had to step in with funds. But it could face closure yet if freight traffic dips too low.

On the potential of rail, Caron comments. “One of the areas we’ve been exploring is shipping by rail to inland North America. We have lumber products here next door to us and most of the product right now is destined for the U.K.” Invoking the name of QSL again, as a strategic partner, Caron notes, “However, QSL operates the rail yard for lumber

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The four terminals at the Port of Belledune, including Terminal 2 (left) and Terminal 3, handled nearly 2.7 million metric tonnes of cargo in 2019.

in Chicago. They can be the connection to that market as well.”

Whether it is looking to more shipping to the Arctic, up the Saint Lawrence, down the Eastern Seaboard or bringing in raw materials for on-site processing, creating value-added products and forwarding, the Belledune Port Authority is preparing, both with a self-assessment of areas requiring improvement, and in upgrading its infrastructure.

Yes, there are challenges, such as the likelihood that New Brunswick Power will eventually go off coal and pet coke, a high-tonnage customer that brought

328,540 MT of pet coke into the Port from the U.S., in addition to 816,947 MT of coal in 2018, for example. On the other hand, the possibility that Toronto-based Maritime Iron Inc. could build a $1.5 billion iron ore processing plant projected to produce 1.5 million tonnes of pig iron a year in Belledune is still in play.

Caron points to the Port’s return on revenue, which, he says, has increased from 20 per cent in 2015 to 33 per cent in 2018. An optimist who has already made a difference, he says of the port, “We feel we have a clean slate to develop. I really believe we can do 30 million tonnes a year.” CS

Photo: Belledune Port Authority

EAST COAST GATEWAYS Housed in the city's old planetarium building, business tech incubator Centech is helping the Port of Montreal fast-track its digital innovation projects.

COLLISION COURSE Digital innovation at the Port of Montreal has accelerated since its partnerships with a local tech incubator

BY MARK CARDWELL

D

aniel Olivier says that from an infrastructure perspective the Port of Montreal can’t hope to match the multi-billion-dollar investments being made by many of its deep-water, deep-pocketed North American rivals.

But from an organizational viewpoint he says the port can, and does compete with the world’s elite by following a strategy focused on the development of innovation and visionary technologies and digital solutions that serve the whole of the Montreal supply chain.

“We’re on a river so we have limited capacity (and) it’s pretty clear we’re not going to compete with the capital expenditure envelopes of ports like New York City or Los Angeles,” said Olivier, the Port of Montreal’s director business intelligence and innovation. “So innovation is the core component of our business model. We want to become North America’s smart port.”

Photo: Port of Montreal

A geographer by trade with a PhD in maritime transport geography from the University of Hong Kong—the so-called ‘Harvard of the East’—Olivier leads a four-person team that works to design, spearhead and manage the development and implementation of digital solutions to organizational and operational problems identified by the Montreal Port Authority (MPA).

Start me up

The most recent innovations have come from the port’s participation in Centech, a world-class tech business incubator and accelerator for budding technology companies.

Created in 1996 by the engineering school at the Université du Québec à Montréal and housed in the old planetarium in the city’s downtown core, the start-up launcher has three programs— Acceleration, Propulsion and Collision— that provide tools, technologies and busi-

ness opportunities for the design and development of new products.

Centech is also part of a fast-growing AI ecosystem that makes Montreal one of the world’s leading hotbeds for deep machine learning with more than 100,000 experts, researchers, students and workers in AI and AI-related fields.

In late 2018, the Port of Montreal joined nearly a dozen major companies—among them German engineering and industrial manufacturing giant Siemens and Canadian flight simulator manufacturer CAE—in Centech’s Collision program.

Under the program, in-house technological experts from participant companies meet with start-ups and doctoral students from several universities to explain their real-life business problems and challenges and to discuss possible digital solutions.

The most promising ideas are developed under contract in fast-paced, four-month cycles. Work on the port’s projects is carried out in a dedicated 600-square-foot workspace in the old planetarium nearby.

According to Olivier, the Port of Montreal has so far done four projects aimed at developing scalable digital solutions to address challenges faced by the Montreal cargo community in four areas: supply chain visibility and freight mobility; cyber security; process improvement and agility; and supply chain decarbonisation.

The showcase project developed so far by the port’s Centech-based logistics innovation unit—which Olivier says is the first of its kind for a port in North America—is the Digital Twin.

Developed by two UQAM grad students at Centech, it provides an immersive, three-dimensional modelling experience of port locations and facilities that can be used for everything from infrastructure planning to fire prevention simulations and training.

“It’s very useful to have such a design tool available to us,” Olivier said about the port’s digital clone, which was produced using photos taken by drones and augmented reality software and technology from Montreal high-tech firms PreVu3D and ARA Robotics. continued

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March 2020

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EAST COAST GATEWAYS

continued from p. 35

In addition to helping to improve and optimize planning and operational conditions at the Port of Montreal, Olivier said the same digital cloning technology can be used to help in the design and development of other sites or projects like the Contrecoeur container terminal.

Construction of the nearly $1-billion project is expected to begin later this year. Designed to support the growth of the container market in Eastern Canada, the terminal is designed to handle 1.15 TEUs a year with two berths, an intermodal rail yard and an entry portal through which 1,200 trucks a day will pass.

“This technology allows us to introduce and import objects that you’d find in a typical container terminal like truck gates and container stacks,” said Olivier.

“We can also add and remove things to optimize our operations and traffic flow.”

Other innovative projects the Port of Montreal has developed with partners through Centech are an AI-powered container inspection device to scan inbound truck containers for seals, placards and rust and to detect anomalies.

“It helps to facilitate, streamline and speed up the human verification process and increase truck fluidity,” said Olivier.

Another Centech-spun project—an automated labour dispatch app—contacts replacement workers automatically when vacancies arise and features pre-programmed labour contract parameters.

“We’re leveraging data over bricks and mortar,” said Olivier. “We’re migrating away from being a traditional infrastructure provider to a hub of digital solutions that serves the Montreal supply chain.”

Olivier considers the advent of Centech and other local initiatives like Scale AI, one of five Canadian governmentbacked, super-cluster networks of businesses, academics and start-ups that is devoted to the rapid creation, adoption and integration of AI in the supply chain, as a godsend for economic development in an increasingly AI-dependent world.

“The beauty of Centech is that it helps us fast-track our innovations and reduce costs,” he said. This puts it at the forefront of the marine sector’s movement towards a future where emerging technologies, efficiency and sustainable dePhoto: Port of Montreal

velopment go hand-in-hand. Instead of the traditional procurement process where you identify the problem you draft solutions and then contract out solutions—which is long and expensive—this open innovation approach is fast, easy and cheap. From Day 1 we working with people to co-create and co-innovate solutions to our problems.”

The Centech projects come on the heels of other successful high-tech innovations the Port of Montreal has adopted.

It was one of the first ports, for example, to join TradeLens, a blockchain-enabled digital shipping platform, jointly developed by A.P. Moller-Maersk and IBM. Smart Port

In 2016, the port introduced a fully public portal on the Internet that provides real-time information on traffic in and Montreal and the port.

“It’s really helped to optimize service to the port by helping truckers avoid areas of traffic congestion in the city,” said Olivier.

In December, a new version of the portal was activated that features 24-hour, AI-driven predictive models for traffic.

“We’re the only port in the world with that,” Olivier said about the technology, which was developed as the result of a hackathon (speed dating-like events to bring together developers, start ups and investors in the world of software development) that was organized by the Montreal Board of Trade for the Port of Montreal and the Pierre Elliot Trudeau International Airport.

According to Olivier, the port’s focus on innovation and visionary technologies as part of its development strategy reached a major milestone three years ago when it joined the chainPORT group.

Founded and led by the ports of Hamburg and Los Angeles, chainPORT is an international partnership of a dozen ports that share knowledge and innovations about digital tools to help improve their use of existing infrastructures and to plan and maintain sustainable future growth.

Other group members include the ports of Antwerp, Barcelona, Busan, Felixstowe, Indonesia, Panama, Rotterdam, Shanghai, Shenzhen and Singapore, as well as the Global Institute of

Daniel Olivier leads a four-person team that works to design, spearhead and manage the development and implementation of digital solutions for the Port of Montreal.

Logistics, a non-profit group founded in 2003 by U.S. logistics guru Kieran Ring to promote “joined up thinking” among global supply chain stakeholders.

The organization notably features working groups that meet online and/or at annual meetings to discuss, share and develop ideas and strategies on four themes: smart IT solutions (such as standardization in data formatting and terminology between maritime and logistics partners, data exchange between ports, cyber resilience, and hackathons); global maritime logistics; shaping the digital culture in port authorities; and the chainPORT Academy, an annual continuing-education IT event for port and partner employees.

“It’s a terrific international forum for high-tech learning and development,” said Olivier, who was a speaker at the Smart City Expo World Congress in Barcelona last November, an event dubbed ‘Smart Ports, Piers of the Future’ that was co-organized by the ports of Montreal, Antwerp, Hamburg, Los Angeles and Rotterdam.

“We are working to leverage these fantastic digital tools to help optimize the flow of goods and traffic and to create a chain of intelligent ports around the world that communicate with one another, their customers and local and regional supply chains,” said Olivier. “This collective thinking is not only great for our port but the future of the marine industry as a whole.” CS www.canadianshipper.com

March 2020

37

EAST COAST GATEWAYS

Australian Captain Allan Gray was recently chosen as the Halifax Port Authority’s president and CEO, after serving as harbour master and general manager port operations with Fremantle Ports.

NO GRAY AREA Growth and prosperity for the port are the goals of the Halifax Port Authority’s new leader, Captain Allan Gray

BY TOM PETERS

38

March 2020

www.canadianshipper.com

W

ith his strong Australian accent, Captain Allan Gray’s voice exudes optimism and excitement, not only for his new position as president and CEO of the Halifax Port Authority (HPA), but also for the future growth and prosperity of the port.

Gray, who says Halifax has a “similar style port as Fremantle,” where he was harbour master and general manager port operations of Fremantle Ports in Perth, chose Halifax because the city is “going through a lot of growth. The port has got potential to grow so I looked at it as an exciting opportunity and to bring some of the experience and global perspective that I have, but it is just exciting. The people I have met are full of optimism, which is terrific,” he told Canadian Shipper during a recent interview.

Captain Gray took over the top HPA position in November, succeeding Karen Oldfield who had held the position since 2002.

In announcing Captain Gray’s appointment, HPA Board Chair Hector Jacques said, “Captain Gray’s extensive experience in leading a large port with similar priorities and economic impact as our own, from container and bulk shipping to cruise and infrastructure expansion projects, will serve the growing Port of Halifax’s needs well. Our new CEO brings great depth and breadth of experience, and relationships in maritime transportation, shipping and cruise which will allow the Port of Halifax to continue to play an important role in growing Canada’s international trade.”

Captain Gray spent 20 years at sea and traded on various vessels from roro, container, bulk and tankers. After his sea career he was involved in various marine safety management positions. He diversified into systems development and management with extensive experience in the operation of dynamic under keel clearance, Photo: Port of Halifax

EAST COAST GATEWAYS

berth warning systems, ship movement displays and real time geographic information systems.

During his initial days in Halifax, Captain Gray has been immersing himself in the issues and challenges of the port and discussing strategies for growth.

In each of the past three years the Port of Halifax has handled approximately 550,000 TEUs (twenty-foot equivalent units). There is still plenty of unused capacity at the port which Captain Gray has visions of filling. He plans to further develop markets in the U.S. Midwest and Central Canada plus expand others.

Looking to the future, he says normal growth at the port will likely be one to three per cent based on population and normal GDP (Gross Domestic Product). So, to build on that he points to the Midwest and the “inter-Canadian area” to develop more cargo “and the only way we are going to get that is by true reliable services by train. We have got to be able to turn (containers) around quickly. So shortly after a ship arrives, we have got to have containers headed out in 24 to 48 hours to their destinations.”

Export growth

Building local exports is also part of the plan. With the many weekly shipping services into Halifax “it means you open up the export markets for Nova Scotia products. So it is important, from my perspective, that I do everything I can to keep Midwest growth going so I continue to have slots available for further growth in Nova Scotia and that’s certainly a target for the province, to get great export growth to both the airport and port,” he said.

For many years cargo from Europe was a mainstay for Halifax until stronger trade links shifted to Asia. However, in late 2016 Canada signed the Comprehensive Economic Trade Agreement (CETA) with the European Union which many felt would be a big boost to marine cargo over Canadian ports. The increases haven’t been as dramatic as some might have expected but the new port CEO still sees opportunities in Europe.

Captain Gray says he has “seen some movement but [Europe] is always a tricky market. Europeans have lots of rules and you have to make sure your customers comply with those rules if you want to break into those markets. It is about working with our customers to make sure we get through those rules and comply. I think it will open up fairly well. The Great Circle route that Halifax is on coming from Europe and Asia, puts us in a good position to further expand opportunities there.”

Taking advantage of those opportunities also means efficient and effective rail infrastructure to and from the port.

In May, 2019, the Quebec Port Authority signed a major, long-term commercial agreement with Hutchison Ports and CN to build and operate a major, new container terminal. Should that agreement with Quebec be of concern for CN’s service to Halifax?

“CN has both Halifax and Quebec in its sights,” he said. But Captain Gray feels Halifax has an advantage because “we already have capacity and we don’t have to spend a lot of money to get there. From a competitive point, we are ready right now. We will see the big ships coming here very shortly and we can handle them. There is probably double the capacity across our two terminals in dealing with throughput so we are in a very competitive position.”

Captain Gray said Quebec has to stand up on its own business case, but added that CN President and CEO JJ Ruest has made it quite he wants to pull the cargo from Eastern ports on the rail system “and he is making sure he has covered both bases.”

Taking a bite out of business

While Quebec has signaled it plans to move into the container business in a big way, there are two container terminal proposals in Nova Scotia, that if developed, could bite into Halifax’s cargo business.

The Sydney proposed container terminal project and logistics park and the proposed Melford terminal and logistics park have been on the

books for a number of years. Both say they are shovel ready and only need a long-term contract with a major carrier to start building.

At this point, Captain Gray’s tone didn’t denote any immediate concern.

“I think it is important across the whole port system in Canada that we provide a competitive system not a competing system,” he said. “Again, those ports need to stand on their own business cases as they go forward and it will depend on cost and volume available in the market. Time will tell on those but we are ready to go without a big spend so we are competitive.”

One of the ongoing projects at the port for the past several years has been the redevelopment of the waterfront or Seaport area. Former CEO Karen Oldfield, always felt it was important to bring people back to the port and worked with various retailers, institutions, organizations and levels of government to see that happen.

Captain Gray is excited about continuing the development of the waterfront as an attractive entity.

“I think having an area like Seaport, which is active and vibrant, is certainly something we are focused on to and to see that the Seaport area stays active and vibrant all year, not just in summer,” he said. He added that he would like to see come “connectivity” from the waterfront to a nearby park area.

“My thought is here we are in Halifax the port city, not the Port of Halifax and the city. I have been working with government on how do we collaborate more. I think that the waterfront and bringing people into the waterfront and the operational port environment is important. We are going to work with Develop Nova Scotia and others on how we get some innovative urban planning solutions which get greater connectivity between port operations and the city,” he said.

While Captain Gray continues the learning process at the port with its challenges and strategies, his vision is wide, not only to see Halifax prosper for the province but to see it grow into Canada’s Ultra Atlantic Gateway. CS www.canadianshipper.com March 2020 39

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INSIDE THE NUMBERS WITH LOU SMYRLIS, MCILT

THE PRICE OF UNCERTAINTY

Canadian Trucking Freight Trends 2019

The Canadian economy may still be growing ng but the trucking market experienced sharp freight volume drops in 2019. What does this mean for capacity and rates in 2020? The picture is far from crystal clear but forecasts for declining equipment purchases and recent increases in spot market freight volumes point to capacity tightening once again and gentle upward pressure on rates.

Canadian Trucking Market Rates 2019 For-hire trucking rates

General freight rates

UP

UP

1.8%

3.0%

YoY

YoY

(YEAR-OVER-YEAR)

Percentage of shippers who expected to increase freight volumes in 2019

61%

Percentage of shippers who actually did increase freight volumes in 2019

41%

Percentage of shippers who expected to decrease freight volumes in 2019

4%

Percentage of shippers who actually did decrease freight volumes in 2019

22%

Specialized freight rates

Local freight rates

Long haul freight rates

Total spot market volumes

4Q 2019 spot market volumes

December 2019 spot market volumes

DOWN

UP

UP

DOWN

UP

UP

0.8%

0.9%

3.2%

30% YoY

7%

7%

YoY

YoY

YoY

Source: Statistics Canada

From Previous Quarter

YoY

Sources: Transportation Buying Trends Survey, Newcom Media and Transcore Link Logistics Spot Market Freight Index

US For-Hire Trucking Market 2019

Canadian Equipment Sales Forecast 2020

Shipment volumes

Truck tonnage

Shipper freight spending

Trailer sales

UP

UP

UP

DOWN

DOWN

DOWN

3.4%

3.3%

3.3%

22%

11%

22%

YoY

YoY

Source: US Bank Freight Payment Index

YoY

Class 6-7 sales

Class 8 sales

Source: MacKay and Company

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March 2020

41

Insights that deliver the goods

October 14, 2020 International Centre, Mississauga, Ontario

PRODUCED BY: C A N A DAâ&#x20AC;&#x2122; S S U P P LY C H A I N M AG A Z I N E

COACHING CORNER

Everyone’s title should include the word sales The aphorism “a rising tide lifts all boats” is associated with the idea that an improved economy will benefit all participants, and if everyone helps an organization thrive financially it will benefit all within that organization.

Everyone, therefore should focus on broad economic efforts.

Q: I want to increase my contribution within my organization to increases my career prospects within leadership and to showcase my skills. In other words: I want to be noticed and stand out from the rest and make more money. Can you suggest a way to do this?

A: Most people believe that they deserve a raise for doing a good job. Doing a good job is the reason you get to keep your job, not necessarily a good enough reason to increase someone’s pay.

I know this sounds harsh, but it’s the truth. The easiest and fastest way to get noticed and earn more money is to help the company make more money. I know what you are thinking. “But I am not in sales.” Wrong.

Every single employee within an organization has the opportunity to be an ambassador for the company they work for; to represent the company, potentially bring in new customers or leads and to increase the company’s brand awareness and exposure, which is directly linked to the brand’s success.

This approach is a win/win/win, but it does require mutual investment and approval before you begin to act as a brand ambassador. ©iStock

For the organization

Why only limit sales to the sales department, when the whole company has the potential to be your sales department?

It’s important that when they train their sales people on new products and or services that they train all employees.

Sales training should be mandatory for all employees. Everyone should understand exactly what the brand promise is.

Every employee should know their company’s elevator pitch.

The organization should have a referral incentive program for all employees who bring in new customer leads and/or process improvement incentives for employees that save money or wish to become brand ambassadors.

Investment in sales training for the entire workforce would yield great ROI, plus it would ensure there is a consistent message being delivered by all employees. You never know who people know, are friends with, or related to.

For the employee

If any of the above programs do not exist, then this is a great opportunity to take the initiative to start one. Taking on special projects that help the organization you work for, above and beyond your job duties are a great way to get noticed, be appreciated and potentially compensated for it.

Become an expert within the industry you work in. Sometimes it takes your personal brand outside of your work to get traction before leadership within your organization to realize the depth of your knowledge and can appreciate your potential. I know personally when I was in a

By Carolina Billings, CPCC, CHRL, MA-IS

corporate environment, I grew my personal brand outside my place of employment first. Then I was able to capitalize on it within and carve a faster more profitable career path than if I did not have a portfolio per se outside the skills I was hired for or known for.

There is an equation that everyone within an organization must understand when asking for a salary increase: Revenue less expenses equals profits.

When asking for a raise without presenting a win/win/win plan for you, the organization, and the organization’s stakeholders, it means you are asking them to increase expenses and reduce profits for your personal benefit.

Any salary or compensation increase to employees must be funded either from additional revenue the company is able to generate, or it is eating into profitability.

Not likely to result in a salary increase or help the company’s bottom line.

When asking for a raise or preparing for performance evaluations put together a proposal to increase brand equity and value. You will see results in all the areas you wish to succeed. CS

Carolina M. Billings is Partner & CEO of a management consulting group and has 15+ years of experience in the fields of Business Development, Branding, Human Resources and Finance.

She champions leadership initiatives as well as empowering and mentoring others to lead. For more information please visit: www.powerfulwomentoday.com or email info@powerfulwomentoday.com www.canadianshipper.com

March 2020

43

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THE BIGGER PICTURE

Shipper strategies for 2020

By Dan Goodwill

2020 will likely be another year of upheaval. The current “manufacturing recession” is restraining freight volumes and there will likely be a removal of a glut of fleet equipment. This coupled with the ELD compliance requirements in the U.S. and Canada, and high insurance costs, may push out more poorlyfinanced carriers. Political instability in the Middle East may drive up fuel costs. The maintenance of tariffs, even after the signing of the phase 1 China / U.S. trade deal, will continue to drive up costs of supplies from China. This will likely make this a challenging year for shippers and carriers. And it is very likely that shippers will face rising freight rates in 2020 to offset rising costs.

What can shippers do to restrain freight costs in 2020?

2. Become a “Shipper of Choice”

1. Re-evaluate your network and shipping practices

3. Lock in financially sound, ELD compliant, safe driving core carriers

Shippers need to look at their sourcing practices. Can raw materials and semi-finished goods be imported from lower cost sources and can lower cost modes of transport (i.e. intermodal versus truck, full truckload versus LTL, moving consolidated shipments to specific destinations and deconsolidating at a DC and then shipping to destinations) be used? This is a time to perform an audit of your freight operations and update your shipping practices.

As highlighted above, a range of variables are pushing poorly managed trucking companies out of the industry. Look at the quarterly financial reports of the carriers that serve your geographic area. Leverage your volumes and sign contracts with quality trucking and in-

46

March 2020

During the strong economic conditions of 2018, many shippers experienced truck capacity shortages. To obtain capacity, shippers were advised to become a “Shipper of Choice.” They were encouraged to remove wasteful practices in their facilities that limited the efficiency of carrier drivers trying to make pickups and deliveries. As capacity surged in 2019, many shippers abandoned the “Shipper of Choice” philosophy of working with contracted core carriers in favor of lower cost options on the spot market. As capacity tightens, this strategy will likely get shippers in “hot water” again. If you don’t want to suffer through a year like 2018, now is the time to act.

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termodal providers that can supply reliable, consistent service and peace of mind.

4. Explore the use of logistics and dedicated service providers

Some of your core carriers may not have any or enough capacity to meet your needs on certain shipping lanes.

Freight brokerage companies can fill these gaps. In cases where your company can balance customer deliveries with inbound loads of supplies, consider obtaining dedicated fleet round trip rates to reduce costs.

5. Conduct your RFPs now

In this year of transition, it is an opportune time to conduct an RFP on your freight volumes. This will allow your company to find a group of service providers that have the capacity, services and competitive rates to meet your needs for multiple years.

6. Practice very tight freight spend management

It is always a good idea to revisit your spend management practices. Does your

company have the data to monitor the modes, carriers and rates being paid for transportation services within your company? Can you identify carriers being used that are not in your company’s routing guide?

Can you identify maverick spend (i.e. money spent on expedited services or nonstandard modes of transport) that might highlight production problems or weak transportation compliance processes?

7. Use smart technology

Finally, look at the technology being used to manage your freight transportation.

Does your company have a robust TMS (Transportation Management System)?

Does it facilitate the consolidation of shipments whenever possible; does it ensure the right carrier is used on each lane? Is your company using static spreadsheets while automated tools, now available at very reasonable rates, could save your company money?

Now is the time to put your freight transportation department on a track for success. CS

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

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