Canadian Shipper January 2020

JANUARY 2020

PUBLISHED PUBL PU BLIS BL ISHE IS SHE HED D SI SINCE SINC NCE NC E 1898 1898 | W WRITTEN RITT RI TTEN FOR BUYERS OF TRANSPORTATION SERVICES

FLYING HIGH Drones take off in Canada

NORTHERN REFLECTIONS Arctic routes give shippers pause

WHAT’S IN YOUR WALLET?

AGREEMENT 40063170

RESULTS OF THE 2020 SURVEY OF THE LOGISTICS PROFESSIONAL

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CONTENTS

JANUARY 2020

DEPARTMENTS

12

5 | Editor’s Foreword Lithium layaway

6 | In the news Uber Freight arrives; DHL to expand Canadian gateway; SUPPLY STATS; Industry Q&A: Scott Shannon; The “world’s most sustainable DC”

33 | Inside the Numbers More of the same for 2020

COVER STORY

35 | Coaching Corner Happiness matters

WHAT’S IN YOUR WALLET?

38 | The Bigger Picture Things are warming up

2020 Survey of the Logistics Professional

30 AUTOMOTIVE LOGISTICS

Photo: iStock

Transporting cars by air requires a certain amount of trust between carrier and forwarder

Our bi-annual survey of Canadian supply chain and logistics professionals, sheds light on the state of compensation and job satisfaction in the industry.

FEATURES FREIGHT MATCHING

| 20

Technology is changing the load board landscape

20

DRONES | 22 Delivery by drone is becoming a reality

ARCTIC SHIPPING

| 26

Shippers and carriers debate the viability of using Arctic sea routes

Photo: Air Cargo Canada

www.canadianshipper.com January 2020 3

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EDITOR'S FOREWORD John Tenpenny January 2020 Volume 123 Issue No. 1

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

Batteries not included

ART DIRECTOR Anita Balgobin CONTRIBUTORS Emily Atkins, Carolina M. Billings, Mark Cardwell, Ken Mark, Ian Putzger, Laurie Turnbull 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

5353 Dundas Street West, Suite 400, Toronto, ON M9B 6H9 Canadian Shipper is written for Canadian transportation and logistics professionals who manage product flow from manufacturer to point-of-sale. Editorial is focused on reporting, analysis and interpretation of Canadian logistics trends and issues. It is published by NEWCOM MEDIA INC.

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L

uxury items such as designer handbags and high-end watches are what come to mind when people think of counterfeit goods. Relatively harmless, right? But when dangerous goods like lithium batteries are counterfeited and shipped by air, everyone is put in harm’s way.

The growth of ecommerce and the evolution of the supply chain has increased the focus on making sure the movement of dangerous goods is done in a safe and compliant manner.

At its recent global media days, the International Air Transport Association (IATA) renewed its call for governments to crack down on manufacturers of counterfeit batteries, and mislabeled and non-compliant shipments introduced into the supply chain, by issuing and enforcing criminal sanctions.

“Dangerous goods, including lithium batteries, are safe to transport if managed according to international regulations and standards,” said IATA’s Nick Careen. “But we are seeing an increase in the number of incidents in which rogue shippers are not complying.”

Airlines, shippers and manufacturers have worked hard to establish rules that ensure lithium batteries can be carried safely. But the rules are only effective if they are enforced and backed up by significant penalties. Government authorities must step up and take responsibility for stopping rogue producers and exporters. Abuses of dangerous goods shipping regulations, which place aircraft and passenger safety at risk, must be criminalized.

IATA, in partnership with the Global Shippers Forum (GSF), the International Federation of Freight Forwarders Associations (FIATA) and the International Air Cargo Association (TIACA), are amplifying their efforts to ensure the safe air transport of lithium batteries.

The industry is uniting to raise awareness of the need to comply. This includes the launching of an incident reporting tool so that information on rogue shippers is shared. And they want governments to get much tougher with fines and penalties.

Responsible shippers play a vital role in international supply chains and it is essential that, along with all parties involved, they ensure the rules for ensuring the safe movement of all cargoes are understood and acted on by all parties involved. CS

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Canadian-Shipper

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January 2020

5

IN THE NEWS

Better late than never Uber Freight comes to Canada … via Europe

Uber Freight’s launch of a dedicated freight app for Europe left many Canadian firms scratching their head earlier this year, wondering why the U.S.-based digital freight matching service would bypass this market.

It turns out that it was only a matter of time. On Oct. 14, the service supported a food shipment from Mississauga, Ont. to Montreal, including a backhaul and day move in between.

Montreal-based Transport DSquare moved the first load with Uber Freight a week before the official launch, and everything went off without a hitch, according to Transport DSquare’s director Corey Darbyson.

“We’d been talking to Uber Freight since last year and we really wanted to be the first to move a load in Canada,” he said. “Uber gives us access to clients that we otherwise couldn’t get. Now we can compete with the larger carriers on service, and that’s a game-changer.”

That’s music to the ears of Bill Driegert, Uber Freight’s head of operations.

“Part of our mission is to make the market more sustainable for small carriers and drivers, and the way we do that is by making freight more accessible.”

As for its European detour, Driegert explained that going there first allowed Uber Freight to solve challenges around currency, regulations and language.

“Going to Europe first for us was about unlocking a region. We knew if we built the technology that would work in Europe in multiple languages and currencies and with different types of addresses, that we would have a tech platform that we could then take to Canada.”

In addition to Transport DSquare, Uber Freight also announced that it has partnered with larger logistics firms, such as Martin-Brower, which delivers for McDonald’s and other restaurant brands.

“Martin Brower is always looking for new technologies that help us raise the bar of service for our restaurant partners,” said Kristofer Lorelli, director of 6

January 2020

www.canadianshipper.com

By John Tenpenny

Uber Freight’s expansion into Canada comes on the heels of its recent European expansion to Germany, the Netherlands and Poland, as the company continues to scale its global operations.

freight at Martin Brower. “We’re excited to work with Uber Freight to tap reliable capacity and ensure seamless, fast service across North America.”

Driegert said the company’s early customer base in Canada is similar to its shippers in the U.S., with a focus on food and beverage and consumer packaged goods.

“Typically, the shippers that see the value in Uber Freight are high-volume shippers that need to source freight quickly. Also, the shippers that are more tech-forward are interested in what we offer.”

According to Driegert, since launching in the U.S. in 2017, shippers and carriers have seen the benefits of Uber Freight’s offerings. “From the carrier side, they have instant access to freight. They can hit a button and book a load. On the shipper side, they are getting instant prices and visibility to capacity, which allows them to make better decisions.”

The technology also differs from other load boards when it comes to getting paid, said Darbyson. “Uber is the one

that pays us, and not only that, they pay us within five to seven days, which is unheard of. We used to 45 to 60 days.”

Whether there will be drivers lining up to receive that money may be in doubt, according to Purolator president and CEO John Ferguson, speaking recently at the opening of the company’s latest facility in Toronto.

“It’s early days, but the driver shortage is the most interesting facet to it, because it is already a precious commodity. Will they get drivers? Drivers want hours and consistency of work.

Without that I think the supply side will be their issue.”

As for whether Purolator sees Uber Freight as a competitor, Ferguson says the company hasn’t had any discussions on the impact Uber may have on their northbound cross-border LTL business.

“We’re so integrated with our courier operation that our clients are very sticky with us, versus the general LTL business.

Things such as our cross-border business make us less vulnerable to a pure LTL threat.” CS Photo: Uber Freight

IN THE NEWS

Quadruple bypass DHL Express Canada to expand handling capacity at Hamilton airport

A new $100 million facility for DHL Express Canada at the Hamilton airport will expand handling capacity to a point that may see the gateway become a hub for international shipping, not just as a destination for the Canadian market.

“The building has been designed as an inbound and outbound gateway for the southern Ontario market, but the reality is that with the automation we’ve put in place it opens up the potential for us to connect countries through Hamilton,” Andrew Williams, CEO for DHL Express Canada told Canadian Shipper at the official groundbreaking ceremony. It was held at Cargojet’s maintenance facility at the John C. Munro Hamilton International Airport.

“Hamilton International Airport offers us the benefits that we need to meet our growing demands in handling capacity,” he added. “With 24-hour landing capability, dedicated onsite Canada Border Services Agency representation and the ability to grow in the future with a partner positioned to become the cargo hub of Ontario, we know this is the best decision to continue leading the market.”

The new facility, set to open in 2021, will be four times the size of the current one at 200,000 square feet, and will feature a fully-automated sort system with a capacity of processing 15,000 packages per hour, helping DHL to meet doubledigit growth in shipment volumes. According to Williams, Canada has been the fastest-growing country for DHL Express the last three years running.

The largest company investment in Canada since its launch 42 years ago, “will help [us] get out on the road earlier in the day,” he said.

DHL Express moved to its current Hamilton International facility in 2008.

In the last four years, the company has invested more than $30 million to increase its fleet and aviation capacity, along with expanding its facilities in Edmonton and Winnipeg, and most recently, doubling its capacity at the Vancouver International Airport in Richmond.

Photo: John Tenpenny

By John Tenpenny

DHL Express Canada CEO, Andrew Williams, announces plans to invest $100 million to expand its existing gateway at John C. Munro Hamilton International Airport.

Williams cited the sorting technology at the facility—the same used at DHL’s global hubs in Cincinnati and Leipzig, Germany—as a major reason Hamilton could be used to alleviate stress on the some of the larger hubs in the company’s system.

“It would allow us to use the sort technology we have here and the ability we have to land planes 24/7 in Hamilton to de-stress a little bit of the volume out the Cincinnati facility and move it through another automated facility, in this case, Hamilton.”

He also discussed capitalizing on the fact that their partner, Cargojet, already has existing European and South American routes.

As an example, “a flight that originates out of Europe (Leipzig) that today

would go to our Cincinnati hub and up to Hamilton, could potentially go from Europe into Hamilton, drop the Canadian freight and then move on to another point in our network, whether that be into the U.S. or potentially down to South America.”

Hamilton Mayor Fred Eisenberger— who made a trip to Germany two years ago to make a pitch for DHL’s expansion—said the move is “further evidence that our airport is an economic driver.”

Added airport president and CEO Cathie Puckering: “The Airport and DHL are proud of a great, long-standing relationship for two decades and DHL’s investment will ensure it is well positioned for success at Hamilton International Airport for many years to come.” CS www.canadianshipper.com

January 2020

7

IN THE NEWS

SUPPLY STATS

$250M per week According to the Chamber of Marine Commerce, closing the St. Lawrence Seaway to accommodate higher water outflow at the Moses-Saunders dam would cost the Canadian and U.S. economies $250 million per week—impacting farmers’ grain exports, manufacturing plant operations, and disrupting deliveries of fuel, construction materials and road salt for winter safety to sites throughout the region.

$2.5M investment

3,200 rail workers More than 3,000 Canadian National Railway conductors, trainpersons and yard workers across the country went on strike for eight days in November before the company and Teamsters Canada reached a tentative deal, ending the strike that halted shipments, triggered layoffs and disrupted industries across the country.

Zero-emission delivery Anheuser-Busch, in partnership with Nikola Motor Company and BYD Motors, completed their first ever ‘Zero-Emission Beer Delivery’ in the company’s hometown of St. Louis — utilizing both companies’ innovative fleet technology to deliver beer from the local Anheuser-Busch brewery to the Enterprise Center using only zero-emission trucks.

The Trois-Rivières Port Authority received a $2.5 million grant from the Government of Québec for the development of an outdoor storage space, a multi-purpose shed and an oversized equipment warehouse, which will allow Hason Steel Products to operate a receiving, storage and assembly unit for its oversized products and to export them.

35 million parcels Purolator opened a new terminal in North York, Ont., part of the company’s network expansion that helped process more than 5 million pieces the week of Cyber Monday, and an estimated 35 million packages over the holiday season. The terminal—the first of five new facilities across Canada—is a complement to Purolator’s national super hub in Toronto, which is planned to open in 2021.

Two-level distribution centre Oxford Properties Group unveiled its plans to develop Canada’s first large bay multi-level distribution centre in Burnaby, B.C. Comprising 707,000 square feet over two levels, the ground floor features 437,000 square feet with 32-foot clear heights. The second storey, which is accessible to full-size transport trailers via a heated ramp, consists of 270,000 square feet, 28-foot clear heights and a 130-foot truck court.

8

January 2020

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INDUSTRY Q&A

Tech will shape the future of the logistics ecosystem Scott Shannon, VP of North American Surface Transportation, C.H. Robinson Canadian Shipper spoke to Shannon at the recent CITT Canada Logistics Conference, where he moderated a panel on the influence of technology on supply chains. Shannon has been with C.H. Robinson for over 25 years and has key responsibilities in the management of its North American network.

Which technologies will have the biggest impact on supply chains?

Clearly big data and digital technologies, including artificial intelligence, machine learning, and predictive analytics are having a profound impact on the supply chain marketplace. Only those who leverage both technology and talent will compete and win on supply chain in the future.

Part of AI is improving process, taking manual processes and converting them to digital formats so there are less errors, and that’s a good thing.

With predictive analytics, it’s taking the data and turning it into information that you can use to your advantage.

It’s not like one tool is going to solve everything. I think the most powerful thing is having the industry experts—the people—that know how to combine all of that technology, which can then be used to the carrier’s and customer’s advantage.

What are shippers telling you about their priorities when it comes to technology?

We did some customer research with more than 3,000 shippers and the results demonstrate how important new capabilities, visibility into supply chains and deep expertise in local and global needs are.

First, that technology is more important than ever, with 88 per cent of shippers who contract to purchase freight saying that technology is extremely or very important when choosing a logistics provider.

Second, visibility and predictive tools are external logistics providers’ most important assets, with 65 per cent of customers saying they either have or are

“With predictive analytics, it’s taking the data and turning it into information that you can use to your advantage.”

Scott Shannon, VP of North American Surface Transportation, C.H. Robinson

planning on implementing visibility and insight tools in the next two years.

And third, local expertise is key, with 83 per cent of shippers saying that having a logistics partner with local and global expertise is essential.

What lessons have you learned from the U.S. implementation of ELDs?

In the U.S. it was estimated that there was a seven to 10 per cent decrease in efficiency because of ELD implementation, but we’ve gained most of that back.

I’m extremely excited about ELDs. I wouldn’t have said that a couple of years ago, but the reality is so much of our recent and future investments are about

connectivity, and the ELD mandate is going to significantly impact our ability to take our entire industry and lift it up so we actually have that visibility.

Inclusive of the ELD providers that we’re connected with and the driver apps we employ, there will be a big improvement.

We did a survey with our carriers (over 15,000 trucks) and we found that even the average drop trailer loading time was just over two hours. We were shocked. The thought is you show up and it’s loaded and it’s on your trailer, so you should be on your way. The reality is even with drop trailers there is an immense opportunity to be able to streamline and get those drivers on the road, which benefits everyone.

The net effect will be positive if we can make those thousands and thousands of pieces of equipment out there more efficient—we all win.

C.H. Robinson recently announced it will invest $1 billion in technology over the next five years. What will be driving those investment decisions?

The results from our customer research demonstrate how important new capabilities, visibility into supply chains and deep expertise in local and global needs are. We also identified some trends in the industry that will guide us as we continue to invest in innovation.

People will drive technology. Despite new tools and technologies, people will become more important to the supply chains of the future.

To go global, we must first go local.

As the world becomes more connected, businesses are accessing the global market like never before—and they need the kind of global expertise and experience that C.H. Robinson provides.

Investments in infrastructure are key.

In our global economy, even the best ideas cannot win without first winning on supply chain and that can’t happen without great infrastructure. CS www.canadianshipper.com

January 2020

9

SUSTAINABILITY

Inside the “world’s most sustainable DC”

BY JOHN TENPENNY

C

alling yourself the “world’s most sustainable DC” might be considered hyperbole, that is unless you can back it up.

Nicknamed “The Tube” because of its cylindrical design, the Netherlands head office and distribution centre for multinational logistics company Rhenus, located on the outskirts of Tilburg, may attract stares from commuters on the highway alongside it, but this warehouse boasts the green credentials to back its 10

January 2020

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claim as one of the world’s greenest industrial buildings.

With over 13,000 solar panels, the site produces not only enough energy to power its own production, but also feeds back into the country’s general supply lines–powering approximately 750 households on an annual basis, according to Rhenus Logistics senior vice-president Alphons van Erven.

“We’re an energy producer,” he told a room of visiting journalists on a tour of

the country’s logistics sector, hosted by the Netherlands Foreign Investment Agency (NFIA) and the Holland International Distribution Council (HIDC).

“Using the entire roof for solar panels was a good business case for us and it’s a win-win situation for Rhenus and the Dutch government.”

In May of this year, it received the highest-ever rating (99.48 per cent) for an industrial building from British sustainability assessors BREEAM, which

SUSTAINABILITY

At its Tilburg facility, Rhenus uses an AutoStore system for fast, energy-efficient storage and retrieval.

has analyzed the green design and concept of more than 500,000 buildings in over 80 countries.

The 650,400-square-foot building is completely airtight, meaning no hot air escapes in the winter. The roof also houses two large pumps that draw heat from the air outside and use it to keep the inside of the building warm. There are electric boilers for exceptionally cold days, which the company estimates are used only 10 days each year.

Along the side, and at either end, are huge glass windows, allowing light to flood into the building.

Not only is it thought to improve the wellbeing and productivity of workers, by making it a nicer environment, but it means they use 70 per cent less electricity in lighting the premises.

“The idea was to have a building that is comfortable to work in,” said van Erven. “It helps us attract people in what is a very tight labour market.”

Sustainability measures even extend to the toilets, which use rainwater collected on the roof.

Van Erven is “quite convinced” that companies that are not already taking such measures should be forced to by governments.

“There is a discussion here in the Netherlands that companies with big carbon footprints will have to pay a penalty on the amount of C02 they are exposing to the air,” he said.

“We have an advantage because we don’t have any C02 pollution anymore, so in the future it will pay off.”

During the tour, Rhenus also showed off its newly installed AutoStore system.

The AutoStore system, provided by Swisslog, has a surface area of 1,000 square metres, and is equipped with 21,000 containers, 19 robots, two infeed and three order-picking ports. The automated order picking and storage installation is integrated with both the Warehouse Management System (WMS) and Transport Management System (TMS), both of which provide weighing and measuring scanners.

According to van Erven, the robotic system will help Rhenus to serve more customers. “The AutoStore system as-

sists in further improving the accuracy of its order picking and in fulfilling the customers’ growth needs through optimization of continuity and quality,” he said.

And, according to AutoStore’s U.S. business development manager Andrew Benzinger, “labour and space savings are paramount for our customers, but they love to hear that the power consumption of ten AutoStore robots equals one vacuum.”

The Rhenus Group, a logistics service provider with global business operations and an annual turnover of 5.1 billion Euros, has 660 locations worldwide and employs 31,000 people.

Last spring the company acquired Canadian logistics specialist Rodair.

“The acquisition is an important step for Rhenus in establishing a network in Canada,” said Jörn Schmersahl, CEO, Air & Ocean Americas for Rhenus Freight Logistics. “Rodair’s entrepreneurial and family-oriented history and conviction to the same values will make an important contribution to the ongoing growth of the Rhenus Group.”

Jeff Cullen, CEO of Rodair, added, “Being integrated into the Rhenus Group enables us to become part of an entrepreneurial global enterprise with depth expertise and passion which offers us the best prospects for long-term and sustainable development.” CS www.canadianshipper.com

January 2020

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SURVEY OF THE LOGISTICS PROFESSIONAL

WHAT'S IN YOUR WALLET? Results from our 2020 Survey of the Logistics Professional

W

ith Canada’s economic outlook at a cautiously optimistic level, 63 per cent of supply chain professionals say they are expecting to get a raise in 2020, according to this year’s Survey of the Logistics Professional.

Up against that optimism, however, is the fact that the overall average salary dropped compared to our 2018 survey. In 2019, the average salary was $92,289 compared to an average overall salary of $99,902 two years ago.

Taking a closer look, there were fewer respondents in 2019 that fall in the older age range (45+). As part of this trend, there were also fewer respondents in our sample with more than 20 years experience in the field.

“It’s part of the demographic shift happening across the entire workforce,” says Gerald Bramm, president of Bramm Research Inc., which conducts the bi-annual survey for Canadian Shipper and Inside Logistics magazines. “Aging boomers, with a lot of experience and with their high salaries, are leaving the workforce. The millennials, are entering the workforce at the bottom end of the pay scale. The net effect, when we look at the results in total is a lower overall average salary.”

The possibilty of a recession, however, has some thinking that raises may be scarce.

“It’s curious to me that only 60 per cent of people received a raise in 2019,” says supply chain recruitment veteran Ross Reimer, president of Reimer Associates. “Based on that I think that number will go down this year, as we’re headed for troubled waters.”

According to Reimer, 2018 was a record year for transportation, while 2019 saw a cooling trend and “everybody’s worried about 2020.”

Also on the horizon is the threat of retiring baby boomers. Reimer is concerned that the marketplace for talent, which he describes as “very tight” at the moment, is only going to get tighter. continued

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January 2020

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Photo: iStock

SURVEY OF THE LOGISTICS PROFESSIONAL

www.ca www www.canadianshipper.com .ca .cana cana adianshipper.com

January 2020

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SURVEY OF THE LOGISTICS PROFESSIONAL

“There is a retiring cohort that is going as early as 55. The industry hasn’t put in place that secondary group of management people (35 to 45-years-old) with substantial enough training to take on those roles, hence they’re going outside.”

Positions in sales are particularly difficult to recruit for, says Reimer. “To me it

continued from p. 12

seems like 95 per cent of them are happy with their jobs,” referencing the survey results that place job satisfaction at 57 per cent who say they are “very or extremely satisfied” with their current position.

In fact, only 24 per cent of this year’s respondents indicated that they are currently “seriously looking for work

at with another company,” a number that ur has remained unchanged since our 2018 survey. rWhile most may be happy in their curnrent roles, the demographic shift happenk king in the logistics and supply chain worknt force may result in a much different looking survey next time around.

SALARY OVERVIEW TOTAL RESPONDENTS MEAN SALARY $92,289

By Gender Male $96,344 Female $77,971

By Management Level Executive Management

$121,502

Senior Management

$109,630

Operations Managers/Supervisors

$86,598

Support & Sales Staff

$66,335

By Budget Managed None

$78,406

$1million or less

$94,327

$1 million to $10 million

$105,874

More than $10 million

$120,607

By Years in the Supply Chain

14

10 years or less

$67,714

10 to 20 years

$85,562

20 to 30 years

$92,223

More than 30 years

$117,487

January 2020

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SURVEY OF THE LOGISTICS PROFESSIONAL

SALARY BY REGION TOTAL RESPONDENT $92,289 7.6%

BRITISH COLUMBIA 93,765 8.8% ALBERTA $95,687 no change

ATLANTIC CANADA $94,489 0.4%

MANITOBA/ SASKATCHEWAN $101,312 4.7% ONTARIO $92,319 0.3%

QUEBEC $79,875 7.1%

SALARY BY SECTOR TOTAL RESPONDENTS $92,289

93,765

$92,734

$86,105

$102,077

$90,602

Manufacturing

Transportation

Third-party logistics

Retail

Other

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SURVEY OF THE LOGISTICS PROFESSIONAL

SALARY BY COMPANY SIZE TOTAL RESPONDENTS $92,289

BY COMPANYâ&#x20AC;&#x2122;S ESTIMATED GROSS ANNUAL SALES ($CDN) $1 million or less

$76,650

$1 million to $5 million

$74,164

$5 million to $15 million

$82,400

$15 million to $30 million

BY NUMBER OF PEOPLE WORKING IN COMPANY

25 or fewer

$87,974

26 to 100

$82,752

$86,999

101 to 500

$91,904

$30 million to $60 million

$85,797

501 to 1,000

$87,909

$60 million to $100 million

$95,909

1,0001 to 5,000

$92,328

$100 million to $500 million

$98,049 5,001 to 25,000

$105,220

$500 million to $2 billion

$101,382

Over $2 billion

$111,433

More than 25,000

$100,581

SALARY BY INDUSTRY TOTAL RESPONDENTS $92,289

Food and Beverage

$92,230

Consumer Durables

$89,131

Manufactured Industrial Inputs

$88,385

Automotive Parts

$86,912

Chemicals, Petroleum and Hazardous Waste

$96,493

Transportation Equipment

$79,778

Lumber and Building Materials

$90,923

Paper and Print

$98,926

Clothing, Apparel and Textile Products

$85,685

Computers and Electronics

$85,490

Pharmaceuticals

$80,359

Other

$94,237

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January 2020

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SURVEY OF THE LOGISTICS PROFESSIONAL

SALARY BY JOB FUNCTION

Customer Service

$90,450

Purchasing

$98,905

Training & Development

$92,010

Inventory Control

$97,171

Project Management

$99,549

Customs

$88,383

Warehousing

$96,942

Demand planning/Forecasting

$95,262

Order Fulfillment

$95,212

Sales/Marketing

$95,427

Information Technology

$93,502

Other

$85,137

$96,575

Post Graduate Degree

$93,888

$92,289 Undergraduate â&#x20AC;&#x201C; Bachelors Degree

Transportation

TOTAL RESPONDENTS

$98,565

$99,276

Community College Graduate

$92,289

High School Graduate

TOTAL RESPONDENTS

SALARY BY EDUCATION

$84,520

SALARY BY EXPERIENCE TOTAL RESPONDENTS

SALARY BY AGE TOTAL RESPONDENTS

$92,289

Under 26

$58,500

26 to 35

$70,506

36 to 45

$83,271

46 to 55

$94,738

56 to 65

$109,700

Over 65

$86,636

Over 55 mean

$106,489

JOB SATISFACTION OVERALL SATISFACTION WITH CURRENT JOB

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January 2020

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$92,289

Two to 5 years

$60,675

5 to 10

$65,692

10 to 15

$85,001

15 to 20

$86,146

20 to 25

$92,540

25 to 30

$91,928

30 to 35

$113,570

More than 35 years

$121,750

Less than 5 years mean

$70,268

More than 30 years mean

$117,487

TOTAL RESPONDENTS

$92,289

Extremely Satisfied

17%

$113,158

Very satisfied

40%

$92,359

Neither satisfied nor dissatisfied

30%

$87,941

Dissatisfied

11%

$84,970

Not at all satisfied

3%

$80,900

SURVEY OF THE LOGISTICS PROFESSIONAL

TOTAL RESPONDENTS CURRENTLY SERIOUSLY LOOKING FOR

YES NO

WORK WITH ANOTHER COMPANY

24% 75%

TOP THREE REASONS FOR CONSIDERING RECEIVED A SALARY INCREASE THIS YEAR

A POSITION WITH ANOTHER COMPANY Better money

61%

Better work/life balance

37%

Geographic location

28%

Better career opportunities

25%

Better benefits

23%

Flexible hours

22%

Greater say in management decisions

15%

Better rewards program

13%

Reputation of firm

11%

More responsibility

10%

Industry of choice

5%

Larger firm

5%

Smaller firm

3%

Other

10%

YES 60% NO 39%

SALARY INCREASE ANTICIPATED FOR NEXT YEAR

YES 63% NO 36%

SALARY LEVEL HAS KEPT PACE WITH RESPONSIBILITIES OVER THE PAST FIVE YEARS

YES 49% NO 49%

TOTAL RESPONDENTS

$92,289

PERCENTAGE INCREASE RECEIVED 2% or less

36%

$92,676

2.1 to 4%

42%

$91,749

4.1 to 6%

8%

$102,043

6.1 to 10%

6%

$110,392

More than 10%

6%

$93,435

TOTAL RESPONDENTS

$92,289

$92,289

PROFESSIONAL DESIGNATIONS EARNED CCLP

31% of respondents

$91,421

SCMP

9%

$92,785

CIFFA

7%

$73,728

P.Log

7%

$112,480

CSCB-CCS

6%

$80,901

APICS-CSCP

2%

$97,250

Other

16%

$85,014

$83,206 $96,328

RESPONDENT PROFILE & METHODOLOGY Of the 410 supply chain professionals included in our sample, 50% defined themselves as being in the managerial ranks of their organizations and 69% said they were in transportation. Of the respondents, 37% indicated they manage at least five employees.

The vast majority of respondents (87%) were over 35 years of age with the mean age being 50. Of all respondents, 43% hold an undergraduate degree at either the university or college level.

The survey enjoyed wide geographic reach across Canada.

While 48% of respondents came from Ontario, another 39% were from Western Canada and 21% from Quebec and the Maritimes.

The respondents also represented a mix of small, medium and large enterprises with 39% working for large companies employing more than 500 while 33% worked for small organizations employing fewer than 100. E-mail invitations were sent to supply chain professionals across Canada from email lists provided by Canadian Shipper and our sister publication Inside Logistics. The survey was handled once again by the research firm of G. Bramm Research Inc. After filtering out unqualified respondents and incomplete surveys, we compiled data from 410 respondents. This represents a margin of error of plus or minus 4.8 percentage points, 19 times out of 20.

www.canadianshipper.com

January 2020

19

FREIGHT MATCHING The likes of Uber and Amazon are going to push the freight matching industry forward by forcing everybody to spend more on technology.

As digital apps proliferate, are load boards losing their appeal?

BY IAN PUTZGER

A

fter a foray into Europe, Uber Freight is now out to conquer the Canadian market.

The move heralds disruption for the freight matching scene, but more is on the horizon Joel MacKay, president of Mactrans Logistics, reckons that the entry of the digital freight matching service will have an impact on the Canadian scene.

“Uber is a big deal,” he says. “Uber is an intermediary. They’re not just matching up loads; they’re managing the entire process.”

His company should be able to cope fairly well with the change, he thinks.

“Am I worried? If you’re merely a freight brokerage, just providing transactional service where price is the factor, it is an issue. We do more than that. We do a lot of integrated final mile and LTL business,” he comments.

Overall the advance of the likes of Uber and Amazon will push the industry forward by forcing everybody to spend more on technology, he adds.

“We invest a significant amount on technology,” he says. “What’s available now is reasonably priced.”

20 January 2020 www.canadianshipper.com

Matthew Kane, founder and CEO of Riteload, thinks that the change ushered in by the likes of Uber does not go far enough.

“The likes of Uber Freight and Convoy are still brokers,” he comments.

“C.H. Robinson and other brokers now go to technology, because they realize that technology is going to make the process and easier, but they’re still inserting themselves in it. But if the technology is so good, why not connect the shipper and the trucker directly? Why not replace the broker in the middle?” he says.

He argues that it is time for a fundamental change.

“The freight broker model is done.

It’s over. Technology is going to replace it,” he declares.

His own outfit is trying to do just that. Riteload’s platform is for shippers and truckers. They sign up at no cost to post or look for loads and pay a flat fee if they connect and contract a load through the platform.

According to Kane, this is a winwin scenario that cuts out the fees a broker would pocket. The trucker ends

up with more money, and the shipper pays less money, he argues.

According to him, Uber and Convoy cannot match Riteload’s low pricing, being burdened with investors who demand a higher return.

According to him, at this point his outfit has over 20,000 carriers in the system. It vet truckers and offers geotracking functionality. Payment is fast, he claims. Carriers can send proof of delivery over the phone before leaving the consignee’s premises, triggering a message to the shipper to authorize payment.

For Kane, this is just the start. He intends to leverage the number of truckers that use Riteload to get discounts on fuel, repairs, tires and towing. “We’re looking to build a one-stop shop,” he says.

Next year he intends to formalize a partnership with a “fairly significantly sized insurance company” to offer truckers savings on their insurance costs. “We’ve been speaking with an insurance carrier in Canada,” he adds.

“We will move into Canada, but I’m not putting a timeframe on it. I want to Photo: iStock

FREIGHT MATCHING

build a solid case in the U.S. first,” he says.

What does his scenario mean for load boards? Are their days numbered, or do they have to change?

“The likes of Truckstop will have to adjust. They’re in a quandary. Their bread and butter are the brokers. If they go towards the Riteload model, brokers will bail out on them,” Kane reflects.

Commercial Capital, which offers invoice factoring besides supplier financing and purchase order financing, sees load boards as tools of limited appeal. In a blog on its website it characterizes them as good for new entrants or truckers with few shipper contacts. On the positive side, they are available 24/7, are usually free or inexpensive for truckers, and many have additional features like credit checks. However, competition of participants drives down rates, which are further reduced by the margins claimed by brokers, so they are not very

profitable for owner-operators, according to Commercial Capital. The firm does not find them good for long-term strategic use.

Mactrans uses load boards mostly for ad hoc, often last minute, loads. For regular business it talks with clients to develop carrier programmes, MacKay says.

Less than 10 per cent of the freight that Mactrans manages is posted on load boards, but “for that portion it is an important tool,” he remarks. “It’s a way to find backhaul. It is important.”

Moreover, load boards have added features to make themselves more useful.

In the U.S. market 123Loadbaord introduced a mobile app in November to submit invoices for faster access to money from factoring companies. In September it had launched a free profit calculator for truckers to compute linehaul revenue, fees and estimated fuel costs and establish within seconds if a load is profitable.

Loadlink’s Rate Index is helpful when Mactrans is working on larger bids, and other elements also provide useful information, MacKay says. He would like load boards to introduce more features for brokers.

These functions are helpful tools but should not replace the user’s work entirely. Load boards usually vet their carriers, but Mactrans has its own process to check out truckers it finds online. “At the end of the day it’s our responsibility,” MacKay says. 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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www.canadianshipper.com January 2020 21

DRONE DELIVERY

London Drugs, Canada Post and InDro Robotics successfully tested drone delivery of emergency medications on Vancouver Island.

Recent testing has shown drones can immediately impact deliveries to remote locations

BY KEN MARK

D

rone product delivery hardware and software have the potential to change logistics practices forever. Eventually, it may reduce, if not eliminate the need for people, paper and carbon-based power when shipping goods to customers.

More importantly, Canada appears to be leading the parade. Last summer, Canada Post, London Drugs together with InDro Robotics successfully completed Canada’s first-ever Beyond Visual Line-of-Sight (BVLOS) flight carrying pharmaceuticals via drone from a London Drugs pharmacy to remote Salt Spring Island, B.C. Canada Post was selected along with InDro Robotics in 2018 to participate in Transport Canada’s BVLOS Drone Trials.

The proposal focused on testing BVLOS capabilities over open water and partnering to test the delivery of prescription medications to remote areas.

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There were three parts to the August 19 trials including delivery of an Epi pen (Epinephrine) and Narcan, leaving London Drugs’ mobile facility in Duncan, B.C. to the local Country Grocer on Salt Spring Island as well as direct, pin-pointed delivery to a patient’s home on Salt Spring Island.

“The ability to provide medications to patients in remote areas that would otherwise have to travel hours to obtain pharmacy service is significant in so many ways. In the very near future we will be able to provide delivery of prescription medications to an abundance of areas not accessible by vehicle,” said Chris Chiew, general manager of Pharmacy, London Drugs.

The operational data obtained from the trials will be used by Transport Canada to inform BVLOS regulations moving forward in Canada. As part of the ongoing testing, Canada Post is simulating deliveries over bodies of water, icy roads and

challenging terrain to temporary camps and other remote locations.

“The delivery of prescription medications by drone to rural areas will be of great advantage to communities across the country including northern Canada and as well to hospitals in remote communities where drones can land on hospital Heli pads,” said Philip Reece, CEO, InDro Robotics.

The test flight was four years in the making. Among other things, it also involved three years of trials by InDro, which designed and built the drone, including one that took place in rural Ontario involving the OPP, RCMP, Renfrew County Paramedics and Transport Canada.

“The drone carrying the EpiPen flew at 50-60 km/h at about 75 metres above the ground,” explained Reece. “It can carry a maximum of 5.5 kilograms. The current payload limit is 20-25 kilos.”

Photo: InDro Robotics

DRONE DELIVERY

That’s comparable to the weight of a medium-sized concrete block.

Reece adds, “In the future, drones will create and send a bar code to the receiver which can be printed to identify exactly where the load will be delivered. As well, to prevent theft and mis-use, containers will be sealed with a lock to which only the recipient has been given the code to open it.”

In addition, for UAV operators, he expects future technology will enable drones to move on to a second site to the drop off other packages or pick up return shipments. Such multiple delivery and back-haul opportunities reduce fuel use and other operating costs while earning additional revenue. Since drones are essentially flying robots, there are no pilots keeping keep track of their hours and punching time clocks.

As well, deliveries are also paperless since shippers, carriers, forwarders, regulators and receivers can receive and share data, not to mention pay digitally. By eliminating empty return trips drones focus last-mile delivery priorities on customer service, asset productivity and revenue generation by reducing, if not eliminating labour and fuel expenses, equipment wear and tear and maintenance costs.

In addition, drones are also environmentally friendly. They are powered by lithium-ion batteries which are recharged by solar- or wind-powered electrical sources. By avoiding the use fossil fuels, drones do not add to greenhouse gas emission.

Medical products and related instruments are ideal first users of urban, lastmile drone product deliveries. Reece predicts hospitals and other health facilities becoming early adopters. Currently Canada has a total of 367 heliports. Many of them are linked to hospitals ranging from Toronto’s Hospital For Sick Children to the Vermilion Health Centre in Vermilion, Alberta (pop. 4,084). Reece also sees the growth of emergency deliveries of lifesaving products expanding beyond prescription drugs, and blood to include medical instruments and prosthetics.

Such cargo is typically compact, lightweight and critical, meaning timely and prompt delivery can save lives. Reece also Photo: Drone Delivery Canada

Drone Delivery Canada signed a $2.5 million contract to deliver parcels between two First Nations settlements—Moosonee and Moose Factory in the James Bay region of Northern Ontario.

anticipates drones delivering urgent supplies to city-centre hospitals located on traffic-clogged, densely populated streets. As well, drones are ideal for providing emergency deliveries to highway accident sites where dense rush-hour traffic can hold up deliveries of blood, emergency drugs and medical instruments to police, rescue teams and ambulance staff to attend to accident victims well before helicopters arrive to take them to hospitals.

In today’s increasingly crowded urban air space, all airborne vehicles must know at all times the precise location of nearby flying objects—helicopters, small planes and other drones. To do so, drones are quickly adopting the latest technology such as portable ADS-B (Automatic dependent surveillance-broadcast) to replace existing GPS systems. Reece explains that after ADS-B determines the drone’s position from their links to orbiting satellites, it can quickly share it with other aircraft so they all can make better, more timely decisions to stay out of each other’s flight paths.

Drones’ ability to offer additional outbound deliveries and back-haul opportunities will make supply chains more productive and profitable. The days of one-way deliveries and drivers or pilots sitting around waiting or returning home empty may be over.

More crucial will be drone deliveries to major urban centres. Ensuring air traffic safety over metropolitan areas will facili-

tate the introduction of drones in using roof tops of hospitals, office buildings, apartments, parking lots, sports stadiums for picking up and dropping off cargo.

For that reason, Transport Canada has been actively monitoring the safety and security of drone deliveries. It agreed to use Salt Spring Island as test case.

Since major urban centres pose more safety and security challenges such as crowded skies, tall structures, dense populations, air pollution etc. regulatory approval of such drone deliveries will likely take longer than landing sites in less crowded, wilderness destinations. Potential back-country users include construction, mining, forestry, oil and gas exploration and wildlife management sites.

Economic development

Drones will facilitate year-round deliveries to such destinations since they lack accessible, land-based year-round links such as roads, railroads or airfields. Currently such deliveries can be awkward, dangerous and expensive since they usually involve light planes, helicopters and even lighter-than-air dirigibles which require pilots and burn fossil fuels.

As a result, several Indigenous groups are moving quickly to take full advantage of their isolated properties as potential drone delivery sites. Recently, Drone Delivery Canada signed a $2.5 million contract to deliver parcels within the continued www.canadianshipper.com

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23

DRONE DELIVERY

Getting Ready for Take Off New rules to consider when using drones in a maritime environment

T

he potential uses for drones in the shipping and maritime industry are many, and this is an exciting area of development in the years to come.

In Canada, operators of drones used for commercial purpose (including onboard a ship or while at port) must comply with new regulations from Transport Canada. This review highlights some questions those in the shipping industry should ask themselves before engaging in drone operations so that they can better manage the associated legal and risk factors.

Can I fly my own drone under the new regulations?

Yes, as long as you comply with the Transport Canada regulations, which include licensing and domestic registration requirements for all drones weighing between 250 grams and 25 kilograms. Drones of this size may only be registered for flight in Canada by Canadian citizens, permanent residents of Canada, Canadian corporations or Canadian government entities.

Drones must be flown by a certified drone pilot who has passed an exam and completed an assessment with a flight reviewer.

Drones weighing less than 250 grams need not be registered, and no licence is required.

Those who are not Canadian citizens, permanent residents of Canada, Canadian corporations or Canadian government entities, and those who wish to fly drones weighing more than 25 kilograms must apply for a Special Flight Operations Certificate (SFOC).

Where will my drone be flown?

If you are operating a drone weighing between 250 grams and 25 kilograms, you should determine if the operations will be considered “basic” or “advanced” as defined by Transport Canada.

To qualify for basic operations, the drone has to be:

1. Flown in uncontrolled airspace (typically where no air traffic control is provided); 2. Flown more than 30 metres (100 feet) horizontally from by standers (in other words, those not involved in the drone’s operation); and 3. Never flown over bystanders.

If you do not meet all of the above conditions, the drone operations will be considered advanced, which in turn triggers additional requirements that must be complied with. Given the bystander rule and the nature of shipping and port operations, it is quite possible that Transport Canada will consider many drone operations for the shipping industry to be advanced.

If you are planning on using your drone for aerial surveys, be aware that Transport Canada has placed maximum altitude restrictions. If your drone will be flown more than 400 feet above the 24

January 2020

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ground or more than 100 feet above any building or structure if it is less than 200 feet horizontally away from it, you must obtain an SFOC. Special rules also apply if you will be operating your drones near airports, aerodromes, or sites operated under the authority of the Minister of National Defence.

For uses of drones at a distance, it is important to be aware of the concept of “visual line-of sight.” Maintaining visual line of sight means that visual contact with the drone, without the use of any aids, can be maintained at all times while flying the drone. This allows the operator to maintain control of the drone, know its location and scan surrounding airspace to detect and avoid other aircrafts and objects. Though the new regulations permit the use of “visual observers” to assist in drone operations, care should be taken to understand these regulations closely. If visual line-of sight cannot be maintained, a SFOC will be required.

Who will be flying my drone?

Different licensing requirements for pilots are triggered depending on whether a drone is used for basic or advanced operations.

Beyond the pilot, however, “crew members” (those assigned to duty related to the operation of a remotely piloted aircraft system during flight time) are also subject to these new regulations, which include a prohibition on acting as a crew member within 12 hours of consuming alcohol. Visual observers assisting a pilot in operating a drone within a visual line-of-sight have additional responsibilities. For example, visual observers must communicate information to the pilot in a timely manner of any hazards and can generally only perform these duties for one drone at time.

What are my operating procedures and how are they recorded?

Transport Canada has a number of provisions on safety and operations. As an operator you must have established procedures for certain events including pre-flight, landing, and equipment failure.

The new drone rules also specify pre-operations site survey requirements, acceptable weather conditions for operations, and recordkeeping requirements. The government reserves the right to examine these records within a certain period. As in the case of any maritime endeavour, documentation is often key. CS ABOUT THE AUTHORS Robin Squires, a Partner with BLG (Borden Ladner Gervais LLP) is the national leader of BLG’s Transportation Focus Group and the Toronto leader of BLG’s Maritime Focus Group. Katherine Ayre is a Partner with BLG and a civil litigator specializing in aviation law and land transportation. Adrienne Ho, is an Associate in the Construction Group of BLG's Toronto office.

DRONE DELIVERY

continued from p. 23

Moose Cree First Nation communities in Northern Ontario.

DDC says the project is also 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, capable of carrying a 5-kg payload, for the transport of goods including letters, general parcels, and medical supplies.

The site represents a prime candidate for regulatory drone flight approval since it is a tiny, out-of-the-way, obstruction-free wilderness location. As well, year-round drone links will help boost local economic development and trade for an isolated Indigenous community, according to Jonathon Araujo, an Odawa from the Manitoulin Island-based Wikwemikong First Nation and Toronto-based co-founder of the Pontiac Group, a First Nations consulting firm focused on boosting First Nations’ socio-economic development.

“Overland roads are fine in winter when temperatures drop to minus 40º C. so people can use dog sleds to cross the water. But it is virtually inaccessible the rest of the year—the ground is too soft for trucks and cars.” As a result, shipping goods by helicopter cost between $7 to $10 per pound. When barges or trucks can be used, transportation costs which remain high are passed on to customers.

While many observers focus on the business and commercial benefits of drone deliveries, Araujo also stresses the cultural and social benefits of such reliable, year-round supply chain links. He says, “Some of our older residents have been creating hand-made Cree Twig Ducks by bundling tamarack tree branches together to resemble Canada geese.

“We want to preserve this traditional art form. Using drones to ship them south will boost the local economy by creating more jobs for local craftsmen.

In the past, we all feared the craft would die out since tourists had to come up here in the summer to see them before buying them. But if we can ship them down to Toronto year-round, it will help spread the word, boost sales and encourage people up here to learn the craft and keep the tradition alive.”

Since the decoys are relatively light but slightly bulky, they are ideal candidates for back-haul drone cargo.

In the emerging world of drone deliveries, many of Canada’s First Nations locations become an opportunity rather a challenge. CS Ken Mark is a veteran technology expert, who has covered supply chain management since it was called distribution and has documented its legitimization as a critical business function.

He holds an MBA from York University.

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25

ARCTIC SHIPPING

For much of its 75-year history, Montreal-based Fednav has been involved in every major shipping project in Canada’s Arctic.

OPEN FOR BUSINESS? With receding ice, shippers and carriers debate the viability of using Arctic sea routes

BY MARK CARDWELL

Northwest Passage during the navigable summer months make it a far more precarious, go-slow route than the warmwater Panama Canal, even though it adds 4,000 kilometres to the journey.

“Much of (the passage) is wet and foggy and miserable with restricted visibility and multi-year ice in the water,” Paterson said. “Whether you go 20,000 miles at 10 knots or 10,000 miles at 20 knots, you still travel the same distance in the same amount of time. Using the Northwest Passage doesn’t save time (and) no ship maintenance gets done.”

Despite the obvious dangers, decades of decline in both the extent and thickness of Arctic sea ice—the result of an ongoing global warming trend that scientists say could result in a completely ice-free Arctic in the summer within decades—simultaneously titillate and terrify profit-minded owners, operators and agents of ships involved in world trade over the prospect of functional commercial waterways over the top of the world.

All three routes—the Northwest Passage, the Northern Sea Route and the Transpolar Route, a near-mythical shipping lane that would open over the North Pole if and when the entire Arctic region becomes ice free during the summer months—have become the subject of intense international debate in recent years over the possible economic savings and benefits versus safety and environmental impacts of shipping good through the region.

The Russians are coming

rchimedes once famously surmised that the shortest distance between two points is a straight line.

But Tom Paterson says the ancient Greek mathematician’s theory doesn’t hold water when it comes to using the Northwest Passage as a commercially viable waterway for the movement of ocean freight as a result of climate change.

“All the articles you read and things you hear about it being a shorter sailing distance between Asia and Europe or the Eastern Seaboard fail to mention one thing—it’s only shorter if you’re going the same speed,” said Paterson, se-

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January 2020

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nior vice president, Shipowning, Arctic and Projects at Fednav.

The Montreal-based firm, which just celebrated its 75th anniversary, has been involved in every major shipping project in Canada’s Arctic for the past 65 years.

Today Fednav owns and/or manages more than 100 vessels—including the three largest ice-breaking bulk carriers in the world—that service every major mine in Canada’s North and Alaska, carrying more than eight million tons of material from the region in 2019.

Paterson told Canadian Shipper that the unique weather and ice conditions that prevail in different sections of the

The most talked about route of late is the Northern Sea Route (also called the Northeast Passage), which hugs the Arctic coasts of Russia and Norway, linking the Pacific and Atlantic Oceans.

In both theory and practice, it is a much shorter route that links Northeast Asia with Western Europe than the Suez or Panama Canals or around the Cape of Good Hope, reducing the distance between Rotterdam and Yokohama by 37 per cent Shanghai by 24 per cent and Hong Kong by 11 per cent.

Russia has invested massively recent years in infrastructure and capacity aimed at making the route a conduit for

Photo: Fednav

ARCTIC SHIPPING

For a container company, I can’t see how you could compete with 20,000-TEU ships carrying finished products through the Suez Canal when you risk getting bogged down by weather in the Arctic.”

—Tom Paterson, SVP, Fednav

not only international trade but for the export of its massive oil and gas reserves in its frozen northern regions.

There are now a dozen ports along the route with a combined population of around two million. The Kremlin is also building icebreakers at a record pace, with nearly 50 now in service—including several nuclear-powered vessels—and more on the way.

Shipping traffic in the region between May and October has continued to increase in recent years. According to the most recent data from the Northern Sea Route Information Office (NSRIO), there were 452 voyages into and out of the region and 186 vessels operating in route waters in September— always the busiest month—including general cargo ships (134 voyages), tankers (130), supply (48), LNG tankers (40) and research vessels (30).

However, the number of full transits remains small and has grown unevenly from only four ships in 2011 to an alltime high of 71 full transits in 2013. According to NSRIO numbers, only 31 ships had made the full voyage by the end of October, 2019.

Russia’s nuclear container ship Sevmorput was the fastest to pass in 2019, taking less than six days to—an average speed of 15.1 knots—to deliver sea products from Petropavlovsk-Kamchatskiy to St. Petersburg.

The largest number of transits in a single month—16—was in September,

Photo: Fednav

with five ships going east to west, four west-east and seven, including the Sevmorput, stopping between Russian ports.

The viability of the Northern Sea Route got a big boost from Maersk in 2019 in a follow-up to the voyage of the Venta Maersk, which became the first commercial container ship to transit the route in 2018—the same year China called for an infrastructure-building Polar Silk Road initiative in the Arctic—when it carried 660 reefer containers with South Korean electronic products and Russian fish from Busan to Bremerhaven, Germany.

Officials with the world’s largest container company initially called the 37-day trip by its Baltic feeder ship, the fourth in a new line of the world’s largest ice-class vessels that are designed to operate in -25 degrees Celsius water, as a one-off designed to test vessel systems and gain operational crew, support and equipment training.

But in June 2019, Maersk unexpectedly announced that it was in talks with Russian nuclear-powered icebreaker company Rostamflot aimed at establishing a service agreement.

“We have experienced growing demand for transport of goods from the Far East to West Russia (and) are currently exploring the possibilities of offering together with Atomflot,” the company told Reuters, adding that it had no current plans to dedicate or deploy vessels to the route.

Rosatom Group, the Russian state-run nuclear power operator, doubled-down in November, announcing plans to borrow $7 billion from Russian banks to build 55 ice-class container ships to operate along the Northern Sea route.

Within weeks, however, several of Maersk’s international shipping rivals poured cold water on the potential of all Arctic waterways and their tantalizing savings in fuel costs and faster cargo delivery by publicly renouncing their use over environmental concerns.

In August, CMA CGM Group chair and CEO Rodolphe Saadé announced during a visit with French President Emmanuel Macron at the Elysée Palace that none of his company’s 500 ships will use the Northern Sea Route due to the accompanying dangers it represents for natural ecosystems.

“With this decision, CMA CGM makes the resolute choice to protect the environment and the planet’s biodiversity despite the major competitive advantage this route represents for shipping companies,” said Saadé.

In October, both Hapag-Lloyd and MSC made a similar pledge to avoid using any and all Arctic routes—for now at least. “Hapag-Lloyd does not use the Northwest Passage or the Northeast Passage as shipping routes right now, nor are there any plans to do so in the future,” said the company’s senior director for sustainability, Jörg Erdmann.

According to Erdmann, because container ships operate in liner services, the possible time savings and added cargo from the use of larger ships (albeit ones with the appropriate ice classes) in either/ or the Northwest or Northeast Passages would be an economic boon.

“Thus, all things considered, the desirability of using these passages much be carefully weighed from both the ecological and economic perspectives,” he said.

For his part, MSC president and CEO Diego Aponte said in a statement days later that “as a responsible company with a longstanding nautical heritage and passion for the sea,” MSC finds the disappearance of Arctic ice “to be profoundly disturbing.”

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27

ARCTIC SHIPPING

Aponte argued that a surge in container shipping traffic in the Arctic would threaten air quality and biodiversity there. “Our industry should focus its efforts on limiting environmental emissions and protecting the marine environment across existing trade routes,” said the Italian billionaire.

North-by-northwest

Compared to the Northern Sea Route, use and development of the Northwest Passage, a once-impassable waterway connecting the Atlantic and Pacific Oceans through the Canadian Arctic Archipelago, has been advancing at a glacial pace.

But as the number of vessels of all size and manner that now sail into the region during the increasingly ice-free summer months continues to grow, the same hopes and fears are being expressed over the route’s real and imagined use as an international trade route.

“The Arctic is a big place and sailing conditions are very uneven across it,” said Neil O’Rourke, assistant commissioner of the Canadian Coast Guard’s (CCG) year-old Arctic Region, from his office in Yellowknife. “We have to take a very prepared and flexible approach when it comes to our operations.”

According to O’Rourke, the advent of thinner and less expansive ice during the June to November ice-breaking season, together with predictive models that foresee open water in the Arctic in summer within 50 years, have led to a doubling of trips into the Canadian Arctic over the past decade, including leisure craft and cruise ships.

According to the latest statistics from Transport Canada, 147 vessels of at least 300 gross tonnes—which must by law report to Canadian authorities—made 368 voyages into the zone in 2019.

That was an all-time high and nearly twice the number of voyages as the 185 trips made in 2009.

The 2019 ships included 97 bulk carriers, 59 general cargo ships, 28 tankers and four grain ships. Most commercial traffic is resupply for Arctic communities and mining operations and domestic LNG and mineral carrying.

Only 27 ships did a full Northwest Passage transit from Baffin Bay to the Beau28

January 2020

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With Arctic ice melting, the Northwest Passage and Northern Sea Route have become the subject of intense international debate over the possible economic savings and benefits versus safety and environmental impacts of shipping goods through the region.

fort Sea in 2019. Of those vessels, only five were general cargo ships. The rest were pleasure craft (13), passenger ships, CCG ships (2), a tug and a research vessel.

That is a far cry from the high hopes expressed by some in 2013, when the ice-strengthened freighter Nordik Orion became the first bulk carrier to fully navigate the Northwest Passage, carrying a load of high-grade coking coal from Vancouver to Finland.

The route took four days less and allowed the ship to carry 25 per cent more cargo because it didn’t have to pass through the shallower waters of the Panama Canal, a route that is 1,600 kilometres longer.

The company owners admitted however that the trip would not have been either possible or profitable had it not been for the free icebreaker escort—a service that then cost $50,000 a day— provided by the CCG.

According to O’Rourke, the seven ice breakers the CCG had in operation in the Arctic in 2019—including the CCGS Captain Molly Kool, one of three medium-class icebreakers that were built as tugs for Viking and bought by Canada in 2017 and refitted at the Davie shipyard in Lévis, Quebec—can handle the current demand for ice-breaking services.

And he is confident that the nearly $2 billion in life extension programs and $15 billion in capital expenditures announced by the federal government in 2019 for the construction of 16 new CGG vessels— including six 8,000-tonne heavy icebreakers and one or two 23,000-tonne polar icebreakers (including the long-delayed CCGS John G. Diefenbaker) at a third Canadian shipyard (likely Davie)—will help to handle what he says is growing interest for the Arctic among commercial shippers.

“The Inuit population in the region is booming, communities are getting bigPhoto: iStock

ARCTIC SHIPPING

ger and there are more mining companies,” said O’Rourke. “Canadian shipping companies tell us they are getting lots of demand. If we can entice more traffic it would offset their costs of ice breaking and infrastructure.”

For Michael Broad, president of the Shipping Federation of Canada, whose 75 members operate or act as agents for more than 300 international steamship lines and represent 95 per cent of ocean vessels trading to and from ports in Atlantic Canada, the Arctic is and will remain for the foreseeable future more a destination market than a maritime highway across the North.

“You can have all the ice breakers and infrastructure you want, but it is a complex operating area with multi-year ice, drifting ice, reduced hours of light and it’s remote with little supporting infrastructure,” said Broad.

“There are literally dozens of things to consider. What if a crew member gets hurt? How do you get them out? And don’t forget the need for pricey Arctic insurance, expensive icebreaking services and environmental and safety protection. Our members are committed to safety, it’s the No. 1 priority.”

For Fednav’s Paterson, the risks of sailing in the Arctic outweigh the potential benefits of a quick passage that may or may not result from the effects of global warming.

“Twenty years ago, people said the Northwest Passage was going to be the next Suez Canal. Yes, there is now less ice, but the shoulder seasons have increased by only 10 days on either end, which is nothing dramatic,” said Paterson. “And don’t forget you don’t need the whole passage to be blocked to stop a ship, just a mile of it.”

Though the ice pack on the Canadian side of the Arctic is more blown and packed than on the European and Asian sides, making their water more ice free and navigable, Paterson says he fails to see the economic advantages of using trans-ocean Arctic routes by shipping companies that don’t have the specialized vessels required to sail in those waters.

“For a container company I can’t see how you could compete with 20,000TEU ships carrying finished products

through the Suez Canal when you risk getting bogged down by weather in the Arctic,” said Paterson.

“You’d need spectacular ice-breaking container ships to operate there during the three- or four-month sailing season.

The value is simply not there.” 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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January 2020

29

AUTOMOTIVE LOGISTICS

Air Canada Cargo’s freight division has a solid reputation for transporting automobiles by air from Europe into Canada.

METAL Transporting automobiles entails a great amount of trust between air carriers and forwarders

T

ransporting a special-order automobile often involves a measure of cloak-and-dagger for Rodair International Ltd., a Canadian company specializing in freighting high-value goods into North America.

“Confidentiality for clients and keeping these vehicles from prying eyes are often paramount,” says Jeff Cullen, CEO of Rodair. “Many clients do not want anyone to know about their purchase, choosing to keep a low profile.”

The company, which began out of a garage in Mississauga in 1996, has since expanded five offices across Canada.

Last spring German logistics company The Rhenus Group, acquired Rodair.

Although it also handles high-end retail and consumer products, as well as transport in the mining and oil and gas industries, Rodair’s forte is within the automotive sector, shipping luxury, collectible, prototype and test automobiles all over the world. It has delivered everything, from production vehicles for coldweather testing in Canada’s north to fleets of sports cars for royal families in the Middle East.

Some of Rodair’s more memorable shipments?

“We delivered to a gentleman just outside of Toronto who pulled up in a Ferrari Enzo as we rolled his brand-new Mercedes-Maybach McLaren out of a NASCAR trailer [and onto] his driveway,” recalls Cullen. For that delivery, the Rodair crews donned white gloves and bootie shoe covers to keep the vehicle, which costs USD$190,000–plus, in pristine condition.

The importance of keeping luxury automobiles in flawless condition during transit means that air transport is often the best option. Rodair has long worked with Air Canada Cargo for its auto deliveries, primarily because the two companies have built up a great deal of trust.

The airline’s freight division has a solid reputation for transporting automobiles by air from Europe into Canada and, for that matter, the rest of North America, as well as, occasionally, South America, according to Tim Hitchings, Air Canada Cargo’s sales and interline manager for the U.K. “I don’t think there was a time when we haven’t moved vehicles of some type,” says Hitchings, who is based at London’s Heath-

row Airport. “We fly them on regular passenger flights—[on] pretty much the same airplanes you might go on [for] your summer vacation or your business trip.”

The vehicles are often trucked to the Air Canada Cargo hangar at Heathrow, arriving in a covered trailer and already loaded onto ULDs, the cars move effortlessly on an automated system of rollers and lifts that load them into the belly of a passenger jet.

“The pallet has a locking system that attaches to the floor of the aircraft, so the vehicle cannot shift around laterally or vertically [while] in flight,” Hitchings explains.

Generally, only one automobile is transported at any given time on an aircraft and tucked away in the same pressurized, climate-controlled compartment used for pet animals. “This way they’re not exposed to any adverse heat or cold,” Hitchings says. “They’re pretty much cocooned in there.”

On any given month, the airline transports only a handful of automobiles, often on order by wealthy collectors or dealers buying vehicles by auction in Eucontinued

30

January 2020

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Photo: Air Cargo Canada

AUTOMOTIVE LOGISTICS

Porsche Canada’s new Mississauga parts distribution centre serves dealers across the country and is operated by 3PL DB Schenker.

TOP GEAR Porsche Cars Canada’s new DC shifts parts fast

BY EMILY ATKINS

or a brand like Porsche that is all about speed and performance, you can imagine how high customers’ expectations are when their luxury cars are off the road for repairs. To meet those expectations, Porsche Cars Canada has just opened its first parts distribution centre (PDC) in Mississauga, Ontario, to serve all of its dealers across the country.

And speed is of the essence – orders placed up to 5p.m. local time will be fulfilled at the new PDC the same day and shipped out overnight, arriving at dealers the next morning before they open.

That’s pretty exciting for a dealer network that until October 2019 was served from the U.S. with sometimes two or three days’ wait time.

“Being able to take that two to three days and cut it down to an overnight process, gives the dealers a very big market advantage,” says George Fremis, Porsche Cars Canada’s manager, parts operations and logistics.

F

parent company, does employ AS/RS technology in its main DC – but for this project Porsche ran the numbers and found that the ROI was just not there. Instead they opted for a larger space than originally planned, and with room for growth plotted on a tenyear time horizon.

Fremis notes the initial plan was for 62,000 square feet at the outset, increasing to 100,000 square feet in five years.

The new DC is 140,000 square feet, which has been fully racked, with a central twostorey mezzanine for small parts, and a separate secure storage area for electric vehicle specialty items like lithium-ion batteries that require special handling.

The scope grew, he says after talking to racking suppliers: “With economies of scale, it was cheaper to do this.” So for now the upper levels of the racking are bare, and the second level of the small parts storage is empty. Everything’s labeled and ready to go, but for now the unused space is blocked off.

Room for growth

Software smarts

With the emphasis on quick turnaround, you might expect to see automation like conveyors, robotics or goods-to-person picking inside the PDC’s walls – Porsche AG, the German

Traditional manual order picking and putaway processes are managed by Porsche AG’s sophisticated WMS, POLARIS (Porsche logistics, international supply, automated replenishment),

Photo: Emily Atkins

which is linked to the main Porsche DC in Sachsenheim, Germany.

The software controls how much of each of the 12,000 SKUs currently in inventory are ordered, tracking usage and learning what’s required so that the correct quantities can be shipped via ocean freight in the one or two containers received at the dock doors each week. For items that are moving faster than the WMS predicts, Porsche fills in with four or five air shipments each week.

With the PDC only a couple months old, “it’s learning right now,” Fremis says. “As we’re consuming, it’s automatically reordering for us, so we don’t have to place the orders.”

Although Canadian parts orders were previously fulfilled from the U.S., the new Canadian DC does not receive any inventory from south of the border now. Fremis says the possibility of shipments from the U.S. has been discussed but was tabled until the new operation is better established.

Speedy fulfillment

While Porsche Canada owns the infrastructure, the PDC is operated by 3PL DB Schenker. Schenker was selected in part thanks to its experience running Porsche PDCs in China and South Korea. It operates two shifts a day from 7a.m. to 11p.m. with 25 staff who pick an average of 1,150 orders per day, with capacity for 1,500.

The last orders bound for British Columbia are received at 10p.m., giving staff an hour to pick, pack and load the trucks. The parts are then trucked 45 minutes to the Hamilton, Ontario, airport and flown by Cargojet to the West Coast.

Porsche’s other outbound transport vendors are Cardinal, which delivers everything in Ontario and Quebec, and Wesbell Logistics, which, along with Cargojet, covers the rest of the country. Fremis notes that Cargojet and other carriers “love our business” because it operates counter to the retail cycle, with its busy season in the spring and summer instead of the fallwinter retail holiday shopping rush.

“It’s a nice fit from a logistics point of view,” he says. CS www.canadianshipper.com

January 2020

31

AUTOMOTIVE LOGISTICS

continued from p. 30

rope. Hitchings notes that the process involves “a lot of planning” and is about more than just handling the precious, pricey cargo with extreme care. The logistics for these special orders are often complex, with destinations across North America and, sometimes, remote

locales, where new vehicles are testdriven in cold or hot weather. This makes Air Canada Cargo’s operations at Heathrow a perfect hub for transporting vehicles to airports across Canada and beyond.

“Because we have a good folio of di-

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rect services into Canada, we often have plenty of capacity to cope with these special orders from across Europe,” says Hitchings, adding that Italian sports cars are often flown into Canada out of London. “Freight forwarders will bring a car from [northern] Italy to the U.K., for example, and we fly it from here to [somewhere in] North America.”

While loading is largely an automated process, each automobile order is unique and requires a personalized touch. “As much as there is great technology out there [now], it is still very much a matter of high-touch value in a high-tech world,” notes Cullen, whose company’s VIP service involves careful engagement throughout the process, starting from upper management to the logistics teams on the ground.

“When moving things like [a luxury vehicle], we get multiple touch points at the senior level, as well as the operational level, so people are taking the kind of care that’s required of these high-value goods.”

Timing is particularly crucial when transporting what are essentially topsecret, never-before-seen automobiles for events like the North American International Auto Show in Detroit. In fact, Rodair and Air Canada Cargo have partnered many times to deliver preproduction automobiles and concept cars to the premier auto event, including this year, when Rodair brought in two all-electric Formula One race cars.

“If you miss a flight or you haven’t got all eyes on these things to make sure they’re loaded and unloaded on time, you could end up with an empty stand at the show, which [won’t] make the manufacturer smile,” Cullen points out.

Discretion is also valued, he notes, as these vehicles are expected to remain a mystery until they are unveiled.

Yet, beyond ensuring that high-value orders remain hush-hush, what is most valuable is the airline’s experience of knowing exactly what specialized freight companies like Rodair require.

“We have developed a nice rhythm with each other. We don’t have to reexplain to anybody how it needs to be done and why it needs to be done,” Cullen says. “They just get it.” CS

INSIDE THE NUMBERS WITH LOU SMYRLIS, MCILT

FOGGY FUTURE

Freight volumes compared to previous year

Freight volume projections for 2020 in a cloud

Down more than 20%

Freight volumes didnâ&#x20AC;&#x2122;t build in 2019 as initially forecast. After two years of strong freight volumes, which strained capacity, growth was much more muted this year. About a quarter of shippers reported a decrease in their volumes. What can we expect for 2020?

More of the same it seems, with about half of shippers expecting increases and a similar number expecting a similar year to 2019.

2%

of respondents

Down 10-20%

10%

Down 5-10%

10%

About the same

33%

Up 5-10%

28%

Up 10-20%

10%

Up more than 20%

3%

Not sure

4%

Survey respondent representation by region Freight volume projections for 2020 Western Canada

26% Central Canada

66% 8%

Eastern Canada

Freight volume increase projections by region 2020

50%

51%

40%

West

Central

East

0%

Down more than 20%

of respondents

Down 10-20%

1%

Down 5-10%

5%

About the same

45%

Up 5-10%

37%

Up 10-20%

8%

Up more than 20%

4%

Anticipate increase in use of mode 21%

Rail

of respondents

For-Hire Truckload

33%

For-Hire Less than Truckload

38%

Private Fleet Truck

15%

Courier

36%

Air cargo

15%

Marine - Ocean

31%

Marine - Inland

14%

Marine - Inland

14%

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January 2020

33

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PRESENTING M E D I A PA R T N E R

COACHING CORNER

Could your organization use a Chief Happiness Officer?

As the millennial population increases in the workplace, it has significantly shifted the emphasis towards making it a happy, non-toxic environment. From grassroots movements such as #MeToo to economic shifts like the gig economy, they have become empowered employees, who actively advocate for change in the way organizations operate in order to retain and compete for top talent. After all, a happy employee is a productive employee.

Q: Is it naive to expect happiness at work? What if I want to suggest ways to introduce a more dynamic culture that could lead to greater engagement? Would I be laughed off?

A: There are notable personal, social, and professional advantages of happiness at work. It is extremely hard, if not nearly impossible, to be creative and authentically engaged under stress. A creative learning environment is the catalyst for innovation and out of the box thinking is highly coveted by organizations as it greatly improves their differentiating value and competitive advantage.

There are many strategies for evaluating levels of happiness within an organization. As well as how to identify barriers and pitfalls to achieving happiness at work. A series of researchbacked, practical ways to boost happiness at work are a worthwhile investment. Many organizations actually have a Chief Happiness Officer as part of leadership.

Many of us probably don’t associate “happiness” with “work.” But maybe we should: Studies suggest that happy ©iStock

people are actually more productive and successful, and less likely to leave their jobs.

The Greater Good Science Center at the University of California, Berkley has a quiz of twenty questions based on its research that it says, “measures how happy you are when you’re on the clock. It’s based on research that has identified key factors to happiness at work.” (https://greatergood.berkeley.edu/quizzes/take_quiz/happiness_at_work) This quiz measures how happy you are when you’re on the clock. It’s based on research that has identified key factors to happiness at work. There are no right or wrong answers, so please respond as honestly as possible. If you are an independent contractor, when you see “organization,” bring to mind people in your profession—that is, people who do the same kind of work as you. When you see “colleague,” bring to mind people who you interact with during work, such as clients, vendors, or peers in your field. (Answers are on a sliding scale from Strongly Disagree to Strongly Agree.)

1. At my work, I always persevere, even when things do not go well.

2. I try my hardest to perform well and often get immersed in my work.

3. I have a strong and reliable network of supportive colleagues at work.

4. I look forward to each new day at work.

5. I am true to myself at work in most situations.

6. At my workplace, we routinely thank each other for everyday efforts and contributions to success.

By Carolina Billings, CPCC, CHRL, MA-IS

7. I enjoy talking about my work to other people.

8. The work we do in my organization serves a greater purpose.

9. I often ask for feedback so that I can improve my work performance.

10. I believe in giving help to my work colleagues, as well as asking for it.

11. There is a high level of trust throughout my workplace.

12. I view my work as contributing to my personal growth.

13. The work that I do fits well with my personal values and beliefs.

14. The humour my colleagues use makes the work more enjoyable.

15. I have developed some reliable ways to deal with the personal stress of challenging events at work.

16. I am careful to ensure that my work does not dominate my personal life.

17. Curiosity is the driving force behind much of what I do at work.

18. At work, my colleagues and I think of each other as friends.

19. The tasks I have to do at work are in line with what I really want to be doing.

20. It is easy for me to recognize the day to day progress that I am making at work. 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

January 2020

35

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January 2020

37

THE BIGGER PICTURE

It’s getting hot in here The United Nations Environment Programme (UNEP) released its 2019 Emissions Gap Report in November 2019 and it seems things are heating up, literally. The report paints a dismal picture of world progress on the Paris Agreement recommendations for mitigating global greenhouse gas (GHG) emissions. As the successor to the Kyoto Protocol, the Paris Agreement, tabled for signature in 2016, challenged membercountries to join the fight against climate change with a goal of limiting the rise of global temperature this century to below 2 degrees Celsius, ideally to 1.5 degrees Celsius.

What are the risks involved? According to scientists who study this issue, the risks are near catastrophic, including deforestation from uncontrollable forest fires and loss of ocean reefs, resulting in floods and droughts in various parts of the world.

These events in turn are forecast to result in massive human migrations as populations affected by excessive temperatures and lack of food, flee to counties that offer the hope of better living conditions. An example often cited for North Americans is the migration of immigrants from South America and Latin America through Mexico on their way to the United States.

38

January 2020

What is the likelihood of success? Not high. In fact, unlikely. This chilling assessment comes from the UNEP itself. The preface of the 2019 report makes it clear from the very beginning: “The UNEP Emissions Gap Report 2019 finds that even if all unconditional Nationally Determined Contributions (NDCs) under the Paris Agreement are implemented, we are still on course for a 3.2°C temperature rise.”

In other words, we’re going to need a bigger boat.

And this in spite of the fact that 185 of the 197 member-countries who signed the Paris Agreement have already ratified it. Unfortunately, some countries have used this situation as another opportunity to levy carbon taxes with no accountability for how (or if) those revenues are used in a meaningful way to combat climate change.

Perhaps this is just an honest reflection of our hedonistic (perhaps fatalistic) tendencies as human beings. To drive down a one-way street the wrong way, or go through a stop sign at 3:00 am because we think no is looking. Lets’ face it, mankind has been unable to resist the urge to touch a hot stovetop since we first discovered kindling. What should we really think our chances are

www.canadianshipper.com

By Laurie Turnbull

of hitting a 1.5-degree Celsius bullseye a hundred years from now?

These developments will have a direct impact on the supply chain for many companies, particularly in terms of global shipping. In 2016 the International Maritime Organization (IMO) implemented a rule reducing the permissible limit for sulphur in fuel oil used by ships to 0.50%, and that rule took effect January 1, 2020.

While the IMO is to be applauded for resisting calls to delay implementation of its low-sulphur rule, the UN announcement in November highlighted the stark reality of this situation. According to Oceana the shipping industry is responsible for about 3% of global carbon-dioxide emissions. Nonetheless, given the dire edict released by the UN, this relatively low amount should still be seen as significant. Efforts by the IMO are a positive step towards reducing emissions from global transportation, but individual calls

for non-compliance and the decision by the U.S. to withdraw from the Paris Accord will negate these initiatives to some extent.

Transportation managers are well-positioned to ensure suppliers are meeting their obligations in terms of implementing measurable sustainability policies. And consumers can take a much more active role in scrutinizing the environmental claims of organizations they patronize to make sure they are doing their part, and identify those companies guilty of “greenwashing” (issuing sustainability statements without any measurable results).

Its unfortunate that many critics overlook the role of transportation in supporting outsourcing and the rise of GDP in many countries around the world. While the shipping industry may well have been part of the problem, it is now taking an active leadership role as part of the solution. CS

Laurie Turnbull, CCLP, MSc is a Professor, Supply Chain Management-Global, at Conestoga College Institute of Technology and Advanced Learning. He can be contacted at lturnbull@ conestogac.on.ca.

©iStock

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