Canadian Shipper July 2019

THE CARRIERS WHO’VE ACHIEVED INDUSTRY EXCELLENCE JULY 2019

PUBLISHED SINCE 1898 | WRITTEN FOR BUYERS OF TRANSPORTATION SERVICES

PORT SMARTS GLOBAL CONTAINER PORTS GO DIGITAL

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INTERMODAL Shrinking middle mile

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CONTENTS

JULY 2019

DEPARTMENTS

14

5 | Editor’s Foreword Global outlook

COVER STORY

6 | In the news

PORT SMARTS

Shipping Federation of Canada’s annual conference; SUPPLY STATS; Digitalization of container shipping; ELDs coming in 2021

Global container ports go digital

57 | Inside the Numbers Canadian content

57 | Coaching Corner Coalition leadership

62 | The Bigger Picture Trust issues

2019 SHIPPER’S CHOICE AWARDS Celebrating the carriers who have exceeded shipper’s expectations

Photo: Port of Hamburg/Peter Glaubitt

29 The CSCL Venus in the Port of Hamburg’s Waltershofer harbor, leaving Container Terminal Burchardkai (CTB), operated by HLLA (Hamburger Hafen und Logistik AG).

FEATURES

24

TECHNOLOGY | 10 The digital transformation of Polaris Transportation

INTERMODAL | 18 E-commerce is shrinking the middle mile

FREIGHT FORWARDING | 24 The industry is ripe for a technology-driven transformation

ITF 2019 SUMMIT | 50 Highlights from the annual gathering of international transport experts in Germany

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July 2019

3

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

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EDITOR'S FOREWORD John Tenpenny July 2019 Volume 122 Issue No. 4

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

Idea factory

ART DIRECTOR Anita Balgobin CONTRIBUTORS Carolina M. Billings, Mark Cardwell, Peter Glaubitt, Dan Goodwill, James Menzies, Ian Putzger PRODUCTION MANAGER Jwad Khan (416) 510-6779 jwad@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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T

ransportation in the supply chain has issues, regardless of mode. From congestion to infrastructure and its impact on the environment, the movement of goods has work to do, and it’s not a one-person job—especially considering the fact that global freight demand is projected to triple by 2050.

That’s according to the International Transport Forum’s annual Transport Outlook report, released at its 2019 Summit, held in Leipzig, Germany in May, and attended by Canadian Shipper. Under the auspices of the Organization for Economic Co-operation and Development (OECD), the ITF is an intergovernmental group with 60 member countries—including Canada—which acts as a think tank for transport policy and is the only global body that covers all transport modes.

Held since 2008, the ITF Summit brings together ministers from around the world to share policy perspectives with CEOs, heads of international organizations, and thought leaders from government and academia.

The Summit addresses strategic and topical issues across all transport modes where participants can engage in the debate through a variety of session formats, such as official Ministerial sessions, panel discussions, workshops, and demonstrations and informal presentations.

During the week Canadian Shipper spent in Germany, we came across numerous innovations attempting to address freight transport’s future, including the launch of an eHighway (page 54) near Frankfurt that allows hybrid trucks to charge their batteries while traveling at speeds of up to 90 km/h. The hybrid truck’s electric drive is powered from an overhead line via a pantograph.

With freight volumes steadily increasing, freight transport and logistics are undergoing major transformations, and these will likely be even more disruptive in the future. Technology, business models, consumer behaviour, shifts in trade patterns and other factors all contribute to a changing transport landscape and how they play out can have a substantial impact on the projected growth.

Organizations like ITF, while not a policy-making institution, add to the body of work of ideas that the transportation and logistics industry can pull from to lessen the impact freight movement has on the world around it. CS

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IN THE NEWS

Shippers hear gloomy forecasts on trade Dark clouds on the horizon hears Shipping Federation of Canada conference

At the outset of her talk on trade at the Shipping Federation of Canada’s (SFC) annual conference in Montreal, Laura Dawson said event organizers were prescient for scheduling the cocktail party at noon.

“That certainly reflects the mood in the business world,” quipped Dawson, director of the Canada Institute, a Washington, D.C.-based think tank and an expert on political and economic relations between Canada and the U.S. The comment drew laughter from the 100-plus people from Canada’s marine industry in attendance.

But it was one of the only few light moments during a morning of presentations on the outlook for ocean shipping.

In addition to Dawson, speakers included Peter Sand, chief shipping analyst with Copenhagen-based BIMCO, and Jean-Jacques Ruest, president and CEO of CN Rail.

Using the latest data from BIMCO —the world’s largest international shipping association with 19,000 members in 120 countries—Sand painted a grim picture of the impacts that the trade war between the U.S. and China is having on the global economy and the shipping industry.

“There is slower economic growth from unresolved trade tensions that just keep escalating,” he said. “It is highly critical and essential that barriers to trade be removed, not raised.”

Sand said the bulk, container and tanker sectors are all being adversely affected.

In addition to dealing with falling freight rates due to decreased demand, Sand said ship owners are also bracing for the financial impact of the IMO-imposed sulphur cap on fuel in 2020.

In regards to the container sector, Sand said “much stands in the way of a profitable recovery.”

He said the hundreds of billions of dollars in tit-for-tat tariffs imposed by 6

July 2019

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By Mark Cardwell

Laura-Dawson, director,

“We have already had a tough start to 2019 …

There are no winners in a trade war.” Peter Sand,

Canada Institute, Wilson Center

chief shipping analyst, BIMCO

the U.S. and China—together with the growing realization that U.S. tariffs may not be temporary, which has sent stock indices plunging—have a direct impact on a quarter of all the TEUs that are transported around the world.

Shipping companies, Sand added, must also avoid license-losing breaches of the many U.S.-imposed sanctions around the world.

“There are more dark clouds than sunshine,” said Sand. “We have already had a tough start to 2019 and that is likely to continue. There are no winners in a trade war.”

Critical conditions

“Our geopolitical power is insignificant. We’ll have to hunker down and wait.”

Dawson painted an equally gloomy picture of Canadian and global trade prospects due to Trump’s whipsaw use of tariffs.

“It’s a very strange ride,” she said.

“We’re in a period of global instability.”

According to Dawson, Trump’s trade unilateralism has set the world back 70 years to the pre-Bretton Woods era of protectionist tariffs.

“We’re right back there,” said Dawson, who likened tariffs to a Pandora’s Box for international trade. “WTO is on life support.”

Photo: Canada Institute, Wilson Center

IN THE NEWS

She added that tariffs, together with other complex and national security-related issues like intellectual property, cybersecurity and the sudden rise of China, make the political and economic environments both confusing and uncertain for business leaders in Canada and elsewhere.

“Tariffs are highly detrimental to everyone, including the U.S.,” said Dawson. “They create artificial markets and winners (and) investors and producers are rolling the dice on where to put their money. The economy is becoming a casino.”

She added that the still-unratified USMCA deal, which she mockingly referred to as ‘U-Smack-A Canada and Mexico,’ was “good enough but no magic bullet.”

She predicted the upheaval will continue if Trump is re-elected in 2020.

“There is little Canada can do,” said Dawson. “Our geopolitical power is insignificant. We’ll have to hunker down and wait.”

Diversify or die

CN Rail boss Ruest shared a similar long-term outlook in his short morning-ending presentation, which was conducted as a question-and-answer session with Dawson and SFC president Michael Broad.

Ruest said CN, which is celebrating its 100th anniversary this year, has been hit by the slowdown in commodities like steel, aluminum, pork and grain, all of which have been hurt over the past year by now-lifted U.S. tariffs and/or Chinese attacks on Canada over the arrest of Huawei CFO Meng Wanzhou.

“We have to keep a long-term view beyond Trump and the battle with China,” said Ruest. “Any commodity market can be impacted by wars or whatnot. As a long as we as a railroad keep looking ahead.”

Ruest noted that 30 years of free trade and NAFTA have made Canada highly dependent on the U.S. market, with little diversification in other markets.

Photo: CN Rail

“We have to keep a long-term view beyond Trump and the battle with China.” JJ Ruest, president & CEO, CN Rail

“It got too easy to grow business in the U.S. and (not) Europe and Asia,” he said. “Shame on us—and it’s up to us to figure a way out.”

Ruest said CN will continue to invest $3 billion to $4 billion a year—roughly 25 cents of every dollar it earns—into its North American network.

He also called on the federal government to increase its investments in infrastructure to help move Canadian commodities to market.

Though CN is investing mostly in Western Canada, where the potential for higher returns is better, Ruest said there are “serious problems” with access and capacity at

the Port of Vancouver, which will reach its marine terminal capacity in 10 years.

“It’s becoming a serious challenge,” Ruest said when asked for his take on Vancouver’s proposed Roberts Bank Terminal 2 Project, which would see the construction of a new three-berth container terminal on a man-made island. “We’re running out of space.

There’s no place to park trains.”

Unlike the U.S., which has the inland Mississippi River system and dozens of ocean ports, Ruest said Canada needs more new and/or modernized facilities to help increase exports.

He said CN would notably welcome and even invest in any new or modernized seaport on the Atlantic seaboard and the St. Lawrence River, remarks that turned out to be revealing, as days later it was announced that CN, along with Hutchison Ports had signed a longterm commercial agreement to build and operate the new deep water container terminal at the Port of Quebec.

“There’s more trade coming to the East Coast,” said Ruest. “We need a Prince Rupert of the East.” CS www.canadianshipper.com

July 2019

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IN THE NEWS

SUPPLY STATS

21 VLCCs Japanese shipping company Mitsui O.S.K. Lines (MOL). announced its intention to install a navigation system using augmented reality (AR) technology on 21 MOL Group-operated very large crude oil carriers (VLCCs).

In this project, information— e.g. other ships sailing around the vessel and landmarks like buoys at sea—can be shown on tablets and other displays, based on data from the Automatic Identification System (AIS).

3,000 deliveries

75 per cent A road freight service by DHL Global Forwarding along the Hong Kong-ZhuhaiMacau Bridge (HZMB), featuring the world’s longest undersea bridge tunnel system that connects mainland China with Hong Kong, has reduced transit times by 75 per cent. The route—previously 200 kilometres—is now only 80 kilometres and the journey now only takes two hours instead of eight.

Google affiliate Wing Aviation has received federal approval allowing it to make commercial deliveries by drone. Wing said that to win FAA certification it had to show that one of its drone deliveries would pose less risk to pedestrians than the same trip made in a car. The company said its drones have flown more than 70,000 test flights and made more than 3,000 deliveries to customers in Australia.

140 cargo thefts In the first quarter of 2019, CargoNet recorded 330 supply chain risk intelligence events in the United States and Canada. Of those incidents, 42% involved stolen cargo among several other kinds of events. In total, there were 140 cargo thefts across the U.S. and Canada in first-quarter 2019, a 22% decrease from first-quarter 2018.

15 leading maritime capitals In the 2019 Leading Maritime Capitals report Singapore maintained its top position at the head of the 15 leading maritime capitals. On the overall ranking, Hamburg remains in the number two spot, while Rotterdam and Hong Kong showed the biggest improvement, climbing to third and fourth respectively, with London rounding out the top five.

100 years Canadian National was created by an Act of Parliament in Canada on June 6, 1919, and through its evolution over the years — from a Federal Crown Corporation for 75 years to its privatization in 1995 — CN is a railway that spans North America from Eastern Canada to Western Canada to the Gulf of Mexico. For 100 years, CN has been serving Canada’s economy, from building the country to now moving over $250 billion worth of its customers’ goods annually. If you eat it, use it or drive it, chances are that CN moves it. www.canadianshipper.com

July 2019

9

TECHNOLOGY

Digital transformation Polaris Transportation decided to monetize its AI experience by catering to other trucking companies

Dave Cox , president, Polaris Transportation Group

F

or a quarter of a century, Polaris Transportation Group has been known as a carrier who specializes in the transportation of LTL between Canada and the U.S. They have positioned themselves as the “Cross Border Pros,” but who they have become and what they’re seeking to achieve will surprise you.

“Polaris is not your typical transportation and logistics company,” explains Polaris president, Dave Cox. “We have our ears to the ground and our sights set on the future. Through tactical acquisitions and partnerships, we have shifted into the digital space and are creating change not only in the transportation industry but in all connected industries.”

Through its in-house Digital Laboratory and a completely new and separate company—NorthStar Digital Solutions—the company has, says Cox, successfully deployed and utilized RPA (Robotic Process Automation), machine learning, IoT (Internet of Things) and ar-

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July 2019

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tificial intelligence to consolidate and automate antiquated systems technology.

“When it comes to new technology, new ways of thinking or new methods of conducting business, we are not taking a wait-and-see approach, we are embracing it and continuously developing powerful tools that enhance both the customer and employee experience,” he says.

According to Dave Brajkovich, chief technical officer of Polaris, the company is positioning itself as a holistic provider of services and solutions, with the ability to seamlessly integrate business models throughout the supply chain and deliver complete digital transformation solutions. They will provide their clients the benefits of quality services for freight centricity, warehouse inventory management and couple that with an enhanced digital experience delivering insights and information management right at their fingertips. Further to this will be the ability to offer unparalleled digital

solutions producing true integrated transactional data exchange, automated processing and intelligent reporting/predictive analytics.

“Our primary vision is being first to market with a distributed ledger on a centralized hosted environment that will be dynamic, safe, immutable, easy to use/do business with and provide great insights and predictive analytics like no other,” says Brajkovich.

“It will allow for the common sharing of business transactions between partners, shared services providers, competitors and clients — used by organizations and consumer-end users who are looking to receive fast, efficient, secure and cost-effective service.”

Polaris Transportation Group has partnered with cutting-edge corporations and industry influencers to assist in their mission to revolutionize the way business is conducted in both transportation and other marketplaces as the need for enhanced processing touches all industries. Cox and Brajkovich believe they are well on their way to establishing their digital transformation and although the work being completed behind the scenes is quite complicated, their vision is quite simply—harness the power of advanced technologies to deliver easy-to-use, fast, secure and cost-efficient services.

“We will not accept the status quo,” says Cox. “We are hungry for change; for a better way of doing business. We have and will continue to hire top-level talent who bring fresh, innovative thinking. It’s an extremely exciting time to be a part of our group and the opportunity for growth through innovation is seemingly endless.” CS Photo: Polaris Transportation Group

IN THE NEWS

The more the merrier Container shipping companies are jumping on the digital bandwagon The digitalization of container shipping has picked up the pace recently, with two of the leading organizations at the forefront of standardization, announcing the signings of several major liner operators.

First, the Digital Container Shipping Association (DCSA) announced that five more ocean carriers had joined— CMA CGM, Evergreen Line, Hyundai Merchant Marine, Yang Ming, and ZIM—in addition to A.P. MollerMaersk, Hapag-Lloyd, MSC and ONE, bringing the total to nine of the largest container shipping lines in the world.

“We are thrilled to have additional members joining the DCSA on our journey to drive standardization and interoperability in the industry, with CMA CGM joining as a founding member. It is critical for our success that the standards developed will be implemented, and the commitment and engagement of many container shipping lines is therefore crucial,” said Thomas Bagge, CEO of DCSA. Next up was an announcement from TradeLens, the blockchain-enabled digital shipping platform, jointly developed by A.P. Moller-Maersk and IBM, that global container carriers CMA CGM and MSC Mediterranean Shipping Company (MSC) will be joining.

With the new members and other carriers committed to the platform, data for nearly half of the world’s ocean container cargo will be available on TradeLens.

Said André Simha, chief digital & information officer, MSC and chairman of the DCSA: “Digital collaboration is a key to the evolution of the container shipping industry.

The TradeLens platform has enormous potential to spur the industry to digitize the supply chain and build collaboration around common standards.”

“We think that the TradeLens Advisory Board, as well as standards bodies such as the Digital Container Shipping Association, will help accelerate that effort.”

Photo: Digital Container Shipping Association

(From L to R): Rajesh Krishnamurthy, executive vice president IT & Transformation, CMA CGM; Adam Banks, chief technology & information officer, A.P. Moller-Maersk; Martin Gnass, managing director information technology, Hapag-Lloyd; André Simha, chief digital & information officer (DCSA chairman), MSC Group; Noriaki Yamaga, managing director, Corporate & Innovation, Ocean Network Express.

“Digitization is a cornerstone of the CMA CGM Group’s strategy to provide an end-to-end offer tailored to our customers’ needs,” said Rajesh Krishnamurthy, executive vice president, IT & Transformations, CMA CGM Group. “We believe that TradeLens, with its commitment to open standards and open governance, is a key platform to help usher in this digital transformation.”

With more than 100 participants on the platform today, TradeLens is already processing over ten million discrete shipping events and thousands of documents each week, providing shippers, carriers, freight forwarders, customs officials, port authorities, inland transportation providers, and others a common view of transactions, which can build trust. A commitment to data ownership rights and permissioned access to data helps ensure privacy and confidentiality while enabling users to

collaborate more efficiently with realtime access to shipping data.

Beneficial cargo owners like Procter and Gamble will benefit from the addition of more carriers onto the platform.

“P&G ships a significant volume of ocean containers every year. Whether filled with our products or the materials used in production, understanding the status of our containers helps us manage an efficient supply chain,” said Michelle Eggers, director Global Logistics Purchases, P&G. “We have been testing TradeLens for the P&G business and see potential as the solution scales. We look forward to industry-wide adoption to benefit all network members.”

Eyal Ben-Amram, executive vice president, CIO of ZIM Integrated Shipping Services believes that digital innovation will shape the future of the shipping industry, and that “standardization is the right way to improve the eco-system of all stakeholders.” CS www.canadianshipper.com

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IN THE NEWS

Made-in-Canada regulation Transport Canada announces ELDs to be required by 2021 Canada’s long-awaited electronic logging device (ELD) rule has been published, which the Canadian Trucking Alliance (CTA) says will catapult Canada ahead of the U.S. in terms of safety and compliance.

The made-in-Canada regulation requires third-party device certification, something the U.S. did not pursue, and a detail the Canadian trucking industry lobbied to have included. In the U.S., devices are self-certified, which has led to the arrival in the market of ELDs that can be modified or tampered with.

The rule was announced by government and industry officials at a press briefing at Ontario Trucking Association (OTA) headquarters on June 13. Officials said the new rule will be introduced nationally as soon as possible.

By James Menzies

Transport Minister Marc Garneau (centre) announced the new ELD rule at the Ontario Trucking Association’s headquarters in Etobicoke, Ont.

By June 2021, third-party-certified ELDs will have to be used by all truck drivers currently required to maintain a logbook. The announcement

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was greeted with enthusiasm by industry associations.

“The vast majority of our companies and drivers in our industry fully comply

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IN THE NEWS

with hours-of-service rules, but, undoubtedly, the implementation of tamper-proof, third-party ELD devices will further enhance safety and help ensure all drivers and companies hold themselves to the highest levels of compliance,” said CTA chairman Scott Smith.

The hours-of-service rules themselves will not be changed; they’ll simply have to be recorded using an ELD. “Third-party certification of ELDs is critical for hours-of-service compliance and fatigue management as the technology behind ELD devices is key to ensuring drivers and companies follow their work-rest cycles,” said Stephen Laskowski, CTA president. “As we learned from the previous era of paper logbooks, the non-compliant segment of our industry, while a minority, have a history of finding workarounds of the rules. We must ensure that there are no gaps or opportunities to manipulate the technology and that compliance is the only option.”

The final rule also accelerates the implementation timeframe, from the initially proposed four years, to two.

But unlike in the U.S., existing automatic on-board recording devices will not be grandfathered.

That worries Mike Millian, head of the Private Motor Truck Council of Canada (PMTC).

“The PMTC is in agreement with the two-year compliance date attached to the posting, however we do have concerns with the removal of the grandfather clause that was posted in Canada Gazette 1,” said Millian.

“The removal of the grandfather clause may actually place fleets who implemented devices years prior to a mandate, in a worse position that those who did nothing. These fleets will have to work with their supplier and hope that the device they purchased can be updated to be third-party-certified, or replaced with new devices.”

The CTA’s Laskowski noted the requirement for third-party certification meant the grandfather clause had to go.

“After Gazette 1 was published, it became very clear that there were challenges in the self-certification world,” he said. “How can we have grandfathering of non-third-partycertified devices? We were originally asking for 24 months plus grandfathering. It became very clear to us that a 12- to 18-month period was sufficient.”

The CTA has hosted several meetings with more than a half dozen device suppliers since January 2018.

It says it will be embarking on an education campaign to ensure the industry is ready for the mandate. It is also working with ELD manufacturers and suppliers to ensure they are aware of their requirements to become third-party-certified. CS

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GLOBAL CONTAINER PORTS

PORT SMART The Port of Hamburg is blazing a trail of automation and digital integration ntegration

BY JOHN TENPENNY

T

he movement of containers through the modern port relies on cranes and trucks and always has. But the Port of Hamburg has a different look in mind, one that someday might include drones lifting containers, along with autonomous trucks and high-speed tubes shuttling them to and from the port.

Under its ‘smartPORT’ umbrella, the Hamburg Port Authority (HPA) has pooled numerous projects that test 14

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digital and automated technologies in partnership with port operator Hamburger Hafen und Logistik AG (HHLA).

As part of its trip to Germany to attend the International Transport Forum’s annual Summit, Canadian Shipper had the opportunity to tour the Port of Hamburg and hear about some the projects recently announced and some that are already underway.

Ranked in the top 20 of world container ports, Hamburg handled 135.1

million tons of cargo in 2018, including 8.7 million twenty-foot equivalent unit (TEU) containers, making it the third largest container port in Europe. The port boasts 300 berths and a total of 43 kilometres of quay for seagoing vessels at four state-of-the-art container terminals and 50 facilities specialized in handling RoRo and breakbulk cargoes, as well as approximately 7,300 logistics companies within the city limits.

Photo: HHLA

GLOBAL CONTAINER PORTS

With Container Terminal Altenwerder (CAT) Hamburg possesses one of the most cutting-edge terminals in the world. A major part of operations is automated, including the guided vehicles that move containers between the quay wall and storage blocks.

At Hamburg's CTA terminal, HHLA and MAN have launched a pilot project, testing automated and autonomously driving trucks.

MAN-ning up

In partnership with MAN Truck & Bus, HHLA last year launched the “Hamburg TruckPilot,” which will see the testing of automated and autonomous trucks in real use with HHLA Container Terminal Altenwerder (CTA) and a 70-kilometre stretch of the A7 motorway serving as the field testing environment.

The goal of the partnership between MAN and HHLA is to analyse and validate the exact requirements for customer-specific deployment in a real-world setting and the integration of autonomously driven trucks into the automatic container handling process.

“The project is another important development step for automated driving for MAN,” says Dr Frederik Zohm, board member at MAN. “As with other projects, the focus here is on integrating the system into concrete workflows for a future user. Together with HHLA, we will generate important insights for the further development of the technology into a system that is ready for the customer.”

Beginning earlier this year, the testing phase commenced with two prototype trucks equipped entering the A7 motorway at the Soltau-Ost junction fulPhoto: HHLA / Thies Rätzke

ly automated, then autonomously handling discharge and loading within the Altenwerder container terminal.

According to HHLA, a trained safety driver will always be present in the vehicle during this phase to monitor the automation systems. If required, they will intervene and become an active driver.

Automated driving functions will provide relief and support for truck drivers during their work., said HHLA representatives. For example, assuming the legal fundamentals are in place, the driver could process freight documents during fully automated motorway travel or simply take a rest.

In the event of autonomous loading and unloading, the driver can leave the vehicle and use the time for their legally prescribed breaks. Other potential benefits include increasing efficiency through automated defensive driving. Both HHLA and MAN say the project will significantly reduce fuel consumption and can also positively influence the general flow of traffic, as well improve safety in all areas.

The project is part of the strategic transport partnership between the City of Hamburg and the Volkswagen Group and is one of many under the umbrella of the Intelligent Transport Systems (ITS) World Congress being hosted by the city in 2021.

Speed of sound

Transporting containers at high speed through a tube to and from the Port of Hamburg is the joint vision of HHLA and U.S.-based Hyperloop Transportation Technologies (HTT).

The goal of the joint venture is to develop and later market a Hyperloop transport system for shipping containers. Currently, the construction of a transfer station for testing purposes at a HHLA terminal in Hamburg and the development of a transport capsule for standard shipping containers are planned.

“As a gateway to the future, we want to employ innovative approaches to make a contribution towards relieving the strain on the transport infrastructure in and around the Port of Hamburg and to use the capacities of our terminal facilities in an even more efficient way,” said Angela Titzrath, chair of HHLA’s executive board.

“Together, we will develop a complete system that not only concentrates on speed and efficiency, but also takes into account the issues ports face in daily operation,” added Dirk Ahlborn: founder and CEO of HTT. “In order for us to remain a leading global logistics hub in the future, we need new ideas and new business models in the logistics environment, as well as infrastructure projects such as the adjustwww.canadianshipper.com

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GLOBAL CONTAINER PORTS

ment of the navigation channel of the Elbe River and the expansion of motorways. Michael Westhagemann, Minister for Economy, Transport and Innovation of the Free and Hanseatic City of Hamburg. “It is good when we can develop and test such innovations here in Hamburg,” Behind the concept of the Hyperloop is the idea of transporting people and goods at high speed through a tube. With the help of magnetic levitation technology, the transport capsules used in the system will be sent through a tunnel, in which there is a partial air vacuum, at speeds reaching or even exceeding 1,000 km/h. A test track for transporting people and goods was recently completed in Toulouse, France.

Drones and 5G

HHLA is also mulling use of drones for container transport.

HHLA, along with the Fraunhofer Center for Maritime Logistics have examined the technicalities and Titzrath

confirmed that the next step will be an assessment of the economic feasibility.

Drone transport is already technically possible, with large drones capable of carrying loads of up to two tonnes, according to the HHLA. Drones will also be an indispensable feature of the port, according to Port Authority officials, who envision using underwater drones to monitor quay walls along the Elbe River. Airborne drones could be used, for example, to inspect the load-bearing cables on bridges and HHLA is already successfully deploying drones—some of these autonomous—at its terminals.

Another project providing further momentum for ‘Port 4.0’ with tests of the new 5G broadband network by the Hamburg Port Authority, Deutsche Telekom and Nokia The pilot tests, which serve as a basis for enhancing the 5G standard, began last year and are scheduled to run until 2020.

“The testbed has given us a first impression of the enormous potential that

5G and, in particular, network slicing will offer us,” said Jens Meier, CEO of HPA. “For me, the new standard is the basis for solving challenging tasks in the industry and finally helping digitalization to make a breakthrough. I am proud that Hamburg and the port are among the first to benefit from this technology.”

Going green

Reducing the port’s carbon footprint is another area where Hamburg is on the leading edge. Earlier this year, HHLA took delivery of the first 26.5 tonne container transporter with lithium-ion battery propulsion By the end of 2020, its fleet of almost 100 Automated Guided Vehicles (AGV) will have been entirely converted to lithium-ion battery propulsion.

In comparison to the AGVs deployed until now at CTA with lead batteries, the lithium-ion technology is notable for its recharging speed: These batteries can be fully charged in 90 minutes, weigh approximately only one third as much as

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GLOBAL CONTAINER PORTS

lead acid batteries, and need no maintenance.

“With the lithium-ion AGV, we are making a contribution to preventing air pollution in Hamburg,” explains CTA general manager Ingo Witte. And, he adds, the environment-friendly transporters make commercial sense too. “Taking the relationship between energy used and actual engine output, they are three times as efficient as their diesel-driven predecessors.”

Over at Container Terminal Tollerort (CTT), HHLA recently installed two straddle carriers with environmentally friendly hybrid engines, which are now transporting containers between the ship, the yard, the rail terminal and the truck gate at the Port of Hamburg. The two prototypes are expected to use at least 15 per cent less diesel than their predecessors.

The manufacturer of carriers, Konecranes, forecasts an annual reduction of 30 to 50 tonnes of CO2 per straddle carrier.

The principle behind the hybrid technology is simple: the straddle carrier

HHLA and Hyperloop are working on how to transport containers at high speed through a tube to and from the Port of Hamburg.

stores surplus energy, which is, for example, generated during braking or while the load is being lowered, in a high-performance lithium-ion battery. As it drives, the vehicle uses this energy from the battery. This significantly eases the load on the combustion engine.

The Port of Hamburg doesn’t plan on slowing down anytime soon because they know the other leading container

If you’ve already learned the business of logistics

ports around the globe aren’t sleeping either, as the speed of technological developments has continually increased and is still continuing to do so.

“The shippers set the beat,” says Ulrich Wrage, CEO of Dakosy, the port authority’s IT service provider. Global trading groups like Amazon and Alibaba, “take a very close look at just what a port can, or cannot, do.” CS

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17

INTERMODAL

U.S. imports into Eastern ports have increased by 56 per cent since 2012 compared to a 22 per cent increase or West Coast ports, resulting in “a more consistent share� between the two coasts.

MIDDLE

of the Road Online sales are shifting import flows and shrinking the middle mile for intermodal

BY MARK CARDWELL

INTERMODAL

D

an Bresolin wasn’t surprised by news from the U.S. Treasury Board in April that “non-store” or online retail sales in the United States in February had surpassed general merchandise sales for the first time in history.

“I see it in my home every day with my family,” says Bresolin, a Toronto-based assistant vice president with Canadian National’s international intermodal services.

“They buy stuff all the time online. At Christmas, that’s how my wife does threequarters of her shopping now.”

Bresolin is equally nonplussed by reports that e-commerce and the accompanying need for speed in delivery times are reportedly driving the uptick in infrastructure investment and freight traffic to ports on the demographic-heavy Eastern seaboard of the United States and Canada.

“Brick and mortar sales have changed and so has the way of getting goods to the door,” says Bresolin, who handles CN Rails’ sales and relationships with ocean carriers and port stakeholders on the three coasts the company serves. “The traditional last mile of getting in your car and driving to the mile is definitely shrinking.”

The Internet was still science fiction when the word ‘intermodal’ was coined in the 1960s to capture the need for and growth of transportation involving more than one form of carrier.

But the rising fortunes of virtual businesses like Amazon are having real-world impacts on supply chains. And no where is the potential shock greater than on the so-called “middle mile” that connects goods between ports and end consumers in Eastern North America.

Shop ’til you drop

According to an investors’ report released

by Germany’s Deutsche Bank in April on the potential implications of rising e-commerce sales on U.S. transportation stocks, online sales in the U.S. doubled between 2013 and 2018 to more than US$500 billion a year.

“But e-commerce penetration is still less than 15 per cent of retail sales, implying still significant runway for growth,” reads the report. It adds that big-

box retailers like Walmart are now closing stores and scrapping plans to build new ones in order to invest in omni- or multi-channel retailing and so-called fulfillment centers that enable merchants to outsource warehousing and shipping and provide consumers with a more seamless shopping experience.

The result has been a 30 per cent reduction in delivery times for e-commerce sales by traditional retailers, a performance the report predicts will only improve due to increased competition and the emergence of new and future transportation technologies, including everything from driver-less vehicles to drones.

“Faster delivery times require more fragmented supply chains, namely inventory positioning near final destination points via more fulfillment sites closer to major demand centers (including store-based e-commerce fulfillment),” reads the report. “Density and demographics make the East a natural focus for retailers in this context.”

The report notes that 15 of the 20 biggest American cities and two-thirds of Amazon’s fulfilment centres are located east of the Mississippi River, resulting in an eastward migration of port investment aimed at handling the upswing in e-commerce-driven demand for seaborne consumer goods.

According to the report, U.S. imports into Eastern ports have increased by 56 per cent since 2012 compared to a 22 per cent increase or West Coast ports, resulting in “a more consistent share” between the two coasts.

“We expect this trend to continue, driven by e-commerce and the need for faster delivery times together with port infrastructure projects (New York’s raising of The Bayonne Bridge as well as several other projects at the Ports of Savannah, Virginia and Charleston).”

“East coast volumes have growth two times faster and the largest port in Canada (Prince Rupert) has grown five times faster than the two largest West Coast ports (Los Angeles and Long Beach),” reads the Deutsche Bank report.

It adds that major ports in the Eastern U.S. and Western Canada plan to invest between three and eight times more on a dollar-per-TEU basis to ex-

pand throughput capacity than major U.S. West Coast ports.

“We believe these investments, coupled with ongoing e-commerce demand shifts, will result in the volume growth exceeding large West Coast ports. This has significant implications for intermodal vs. truck penetration vis-à-vis length of haul, as the middle mile migrates east,” reads the report.

It also predicts that the “cyclicality” of the truckload market will accelerate over the next few years “as truck supply/ demand imbalances and lower length of haul allow trucking to recapture lost market share.”

Carrying costs

Michael Broad, president of the Canadian Shipping Federation, doesn’t see any perceptible shift in investment or traffic to Canada’s East Coast ports due to e-commerce.

Instead, he credits improvements to the Suez and Panama Canals and free trade deals like the pending Canada-European Union Comprehensive Economic and Trade Agreement (CETA) for fueling big growth-sustaining projects like the Port of Montreal’s planned Contrecoeur container terminal.

“It’s all about the cheapest way to get it to destination,” says Broad, whose organization has 71 core members and represents some 250 shipping lines worldwide.

“Money is a prime driver. Everything is cargo driven and shipping costs drive cargo. At the end of the day freight goes where it costs less.”

Phil Shook agrees that the bottom line in the movement of freight is money, especially in regards to the value of cargo and related carrying costs.

“You can’t sell it on the water,” says Shook, vice president of C.H. Robinson, one of the world’s leading third-party logistics providers with the largest network of motor carrier capacity in North America. “You want to get your freight into DCs (distribution centres) as quickly as possible.”

According to Shook, who has been with C.H. Robinson for 21 years, the slow shift eastward of freight and port investment has long been a topic of debate and conversation in the U.S. transportation industry. continued

Photo: CN Rail

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July 2019

19

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INTERMODAL

continued from p. 19

“The East Coast has grown faster in recent years but the West Coast is (also) doing well,” Shook tells Canadian Shipper from C.H. Robinson’s headquarters in Aurora, Illinois.

He said ports on the U.S. East Coast have been “beefing up” since the expansion of the Panama Canal, while Long Beach and Oakland remain “intermodal friendly” because they provide significant length of haul. “It’s all about where freight lands,” he says.

He remains unconvinced that the current eastward migration of infrastructure dollars will have a groundshaking impact on the transportation industry in the U.S. and Canada, a market in which most inbound container traffic remains intact on trains headed to Toronto or Montreal, where C.H. Robinson opened a facility 18 months ago to handle its intermodal operations.

“The concern is that it could lead to a shift from intermodal to truck,” says Shook. “But that would require a sizeable shift. I don’t see that happening. At least not to the point of having long-lasting ramifications.”

Fast freight

Another American trucking, intermodal and logistics expert and executive— Rob Bulick, senior vice president and general manager of First to Final Mile with Wisconsin-based Schneider National—believes that e-commerce is indeed driving the amounts of freight and infrastructure spending east.

And he thinks the need and ability to get goods straight from regional ports to consumers will drive efficiencies in networks, but only to the point where industry challenges like recruiting and retaining drivers limits capacity.

“What we feel this change in this middle-mile network will give us is a much more fluid and reliable and consistent way to move freight into (major East Coast population centres) and then ultimately closer to the consumer for the final mile of e-commerce deliveries,” says Bulick.

He added that the growing need for the faster movement of freight through Schneider’s 24 terminal networks across the contiguous U.S. (the company servic-

The rise of e-commerce means the traditional last mile of getting in your car and driving to the mall is shrinking.

es Western Canada through its operations in the northwestern U.S.) was the impetus for both the company’s 2016 acquisition of Watkins & Shephard Trucking and the broadening and connectivity in April of its middle-mile configuration to include its Van Truckload and Intermodal assets, providing access to more than 10,700 trucks and 22,000 intermodal containers.

“The ability to utilize both truckload and intermodal modes to access and to move east and into end-of-lane areas is not going to diminish—on the contrary,” says Bulick.

He added that while ongoing constraints and needs for drivers and continued regulations act as brakes on capacity, those limitations will give rise to both efficiencies and disruptive solutions in the transportation network.

“Both the retail and transportation industries are working to meet those challenges,” says Bulick. “It’s all about being able to access markets and understanding lead times and delivery schedules (and) the ability to access goods and services from any customers online and being able to generate that delivery into their home or business.”

Consumer hub

Whatever the reasons for the rising tides of the freight-handling business in East Coast ports, Tony Boemi, vice president growth and development at the Port of Montreal, says his facility welcomes it with open arms.

“We’re expanding and investing heavily in infrastructure because of what we’re seeing and experiencing.”

According to Boemi, the Port of Montreal has enjoyed a 17 per cent compounded increase in volume since 2017, with 12 and nine per cent jumps in January and February respectively in 2019.

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

A port terminal is also now experimenting with offering trucks windows of time to come aimed at helping companies speed up delivery times and the port to better manage the number of trucks coming in to the facility. continued

Photo: CN Rail

www.canadianshipper.com

July 2019

21

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INTERMODAL

continued from p. 21

“Our growth has taken our projects from ‘nice to have’ to ‘need to be,’” says Boemi, who credits the Port of Montreal’s location on the St. Lawrence River, 1,600 kms inland from the Atlantic Ocean, for making it a prime location as an intermodal hub.

“We’re within eight hours of trucking to 40 million consumers and we’re lucky to have two Class A railways— CN and CP—which enables us to access another 70 million consumers through the Midwest U.S.” A growing percentage of the port’s inbound traffic, he added, comes from companies that are developing trans shipping ports in Europe where cargo from major vessels used for Asia-Europe crossings is transloaded onto smaller vessels that sail to Montreal.

“It’s mostly cargo that’s not necessarily time sensitive or major companies that readjust their supply chain to factor in the additional transit times,” says Boemi.

On-time delivery

For his part, CN’s Bresolin believes transit times—not e-commerce—is the ultimate driver behind increased cargo movement through Canada’s East Coast ports.

When you talk about the movement of products from West Coast ports to East Coast ports, being near the population is a big factor—but so is transit time and the origin of where the goods are coming from,” says Bresolin, who works daily with the world’s largest ocean carriers on supply chain-enabling contracts to do inland transportation from ports to inland terminals.

“If it’s coming from northern China and you want to get it to Chicago, the fastest way to do it is through the West Coast. If you are dealing with Southeast Asia—and there’s a point around Hong Kong where it’s almost equidistant—on whether you come through the West Coast or East Coast ports, there are opportunities now more than ever to move goods through the East Coast versus the West Coast or through the Panama or Suez canals, which you can now get bigger vessels through,” explains Bresolin. “The casPhoto: CN Rail

According to a report from Deutsche Bank, two-thirds of Amazon’s fulfilment centres are located east of the Mississippi River.

cading effect of all these vessels is really pushing a lot of larger vessels into the East Coast trade lanes.”

Though the mostly 10,000 to 14,000 TEU-range ships that visit East Coast ports are smaller than the 18,000-plus TEU behemoths than ply West Coast waters, according to Bresolin, the densely populated East Coast remains the most lucrative retail hub in the world.

“No ocean carrier is going to design strings for their business that don’t touch New York,” says Bresolin, who lauds the raising of the Big Apple’s Bayonne Bridge as a shipping game changer. “New York is such a huge local consumer market that you want to bring the biggest possible ship you can into New York.”

Geography, he adds, also allows Halifax and Montreal to be critical players in international shipping string design.

“You can drop off all your containers for Chicago and the Midwest in Halifax, then go down to New York and discharge your local cargo,” says Bresolin. “Halifax has plenty of capacity and plenty of upside to grow there.

We’ve had a real good five-year stretch of growth there.”

Aiding and abetting the eastward migration of freight, he added, are warehousing costs in West Coast U.S. ports in particular and the potential for freight-blocking labour disputes in U.S. ports on both coasts.

“You’ve got bigger ships heading east (and) historical issues with strikes that have clogged up terminals in the past,” he says. “The large retailers and forwarders of the world have used Canada—namely Vancouver, Prince Rupert and Halifax—as opportunities to mitigate risk.

“Even the Gulf terminals we serve like Mobile [Alabama] and New Orleans have been successful in being part of that mitigation strategy,” he adds. “L.A.Long Beach is a really big, big, big terminal, by far the largest centre for imports into the U.S. But, if there’s a labour disruption there, you don’t want to have all your eggs in one basket.” 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. www.canadianshipper.com

July 2019

23

FREIGHT FORWARDING

TECHNOLOGY

TSUNAMI A wave of digital disruption is crashing down on freight forwarders and it’s imperative that the industry change its business model

BY IAN PUTZGER

O

ver the past couple of years, venture capital firms around the world have been very active in the freight forwarding industry, pumping billions of dollars into technology-based forwarders like Flexport, which received a whopping US$1 billion earlier this year.

Some established players scoffed at the news, commenting that the tech rival does not have a stellar performance record to match such lofty investor confidence. Still the investment reflects a broad belief that the logistics sectors, and forwarders at the heart of it, is ripe for a technology-driven transformation.

According to a recent survey by supply chain industry association MHI, projected investment in supply chain innovation is up 95 per cent this year, with 57 per cent of respondents planning to spend over US$1 million on new technology over the next two years.

Cathy Morrow Roberson, founder and head analyst of consultancy and research firm Logistics Trends & Insights, comments that the forwarding business 24

July 2019

www.canadianshipper.com

is changing, driven by developments like the rise of e-commerce and changing global trading conditions. Forwarders invest in technologies to improve efficiencies and respond faster, she says.

“Technology has been on the backburner for a long time. This changed over the last few years,” comments Jon Slangerup, CEO of American Global Logistics.

At the same time, there is greater pressure on forwarders to beef up on technology. Ashok Thomas, president of Global Supply Chain Logistics, notes that ocean and air carriers have been pushing forwarders to use digital channels to communicate and book shipments with them.

Eight out of 10 respondents in the MHI report believe digital supply chains will be the dominant model within the next five years.

“From a TMS perspective, our value proposition is from TMS to digital,” remarks Steve Barber, vice-president of IT customer solutions at supply chain management solutions provider Transplace. “We’ve been in the digitization

business for a long time but we’ve still in the early stages from a maturity standpoint of the industry.”

A good deal of the noise surrounding technology is hype from tech providers who look to sell their offerings.

“Technology wants to sell us everything, instant and all in one,” comments Karl-Heinz Legler, general manager of Rutherford Global Logistics.

Without a doubt, air and ocean carriers have been pushing for digitization.

From the shipper side, there is certainly a heightened interest in faster data flow to make them more responsive to developments in market and supply chains, confirms Jeff Cullen, CEO of Rodair International. However, he adds that no client has tried to force a purely electronic interface on his company.

Many shippers rely on the forwarder to take the lead in improving supply chain intelligence.

Roberson states that the rise of software as a service (SassS) has helped level the playing field for smaller forwarders by making tools available to

FREIGHT FORWARDING

them that previously only large companies with deep pockets could afford.

“Those that can differentiate themselves are the ones who are going to succeed,” she adds.

Thomas has some reservations on that front. Many low-cost offerings are not worthwhile, he argues. “To get really in you have to invest big bucks,” he says.

Customer-focused

It is large players who usually take the lead. Last November Kuehne + Nagel unveiled its new ‘myKN’, its customer facing platform on its website that serves as a single access point to all its online services. Functionalities are

built around four basic elements—an information section that holds schedules, transit times, service details etc.; quoting and booking for both air and ocean cargo; and tracking at three different levels, ranging from basic status information without details for users who are not logged in, over full shipment details and documents for registered users to a fully customized transparency and visibility tool for a number of clients.

Canada was one of the first countries where myKN was launched, says Jan Dreyer, vice-president of sales and marketing. It was designed on the basis of interviews with customer about their

needs—notably improved visibility, better control, fact-based decision making and speed to market. According to him, 35 to 40 per cent of the company’s Canadian customers are actively using it.

Not everybody is convinced that online quotes are the way to go. Joe Lawrence, president of Airline Services International, notes that a forwarder with a sizeable shipment will send an e-mail blast to all airlines serving the route in question asking for quotes rather than check out all the airline websites.

“With the exception of regular volume traffic that moves under a specific rate agreement, cargo is tendered on spot rates. Of course, you shop around,” remarks Legler. www.canadianshipper.com

July 2019

25

FREIGHT FORWARDING

Arguably price portals can come in at this juncture. Thomas finds they mostly offer “old hat information,” besides being limited by the number of carriers they have on board. “All they are doing is collate what people transmit to them,” he says.

Like forwarders with carriers, some shippers like to foster some competition on the logistics provider side and want to compare different prices, says Barber.

Dreyer notes that there is a difference between regular traffic and ad hoc shipments. “Regular shipments are usually done via our freight tools. If they have a bigger shipment, customers will quote that out anyway,” he says.

There is a widespread suspicion that digitization often amounts to little more than cutting costs and commoditizing the business. Carriers’ moves to push customer interaction into digital channels have made it harder to get service and find somebody to talk to if there is an issue.

“Some people like personalized service and like to call us. That’s also fine, but when the office is closed they can use myKN to do their rate enquiry or booking,” comments Dreyer.

He stresses that Kuehne + Nagel uses digitization not to cut costs but in order to enhance the customer experience. These tools are designed to make it easier to deal with the company and to help its own staff.

“How do you differentiate your service? It’s all about having the best people in the front line,” he adds.

Going paperless

A key element in this, and high on shippers’ radar, is improved visibility. Transplace is looking to get a better handle on where carriers’ trucks are and traffic conditions for more accurate predictions of delivery times.

Such plans hinge on good connectivity with supply chain partners, which is too often an issue. “The biggest challenge right now is alignment of all parties,” says Barber.

Some large international shippers are establishing their own platforms where their logistics providers and carriers have to log in to access and move information, observes Cullen. He adds that this goes some way in the direction of a blockchain scenario, which proba-

bly reflects a broad cooling off on blockchain itself in the wake of the realization that it will take some more time and effort for that concept to mature and find broader acceptance.

Even within companies there are frustrating barriers between different systems. Rodair has multiple ERPs for different strands of business. One of the biggest challenges is to develop dashboard tools that would allow the company to extract data from the various systems and perform analytics for clients, Cullen says.

Digitization is improving data flows, but the issues around connectivity still constitute powerful roadblocks that limit their use. Meanwhile, companies are exploring what they can get out of those reams of data in their systems.

Increasingly they are looking to machine learning to tap their potential.

While interest in the blockchain has waned, artificial intelligence (AI) and predictive analytics are widely regarded as up and coming hot technologies.

According to the MHI report, predictive analytics is forecast to reach an adoption rate of 87 per cent over the next

The Freight Forwarding Landscape is Under Attack from Five Types of Companies

26

July 2019

www.canadianshipper.com

Photo: Boston Consulting Group: “The Digital Imperative in Freight Forwarding”

FREIGHT FORWARDING

five years, while AI is expected to rise to 62 per cent. The former looks set to overtake cloud computing and storage, the current front runner at 56 per cent adoption, which is predicted to climb to 79 per cent over the same period.

Barber sees promising potential with predictive analytics to get a better grip on flows through various hubs and what action should be taken to address issues. In addition, it may help with pricing predictions, he adds.

At this point Kuehne + Nagel is employing predictive analytics and machine learning mainly for internal use.

Machine learning is deployed for data reading, converting all kinds of documents into digital format, while predictive analytics comes into play for risk assessment.

Rodair’s Cullen is not sure about predictive analytics at this point, noting that reality has repeatedly been throwing up surprises. “We work with a few large players in the retail sector. They have challenges around forecasting. Some of that has not gone well in the last years,” he says. “Often there is a large disconnect between marketing and logistics.”

As for AI, Thomas reckons it will take time to get full traction. Everybody wants to harness it, but it takes money and time to do it effectively, he comments. He also misses a concerted approach. “We’re all trying to do it individually,” he says.

For now, most operators train their technology sights primarily on productivity gains.

“We’ve focused on the manual processes, to kill paper as much as possible,” says Barber. Partnering with optical character recognition technology providers to capture invoices, PoDs, bills of lading and other documents directly from their websites has brought significant savings in clerical work.

Another big focus for Transplace is to speed up processes across the board.

Barber anticipates much work on that front. We’re just getting started,” he says.

The disruptive force of tech-based entrants appears to have had little impact on Canadian forwarders to date.

“We haven’t bumped up against Flexport so far,” says Cullen. He reckons

that the U.S. firm is geared for a different clientele that has other priorities than Rodair’s customers, with the latter being less focused on transactions and more on value-based partnerships.

“There are different players for different segments.” 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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SHIPPER SUPREMACY Our 18th annual Shipper’s Choice Awards survey reveals the carriers who have exceeded the industry’s benchmarks of excellence

EXPLAINING THE SCORES ur annual Shipper’s Choice Awards measure how well carriers perform when compared to eight Benchmarks of Excellence—scores established by shippers, 3PL service providers, and freight forwarders from across Canada.

Those who buy transportation services use a five-point scale to rate each of their top three carriers when it comes to eight key performance indicators, and use another fivepoint scale to rate the importance of the key performance indicators themselves. The weighted rankings

O

emerge by multiplying the two numbers together.

These weighted rankings are then compared to the Benchmarks of Excellence, which represent averages of the weighted scores for each category’s key performance indicators.

Thirty-one carriers met or exceeded the benchmarks established for the 2019 honors. Thirteen companies earned the coveted Carrier of Choice designations because they have scored above such benchmarks for at least five years in a row (see page 48).

Draw Prize Winner!

Canadian Shipper is pleased to announced that the winner of the draw to receive a $500 gift card for participating in the 2019 Shipper’s Choice Awards survey is Travis Macfarlane of Vancouver, BC. Macfarlane is the operations manager for Murchies Tea & Coffee, based in Delta, which has nine stores in the lower mainland and on Vancouver Island as well as an e-commerce storefront. The importer of raw tea and coffee is locally owned and has been in business since 1894. Macfarlane has worked in the beverage industry since 2009.

The Methodology More than 2,000 respondents—the buyers of transportation services, and those who manage shipments handled by freight forwarders or 3PL providers—completed our survey. And they collectively evaluated more than 9,000 carriers across all transportation modes.

To qualify, carriers need to receive a minimum number of evaluations. To prevent tampering, we even watch for multiple submissions by known respondents; look for similar IP addresses; and if carriers have invited customers to submit scores, we compare those email addresses to our own database used in this program.

The Shipper’s Choice Awards Survey is undertaken through a continuing partnership with CITT and the Freight Management Association of Canada (FMA), and conducted by an independent research firm.

Importance Of Performance Criteria

30

Mode

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable transportation practices

LTLTrucking

4.787

4.389

4.192

4.716

4.757

4.511

3.755

4.141

TL Trucking

4.864

4.541

4.187

4.726

4.671

4.483

3.960

4.209

Ocean Carriers

4.575

4.458

4.434

4.694

4.651

4.493

4.132

4.188

Couriers

4.876

4.433

4.573

4.765

4.688

4.458

3.883

4.184

Air Carriers

4.879

4.573

4.526

4.612

4.745

4.666

4.213

4.274

Rail Carriers

4.568

4.446

4.326

4.664

4.547

4.344

3.730

4.017

July 2019

www.canadianshipper.com

SPEED BRINGING

& CONSISTENCY TO

YOUR

-;, ;,' -2;83&<$ধ32 3( !-£Z9 '1!2& !2!+'1'2; 93£<ধ32T

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INTERMODAL

-2;'813&!£ -2&<9;8@f£'!&'8 (38 @'!89 ;3 $31'W

SHIPMENTS YOUâ&#x20AC;&#x2122;RE IN CONTROL

LTL INTERMODAL SERVICE FROM TOR / MTL (TERMINAL TO TERMINAL) CALGARY

EDMONTON

VANCOUVER

FRATE EXPRESS

4 DAYS

5 DAYS

5 DAYS

FRATE

6 DAYS

7 DAYS

7 DAYS

*A D D 1 E X T R A D AY F R O M M O N T R E A L

TL INTERMODAL SERVICE FROM TOR / MTL (TERMINAL TO TERMINAL) CALGARY

EDMONTON

VANCOUVER

FRATE EXPRESS

3 DAYS

4 DAYS

4 DAYS

FRATE

5 DAYS

6 DAYS

6 DAYS

*A D D 1 E X T R A D AY F R O M M O N T R E A L

R

YOUâ&#x20AC;&#x2122;LL NOTICE THE DIFFERENCE

CONTACT YOUR FASTFRATE REPRESENTATIVE TODAY TO LEARN MORE ABOUT OUR REVOLUTIONARY INTERMODAL SERVICE OFFERING

EXPLAINING THE SCORES Shipper Satisfaction Ratings By Mode Mode

On-time performance

Quality of equipment & operations

Information technology

Competitive pricing

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable transportation practices

Total satisfaction score

LTLTrucking

20.62

18.83

17.17

20.32

20.54

18.69

15.44

17.27

148.868

TL Trucking

21.59

19.86

17.12

20.58

20.91

19.25

16.39

17.64

153.333

Couriers

18.47

18.24

17.75

18.98

18.48

17.07

15.01

16.16

140.160

Air Carriers

20.93

18.58

19.02

19.38

18.33

16.51

14.41

16.31

143.485

Ocean Carriers

21.26

19.89

19.05

19.55

20.14

19.06

16.85

17.75

153.547

Rail Carriers

18.22

18.18

17.14

19.56

17.41

15.91

13.54

16.91

136.868

9

â&#x20AC;˘ Eastern Ontarioâ&#x20AC;&#x2122;s Multi-Award-Winning â&#x20AC;&#x153;Carrier of Choiceâ&#x20AC;? Transportation Company â&#x20AC;˘ Rated â&#x20AC;&#x153;Excellentâ&#x20AC;? Since 1999 by MTO â&#x20AC;˘ DC Appointment Specialists for: Walmart, Matrix, NAPA Giant Tiger, Pharmacy Jean Coutu

www.seawayexpress.ca CORNWALL

â&#x20AC;˘

OTTAWA

â&#x20AC;˘

BROCKVILLE

â&#x20AC;˘

MONTREAL

IN A ROW AS THE SHIPPER’S CHOICE FOR LTL We’ve been serving your LTL, Truckload & Dedicated requirements to/from Canada, AL, GA, TN and KY for more than 20 years.

We are so proud that for the last 8 of those years, the GX Team has been recognized by our customers as The Shipper’s Choice.

THANK YOU FOR ONCE AGAIN RECOGNIZING THE GX TEAM

WHO FILLED OUT OUR SURVEY A deeper dive into our Shipperâ&#x20AC;&#x2122;s Choice respondents

Geographic distribution of respondents

61%

Industry sector distribution of respondents

of respondents had an annual supply chain budget under $1 million

26% 47% Western Canada Manufacturing

39%

11%

14%

Retail

Third-party logistics

21% 8% Freight forwarding

Annual supply chain budget Central Canada (Ontario)

Other

Gross annual sales

More than $20M

35%

Less than $100,000

$10M - $20M

8%

Eastern Canada (Quebec and Atlantic) $5M -

9%

5 million or less

22%

24%

9%

$10M

34%

Over 5 million to 15 million

15%

59%

% of budget spend on transportation 1-20% .......................... 44%

11%

$1M - $5M

of respondents spend under 40% of their budget on transportation

28%

10% $100,000 -

Over 15 million to 30 million

$500,000

10% $500,000 - $1M Over 30 million to 60 million

Biggest annual expenditures in mode of transportation

Transport

$100,000 - $449,999

(27%)

5% Over 60 million to 100 million

8% Over 100 million to 500 million

21-40% ..........................

15%

Air Cargo

$10,000 - $49,999

(28%)

41-60% ..........................

11%

Marine

$100,000 - $449,999

(25%)

61-80% ..........................

15%

81-100% ........................

15%

36

July 2019

www.canadianshipper.com

Rail

$100,000 - $449,999

(25%)

Courier

Less than $10,000

(30%)

5% Over 500 million to 2 billion

4% Over 2 billion

FREIGHT FR REI E GH HT FO F FORWARDING ORW R AR ARDING

Our Mission is to move freight safely, on time, and intact.

We believe our clients’ freight should always be treated as if it were our own.

We invest in our loyal and dedicated team; they are what drive the continuous growth of Spring Creek

Thanks to all our clients for trusting us with their valued products and to our dedicated team for their contributions in making it possible to be recognized 4 years in a row….

4695 BARTLETT RD., BEAMSVILLE, ON, CANADA, L0R 1B1 855-563-5623

csr@springcreekcarriers.com

Total No. of shippers evaluating

LTL WINNERS

carriers in this mode: 2,075 Total No. of carrier evaluations: 3,142 Total No. of carriers evaluated: 235

GX Transport is a privately owned, asset-based company established in 1997 with operations in ON, QC, AB & BC and in the U.S. (TN, KY, AL, GA). GX provides LTL, TL, DDS, Consolidated and Project services and are CTPAT, PIP, CSA certified with FAST carded drivers. We are fully compliant with the ELD regulations for trans-border activity coming soon in Canada. The company has also received the NISSAN Branded Excellence award for U.S. and Canadian operations two years in a row, as well as being recognized by HR Trucking Canada as a â&#x20AC;&#x153;Top Fleet Employerâ&#x20AC;? for 2019.

Carriers

GX Transport

Benchmark B of Excellence E

38

Quality of On-time performance equipment & operations

23.26

20.62

21.37

18.83

Information technology

20.42

Competitive pricing

22.62

Customer service

23.61

17.17

20.32

20.54

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

22.25

18.25

20.11

18.69

15.44

17.27

All Connect Logistical Services

22.39

20.46

18.68

21.78

23.30

21.64

17.52

18.99

Apps Transport

21.04

19.15

16.42

20.59

21.10

19.17

16.79

18.14

Armour Transportation Systems

20.39

18.82

17.20

20.67

21.41

19.29

16.15

17.31

Big Freight Systems

21.37

19.83

18.91

21.22

22.14

21.02

17.10

18.63

Transport Bourret

20.97

19.55

18.85

20.11

21.40

19.23

15.95

17.26

Cavalier Transportation Services

22.28

20.03

18.20

21.55

22.03

20.93

17.39

18.84

CCT Canada

21.54

19.92

18.38

21.40

22.96

21.26

16.64

18.72

Guilbault Transport

20.21

19.26

17.23

19.21

21.44

20.33

15.65

17.53

Hercules Forwarding

22.72

20.19

18.75

21.73

22.93

21.05

16.92

18.89

Polaris Transportation

21.15

19.90

19.04

21.92

20.85

19.56

16.25

18.68

Groupe Robert

20.58

20.19

17.33

19.34

20.93

18.98

16.75

17.39

Seaway Express

21.88

20.27

17.79

20.10

22.54

20.47

17.19

18.37

Spring Creek Carriers

21.57

19.72

17.80

21.88

22.18

20.61

16.04

18.56

July 2019

www.canadianshipper.com

Total No. of shippers evaluating

TL WINNERS

carriers in this mode: 1,090 Total No. of carrier evaluations: 1,524 Total No. of carriers evaluated: 231

Hercules is an award winning asset based motor carrier operating over 1000 pieces of equipment through 26 terminals. Specializing in cross-border LTL shipments, the carrier also services regional U.S. domestic inter and intrastate LTL, Canada to U.S. TL, as well as a Canadian customs brokerage service. Hercules â&#x20AC;&#x153;no breakbulkâ&#x20AC;? LTL line-haul system removes the opportunity for damage and misrouting associated commonly with the traditional LTL hub and spoke networks.

Established in 1985 Hercules now employs over 500 people between the U.S. and Canada with healthy year over year growth.

Carriers

40

Quality of On-time performance equipment & operations

Hercules Forwarding

23.52

Benchmark B of Excellence E

21.59

21.28

Information technology

19.89

Competitive pricing

22.46

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

23.18

21.67

18.67

20.10

19.86

17.12

20.58

20.91

19.25

16.39

17.64

All Connect Logistical Services

22.94

21.12

18.62

22.42

23.22

21.87

18.01

19.28

Apps Transport

21.10

19.25

17.09

21.39

20.88

18.98

18.08

18.81

Armour Transportation Systems

21.29

19.68

17.32

21.25

21.59

19.15

17.13

17.71

Big Freight Systems

21.51

21.14

18.21

20.97

22.15

20.11

16.37

18.56

Cavalier Transportation Services

23.37

21.18

18.07

22.07

22.61

21.23

18.23

18.81

Penner International

23.62

20.96

18.65

21.90

22.94

21.06

18.41

19.65

July 2019

www.canadianshipper.com

Total No. of shippers evaluating

COURIER WINNERS

carriers in this mode: 980 Total No. of carrier evaluations: 1,585 Total No. of carriers evaluated: 55

Cardinal provides a true competitive advantage and overall savings to Canadian businesses through its unique shared network and unattended Pre 8:00 AM delivery services. With over 40-years’ experience, Cardinal has developed a strong appreciation for the time sensitive requirements of the shipping community. Cardinal’s award-winning courier services have made the company a proud transportation and logistics leader to over 5,000 shippers across varying markets. The company’s success is also predicated on the belief that strong and collaborative relationships are critical to driving a consistent customer experience. Cardinal is honored to be ranked by our customers as the 2019 Shipper’s Choice Top Performer.

Carriers

Cardinal Couriers

Benchmark B of Excellence E

On-time performance

23.82

20.93

Quality of equipment & operations

19.85

Information technology

20.06

Competitive pricing

23.18

Customer service

20.35

19.15

Ability to provide value-added services

Sustainable Transportation Practices

15.53

18.17

18.58

19.02

19.38

18.33

16.51

14.41

16.31

Armour Courier Services

21.00

18.22

18.42

20.78

20.83

18.98

16.47

17.57

FedEx

21.76

19.34

19.84

19.41

18.94

17.18

14.73

16.91

Midland Courier

20.76

18.63

17.61

20.54

19.50

16.93

14.74

16.78

CARRIER OF CHOICE

www.cargojet.com • 1.800.753.1051 42

Leadership in problem solving

July 2019

www.canadianshipper.com

For the 11th consecutive year, Cardinal has been recognized for the Shipperâ&#x20AC;&#x2122;s Choice Award. We want to thank our loyal customers for your appreciation and ranking us as top carrier for 2019! Your success is our success.

AIR CARRIER WINNERS

Total No. of shippers evaluating carriers in this mode: 286 Total No. of carrier evaluations: 381 Total No. of carriers evaluated: 47

Cargojet is Canadaâ&#x20AC;&#x2122;s leading provider of time sensitive overnight air cargo services and carries over 1,300,000 pounds of cargo each business night. Cargojet operates its network across North America each business night, utilizing a fleet of all-cargo aircraft.

Its main base is John C. Munro Hamilton International Airport.

On-time performance

Carriers

Cargojet

23.31

Benchmark B of Excellence E

21.26

British Airways

20.36

Quality of equipment & operations

21.88

Information technology

19.86

Competitive pricing

20.39

Customer service

Leadership in problem solving

Ability to provide value-added services

Sustainable Transportation Practices

22.16

22.00

19.16

19.71

19.89

19.05

19.55

20.14

21.00

19.67

20.20

19.96

Find out why weâ&#x20AC;&#x2122;re more than just on time.

We want to recognize the continued loyalty of our customers who support and trust MIDLAND as their carrier of choice year after year!

Join in their experience with: Superior Quality Service with specialized solutions including ground, air, ambient, and home delivery.

Technology and tools designed for ease of use and clear visibility of information.

Dynamic team of highly engaged people working for you!

11

CONSECUTIVE YEARS

1-888-MIDLAND

midlandcourier.com T

44

July 2019

www.canadianshipper.com

19.06

18.34

16.85

16.85

17.75

18.84

OCEAN WINNERS

Total No. of shippers evaluating carriers in this mode: 306 Total No. of carrier evaluations: 409 Total No. of carriers evaluated: 53

OOIL is principally engaged in the provision of container transport and logistic services. OOCL is one of the world's largest integrated international transportation, logistics and terminal companies, and is an industry leader in the use of information technology and e-commerce to manage the entire cargo transport process.

Carriers

OOCL

Benchmark B of Excellence E

46

On-time performance

19.14

18.47

Quality of equipment & operations

19.52

18.24

Information technology

18.41

Competitive pricing

19.84

Customer service

19.13

17.75

18.98

18.48

Leadership in problem solving

18.18

Ability to provide value-added services

Sustainable Transportation Practices

15.88

16.53

17.07

15.01

16.16

CMA CGM

17.65

18.92

18.57

19.40

19.13

16.53

14.37

15.81

Oceanex

18.83

18.14

18.25

18.34

20.01

17.66

14.23

15.03

ZIM Container Service

19.76

18.40

18.11

21.47

18.60

17.78

14.35

16.05

July 2019

www.canadianshipper.com

WE WOULD LIKE TO THANK OUR CUSTOMERS FOR THEIR MANY YEARS OF SUPPORT! F ONTARIO & EAST LTL & TL SERVICE INTERMODAL LTL & TL SERVICE FULL SERVICE WAREHOUSING ON, AB, BC TRANS-BORDER FREIGHT SOLUTIONS LTL & TL TRAN

CARRIERS OF CHOICE Consistency of performance deserves a special award

arriers are presented with this prestigious award if they have demonstrated the consistency necessary to attain the highest levels of service by surpassing the industry Benchmarks of Excellence for a minimum of five consecutive years.

This is a particularly difficult task be-

cause aside from having to maintain consistent excellence in their operations, carriers have to meet a likely rising standard set by shippers from yearto-year while also responding to changing priorities.

To remain part of this exclusive fraternity, carriers must requalify each year.

Congratulations to the 2019 Carriers of Choice!

All Connect Logistical Services Armour Transportation Systems Cardinal Couriers Cargojet Cavalier Transportation Services

FedEx Guilbault Transport GX Transportation Hercules Forwarding Midland Courier

CARR OF CH IER O

Penner International Polaris Transportationois Seaway Express

ICE

COURIER LTL TRUCKLOAD VOTED AS THE SHIPPERâ&#x20AC;&#x2122;S CHOICE ALL

YEARS IN A ROW IN

MODES OF TRANSPORT MAKING

ARMOUR TRANSPORTATION SYSTEMS YOUR CARRIER OF CHOICE. Armour Transportation Systems is the only carrier in Canada to achieve this recognition and we could

2018

not have done it without the outstanding support of our valued customers.

Thank you for your continued commitment.

48

July 2019

www.canadianshipper.com

2014

2019

2015

2016

2017

INTERNATIONAL TRANSPORT FORUM

THE DAVOS OF TRANSPORT In late May, the International Transport Forum (ITF), a Paris-based intergovernmental organization affiliated with the Organization for Economic Cooperation and Development (OECD), hosted its annual summit in Leipzig, Germany. Canadian Shipper was selected as one of a handful of international media outlets invited to take part, giving us access to the full event.

T

he 2019 summit on “Transport Connectivity for Regional Integration” hosted more than 1,000 registered participants from 70 countries. Tunisia joined the organization, bringing the number of ITF member countries to 60 and reinforcing the global nature of the organization. “Tunisia aspires to become a regional economic hub and a Mediterranean centre for trade and services,” said Hichem Ben Ahmed, Tunisia’s Minister of Transport.

“Transport is connecting the world, and we are connecting the people who make that happen,” said ITF Secretary-General Young Tae Kim. “The Leipzig Summit is all about global dialogue for better transport.

Today, policy makers must set guidelines in the face of fast, profound, often disruptive change.”

“To meet the challenge, listening to others, learning from their experienc-

50

July 2019

www.canadianshipper.com

es, sharing one’s own successes and failures is of enormous value. Transport connectivity will improve by understanding how to harness digital connectivity, but also by connecting minds. That’s what we do at ITF and at the Summit.”

During this years’ Summit, the ITF launched a common Ministerial Declaration on Transport Connectivity for Regional Integration. The ministers responsible for transport in the member countries of the International Transport Forum, declared that that “safe, secure, economically-efficient, and well-connected transport plays an important role in facilitating individual mobility and trade flows, both of which are essential for the sustainable development of regions.”

The following reports highlight just some of the many sessions and meetings that took place over the three-day summit. CS

International Transport Forum’s head of communications and media, Michael Kloth (centre), poses with members of the Media Travel Program at the summit gala in Leipzig, Germany. Joining the group of non-European journalists covering the event was John Tenpenny, Editor of Canadian Shipper.

Photo: International Transport Forum

INTERNATIONAL TRANSPORT FORUM

CONNECTING THE DOTS Transport demand set to triple, but sector faces potential disruptions

BY JOHN TENPENNY

G

lobal demand for transport will continue to grow dramatically over the next three decades. But potential disruptions from within and without could significantly change the transport sector, according to a new report released at the annual International Transport Forum (ITF) Summit.

Passenger transport will increase nearly three-fold to 2050, from 44 trillion to 122 trillion passenger-kilometres.

Global freight demand will also triple, according to projections published by the intergovernmental think tank.

“At 4.5 per cent, air freight is expected to have the highest compound annual growth rate of all modes through 2050, although representing a small share of total freight tonnekilometres,” stated the report. It also said that more than three-quarters of all freight will continue to be carried by ships in 2050, more or less unchanged from 2015.

“At the same time,” said Jari Kauppila, head of Quantitative Policy Analysis and Foresight with the ITF, at a press conference held during the Summit, “freight transport and logistics are undergoing major transformations, and these will likely be even more disruptive in the future. Technology, business models, consumer behaviour, shifts in trade patterns and other factors all contribute to a changing transport landscape and how they play out can have a substantial impact on the projected growth.”

Although unlikely, new opportunities for commercial shipping could open in light of the decrease of the extent of ice cover in the Artic sea, which would shorten distances considerably from Asia to both Europe and North America. Large transcontinental inPhoto: International Transport Forum

Jari Kauppila (Head of Quantitative Policy Analysis and Foresight, ITF) speaks during the press conference for the launch of the 2019 Transport Outlook at the International Transport Forum’s 2019 Summit in Leipzig, Germany.

frastructure projects may establish alternative routes between major trade partners in East Asia and Europe, while also increasing access to markets in Central Asia and other regions including Africa. This can have an impact on port activity and the way surface transport infrastructure is used. Some parts of current road, rail and river networks could experience major reductions in traffic while others would see sharp increases.

Other disruptions include the growth of e-commerce and increased vehicle automation.

According to the report, greater ease of purchase and returns can increase demand and foster a trend towards more individualized, smallscale deliveries, leading to more freight transport and increasing the share of relatively carbon-intensive modes, such as air and road.

When it comes to vehicle automation, Kauppila pointed to the ability to decrease or totally remove labour costs and use vehicles in more flexible ways can significantly cut transport costs and revolutionize the freight

transport market, not least by pushing up demand for road freight and shifting freight from rail and inland waterways onto roads.

High capacity vehicles (HCV) that carry bigger loads than regular trucks could contribute to lowering emissions, limiting congestion and reducing overall transportation costs while increasing safety. A large-scale introduction of high capacity trucks could lower road freight’s CO2 emissions by three per cent in 2050. If long-distance road freight can switch to low- or zero-carbon fuels, its emissions would fall 16 per cent But, report said, there are also caveats. Like other cost saving measures, HCVs could cause a rebound effect: If they cause a reverse modal shift from rail to road transport, the net impact on emissions will be negative above a certain threshold.

Finally, widespread adoption of decarbonizing technologies for heavyduty long-haulage by 2050 could lead to a decrease of total freight related emissions, although this would also require zero-carbon generation of electric power and hydrogen. CS www.canadianshipper.com

July 2019

51

BOOSTING HUMAN INTELLIGENCE THROUGH ARTIFICIAL INTELLIGENCE

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INTERNATIONAL TRANSPORT FORUM

GETTING TO ZERO

Sita Holtslag, policy advisor, Netherlands Enterprise Agency speaking at the Transport Decarbonization Alliance’s press conference at the International Transport Forum’s 2019 Summit in Leipzig, Germany.

The Transport Decarbonization Alliance

A

lmost all global trade originates from, traverses or is destined for a metropolitan area. However, very few cities and countries have developed structured and sustainable freight policies, dedicated programs or partnerships with the private sector to address the core issues related to urban freight. In most cases, the issue is about lack of ownership: most national governments consider urban freight to be a local problem; many local authorities consider it to be a private sector problem; and the private sector often considers it to be an infrastructure and regulatory problem.

One organization is trying to change this through collaboration between countries, cities and companies—the 3Cs. The Transport Decarbonization Alliance (TDA) unveiled their white paper, Zero Emission Urban Freight, at the International Transport Forum’s 2019 Summit. Since its formation in 2018, TDA has gathered 35 signatory organizations, including countries such at Portugal, Netherlands and the state of California.

“There is a world of goods transportation supporting citizens’ lives: from an e-commerce order delivered to your doorstep by e-bike, to refuse collections, to fresh goods delivered to the neighbourhood grocery store or the paper for the office printer, to the concrete mixer trucks for new buildings and construction. Urban freight is all around us,” reads the report.

Photo: International Transport Forum

“The goal of this whitepaper is to provide a common vision for countries, cities and companies on the topic of zero emission urban freight,” said Sita Holtslag, senior advisor sustainable mobility, The Netherlands, at a press conference held at the ITF Summit. “It is also a resource for these stakeholders to design, plan and implement successful zero emission urban freight measures by 2025.”

“It aims to ensure cohesion, working together to take concrete steps towards tangible actions. As such, this paper does not intend to be an exhaustive review of existing strategies and tools but rather to provide a common preliminary knowledge base to build upon.”

According to the white paper, urban freight is responsible for a substantial share of pollution and CO2 emissions.

In the absence of sustainable freight planning, this is likely to be aggravated further with the rise of e-commerce and an increasing customer expectation of ever faster deliveries.

“In the business-as-usual scenario, the environmental footprint of urban freight will continue to grow as it is im-

pacted by fast urbanization trends and the increase in direct delivery of products to households through e-commerce,” said Holtslag.

While not a member of TDA, Canada recently became the first nation to endorse the Global Commercial Vehicle Drive to Zero program, launched by Calstart, a nonprofit California-based clean transportation industry consortium. The program, which works with the TDA, calls for global adoption of zero-emission and near-zero-emission medium- and heavy-duty vehicles in key urban communities by 2025.

“Canada is well-positioned to be among the leaders transitioning to zero-emission commercial fleets, delivering both environmental and economic benefits,” said Merran Smith, executive director of Clean Energy Canada.

“We’re a big country and we move a lot of freight by truck. We’re also a heavily urban country, and as cities grow, more is being invested in public transit. Shifting to zero-emission trucks and buses, many of which are made right here in Canada, will cut both carbon pollution and fuel costs. It’s a win-win.” CS www.canadianshipper.com

July 2019

53

INTERNATIONAL TRANSPORT FORUM

HIGHWAY TO HESSEN Germany experimenting with eHighway for electric trucks

BY JOHN TENPENNY

I

f you see one truck travelling down the highway, chances are it’s the first of many using the same route. That’s the reasoning behind one strategy for helping reduce greenhouse gas (GHG) emissions produced by freight traffic, which could pave the way for a new carbon neutral strategy to transport goods.

Currently in Germany a new electrified eHighway for trucks, developed by German conglomerate Siemens, allows hybrid trucks to charge their batteries while traveling at speeds of up to 90 km/h. This means that not only is energy consumption cut in half, but local air pollution is reduced too, making the technology twice as efficient as internal combustion engines.

The hybrid truck’s electric drive is powered from an overhead line via a pantograph. While the overhead line (OH) truck is connected to the overhead line, it operates with its electric motor and simultaneously charges its battery.

Drawing on the energy stored in the battery, the OH truck can continue operating electrically and emission free after leaving the overhead line on the highway. In case the battery is nearly depleted, the truck can continue its journey using its diesel engine.

It’s all in the name of reducing GHG emissions by up to 90 per cent by 2050 as global freight transport volumes triple, something the World Business Council for Sustainable Development (WBCSD) predicts and which despite considerable expansion of rail infrastructure, two-thirds of which will be transported on roads.

“The most cost-effective measure to decarbonize road freight in Germany would be to build 4,000 kilometres of electrified highways,” said Patrik Akerman, head of eHighway business development for Siemens Mobility during a presentation at the International Transport Forum’s 2019 Summit in Leipzig, Germany, where more than 1,000 participants from more than 70 countries took part to dis-

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July 2019

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Through the system developed by Siemens, a hybrid truck’s electric drive is powered through an overhead line via a pantograph.

cuss, exchange and define the challenges and future transport policies.

Citing a 2018 study by Federation of German Industries (BDI), Akerman said the costs could be covered by 11 per cent of existing road tolls paid by trucks and that 80 per cent of trucks would then have an incentive to switch from diesel to electric. “[This] innovation combines the advantages of electrified rail lines with the flexibility of road freight transport, thus offering an efficient, economical and environmentally compatible alternative to truck transport with combustion engines,” said Roland Edel, CTO at Siemens Mobility.

The system went into operation late last year on a 10-kilometre stretch of the A5 autobahn between the Frankfurt airport and a nearby industrial park, allowing trucks with the necessary equipment mounted to their roof to use the electrified cables to travel without needing to burn any diesel fuel, converting back to diesel-powered internal combustion once they leave the electrified stretch. The project, named ELISA (Electrified, Innovative Heavy Freight Transport on Highways), is being run by Hessen Mobil, the state government’s road and traffic management authority.

Sixty per cent of heavy duty vehicle (HDV) emissions occur on only two per cent of the German road network, according to the Federal Ministry of Transport

and Digital Infrastructure (BMVI). So changes on the busiest routes can have a significant impact on emissions. Not only that, 80 per cent of German truck trips after leaving a highway are 50 kilometres or less, the ministry says.

“If 30 per cent of German trucks use this system it would save seven million tonnes of CO2 annually,” said Maximilian Eichhorn, global head of strategy and business development with Siemens Mobility.

“Traffic levels are rising around the world and this is true for freight transport and we need to manage CO2 emissions.

Our industry is ready to supply new technology to support these goals to reduce our CO2 footprint while meeting the increased traffic demand, of which our eHighway system is a great example.”

According to Siemens the technology would save a 40-ton truck CAD$30,000 in fuel costs over 100,000 kilometres.

Testing will continue until 2022, after which a decision will be made on whether or not to expand the project, which has so far cost the government $21 million. Two more eHighway tracks are already being built. One is in the northern region of Schleswig-Holstein, the other is in BadenWürttemberg, in southwest Germany.

The country also spent $105 million to make a special hybrid truck with Scania and Volkswagen for the track. CS Photos: John Tenpenny

INTERNATIONAL TRANSPORT FORUM

Credit: Siemens Mobility GmbH

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TRUCKING IS IMPORTANT,

eh!

Here are some eye opening statistics on what trucking means to the Canadian economy

The Canadian truck fleet Class 6 trucks

As a trade dependent nation, supply chains are the foundation of Canada’s economy. As the Transport Canada statistics indicate, trucking is the most integral part of Canada’s supply chains for both domestic and cross border movements.

Class 7 trucks

Class 8 trucks

Canadian shippers estimated annual sales

90%

Trailers

42,000 151,000 351,000

553,000

of all consumer products and foodstuffs are shipped by truck, either solely or in part.

Canadian carrier equipment purchases in 2018

691

11,100

million tonnes of shipments are moved by Canadian carriers annually

35,700

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10

million trucks cross the Canada-US

Class 8 trucks

49,500

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goods on the increase since 2011

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COACHING CORNER

Building a coalition

By Carolina Billings, CPCC, CHRL, MA-IS

Leadership within an organization is not only reliant on your ability to align innovation, change and progress within corporate goals, but to work within the infrastructure of internal and external stakeholders, skillfully maneuvering through political landscapes and personal agendas.

Q: Coming into a new organization in a position of leadership is hard enough, but coming into a place that is highly dysfunctional takes it to a whole new level. How do you even begin to try to introduce change when there are so many egos and personal agendas?

A: Coalition leadership is the ability to motivate and organize stakeholders to join you in the pursuit of common goals. When introducing change, evaluating the political terrain is key. A leader able to awaken the hearts, imagination and passion within their team, will succeed many times faster than a business strategy and working the numbers ever will.

Ultimately your success as a coalition leader will come down to your being able to clearly communicate your plans for the success of your initiative to the members of your coalition. Understanding their personal goals will ensure their support is solid and most importantly public. Public support gives your initiative legitimacy; it clearly establishes to the rest of the organization that this initiative will not only benefit many but there is a greater sense of purpose and likelihood of success.

Long-term coalitions that share broad goals and common resources over time are key to the success of any team or organization. It is important to solidify your team right from the beginning by creating a shared sense of purpose. A shared purpose will en©iStock/DeanDrobot

able your leadership team to move congruently in pursuit of a common goal. Without shared purpose initiatives are likely to easily fragment and may not develop the necessary momentum to overcome resistance to your efforts.

Spend the time to clearly understand the team member’s motivations. Why are they supporting your agenda? What is in it for them? What do they expect to gain from being part of your effort?

Under what conditions would they no longer find it useful to support your change agenda?

Ultimately your success in leading a coalition comes down to your ability to translate your agenda into action, being true to your mandate yet remaining flexible enough to make adjustments to plans as required.

Setting up a timetable with achiev-

“If you want to go fast, go alone. If you want to go far, build a team.” —African Proverb Getting your coalition into action and achieving success no matter how small at the early stages will also help you weed out marginal supporters.

You may find that early supporters were really only supporters in casual conversation, or they were supporters up until you went public and scrutiny and criticism of your initiative began, as it always does. Marginal supporters can quickly become resistors without timely proper nurturing.

Even with public support, people will maintain their private hidden agendas, biases and assumptions even after they’ve bought in to your agenda.

If you allow those personal motivations to go unchecked or not being clearly understood by you, you run the risk of having a message that becomes diffused by personal interests that never achieves the focus required to see your change agenda through.

able milestones that will lead to small success early on will be a great foundation to establish momentum.

The wonderful thing about leading by coalition is the ability to work effectively as a team, counting on each other’s support, celebrating accomplishments and creating an environment of inclusion and mutual opportunity for future collaborations. 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

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THE BIGGER PICTURE

Trust issues It is hard to believe that a decade has gone by since the Great Recession. Those of us in the freight transportation industry at that time remember the sharp drop in business activity and freight volumes. This encouraged many shippers to conduct multiple freight bids during that period to use (abuse) their freight rate negotiating leverage to reduce their shipping costs. Carrier loyalty was sacrificed for freight cost savings.

A year ago, the tables turned with the introduction of electronic logging devices (ELDs) combined with an upswing in economic activity and a capacity shortage pushed freight rates to record levels. Carriers became very selective in allocating their capacity.

Manufacturers and distributors were advised to become “Shippers of Choice.”

Carriers gave preference to shippers whose facilities were “driver friendly,” whose loads and paperwork were ready in a timely manner, who moved loads to preferred locations, and who paid top dollar. Shippers that wished to maintain consistent, reliable capacity and service were encouraged to establish “core carrier” programs at “carrier friendly” rates. They were told to pay the newly elevated rates to protect their supply chains.

At mid-year 2019, the tables have turned again.

While economic conditions 62

July 2019

By Dan Goodwill

are good, they are not as robust as 2018. To address last year’s equipment shortfall, many carriers purchased fleet equipment. To retain drivers, most trucking fleets raised their driver wages. There is now ample capacity in the market.

What about those manufacturers that created core carrier programs and become “Shippers of Choice?” Anecdotal evidence suggests that some carriers that invested in equipment, committed to placing this equipment on specific shipper lanes, and trained their personnel to monitor the capacity and service on these corridors, are seeing shortfalls in their anticipated freight volumes. Given the opportunity to cover some loads with other carriers or brokers at lower rates, some shippers are opting for cost saving over commitment.

Long-term relationships

This is not surprising. I have been in the freight business for over 35 years and have seen this behaviour repeated many times.

It is sad commentary on our industry that after going from one extreme to the other over the past decade, shippers and carriers don’t

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recognize the benefits that come from enduring, committed relationships. They cannot commit to a partnership where over the long term, both parties win.

Shippers achieve dependable capacity and service at fair rates; carriers receive dependable freight volumes at profitable rates.

When they need trucks, shippers talk about partnership, driver issues, appointment scheduling and load commitments. However, when capacity is readily available, some revert to lower cost options. Similarly, in a very buoyant freight year, some carriers abandoned their commitments so they could offer their capacity to the highest bidder.

Some carriers went overboard and bought excess equipment. They are now stuck with a larger than necessary fleet and inflated driver wages.

We all understand that shippers are under great pressure to keep their logistics costs as low as possible

to maximize profits. I am not sure that all shippers understand that it is costly to run a high-quality trucking company. In addition to equipment and salaries, there are considerable expenses associated with operating a safe, compliant, properly insured, financially stable business that is well managed, where the staff are well trained, where employees are motivated to provide superior customer service, that has up-to-date technology and there is ample equipment to meet a range of needs. Shippers that sacrifice quality for short term cost savings place their supply chains at unnecessary risk.

Freight recessions and capacity shortages will reoccur. It is sad that some shippers and carriers are not able to commit to lasting partnerships based on open communication and trust. Hopefully the lessons of the past ten years will be a driving force for trust and change. CS

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

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