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MAY 2019

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MOVIN’ FORWARD FORMER NHLer MATHIEU DARCHE SWAPPED HIS JERSEY FOR A SUIT AT FREIGHT FORWARDER DELMAR TECHNOLOGY Uber Freight’s detour

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Safety regulations debated

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CONTENTS

MAY 2019

DEPARTMENTS

5 | Editor’s Foreword Maritime disaster

COVER STORY

6 | In the news

MOVIN’ FORWARD

Rail safety debated by government, railways; SUPPLY STATS; New path to the CCLP designation

Former NHLer Mathieu Darche exchanges his skates for a suit

33 | Inside the Numbers Retirement realities

35 | Coaching Corner Hunger Games

38 | The Bigger Picture RFQ-eh?

Photo: Denis Bernier

19 FREIGHT TRANSPORT Former NHL player Mathieu Darche still works in his hometown, only now instead of skating for the Montreal Canadiens, he suits up for freight forwarder Delmar International.

NS farm uses its own trucking firm to move produce

FEATURES

TECHNOLOGY | 11 Uber Freight’s expansion plans don’t include Canada

PORT INFRASTRUCTURE | 16 Halifax Port Authority reveals possible expansion plans

CONTAINER SHIPPING | 24 Digital innovation improving supply chain for shippers

AIRFREIGHT | 28 Technology driving air cargo volumes

Photo: Kings Trucking

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May 2019

EDITOR'S FOREWORD John Tenpenny May 2019 Volume 122 Issue No. 3

EDITOR John Tenpenny (416) 510-6880 john@newcom.ca EDITORIAL DIRECTOR John G. Smith (416) 614-5812 johng@newcom.ca MANAGING DIRECTOR, TRUCKING AND SUPPLY CHAIN GROUP Lou Smyrlis lou@newcom.ca ART DIRECTOR Anita Balgobin CONTRIBUTORS Denis Bernier, Carolina M. Billings, Mark Cardwell, Carroll McCormick, Jeff McIntosh, Tom Peters, Ian Putzger, Laurie Turnbull PRODUCTION MANAGER Kimberly Collins (416) 510-6779 kim@newcom.ca DIRECTOR, BUSINESS DEVELOPMENT Delon Rashid (416) 459-0063 delon@newcom.ca REGIONAL ACCOUNT MANAGER Anthony Buttino (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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Dead in r?? the water?

ell, numbers can be deceiving. Compare $2 billion against $5 million. Not much of a contest is it? But a closer look reveals that the latter has turned out to be a great investment on behalf of shippers, particularly on the West Coast. Aimed at boosting Canadian players in the global shipping and trade sector, the federally-funded $2 billion National Trade Corridors Fund supports investment into projects that “support economic activity and the movement of goods and people.” To date, 39 projects have been approved for funding, with the Government of Canada contributing more than $800 million. On the other side is the little-known Vancouver International Maritime Centre (VIMC), a provincially and federally-funded initiative dedicated to attracting the businesses behind international trade. In three short years of existence—with $5 million in funding—it has seen 15 new shipping companies open offices in Vancouver with a projected impact of more than $1.3 billion to B.C.’s economy. But the clock is running out on the VIMC and its goal of establishing the city as a global maritime hub. VIMC executive director Kaity Arsoniadis-Stein says government funding to keep the centre afloat is unlikely to be renewed and points out that making only infrastructure investments, which make for great headlines, often miss the point. Canadian Shipper spoke to Arsoniadis-Stein last year (see “Maritime Capital” November 2018) and she pointed out that major international shipping hubs like London, Singapore and Oslo offer far more, including business activities associated with shipping, such as ship management, brokerages, research and development, chartering, maritime law, ship finance, insurance and technology, that she estimated could be worth up to $20 billion if Canada attracted a significant concentration of those businesses. The biggest fish landed by VIMC so far, is Singapore-based China Navigation Co.— owned by British conglomerate John Swire and Sons Ltd., which also owns Cathay Pacific Airways in Hong Kong—which announced last July that it had decided to open its North American headquarters in Vancouver. For the amount needed from both levels of government to fund VIMC for say, another three years, who knows what other international marine heavyweights could be enticed to open up shop in Vancouver, further raising the city’s profile in the global marine sector. For our money, VIMC’s return on investment makes it a project worthy of funding. CS WANT MORE? www.canadianshipper.com

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IN THE NEWS

Safety first With more oil to be shipped by rail, train derailments show enduring safety gaps The recent runaway CP Rail train in the Rocky Mountains near Field, B.C., highlighted ongoing gaps in Canada’s railway safety regime, more than five years after the Lac-Megantic rail disaster that killed 47 residents of the small Quebec town. The British Columbia crash resulted in the deaths of three railway workers and the derailment of 99 grain cars and two locomotives. In the B.C. accident, the train involved had been parked for two hours on a steep slope without the application of hand brakes in addition to air brakes. The practice of relying on air brakes to hold trains parked on slopes was permitted by both the company and by Transport Canada rules. Revised operating rules, adopted after the Lac-Megantic disaster, had not required the application of hand brakes under these circumstances. The latest accident was one of a rash of high-profile train derailments in Canada since the beginning of 2019. While none compares in magnitude with Lac-Megantic, they evoke disturbing parallels to that tragedy. Although investigations are ongoing, what we do know raises questions about whether any lessons have in fact been learned from the 2013 disaster. Now must apply hand brakes

Within days of the B.C. runaway, both CP Rail and Transport Canada mandated the application of hand brakes in addition to air brakes for trains parked on slopes. This after-the-fact measure parallels the action Transport Canada took days after Lac-Megantic, prohibiting single-person crews, after having granted permission to Montreal Maine and Atlantic Railway to operate its massive oil trains through Eastern Quebec with a lone operator. Furthermore, like the Lac-Megantic tragedy, existing mechanical problems with the locomotives involved reportedly played a role in the CP Rail derailment, raising questions about the ade6

May 2019

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By Mark Winfield and Bruce Campbell

A train derailment is shown near Field, B.C., Monday, Feb. 4, 2019. A union representative says a westbound Canadian Paciﬁc freight train fell more than 60 metres from a bridge near the Alberta-British Columbia boundary in a derailment that killed three crew members.

quacy of oversight with regard to equipment maintenance practices. Like Lac-Megantic, worker fatigue may have also played a role in the crash. Despite efforts within Transport Canada to force railways to better manage crew fatigue, railway companies have long resisted. Instead they have taken page out of the tobacco industry playbook by denying inconvenient scientific evidence as “emotional and deceptive rhetoric.” The situation has prompted the Transportation Safety Board to put fatigue management on its watchlist of risky practices, stating that Transport Canada has been aware of the problem for many years but is continuing to drag its feet. Oil-by-rail traffic explodes

The implications of the B.C. accident take on additional significance in light of the dramatic growth seen in oil-by-rail traffic in Canada over the past year. Export volumes reached a record 354,000 barrels per day in December 2018, with the vast majority of the oil going to refineries on the U.S. Gulf Coast and Midwest. This development has not gone unnoticed by people living in communi-

ties across North America, who are concerned about the growing danger of another disastrous derailment. The increase in traffic—now bolstered by the Alberta government’s plan to put another 120,000 barrels per day of crude oil on the rails by next year—is occurring at a time when the Transportation Safety Board reported a significant increase in “uncontrolled train movements” during 2014-17 compared to the average of the five years preceding the disaster. This is despite the board’s Lac-Megantic investigation report recommendation that Transport Canada implement additional measures to prevent runaway trains. Two weeks after the B.C. crash, a CN train carrying crude oil derailed near St. Lazare, Man.; 37 tank cars left the tracks, punctured and partially spilled their contents. The cars were a retrofitted version of the TC-117 model tank car, developed after Lac-Megantic, intended to prevent spills of dangerous goods. The train was travelling at 49 mph, just under the maximum allowable speed. Photo: THE CANADIAN PRESS/Jeff McIntosh

IN THE NEWS

Budgets chopped

In the lead-up to the Lac-Megantic disaster, the Harper government squeezed both Transport Canada’s rail safety and transportation of dangerous goods oversight budgets. These budgets did not increase significantly after the disaster. Justin Trudeau’s government pledged additional resources for rail safety oversight. However, Transport Canada’s plans for the coming years show safety budgets falling back to Harper-era levels. It remains to be seen whether these plans will be reversed in the upcoming federal budget. A Safety Management Systems-based approach remains the centrepiece of Canada’s railway safety system. That system been fraught with problems since it was introduced 17 years ago. It continues to allow rail companies to, in effect, self-regulate, compromising safety when it conflicts with bottom-line priorities. Government officials claim there has been a major increase in the number of Transport Canada rail safety inspectors conducting unannounced, onsite inspections. But the inspectors’ union questions these claims. If an under-resourced regulator, with a long history of deference to the industry, is unable to fulfil its first-and-foremost obligation to ensure the health and safety of its citizens, the lessons of Lac-Megantic have still not been learned. The B.C. accident highlights that the window for history to repeat itself remains wide open. CS

Mark Winfield receives funding from the Social Sciences and Humanities Research Council of Canada; the Natural Sciences and Engineering Research Council of Canada, and the George Cedric Metcalf Foundation. Bruce Campbell is a Research Associate, Canadian Centre for Policy Alternatives; Board Member, Rideau Institute for International affairs; Board Member, Public Interest Advocacy Centre; Member/Donor, New Democratic Party of Canada. This article was originally published on The Conversation, an independent and nonprofit source of news, analysis and commentary from academic experts. Disclosure information is available on the original site. Read the original article: https://theconversation.com/with-moreoil-to-be-shipped-by-rail-train-derailmentsshow-enduring-safety-gaps-112495

Railways appealing minister’s order for use of handbrakes Canada’s two largest railways are appealing Transport Minister Marc Garneau’s order requiring railways to immediately use handbrakes on all trains stopped on mountain slopes following a deadly derailment in the Rocky Mountains. Canadian Pacific Railway’s chief executive says the company is focused on safety, but the application of handbrakes introduces additional risks and will have unintended consequences. In a news release, Keith Creel says safer options are available, adding “we must get this right.”

The Calgary-based railway says it will comply with the ministerial order throughout the appeals process, including a review by the Transportation Appeal Tribunal of Canada. Canadian National Railway also says it is filing a review. “CN has complied with this order since it came into force, but is of the view that alternative solutions are available that will more adequately address the safety objectives and the realities on the ground,” spokesman Alexandre Boule wrote in an email. —The Canadian Press

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May 2019

IN THE NEWS

SUPPLY STATS

11,788 kilograms Under provisions in the federal government’s new proposed budget, Canadian fleets will be able to write off the full cost of zero-emissions trucks. Electric, plug-in hybrid (with batteries above 15 kwh) and hydrogen fuel cell freight trucks rated above 11,788 kilograms would be eligible for full deductions under the 2019 federal budget. Current regulations allow 40 per cent of the cost of zero-emissions trucks to be deducted.

250,000 TEUs

36,938 metric tonnes

The Montreal Port Authority (MPA) and Logistec Corporation announced that Viau Terminal, will undergo a new construction phase to increase its handling capacity, adding 250,000 TEUs to its current capacity, bringing it to 600,000 TEUs. Corsie, the port’s vice president real estate.

In 2018, Nova Scotia seafood represented a significant portion of the record 36,938 metric tonnes of cargo processed at Halifax Stanfield International Airport. An increase of 8.5 per cent over 2017, this marks the fifth consecutive year of cargo volume growth.

$1.4 billion NDP Leader Rachel Notley is promising to spend $1.4 billion to expand Alberta’s network of roads that handle large and oversized loads. Notley says the current 6,500-kilometre network is recognized as one of the best in North America, and she says a re-elected NDP government would work to increase the network to cover 10,000 kilometres over the next six years.

100 women To celebrate its 100th anniversary and honour outstanding women in the profession, the Supply Chain Management Association (SCMA) launched its first-ever list of the 100 Influential Women in Canadian Supply Chain, which included Inside Logistics editor Emily Atkins

66% According to transport and logistics insurer TT Club, across the intermodal spectrum as a whole, 66% of incidents related to cargo damage can be attributed to poor practice in the overall packing process; that is not just in securing but also in cargo identification, declaration, documentation and effective data transfer. 8

May 2019

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IN THE NEWS

Ramping up CITT launches new path to CCLP designation for experienced logistics professionals

Leadership

There’s no substitute for experience. That was the starting point for CITT in developing a new program to allow experienced professionals a quicker path to earning their CITT-Certified Logistics Professional (CCLP) designation. The new Challenge On-Ramp to the CCLP Designation program (w w w.citt .ca/cha l lenge_ onramp) is a streamlined, new process for experienced people to become CITT-Certified Logistics Professionals— “one

that doesn’t require people to go back to school just to prove they know the business,” explains Perry Lo, chair of CITT’s Board of Directors. In the past, the only way someone could qualify was by passing CITT’s full program of courses, because, explains Lo, “before [the new program] there was no other way that CITT could reliably and consistently assess a person’s competencies if they didn’t take CITT’s courses.” Now people will have a choice

CCLP designation seekers who are confident they have mastered eight critical competency areas (see infocontinued

May 2019

IN THE NEWS

continued from p. 9

graphic) can go straight to CITT’s new Challenge Exam. Those who pass the exam will then participate in a practical interview. And both assessments can be completed from the candidates’ place of work, online and by phone, all of which can be accomplished in a matter of weeks. “There’s a huge demand from industry for the CCLP designation. People with accumulated experience, many of them working at mid-to-senior levels in the sector, ask CITT all the time if there’s an alternative qualification process to completing courses,” says CITT president and CEO Pina Melchionna. About the challenge of developing the new way of certifying experienced pros, CITT’s director of strategic initiatives, Chrissy Aitchison states:

“CITT’s goal was to develop an accurate and reliable way to consistently assess the all critical professional competencies required for the CCLP designation. We want to certify more deserving people, but not at the risk of lowering the high bar that a professional designation from CITT represents.” The first person to earn the CCLP designation via the new Challenge OnRamp program found the process encouraging and CITT staff helpful throughout. “I’d been working toward my designation from CITT for years, on and off … I jumped at the chance to take this new on-ramp,” says the publicity-shy designation holder. “It only took me a matter of weeks to complete the competency assessment process.”

Response from industry leadership has been enthusiastic. “CITT continues to innovate and find ways to better support people who work in logistics disciplines all across the supply chain sector,” comments Bob Ballantyne, president of the Freight Management Association of Canada (FMA). “FMA appreciates and supports the disciplined approach CITT took to developing this pathway to the designation for more experienced people. “In developing the Challenge OnRamp to the CCLP Designation, CITT has developed a rigorous new assessment for experienced supply chain logistics professionals who already have the competencies CITT certifies, giving individuals a way to prove their competency without having to take multiple courses to do so.” CS

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TECHNOLOGY

Missing in Action Uber Freight sidesteps Canada in international expansion By John Tenpenny

ber Freight is coming. To Europe. Since launching in the U.S. two years ago, the digital freight matching service has secured more than 30,000 trucking companies and owner-operators as users. And trucking has quickly become a darling of the tech industry as a whole. Millions are being invested by those looking to digitize trucking-related transactions from payment processes to load tracking. When those factors combined with a recent hiring binge in Uber Freight’s executive suite, many people began to predict the load-matching service had international aspirations. The predictions were right. It just turns out that the aspirations involved borders outside North America. Carriers and drivers in the Netherlands will now be able to book and move the first loads outside the U.S., and from there the plan is to expand access to other parts of Europe in the near future, said Lior Ron, head of Uber Freight. “The European truckload market is a $400 billion marketplace and is the third-largest in the world after China and the United States, yet it still takes dispatchers and drivers multiple hours—sometimes even days—of administrative work to book a single load,” he said in a blog post announcing Uber Freight’s plans. Photo: Uber Freight

He also pointed out that many of Uber Freight’s existing shipper partners have vast operations in the European Union (EU), making it a natural next step for the company. Additionally, the EU shares many of the same pain points that U.S. drivers face. “For example, the European trucking market is experiencing a severe shortage of drivers, and of the time drivers are on the road, 21% of total kilometers traveled are empty. Inefficiency of this scale results in shippers struggling to find available drivers to move their goods.” Small- to medium-sized carriers in the EU make up more than 85% of the total carrier pool, and just like in other international freight markets, they can struggle to connect with larger shippers. “When you combine these shortcomings in the market, the price of goods goes up. A more efficient and transparent freight marketplace is something Uber Freight can bring to the table that will pay dividends to all, as well as reduce wasted miles and fuel,” wrote Ron. While the explanations make sense, the obvious question is why not Canada? Is there something different or unique to the Canadian digital freight matching market that is giving Uber Freight pause? For Karen Campbell Jones, director – marketing at TransCore Link Logistics, the reasons behind Uber Freight’s decision make sense.

“Although entrepreneurship ranks well in Canada, I think in general, the world perceives Canada as slower to adopt new technology than Europe or our neighbours to the south.” She adds that Europe’s population density is much higher, and competition is more robust than in Canada, “helping to drive adoption of new technology much more quickly.” If and when Uber Freight comes calling on Canadian shippers and carriers, Campbell Jones believes they may have their work cut out for them, making adoption in the Great White North slower than in the U.S. or European markets. “Shippers are used to dealing with freight brokers for spot freight, and dealing with trusted carriers is important,” she says of the Canadian marketplace. “Shippers may see it as risky to automatically assign high-valued goods to an unknown party.” Another layer of complexity that Uber Freight will need to address is cross-border shipping, something they don’t have to deal with in the EU. “Who’s going to handle the Customs clearance?” asks Campbell Jones. One factor driving the growth of digital freight matching services is rising lastmile delivery costs, something that is causing traditional transportation management systems (TMS) providers to play catch-up, according to Chris Cunnane, senior analyst in the supply chain and logistics team at ARC Advisory Group. “The digital freight matching market, or the Uberization of freight as some like to call it, is not a new concept. There has been investment money pouring in for a few years, and a plethora of companies trying to make their name,” he says. “Until recently, I was reluctant to think that the market would take off. But, with the current capacity restraints, most of the big TMS suppliers are creating partnerships for digital freight matching within their systems. This leads me to believe that the market is hitting critical mass and can thrive.” The jury is still out on Uber Freight’s European foray. For now, however, a move into Canada doesn’t appear to be high on the agenda. CS www.canadianshipper.com

May 2019

Former Montreal Canadien Mathieu Darche has made a seamless transition from the ice to the boardroom as he enjoys his second career with international freight forwarder Delmar BY JOHN TENPENNY

May 2019

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Photo: Denis Bernier

INDUSTRY PROFILE

aving an MBA is a prized commodity, granting the holder instant credibility in the world of business. And it’s no different in the transportation and logistics industry, earning the designation can take years of study. Unless you’re Mathieu Darche. The former NHLer, now an executive with freight forwarder Delmar International, described his turn as a member of the National Hockey League Players’ Association’s negotiating committee during the lockout of 2012-13 as a high-level crash course in business relations. “It was like getting my MBA in six months,” he told Canadian Shipper in an interview at the company’s Toronto offices. “Working alongside [NHLPA executive director] Donald Fehr and across the table from [NHL commissioner] Gary Bettman—there was no school that could have given me that hands-on experience.” The holder of an actual degree in marketing and international business from Montreal’s McGill University, Darche, after failing to catch on as a free agent after the 2013 lockout, retired and was searching for a career after hockey when fate intervened in the form of his old NHLPA boss. In the spring of that year, Darche was invited to a sports celebrity benefit breakfast honouring Fehr. “They’d always invited me while I was playing, but I could never go,” he said. “I went because of Don.” At the event, Darche crossed paths with Delmar’s COO Mike Wagen and after exchanging pleasantries, the two met later for lunch and the idea of the former Montreal Canadien coming to work for

Photo: Club de hockey Canadien inc.

the company was hatched. More meetings followed, including ones with Delma mar founder and chairman Harrison Cu Cutler and CEO Robert Cutler, which led to an offer Darche was pleased to accept. He called Wagen “a great mentor.” “Mike took me under his wing and I wee to every single meeting with him w went th first year,” remembered Darche, tha that wh began as director of business develwho op opment and public relations, before being promoted to his current role as naing tio tional vice president, sales and ma marketing - Canada in 2016. “It was definit an accelerated learning curve.” nitely Darche oversees the sales teams in Montreal, Toronto and Vancouver, managing existing and new accounts for Canada for Delmar, which has more than 1,300 employees across 40 offices in 14 countries. “Mike [Wagen] told me, ‘Nobody studies to be in logistics, you fall into it,’ and I really enjoy it because it’s so dynamic and you get to meet so many people, and I like that.” No two days are the same, according to Darche. “Let’s face it, we all do the same thing,” he remarked on the freight forwarding business. “You can’t just sell on price. “You can have two customers in the same industry that ship ocean freight from China, but they both have different strategies that work for them and, for me, it’s enjoyable to go through the RFQ process and attempt to bring value to a company’s supply chain. “You have to find a solution, whether it’s a destination solution or an origin solution, find some way to differentiate yourself.” At Delmar, that means technology. “Our industry really lends itself to technology… I think that technology and data interchange is almost as important for just-in-time shipping as moving the actual merchandise itself,” said Darche. To modernize its processes and maintain a competitive edge, Delmar developed its own software. While this has led to higher overhead and IT expenses, the company has gained unique capabilities that allow it to better serve its customers.

“I got paid for over 300 games in the NHL and when I retired, by no means was I on the street, but I had to work; I still had a mortgage on my house,” he said. “The ones that don’t have to work are the minority.” Some might think, being a former NHL player and a Canadien to boot, means Darche can book business solely based on his name. That’s not necessarily the case. “It helps, but I’m not naïve. Yeah, it might help get me the meeting, but at the end of the day I have to know what I’m talking about. I don’t even mention it to customers. I don’t introduce myself, ‘Hi, I’m Mathieu Darche, former Montreal Canadien.’ Some people don’t follow hockey, so I don’t get recognized all the time.” That said, “Business is networking and I have a decent network.” That network includes his former teammates and the world of professional hockey. Darche won’t be far from hockey; he continues his gig as a studio hockey analyst for RDS and expects to be a regular visitor to the Bell Centre, where Delmar, sponsor of TSN Radio 690’s Canadiens post-game show, has a suite for business entertainment. But don’t expect to hear Darche dish on his former colleagues. “If they play poorly, I’ll say that, but I made it clear that I’m not there to hand out scoops on my friends,” which include neighbours such as current Hab Carey Price and former teammates Francis Bouillon and Travis Moen.

Lessons from a life in hockey

When their playing days are over, most professional athletes have no choice but to look for a second career and that was the reality for Darche as well.

Mathieu Darche suited up for 13 teams during his professional hockey career, including three for his hometown Montreal Canadiens.

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May 2019

INDUSTRY PROFILE

It’s that camaraderie and being part of a team that Darche feels is something that can be carried over to the working world. He learned more from his 14 years of pro hockey than just how to execute the neutral zone trap. “You’re only as strong as your weakest link. Same thing in hockey, everyone has to pull in the same direction. I work with people’s strengths and try to get the best out of everyone. When you play hockey, you deal with people from all sorts of different backgrounds.” Including age. During his time in Montreal, he played alongside Louis Leblanc, a 2009 first-round draft pick, who was closer in age to Darche’s two sons (Samuel and Benjamin). Adapting and making adjustments as you go is another lesson Darche brought with him from his playing days. Former Ottawa Senators bench boss Guy Boucher, who coached Darche in Hamilton for the Canadiens’ American Hockey League affiliate during the 2009-

10 season, told him: “I don’t coach a team, I coach 23 individuals.” “It’s the same in the workplace,” said Darche. “You can be hard on the issues, but softer on the people.” Pressure is also nothing new to Darche, who loved playing in front of his hometown fans, “except for all the ticket requests,” he joked. “I played three years for the Montreal Canadiens, I’m used to being criticized. I know how to handle pressure. I don’t get flustered. In hockey it’s a different kind of pressure. At work you can screw up and your boss will know, but in hockey, you screw up it’s in front of 22,000 people and the next day it’s in the newspaper.” Education-life balance

For someone who took the unusual path to the NHL from a Canadian university hockey program, Darche remains a staunch believer in the value of higher education, something instilled in him by his family early in life.

Darche and his older brother (by two years) J.P. grew up loving sports, playing both football and hockey. Their mother Lucie, was an elementary school teacher and their father, Edouard, was an accountant. “Our parents always pushed us toward school. I remember coming back home from school and university and talking hockey with my dad. And the next thing you know, my mom gets over him and she’s like, ‘How were your classes today?’ “We always had a balance.” Recruited by McGill to play football, Darche turned down a hockey scholarship from the University of Massachusetts so he could play both in Montreal, including a year alongside his brother, who would go on to play nine seasons in the NFL, capped by an appearance in Super Bowl XL with the Seattle Seahawks. Nowadays, J.P. is the team doctor for the Kansas City Chiefs. Before McGill, Darche played hockey at Choate Rosemary Hall, a Connecticut

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INDUSTRY PROFILE

prep school better known for educating several generations of Kennedys than for developing NHL players. At McGill, where he dropped football after his first year to concentrate on hockey, Darche racked up 129 points in 75 games over his final three seasons, and was named the Dr. Randy Gregg Award winner as the outstanding Canadian Interuniversity Sport student-athlete. Journeyman might be the best description of Darche’s hockey career. After signing as a free agent with the Columbus Blue Jackets in 2000, he went on to play with 13 teams in the NHL, AHL and Germany’s Deutsche Eishockey Liga. After a decade he finally found success at the age of 33, playing his first game for the Canadiens in 2009 and enjoying twoand-a-half seasons as a full-time NHL player, eventually being nominated by the Montreal chapter of the Professional Hockey Writers Association for the league’s Bill Masterton Memorial Trophy in 2011, awarded annually to a player who

exhibits perseverance, sportsmanship and dedication to hockey. His hard-earned success in Montreal was another lesson learned, he told The (Montreal) Gazette at the time. “In Tampa, every time I got called up I was playing not to make mistakes instead of doing something. When I got called up I had a talk with my brother, and as we were talking I decided: You know what, it’s one of my last chances to make it up and if I have to go back down, I will go down swinging. I will play the way I play, and if it doesn’t work and doesn’t help the team, well, so be it. At least I gave it my all.” Darche is still working hard at the game he loves as president of a school hockey league in Quebec—La Ligue de Hockey Préparatoire Scolaire (LHPS)— which currently boasts 26 schools and over 2,000 players, including his boys, Samuel, 15 and Benjamin, 13. Begun during his years as a Montreal Canadien, it was a concept based on prep schools in the U.S. Hockey Hall of Famer

If you’ve already learned the business of logistics

and former Tampa Bay forward Martin St. Louis—who went to the University of Vermont—is an adviser with the LHPS. Darche said the league’s mandate to ensure young players aspiring to reach the pro level be sufficiently educated to make a living off the ice. Hockey is the only sport where all the major programs before turning professional are not school-based. “I have nothing against Junior hockey if that’s the choice people make, but when you look at the percentage of junior players in the NHL, something like one per cent, if not less, make it to the NHL,” Darche said. “So I say: ‘Yes, it’s okay to dream, but you can’t dream foolishly.’ I think I stuck around in the minors as long as I did because I knew I had options. I wasn’t nervous about what I would do if I didn’t make it.” He had good reason not to worry. All those experiences on and off the ice made for a smooth transition to life after hockey, helping him move forward. CS

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May 2019

PORT INFRASTRUCTURE Liner shipper CMA CGM plans to increase the capacity of its ships calling on the Port of Halifax over the next few years

BIG PICTURE THINKING As the Port of Halifax eyes expansion, all options are on the table, including moving the port to Dartmouth at a cost of $1.4 billion BY TOM PETERS

fter nearly three years and approximately 50 reports and studies, the Halifax Port Authority (HPA) has begun its expansion program. The authority is spending $35 million to extend the South End terminal by 135 metres. Dredging is well underway and tenders have been called to start various aspects of construction. HPA president and CEO Karen Oldfield called this extension a “temporary fix.” It is scheduled to be operational in 2020. The long term plan is to build a permanent terminal to the north of the present South End terminal. That project won’t commence until there is sufficient demand and financing partners can be secured. The HPA has put considerable time and effort into plans to expand its infrastructure and further enhance its capability to be Eastern Canada’s “global gateway” for the ultra-large container vessels (ULCVs) that are now calling the port. Halifax, at its South End terminal, operated by Halterm, is now handling

May 2019

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container vessels with 11,400 TEU (twenty-foot equivalent units) capacities. Jean-Baptiste Longin, general manager, CMA CGM Canada Inc., a carrier that calls Halifax, told Canadian Shipper that his line’s 11,000 plus TEU ships will become regular callers to Halifax by the end of this year and “we see the possibility of 14,000 and 15,000 TEU [ships] coming in two or three years.” Oldfield added: “In order to stay relevant as a big ship port on the East Coast of North America, we need to be able to berth and service two of those vessels at the same time by 2020.” The HPA’s process to explore all its expansion options has been significant. In November 2016, the HPA retained WSP Global Inc., a leading engineering professional services firm, headquartered in Montreal, to provide the first phase of the port’s master plan report on August 25, 2017. The report was considered a “good start” on the overall plan but it was also “apparent that we needed to do a deeper dive and more work,” said the HPA’s Lane

Farguson, manager, media relations and communications. “We continued to work with partners, stakeholders and experts to further assess each of the options studied including alternate uses for existing land holdings. That work continued up until the planning results were released to stakeholders and publicly through our planning website in late January 2019.” Making the case

Having the extension operational in 2020 will dovetail nicely with Halterm’s announced order for a new super post-Panamax, ship-to-shore container gantry crane and associated lifting equipment together with an extensive order for container yard equipment, including two rubber-tired gantry cranes and nine terminal tractors and trailers, with an option to extend procurement to a further ship-to-shore crane in 2019. The new ship-to-shore crane, due June 2020, will have an outreach of 24 containers and enhanced height making it capable of spanning the largest vessels being deployed on North America’s East Coast.

Photo: Steve Farmer

PORT INFRASTRUCTURE

The new crane will be added to Halterm’s main berth alongside four existing super post-Panamax units and one Panamax unit. Paul MacIssac, the HPA’s senior vicepresident, told a recent stakeholder meeting that “Halterm North” was the best choice for a permanent terminal. It would involve infilling the main Ocean Terminal slips and using a caisson wall that supports a new container pier creating a new ULCV berth. This proposal would create an efficient yard that can still accommodate dry bulk and cruise operations. The HPA will investigate relocating users of Ocean Terminals to other locations within the port. The estimated cost of Halterm North is $416 million. MacIsaac said the authority’s infrastructure planning actually began in 2015. “While initially focused on HPA managed properties and facilities, we wanted to fully understand what was possible within the harbour, so we investigated raising the bridges (two), building a Northwest Arm crossing, building a terminal on McNabs Island with rail connections to the mainland and using cross-harbour barges to move containers or trucks between Halifax and Dartmouth. While all are considered technically possible with enough time and money, none of these options was deemed feasible because there is no business case to support the development cost,” he said. Another suggestion was to move both rail cargo and trucks safely through the CN rail cut. However, after considerable study and in cooperation with CN, such a project would present enormous challenges and major expense. There has also been considerable talk about the possibility of moving the South End container terminal to the Dartmouth side of the harbour. MacIsaac said that on the surface it’s easy to see the appeal, but “many of the potential sites in Dartmouth have marine navigational constraints.” Rail is also critical to a terminal, with over 60 per cent of the cargo that currently moves through Halifax doing so by rail from Ontario, Quebec and the U.S. Midwest. According to MacIssac, that percentage is only going to grow, as cargo volumes increase. “As it relates to Dartmouth, rail was studied extensively,” MacIsaac said. “Train lengths of up to four kilometres would be required for efficient cargo operations,”

which would create major traffic issues in the downtown Dartmouth core. Constructing a second, alternate rail line of approximately 20 kilometres would also have a negative impact on a number of properties including residential, commercial, park reserves. It would also impact waterways and wetlands and parts of the Trans Canada Trail. MacIssac estimates the cost to construct a new terminal in Dartmouth at $1.415 billion Total costs could easily approach $2 billion and a projected development timeline would not see completion until “the early-to-middle 2030s.” Other options considered were projects called Halterm South and Halterm East. Halterm South would extend the existing Halterm berth southward with significant infilling to accommodate ondock rail and container storage. This concept is similar to the temporary extension now under construction, however, it would be permanent and consider-

ably larger to accommodate rail and yard storage. The second phase would be the infilling of an adjacent slip to create additional yard space. The cost of the first phase was estimated at $423 million. The Halterm East concept, phase one, estimated at $501 million, would involve infilling a slip between some piers and a new berth would be developed east of the existing main Pier C. Should container volume continue to increase, the new berth would be expanded southward to increase the capacity in subsequent phases. CS

Veteran journalist Tom Peters has been writing about transportation issues, specifically marine, for the past 25 years. After 41 years with The Halifax Herald, Tom now freelances for several marine industry publications. He lives in Sackville, NS.

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FREIGHT TRANSPORT

KINGS

Highway A can-do attitude and local knowledge has made Kings Trucking a trusted Atlantic Canada carrier BY CARROLL MCCORMICK

t is a sunny February day in Nova Scotia’s Annapolis Valley, and there is certainly no apple harvest or fields of pumpkins crying for attention. Yet Bill Cameron’s phone rings constantly during a stop-and-go conversation with Canadian Shipper about his foray into the private fleet/for hire carrier business—Kings Trucking—started in 2007, with a single vehicle. “We were having issues with trucking at that time,” he says of Kings Produce, located near Greenwich (pronounced GRENich) Corner, about halfway between New Minas and Wolfville, home of Acadia University. The vertically integrated company, which grows, packs and now ships, via Kings Trucking, produce from Nova Scotia, was not getting the service it needed from for-hire fleets. Cameron saw this as an opportunity and decided to buy a rig and start moving the produce himself. continued

Kings Trucking is a hybrid private fleet/ for-hire carrier serving farmers in Nova Scotia’s Annapolis Valley.

Photo: Kings Trucking

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May 2019

LEADERSHIP ROUNDTABLE

FREIGHT TRANSPORT

continued from p. 19

Kings Trucking’s Bill Cameron likes the control that comes with having in-house maintenance.

Things went well. “Within a short time, I bought a second trailer. The fleet gradually grew and Kings Produce’s reliance on for-hire fleets reduced,” Cameron says. It was not long before other farmers, who were having their own shipping issues, were calling Cameron, asking him to haul their produce—a long list that includes apples, strawberries, blueberries, raspberries, squash, corn, sweet corn, brussels sprouts, pears, peaches, and apricots. “Other local farmers came to me,” Cameron says. “I said, ‘I can help,’ and it kept going from there. It happened organically and just clicked, I did not have a plan when I started that it would grow to this. It was ‘Can you do it?’ ‘Yep.’ We are proud to work with a lot of Valley farmers.” Fruits of their labours

The clock ticks quickly on fresh produce. Farmers need to load up and hustle out their produce at the end of each day in the fields. “We want the product to be in the store the next morning. When I call Bill, he can respond. He gives you an answer immediately. I really appreciate that,” says Andy Vermeulen, farmer and owner of Vermeulen Farms Limited, just outside Canning, 12 kilometres north of Photo: Carroll McCormick

the Kings Trucking yard and shop. Vermeulen grows crops like tomatoes, romaine lettuce, squash, and strawberries on 450 acres of land. “The big companies, they are guys who want to be home by five, just when we are starting to load. In the busy season Billy is in with two trucks, sometimes three. Most stuff has to be loaded at five or seven at night. We appreciate that,” Vermuelen adds. Randsland Farm Inc. is a 475-acre family farm east of Canning and not far from Blomidon, home of Glooscap, a legendary figure in a Mi’kmaq creation story, and the rugged eastern end of the North Mountain. Cabbage, kale, and broccoli are their main crops, and Randsland supplies local buyers and big chains like Sobeys and Loblaws. “There are hiccups and curve balls at least once a week. Bill always says, ‘Don’t worry about it. We’ll take care of it.’ If there is a problem, he always comes to me with a solution,” says operations manager Andrew Rand. “Kings Trucking does everything for Loblaws and everything else that is local. Anything that comes out of the blue, Halifax, or 20-30 kilometres away, Kings

Trucking is the one we call,” Rand adds. Farmers were happy and Kings Trucking grew. By 2017, it was running 19 power units and 28 reefers. Cameron tried using owner-operators in the beginning, but, he says, “It wasn’t for me. For our format I prefer drivers I know and controlling my own truck.” His trucks, mostly Peterbilts, those long-nosed brutes with twin stacks, are easy to spot. Cameron gives each one an identity-by-colour; e.g., blue, grey, orange/grey and white. “I paint them all grey on top but leave the bottom other colours to make each unique,” he says—a handy trick for anyone trying to describe which of his trucks just came and went. Cameron’s constant refrain as he discusses Kings Trucking is respect. To him, respect is the bedrock of his company’s success. As we sat with our bird’s-eye view of the shop floor, he talks. In short strokes, this is what it grew out of. Family ties

Cameron started trucking at the age of 16 with local carrier David Brown Trucking. His father was a 39-year lifer there and his son grew up in the industry, rubbing elbows with David Brown, drivers, www.canadianshipper.com

May 2019

FREIGHT TRANSPORT

mechanics and farmers, some of whom would later count among his own employees and customers. He left David Brown in 2005, bought his first rig in 2007, and parlayed his experience and trucking and farming contacts into a hopping company. “For me it is all about respect for all my team: dispatch, office, maintenance and drivers. Since I have been in their shoes it helps me a lot. I am thankful for that,” Cameron says. This makes for contented employees—something that the farmers notice. “The other companies we deal with— the drivers don’t like their dispatchers. You never know when they will be here, say they will quit ... it seems like the system is broken. It seems there is a negativity that is not there with Kings. The drivers are happy,” Rand says. “These people are our friends.” Cameron chose to hitch his wagons mostly to Peterbilt power units. The only

exceptions are one Kenworth and one Freightliner. “It’s quality. It’s still a hand-built truck,” he says. Despite the fuel penalty with older tractors, he has nothing against them—the model years in his fleet range from 1998 to 2020. He is quite prepared to rebuild one that shows potential, like he did a 2006 Peterbilt with 980,000 kilometres on it that he brought back from Florida. His shop, formerly a New Holland farm dealership, is a spacious 90 by 130 feet; there were six tractors and one trailer in it when Canadian Shipper visited. Three full-time mechanics tend to the trucks, which are brought in every two weeks for a stem-to-stern going over, and the trailers. They all look very sharp with that prototypical Peterbilt profile, the black and chrome reefers and the silversided trailers. “His trucks are neat. Holy smokes,” Rand exclaims. Cameron likes the control that inhouse maintenance provides in repair

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May 2019

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time, reliability, and having his own parts supply. “It is just one of those things, going to an outsider shop. It’s like going to a restaurant. If they are busy, you are going to wait. At home you can do what you need to do to make it happen.” Too, he notes, “This gives us a better hand in taking care of our customers.” The drivers know their business, as Vermuelen notes. “Bill does a good job training new drivers coming in, for example, orienting with customers, how back up in tricky places. The drivers know how to put a load together. You know it will arrive in good shape. I’ve never had a complaint from customers that product has been spoiled or gone wrong.” Rand adds: “With Kings Trucking, the essentials are totally met. There is a sense of personalization, not corporate, where the left hand doesn’t know what the right is doing. A personal relationship, with the professionalism of a corporation. All of

FREIGHT TRANSPORT

the legitimate requirements are covered, but they go the extra mile.” Horticulture Nova Scotia held this year’s Horticultural Congress just up the road from Kings Trucking. The director asked Rand to thank Kings Trucking for sponsoring the meal. While Rand admits he couldn’t resist having a little roast-like fun at Cameron’s expense, he also richly complimented him and his crew. “Bill was sitting there with three of his drivers. I said that Bill hits that big red easy button. If we have a special order, he goes the extra mile to make life easier.” CS

Carroll McCormick is an award-winning writer who has been covering transportation industry issues and technologies for more than a decade. He is based in Quebec.

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May 2019

CONTAINER SHIPPING

THE DIGITAL IMPERATIVE The use of digital tools by container carriers is helping to improve security and operations and making the supply chain run faster and smoother for shippers BY MARK CARDWELL

aersk executive Mike White says global supply chains are some of the largest and most complex ecosystems in the business world today. But he says historical inefficiencies continue to hinder the movement and growth of global container trade in today’s wireless, post-9/11 world. “It’s not uncommon to see up to 30 different entities, 100 people and 200 different exchanges of information or documentation involved in a single end-toend container journey,” said White, a licensed customs broker who has held many top management positions for Maersk and its global subsidiaries since he joined the company in 1990. “Apart from being hugely inefficient, with people manually keying and rekeying information, a lot of that information gets trapped in silos. It’s costly and frustrating.” That why White says he jumped at an offer 18 months ago to become CEO of TradeLens, a collaborative Maersk/ IBM venture aimed at tackling those inefficiencies through the use of distributed ledger technology (DLT). “They had me at hello,” quipped White. Tested for a year before being launched in December, TradeLens is the world’s first large-scale open platform that brings together supply chain participants and allows for the secure and transparent sharing of digital shipping data using blockchain, the best known and most widely used form of DLT. White says the platform, which he hopes will be a viable subscriptionbased business by the end of 2019, is 24

May 2019

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now being used by more than 100 global participants. They include carriers like Maersk, the world’s No. 1 container shipping company, its subsidiaries and some smaller regional lines like Safmarine and Pacific International Lines. Other TradeLens platform users include terminals, ports, inland transporters, customs authorities and freight forwarding and logistics companies. Both the Canada Border Services Agency and the Port of Montreal—the largest container facility in Eastern Canada with five terminals that handled a record 1. 7 million TEUs in 2018, a nine per cent increase over the previous year—joined the platform late last year. “We are convinced that joint work on a global scale is part of the key solutions to achieve a better flow of information and goods for the benefit of clients and partners,” said Port of Montreal president and CEO Sylvie Vachon in October, when the port joined. “TradeLens is fully aligned with our objectives and business strategy centred on innovation and efficient shipping.” According to White, the TradeLens platform already handles about 20 per cent of all containerized trade traffic on the planet. It also receives some 1.5 million updates daily—roughly 1,000 a minute— on the physical movement of containers according to more than 120 different milestone events, and provides key information on when shipping documents are required. The platform also digitizing docu-

ments—up to 18 kinds, including sea waybills—with the goal of creating schema in support of standards organizations. “Once in the system, that information can be digitally reapplied, eliminating the need for rekeying and improving work flow and process across the supply chain,” said White. That could lead, he added, to an 80 per cent reduction in the need for data entry and save the industry tens of millions of dollars a year in administrative costs. “It’s early days yet,” said White. “But if we succeed we could make global trade more fluid and bring down barriers to global trade and spur growth in global trade, which can drive global GDP.” Shipping rivalries

Though it is the biggest and most talked about DLT initiative in the ocean shipping industry, TradeLens is far from being the only project or product aimed at harnessing the game-chang-

CONTAINER SHIPPING

New digital technologies are aimed at harnessing the movement, tracking and monitoring of containers and container traffic across the globe.

Officials with the companies involved in both TradeLens and GSBN say talks are needed at the highest levels within the container industry to ensure the development of a common standard for DLT platform solutions and other digital projects and trends in the Internet of things (IoT), the concept that the convergence of wireless technologies, computing devices and the Internet will drive improvements in operational and information technology in all sectors of human activity. Floating warehouses

ing potential of both emerging and converging digital technologies for the movement, tracking and monitoring of containers and container traffic. In early 2018, when Maersk first announced its venture with IBM, a consortium of multinational companies (AB InBev, Accenture, APL, Kuehne + Nagel) and a European customs entity carried out several container shipping tests using blockchain technology to exchange documents. Around the same time, the Port of Rotterdam partnered with Samsung SDS and Dutch bank ABM AMRO to do test trials linking container logistics and payments using blockchain. In November, nine companies with global shipping interests—COSCO Shipping Lines, CMA CGM, Evergreen Marine, OOCL, Yang Ming, DP World, Hutchison Ports, PSA International and Shanghai International Port—announced their intention to build a rival platform to TradesLen.

Dubbed the Global Shipping Business Network (GSBN) and designed by Hong Kong-based software company CargoSmart, the proposed DLT platform will also seek to connect container shipping stakeholders “to resolve siloed shipment management procedures and disruptive information gaps,” according to a press release announcing the nine-company agreement in Beijing on Nov. 6. “With the vision of a truly open blockchain platform for the industry, the GSBN will be key to the success of establishing a sustainable blockchain ecosystem for all stakeholders in the supply chain,” stated Andy Tung, coCEO of OOCL. “OOCL is very excited to be a part of this highly collaborative environment that can facilitate the cross-pollination of ideas towards even more innovative business models and solutions for our customers.”

In many ways, blockchain and other types of DLT are already highly dependent on the reams of real-time, in-transit data being collected, analysed and generated from by RFID chips, sensors and many other new smart devices and algorithmic communication platforms that are now being put on both containers and products inside them while in transit on ships and trucks. “A container today can communicate from anywhere in the world,” said Ontarian Don Miller, vice president global sales and marketing for Globe Tracker ApS, a Denmark-based firm that specializes in trade data sharing and autonomous asset tracking and monitoring. The company has put thousands of IoT devices on reefer units carrying perishable products at sea. Reefer units in the cold chain account for about two million—or seven per cent—of the roughly 28 million containers that are estimated to be involved in global trade today. The vast majority of TEUs—93 per cent—are used to carry general cargo that is not sensitive to hot or cold. According to Miller, sensors placed inside containers—including on pallets and even individual products—can collect a wealth of data in both real and non-real time on everything from temperature and humidity to location, movement and damage. That information can then be sent using cellular technology or collected and stored in tags that can be read at journey’s end. “A ship is a floating warehouse and if you put a cell tower on it you can make it talk,” said Miller. “You can put a device in a www.canadianshipper.com

May 2019

CONTAINER SHIPPING

Ocean shippers have started to outfit their reefer fleets with telematic devices that provide customers with real-time data.

40-foot reefer container of blueberries with a ripening algorithm that can tell you which pallet you should put out on the floor first. That’s a win-win for the shipper, the retailer and the consumer because it provides superior quality of service and product.” Miller noted that Maersk last summer became the first major ocean shipper to outfit their entire reefer fleet with telematic devices that provide customers with such real-time data. “Obviously it offers a competitive advantage,” he said. “But what’s needed now is data standardization so that shippers can talk to each other either through the cloud or their own systems.” Miller predicts the digitalization of containers, together with the speculated and feared arrival of retail behemoth Amazon in the shipping business, will lead to a wave of partnerships and acquisitions by carriers eager to consolidate or increase their share of the supply chain. Sharing economy

Another Danish company—tech start up Blockshipping—is also busy developing an innovative system called the Global Shared Container Platform (GSCP). Billed as the world’s first blockchainenabled container asset registry, GSCP is a neutral and independent platform designed to provide the shipping industry 26

May 2019

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with a global inventory and real-time location of every container in the world. “Global container carriers started sharing vessel and container terminal capacity years ago,” Blockshipping CEO and founder Peter Ludvigsen wrote in an email to Canadian Shipper. “We believe it’s time to also start sharing container assets, thereby improving the environmental footprint of containers by minimizing empty container movements.” In addition to providing enhanced information on the whereabouts of containers, Ludvigsen said GSCP provides indisputable title and proof of ownership of containers. “Introducing a global blockchain container register will go a long way in eliminating fraud related to investment in containers such as the P&R Group scandal in Germany last year,” said Ludvigsen. Top management of the Munichbased company, which was one of the world’s largest container leasers until it went bankrupt in March 2018, are accused of operating a CAD$5 billion Ponzi scheme involving the price-hiked sale, resale and rental of 1.6 million containers to 54,000 investors around the world. According to Ludvigsen, reaction to the development of GSCP has been “very enthusiastic” in the shipping industry. “We got mentioned by Gartner in two of their whitepapers and McKinsey called

our project as one of the most promising examples of blockchain use,” he said. “We also got a pre-commitment from a Top-10 container carrier to be the first user of the GSCP (and) many key stakeholders in the shipping industry liked our vision and see a demand for such a solution.” Another digital product making headlines is DynamicETA, an algorithm that predicts ocean shipment arrival times in narrow time windows. Developed by FourKites, a Chicagobased predictive platform that pinpoints freight arrival times and helps companies in all supply chain modes— truckload, LTL, ocean, rail, intermodal, last-mile and parcel—lower operating costs and improve on-time performance and end-customer relationships, the new sea-focussed app has reportedly enabled early adopters to achieve a 90-plus per cent accuracy in predicting the arrival of container shipments to within hours. “We predict end-to-end ETA, [estimated time of arrival]” said FourKites product officer Priya Rajagopalan. “Being able to predict that requires much real-time data on each leg.” According to Rajagopalan, “traditional models of B2B shipping suffer from a lack of visibility across modes, and frequently have high ETA variances due to factors

CONTAINER SHIPPING

like tides [ocean loads] or even traffic [over the road]. But most importantly, it is hard for shippers to derive a predictive ETA that is truly end-to-end across modes, and invariably these are large blind spots along the way.” FourKites’ algorithm collects 150 data points, says Rajagopalan, and attributes and factors that can affect real-time movement of freight on shipping lanes and at transhipment points and applies machine learning to predict arrival times. “The ramifications and benefits of knowing more precisely when freight arrives are immense and multiple for everyone throughout the supply chain,” she said. “Enhanced ETA and improved metrics help suppliers get their lines and products there first and better placement and better shelf space. It also provides better stock planning. You can truly have just in time practices.”

containers difficult to model and plan well for to help the flow of materials,” said Baron. “Clearly triage and handling and waiting times will be improved if you know where containers are and what’s in them by using these new digital technologies.” 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.

Reducing costs

Opher Baron agrees. A professor of operations management and statistics at the University of Toronto’s Rotman School of Management and a worldclass expert in applied probability, facility location and inventory planning, says both the advent and growing use of digitalization and IT and IoT solutions by and for the movement and tracking of containers can only mean good things for the shipping industry. “The current system has lots of uncertainties and this requires lots of safety stock inventory, which can be very expensive,” said Baron. “I think the combination of better control of where things are could have a big impact on shipping and reduce costs for shippers.” In addition to saving time and money on everything from logistics and inventory holding to transportation, Baron believes the use of digital tools can help improve security and operations to make the supply chain run faster and smoother, reducing the sting of the bullwhip effect, the supply chain phenomenon describing how small fluctuations in demand at the retail level can cause progressively larger fluctuations in demand further down the chain. “There is a lot of operational friction and extra complexity that make

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AIRFREIGHT

Technology helps level the playing field by making it easier for small freight forwarders to handle larger volumes of traffic and the associated document work.

SHIFTING SANDS Airfreight volumes are increasingly driven and facilitated by technology BY IAN PUTZGER

yebrows went up and chins wagged in February upon the news that Flexport, a technology-based forwarder launched in 2013, had garnered US$1 billion in funding from a group of international investors. Industry pundits have questioned the wisdom of this move, arguing that the San Francisco-based forwarder, which reported US$500 million revenues for 2018, has been less disruptive and formidable in its performance than touted. Still, the 28

May 2019

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image of a tech-based start-up shaking up an industry regarded as slow in embracing technology has a powerful appeal to investors. Without question technology is becoming harder to ignore. Brian Bourke, vice-president of marketing at SEKO Logistics, sees a quantum change in the business. “Our airfreight volumes are increasingly driven and facilitated by our technology,” he says. “What’s driving cargo is technology in freight and e-commerce.”

Traditionally airfreight was controlled by the shipper, but the rise of e-commerce has shifted the control to the consumer, Bourke argues. “We’re still moving cargo as a traditional forwarder, but more and more a consumer is linked to the shipment. This is about building better solutions to serve that consumer. It’s not driven by traditional cargo sales,” he says. Elliott Paige, director of air service development at Atlanta’s Hartfield Jackson International Airport, also feels the pull

AIRFREIGHT

from this dynamic. “Serving consumers today is driven by the need for speed. We have to adjust to that,” he remarks. For SEKO that target market has expanded to new players. Since last November the logistics firm has increasingly targeted providers of e-commerce technology solutions. It has made deals with companies like ShipStation and Easyship, which provide cloud-based shipping software to online merchants. Instead of integrating lots of such merchants one by one with its system, SEKO gains access to them through the software providers. On the carrier-facing side, technology providers and portals are also becoming more relevant for forwarders. Technology helps level the playing field by making it easier for small operators to handle larger volumes of traffic and the associated document work, remarks Jeff Cullen, CEO of Rodair. CargoiQ, which measures airline performance through a set of defined milestones for a shipment, recently completed trials for a solution for small and mid-sized firms that gives them a route map and status updates. “We provide a turn-key solution for independent freight forwarders to benefit from shipment planning and control through shared Route Maps and operational visibility for various milestones along the shipment lifecycle,” states Chris Davies, manager product and technology. Increasingly forwarders also look to platforms that offer pricing information and booking capability. One of these, Cargo.one, announced in March that

more than 150 forwarders have signed up to use its site, and the number of airlines that are making their capacity and rates accessible through the portal is also rising. Airline rates are moving online, both through rate portals and carriers’ websites. A growing number of airlines, including Lufthansa, Delta and American, have automated quotes and booking functionality on their websites. Rodair has embraced this for regular traffic, says Cullen. “It has helped the airlines reduce cost and head count. As for the volume we can put through today, we can do a lot more with a lower head count.” Lufthansa has made it clear that pricing transparency and better connectivity to its clientele are key factors for its business and pledged further steps to make content accessible to its customers. At the same time the airline has been at the forefront of the push for the replacement of paper documents with electronic data transfer channels. The main focus of this drive, which the International Air Transport Association (IATA) has championed with its ‘e-Freight’ initiative, has been the adoption of the electronic air waybill (e-AWB). Last year, Lufthansa started charging forwarders in markets that are fully eAWB enabled for handling paper air waybills. According to the airline, this has been a major reason for its e-AWB penetration reaching almost 74 per cent in February, up from nearly 60 per cent last March and 40 per cent in January of 2017. The current industry average is around 61 per cent. Lufthansa aims for 80 per cent by the end of this year. Tag and ship

Improved shipment visibility is one of the main objectives in the deployment of technology on the airline side. Trials with Bluetooth technology promise a significant step forward in this arena. Cathay Pacific and Delta have been at the forefront of this, trialing Bluetooth low energy tags with containers for real-time visibility throughout the journey, including the airborne part, which has so far been a black hole, owing to requirements to shut off transmitters during flight lest they interfere with navigation systems.

By February Delta had tagged about 70 per cent of its container fleet and installed readers in 115 locations. “Our goal is to get near 100 percent,” says Shawn Cole, vice-president of cargo. Beyond seamless tracking in real time, this promises uninterrupted visibility of vital shipment conditions, such as monitoring temperature and humidity of climate-sensitive shipments. At this point the airlines have run trials to monitor just container movements, but adding sensors to keep track of temperature is on Cole’s agenda. “A lot of pharma shipments want that,” he says. He likens the state of play with this technology to the early days of mobile phones compared to today. There is broad agreement that the air cargo industry has some way to go with adoption of technology. “There’s still a lot of work to be done. This industry is still very cumbersome and disconnected,” remarks Cullen. As Rodair is preparing for its integration with the Rhenus group ( following the announcement of the takeover agreement in mid-March), he is looking forward to getting access to some of the tools in the new parent’s arsenal, such as voice-activated picking. Tim Strauss, vice-president, cargo with Air Canada, compares the air cargo sector to a start-up. On the passenger side of the business tremendous tools have been developed over the past two decades, but very little has happened in cargo,” he says. For a change Air Canada’s cargo division is leading the charge on one front, ahead of the passenger department. It is among the first batch of companies involved in ‘SCALE AI’, a supercluster supported by the federal government that aims to “build the nextgeneration supply chain and boost industry performance by leveraging artificial intelligence technology.” Strauss says that some 43 areas for machine learning have been identified for Air Canada so far, adding that there will likely be more down the road. “We’re just at the toe in the water stage,” he remarks. He says Air Canada is looking to leverage artificial intelligence for better capacity management. One area of interest here is use of data on weather patterns. For the perishables business, a growing www.canadianshipper.com

May 2019

AIRFREIGHT

part of the airline’s traffic, this can make a huge difference—from severe weather conditions disrupting fishing to cherry crops being ruined by rain at a vulnerable time. AI may help alert Air Canada that bad weather will likely result in only 30 per cent of the planned lobster exports

being loaded on a given day and help identify alternative loads to compensate. No shows, a perennial headache for airlines, is another possible target for AI. Using data on customers’ no show records can help identify possible empty positions and lead to different capacity management decisions.

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May 2019

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Strauss is quick to stress that AI does not make the decisions. It is a tool for staff to enable them to make better informed decisions and spend less time poring over data. “At the end of the day it’s about your front line staff—in sales, in operations— having better tools,” he says. Jens Tubbesing, CEO of GSA Airline Network Services, reckons that the emphasis on complex systems is sometimes misplaced. Often relatively simple technology can go a long way, he says. “Sometimes a guy takes a picture with a mobile phone in a warehouse and sends that. That can get to me faster and tell me more than some systems. Mobile technology allows you to do things that you don’t need major applications to do. What most people are concerned about is: Is my cargo there? Has it been picked up?” In any case, connectivity is set to play a larger role in logistics. Even airport authorities, which are not directly involved in the flow of cargo, are beginning to see a need for network connectivity. Following the severe congestion during the 2017 peak season, which paralyzed both airside and landside operations, some European airports took steps to manage truck access to their cargo areas through electronic channels. The concept is also gaining traction in North America, where airport authorities have traditionally contented themselves with a pure landlord role. For Paige at Atlanta Hartfield, the biggest priority this year is to set up a cargo community system that can serve as a platform for the various stakeholders to communicate electronically. Paige’s colleague John Ackerman, executive vicepresident, global strategy and development, is also thinking of ways to improve data flows between the various parties involved in air cargo on his doorstep. “An airport can play a much more active role than we were doing in the past,” he thinks. “There are some structural things that only an airport can address.” 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.

AIRFREIGHT

CANADA’S

CARGO AIRPORTS CALGARY/Calgary International Airport (YYC) Air cargo traffic (2018): 146,000 tonnes — 1% decrease over 2017 Cargo airlines: Cargojet, Cargolux, DHL, FedEx, UPS Cargo/Logistics footprint: 30,000 square feet 7

FACT:

30% of YYC’s cargo is carried in the belly of mainline carriers

EDMONTON/Edmonton International Airport (YEG) Air cargo traffic (2018): 43,000 tonnes — 0% increase over 2017 Cargo airlines: Canadian North, Cargojet, DHL, FedEx, Nippon Cargo Airlines, Korean Air Cargo, Atlas Air, AirBridgeCargo Cargo/Logistics footprint: 840,000 square feet 7

FACT:

At 7,000 acres, YEG has the largest land mass of any airport in Canada.

HALIFAX/Halifax Stanfield International Airport (YHZ) Air cargo traffic (2018): 36,938 tonnes — 8.5% increase over 2017 Cargo airlines: First Catch, Skylease Cargo, Cargojet, Korean Air Cargo, FedEx, Air Canada, Atlas

FACT:

Cargo/Logistics footprint: 26,000 square feet A $36 million, 47,000 square foot Air Cargo Logistics Park will be built by 2021.

HAMILTON/John C. Munro International Airport (YHM) Air cargo traffic (2018): 525,161 tonnes — 5% increase over 2017 Cargo airlines: Cargojet, DHL, UPS, Canada Post and Purolator Cargo/Logistics footprint: Cargo/Logistics 77,000 square feet

FACT FA CT T:

YHM has a one-day trucking catchment in excess of 150 million consumers.

MONTREAL/ Aéroports de Montréal (YUL-YMX) (Pierre Elliot Trudeau & Mirabel International Airports) Air cargo traffic (2017): 206,020 tonnes — 7.5% increase over 2016 110,667 tonnes (Trudeau) 93,352 tonnes (Mirabel) Cargo airlines: AirBridgeCargo, Ameriflight, Cargojet, CargoLux, Castle Aviation, FedEx, Kalitta Air, Morningstar Air Express, Nolinor Aviation, Royal Air Freight, Skylink Express, UPS Cargo/Logistics footprint: N/A Combined, YUL & YMX have 7,000 metres of runways, capable of handling all aircraft types.

FACT:

TORONTO/Lester B. Pearson International Airport (YYZ) Air cargo traffic (2018): 560,060 tonnes — 5% increase over 2017 Cargo airlines: Cathay Pacific Airways, FedEx, Kalitta Charters Inc., Korean Airlines, Lufthansa Cargo AG, UPS Cargo/Logistics footprint: 1.2 million square feet YYZ is Canada’s largest cargo airport by tonnage and rated in the top thirty airports worldwide for cargo activity.

FACT:

VANCOUVER/Vancouver International Airport (YVR) Air cargo traffic (2018): 338,180 tonnes — 8.1% increase over 2017 Cargo airlines: Cargojet, Korean Air, DHL, FedEx, UPS Cargo/Logistics footprint: 1 million square feet YVR is the closest major North American city to Asia.

FACT:

WINNIPEG/ Winnipeg James Armstrong Richardson International Airport (YWG) Air cargo traffic (2018): Not available — 5% increase over 2017 (Gross Takeoff Weight) Cargo Car go airlines: Cargojet, FedEx, UPS, DHL Cargo/Logistics footprint: 333,780 square meters YWG is a key transportation hub within the MidContinent Trade Corridor. In 2017 Manitoba trade with the U.S. corridor states was worth $15.7 billion.

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FACT FA A T:

May 2019 2 19 20

3 31

IF TIME DOESN’T MATTER, WHY DO THEY CALL IT A RUNWAY? At most gateway airports, cargo spends a lot of time sitting around. Not at Rickenbacker International Airport. We believe runways are meant to be fast. So from the minute your cargo comes in, we’re oﬀ and running—unloading, reloading and sending it on to its next destination right from the tarmac. And because we’re strategically situated within a one-day truck drive to nearly half the U.S. and one third of Canada’s population, your goods get to market faster.

Learn more at RickenbackerAdvantage.com Bryan Schreiber Air Cargo Business Development 011-614-409-3621 BSchreiber@ColumbusAirports.com

IT’S ABOUT TIME.

INSIDE THE NUMBERS WITH LOU SMYRLIS, MCILT

RETIREMENT REALITIES

When you personally plan to retire 21+ years

With the average Canadian truck driver now around 48 years of age, shippers must come to terms with massive retirement numbers expected over the next few years and the impact this could have on available trucking capacity. Close to three quarters of motor carrier representatives responding to our research on the topic said that their workplace was worried about the rising age of employees. While 71% said their workplace was making a specific effort to recruit a younger generation, research conducted by Abacus Data on behalf of Trucking HR Canada found that trucking has significant challenges in attracting millennials.

Is your workplace worried about the rising age of its employees?

Yes

of respondents

12%

11-20 years

22% 30% 2-5 years

26% 6-10 years

Yes

71%

Would millennials consider a career as a long-haul truck driver?

46%

10%

Is your workplace making a specific effort to recruit a younger generation?

28%

72%

This year

29%

Image of trucking among millennials interested in the profession

YES

Enjoyable work

56%

44%

For both men & women

52%

48%

Respected by others

52%

48%

Good work-life balance

32%

68%

42%

12%

Millennials uninterested in blue collar career

ÂŠiStock

Millennials interested in blue collar career

Millennials interested in long haul truck career

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May 2019

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COACHING CORNER

Competition Crisis By Carolina Billings, CPCC, CHRL, MA-IS

How sustainable is it to be in a perpetual Hunger Games environment at work? The idea of creating an environment of competition by regularly comparing employees to their peers as a strong motivator to work harder and longer is the fastest way to burn out, failure and dissatisfaction. Q: I am sick and tired of being pitted against one another at work. Why does everything have to be a competition? It creates a toxic environment. Nobody trusts each other. Why does it have to be like this?

A: Stories of cut throat competitive workplaces are nothing new. It does not only happen on Bay Street or some super sophisticated environment. It happens everywhere. In small and large businesses, sales, marketing, among managers or created by eager go-getters ready to fast track their way to the top at record speed. This Darwinian approach to leadership—and corporate culture—may be compelling to some managers, especially in light of some well-known successes of darling industries. However, be cautious when considering introducing competition into your own workplace as a motivating strategy. First, let’s explore some of the potential positives. ©iStock/DeanDrobot

Competition can be good

It may increase productivity and create a buzz that motivates and creates a dynamic culture, this is true. Sometimes competition can help light a fire under a workforce. Nothing gets everyone on their toes more than a new team member or a new manager. Competition can also increase efficiency. In an effort to be more productive, employees find ways to be more efficient in their work processes and may even highlight deficiencies or put forth new ideas for improvement. It all sounds great, however all good things overdone can become liabilities. Competition is bad for business

Just because there is a competition does not mean you have to compete. Some leaders do like dissent among teams. That being said, there are different ways that competition can be introduced. Some companies do it as a positive, gamifying challenges with the promise of a potential reward. If it is all in fun and clearly meant as a positive reinforcement of behavior it can in fact be a good strategy. What if it is not the organization but an individual taking it upon themselves to create an unsettling environment? After all, our culture seems to reward aggressive, or for the more politically correct, “assertive” behavior.

“People think competition is good. This is dumb,” stated business strategist Grant Cardone on HuffPost.com. “Competition is not the thing you want. Your goal is to dominate. Maybe you are making the mistake of getting too caught up in competing with the wrong players. Don’t be busy looking at the person at the desk beside you, look instead at the top three players in the industry.” At the end of the day, we do have a choice to what degree we get involved or engage in workplace dynamics. I like the quote above, getting inspiration from top people in the industry, planning your own goals and objectives, is far more productive than having to be in a state of paranoia. If you desire and have the drive to be the best and keep your game sharp, look for mentors or people with a proven track record two, three, ten times better than you. Study them, learn from them, not all mentors and teachers have to interact with you in person. Should your desire be improvement and growth, the only person you should be competing with and for, is yourself. 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

May 2019

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May 2019

THE BIGGER PICTURE

Setting a new standard Political turmoil affecting international trade the past two years has certainly not made supplier relationships any easier when it comes to negotiating transportation rates. Not that this has ever been an easy task for shippers and carriers; in fact, despite the obligatory handshakes and monthly performance reports, the rate negotiation is frequently the most unsettling part of a shipper-carrier relationship. The best outcome of a “good negotiation” is one that results in an agreement based on rates, service levels and performance metrics acceptable to both parties, and that requires honest, open communication and factual information. A common method in many industries for conveying this information from the shipper to the carrier is the Request for Quotation (RFQ). In theory, the RFQ is an effective tool, but in practice it leaves much to be desired. When a shipper issues an RFQ, the carrier can assume the shipper knows everything there is to know about its logistics operations and has accurately conveyed all of that information to the potential carrier in the RFQ. In effect, the shipper is declaring itself as an expert in transportation; so much so that all it needs from the carrier is a rate. Of course, anyone who has been on the receiving end of an RFQ knows this is rarely the case. 38

May 2019

By Laurie Turnbull

Limited information

Globalization has increased the degree of logistics complexity exponentially for most companies, to the point where a shipper who combines import and export volumes often uses information based on estimates or inaccurate forecasts. Compounding the problem for carriers, even when a shipper includes information on ancillary services such as delivery appointments, waiting time, drop shipments, and equipment placement (to name a few), that information is often limited to the origin or destination point. To this end, the quality of information disclosed in an RFQ is just as important as the quantity of information. Carriers, incumbents excepted, often have little or no opportunity to question the accuracy of an RFQ. The response requested by the issuer can take various forms, from a bid response consisting of spreadsheet rate-tables to a formal contract acceptance. Its important for respondents to note that an invitation to submit a quotation to an RFQ is in fact an invitation to enter into a formal contract agreement, often including penalties for breach of contract. Its this part of the RFQ process that may pose the most significant risk for a carrier. The RFQ document itself is a collection of

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terms and conditions and, although they may be contradictory or out of date, it must be remembered they were written to protect the interests of the shipper. This places the carrier at a disadvantage in an RFQ negotiation (i.e. without the latitude a Request for Proposal allows to introduce new terms), having to agree in order to have its rates considered, or disagree and risk expulsion from the process. Looking for acknowledgement

No less important, the “other” terms and conditions, usually printed on the back, should be in agreement, or at least not materially in disagreement. Unfortunately, once quantity and price are found to be in agreement, few people take the time to read and compare the fine print on these documents. Oftentimes the remaining terms and condition are contradictory, but because most companies try to provide goods in conformance

with a customer purchase order, and global transportation has evolved to the point where most companies get their shipments, and most companies pay their bills, it woks. No one cares that the terms are not in agreement, they simply start all over again. Of course this system often falls apart if a buyer does not get its goods, resulting is disagreement with the seller over who is liable for the shipment. This might be a worthy example for carriers to consider when responding to an RFQ. For example, instead of simply submitting rate quotations and accepting the shipper’s terms and conditions ad hoc, perhaps carriers should draft and submit a standard set of terms and conditions for responding to an RFQ, i.e. an “RFQ Acknowledgement”, or “RFQ-A”. This document would form part of the commercial contract and codify the carrier’s rights in terms of charging for non-specified ancillary services, liability, unpaid freight charges, and breach of contract, to name a few. In a purely Canadian example, it might be referred to as an “RFQ-eh.” 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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