CTL SEPT 2013

TRANSPORTATION When is service not a commodity?

SEPTEMBER 2013

MARINE Growing ambitions on the East Coast CUSTOMS Are your carriers ready for eManifest?

Published Since 1898

Our 12th annual Shipper’s Choice Awards survey sets industry benchmarks for performance excellence and identifies the carriers who surpass them

“There’s always going to be risk. The issue is how to manage it.”

People who know Distribution, know BDO.

The Consumer Business Practice at BDO The logistics business has never been simple. And with recent emphasis on supply chain sustainability, higher safety standards, and an evolving regulatory climate, it’s getting more complex. BDO’s dedicated professionals provide an exceptional array of partner-led services to help you keep up with key issues and maximize profitability, even in challenging times.

Assurance | Accounting | Tax | Advisory www.bdo.ca/consumer-business BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

Features 36. . . GROWING AMBITIONS ON THE EAST COAST

An embarrassment of riches is what some might call having three super post Panamax vessel-capable container terminals in Nova Scotia. But if everything goes according to plan, that’s what shippers can look forward to as Halifax, Sydney and Melford jockey for position to attract Suez Canal Traffic.

Published Published Since Since 1898 1898

Features

VOLUMEVOLUME 116 111 ISSUEISSUE NO.NO. 8 9SEPTEMBER SEPTEMBER2013 2008

40. . . WHEN THINGS GO 22 . . . CANADA’S TRADE CROSSROADS HORRIBLY WRONG

www.ctl.ca

The infrastructure fora dangerous Canada’s Pacific Gateway The logistics world can sometimes be place to ship isfreight. expanding to chain bridgeinsurance the massive of legs the thanks Supply nowengine has four United Statesaddition and the of burgeoning economies of Asia. to the recent trade insurance coverage.

Find out how it can strengthen the current approach centred on loss, damage and delay.

cover

GROUNDED!

28 . . . LOGISTICS HIGH

How boards across the country ARE are working with 43. school . . CBSA’S EMANIFEST: YOUR groups like the Canadian Supply Chain Sector Council to CARRIERS AHEAD OF THE CURVE? provide career-oriented training at the high school level.

The Fall 2013 deadline for the Canadian Border Service

COVER

Agency’s eManifest regulations is upon us. Carriers and their supply shouldOUT have spent the summer working 32 . . chain . ALLpartners CHECKED on resolving any bugs in the system. your carriers ahead Balancing a secure supply chain andAre a happy workforce of the learning curve? is more than a question of trust in today’s global arena.

Departments

Departments 4 THE VIEW WITH LOU

Why calls for increased rail safety can’t be ignored 4 VIEWPOINT 8 IN THE NEWS capacity temporary or a Are cuts in airfreight Newoffederal sign thingsminister to come?of transport Lisa Raitt emphasizes safety and partnership building in her first speech at annual conference of the of Canadian Port Authorities; US bill could abolish 6Association IN THE NEWS Harbor Maintenance Tax withfreighter fees levied imports from Canada; Lufthansa picks up orphaned routeonafter Air Canada and a out; newOceanex crude oilincreases rail loading terminal forJohn’s; Edmonton. backs capacity to St. rail and truck tonnage dropTHE overNUMBERS summer months; CN to upgrade intermodal 48 INSIDE facility in Prince what’s George;behind and more.

Understanding motor carriers’ continued reluctance to add to their fleet sizes after the recession.

12 THE LEADING EDGE 46 companies DASHBOARD Why with global supply chains require a Trucking’s spot market avoids usualplatform. summer slump; global Enterprise Resource Planning transportation costs continue to ease; rail freight volumes show first drop since 2009; and more.

38 THE BIGGER PICTURE Strategies and tactics for reshaping 50 THE BIGGER PICTURE North America’s supply chain.

Here’s a question you can’t ignore: When is a service (not) a commodity?

After a period of positive growth, the US airlines’ situation has turned desperate. The weak economy and the high price of aviation fuel are setting the stage for cutbacks rather than expansion. There’s really no gentle way to describe what’s

Our 12th Annual Shipper’s Choice Awards Survey sets industry benchmarks for performance excellence and they’re grounded. . . . . . . . . . . . . . . . . . . . . . . . . . . . page 16 identifies the 53 carriers who exceed them �������������� 17 happening to plans for increasing air freight capacity:

Are you prepared for your next round of carrier negotiations?

You need to be up on the latest transportation buying trends and benchmarks.

You need our annual Transportation Buying Trends Survey.

• Anticipated shipment volumes by industry • Rate increase averages by mode • Surcharge increases by mode • Capacity concerns by mode.

All this key information and more can be yours, FREE of charge. Fill out our survey and you will receive the full results, free of charge. . . and you'll be entered into a special prize draw.

Look for our e-mail survey. www.ctl.ca

CONDUCTED IN PARTNERSHIP WITH CITA AND CITT CT&L SEPTEMBER 2008

ct&l september 2013

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the view with Lou Volume 116 Issue No. 8 September 2013

EDITORIAL DIRECTOR

Lou Smyrlis (416) 510-6881 Lou@TransportationMedia.ca

Social license

MANAGING EDITOR

Julia Kuzeljevich (416) 510-6880 Julia@TransportationMedia.ca

Earning it sometimes means going beyond the regulations

I

t’s common after a major transportation accident, particularly one where there has been a significant loss of life, for all sides involved to assume unrealistic positions. In the wake of the Lac-Mégantic derailment that took the lives of 47 people this summer, it’s critical we don’t allow this to unfold.

Already a rail safety group out of the US is comparing the DOT-111, a train tank car design widely-used to transport material such as crude and ethanol, to the infamous Ford Pinto, which was recalled in the 70s due to serious safety conLou Smyrlis, cerns. It has gained media atMCILT tention (including mention in a major feature in the National Post) by doing so. Safety advocates say there is evidence showing the DOT-111 tank cars are more prone to rupture in a derailment than other types and regulators have been slow in mandating safety improvements. (The 72-car train carrying crude which derailed at LacMégantic included some DOT-111s. ) On the other side, the railway involved, MM&A Railroad, was slow to respond and ham-fisted when it did so. It took five days for the company CEO to make his way to LacMégantic to give a set of poorly crafted remarks, all in English. As Dan Goodwill points out in his blog, “this made him, his company and the rail industry, look insensitive and out of touch with the culture and pain of the citizens of this small predominantly Frenchspeaking Quebec town.”

Ottawa acted quickly with an emergency directive of the Railway Safety Act to increase rail safety. The directive requires all rail operators to adopt a number of safety measures, which appear to be rooted in common sense.

For example, one of the directives is that “no locomotive attached to one or more loaded tank cars transporting dangerous goods is left unattended on a main track.” It’s actually hard to believe that in the post 9/11 world tank cars carrying dangerous goods are still being left unattended.

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PUBLISHER

Nick Krukowski (416) 510-5108 nick@ctl.ca

It’s certain there will be a push for more regulatory measures.

Near the end of 2012, the Standing Senate Committee on Energy, the Environment and Natural Resources had already initiated a study of the safe transportation of bulk hydrocarbons by transmission pipelines, tankers and railcars in Canada. No doubt the Lac-Mégantic rail disaster intensified the need to address safety in transporting hydrocarbons and the committee’s report issued late in August includes 13 new recommendations. Included amongst those is a recommendation that Ottawa initiate a major review of the country’s “railway regulatory framework, standards and industry practices” with respect to transporting dangerous goods. There is also a recommendation to accelerate the phase out period for the DOT-111 tanker cars.

Is this too much for a transport mode which the Senate report itself concedes is able to move oil and natural gas safely without spills, 99.9% of the time?

Perhaps.

But transporting crude oil does pose grave dangers. If released into the environment crude oil can spread rapidly, especially in water, and it is flammable under certain conditions. And the number of crude shipments by rail has increased significantly of late. CP is anticipating moving 70,000 carloads of crude in 2013 and CN is expected to move approximately 60,000 carloads of crude. Back in 2009 CP only moved 500 carloads of crude and CN didn’t move any.

And we can’t forget, 47 people did lose their lives in Lac-Mégantic.

The Senate report speaks of “social license” – the broad approval by society for a given activity or project, and how earning a social license is so central to transportation systems moving any form of dangerous goods.

Earning such a “social license”, as the Senate report points out, can sometimes mean going beyond regulated requirements to address community concerns. I urge the railways and shippers to do so. At the same time, I urge legislators not to take this as free license CT&L to impose unnecessary legislation. www.ctl.ca

ART DIRECTOR

Mary Peligra mpeligra@bizinfogroup.ca CONTRIBUTING EDITORS

Carroll McCormick, Leo Ryan, James Menzies, John G. Smith, Ian Putzger, Ken Mark MARKET PRODUCTION MANAGER

Gary White (416) 510-6760 gwhite@bizinfogroup.ca

VIDEO PRODUCTION MANAGER

Brad Ling

RESEARCH MANAGER

Laura Moffatt

CIRCULATION MANAGER

Barbara Adelt (416) 442-5600 Ext. 3546 badelt@bizinfogroup.ca EXECUTIVE PUBLISHER

Tim Dimopoulos

VICE-PRESIDENT PUBLISHING

Alex Papanou PRESIDENT

Bruce Creighton HEAD OFFICE: ­ 80 Valleybrook Drive, Toronto, ON M3B 2S9 ­ ­ CANADIAN TRANSPORTATION & LOGISTICS 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 ­ BIG Magazines LP, a division of Glacier ­ BIG Holdings Company Ltd. ­ SUBSCRIPTIONS: Contact us at: mmarasigan@bizinfogroup.ca­ Tel: 416 442 5600 ext. 3548. Fax: 416 510 6875. ­ Website: ctl.ca (click on sub­scription button) SUBSCRIPTION RATES: Canada: $64.95 + applicable taxes, per year; $105.95 + applicable taxes, for two years. U.S.A.: US$105.95 per year. All other foreign: US$105.95 per year.

Single copies $8 except for the annual Logistics Buyers’ Guide (Aug) $59.95 + applicable taxes, (not including HST) plus $2.00 for postage. USA: US$107.95, Foreign: US$107.95 ISSN 1187-4295 (print), ISSN 1923-368X (Digital), (Can­adian Trans­port­ation & Logistics.) Indexed by Canadian Bus­iness Period­icals Index. Printed in Can­ada. All rights re­served. The Lou contents of thisSmyrlis, publication may not be reproduced either in ­ MCILT part or in full without the consent of the copyright owner.

POSTMASTER: Please forward forms 29B and 67B to: ­ 80 Valleybrook Drive, Toronto, Ontario, M3B 2S9 ­ Second Class Mail Registration Number 0721.

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r 2013

Coming in 2014!

Shipper canadian

Formerly ‘Canadian Transportation & Logistics’

In 2014, Canadian Transportation & Logistics is adopting a new title - Canadian Shipper.

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The new title is more reflective of our editorial scope and mandate: a business journal written for Canadian Supply Chain professionals, in the context of their transportation needs and responsibilities.

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The new title also lends itself more easily to the wide array of media platforms through which we are now able to serve you - not just our print magazine, but our eNewsletter Canadian Shipper News - and online portal as well - CanadianShipper.com.

Canadian Shipper will continue to publish the award-winning features and articles that you’ve come to expect from Canadian Transportation & Logistics - just with a fresh new look! Watch for us in 2014!

Canadian Shipper News

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On October 16th 2013, please plan on joining Canada’s top Transportation Executives for a day of education & networking.

Introducing the 2013 team of presenters...

We have created an agenda that truly addresses the many challenges facing both Shipper and Carrier executives.

Summit AgendA

Angelo Sarracini

President, Bailey Metal Products Limited

Grace Tomaszun

Manager, N.A. Transportation McCormick & Company

Carlos M. Gomes Senior Economist, Scotiabank

Neil McKenna

V. P. Transportation, Canadian Tire Corporation

FReIGHT BIDS: Is there a better way for carriers and shippers to work together?

CARRIeR PeRFORMANCe MANAGeMeNT: Metrics that deliver results INTeRMODAL TRANSPORTATION: Expanding beyond its niche

Keith Reardon

V. P. Intermodal Services, CN Rail

Mike Owens

Jeff Lindsay

V. P. Physical Logistics, Nestlé Canada Inc.

President and CEO, Canada Cartage

Doug Munro

Ian Gragtman

Anna Petrova

Senior Supply Chain Leader, Ferrero

THe vIeW FROM THe TOP: The CEO’s perspective on major transportation trends DeDICATeD TRANSPORTATION: Outsourcing fleet management to a third party CROSS-BORDeR FReIGHT TRANSPORTATION: Best practices TRANSPORTATION SALeS: Can you adapt to the new normal?

Charles W. Clowdis, Jr. Managing Director, North American Markets, IHS Global Insight (USA), Inc.

President and Owner, Maritime-Ontario Freight Lines Limited

Tibor Shanto

Tom Coates

Ron Tepper

Executive Vice President Colliers International

Executive Chairman & CEO, Consolidated Fastfrate

Jeff Pries

Michelle Arseneau

Douglas Nix

Mike McCarron

MeRGeRS & ACQuISITIONS IN TRANSPORTATION: How big are the opportunities?

LOOKING AHeAD: Economic forecasts for 2014 Principal, Renbor Sales Solutions

VP and COO, Lakeside Logistics

Sr. V. P. Sales & Marketing, Bison Transport

Registration: 7:30 am Presentations: 8:20 am sharp

Managing Partner, GX Transportation Solutions

MISSISSAuGA CONveNTION CeNTRe 75 Derry Road West, Mississauga, ON 2013 Summit SponSorS

Barry O’Neill

Executive Vice President, Hub Group

Jacquie Meyers

President, Meyers Transportation Services

Wes Armour

President & CEO, Armour Transportation Systems

Vice Chairman, Corporate Finance Associates (CFA) Chairman of CFA’s Transportation and Logistics Industry Practice Group

Consolidation Consultant, Wheels Group

For more information and to register, please visit www.SurfaceTransportationSummit.com

PRODUCED By MOTORTRUCk FLEET EXECUTIVE, CANADIAN TRANSPORTATION & LOGISTICS & DAN GOODWILL & ASSOCIATES

Trans Summit 2013 CTL.indd 1

13-08-26 1:28 PM

ONLINE

What’s on

CTL.ca?

Web TV: Transportation Matters

• CHICKEN OR EGG?: Does infrastructure spending boost the economy? See what the politicians and the experts have to say.

• CLOSING BOTTLENECKS: Canada’s approach to infrastructure challenges. Is it good enough?

• NO SOFT LANDING: Some airfreight sectors remain mired in overcapacity. Will it change the way they serve the Canadian market?

• CN’s ‘COOL’ SERVICE: CN Rail is tapping into the booming refrigerated goods segment with its new CargoCool refrigerated service.

STOP SURVIVING; START THRIVING: Discover the opportunities in your challenges at CITT’s Reposition 2013.

FEATURES • A Risky Business: Going global with your supply chain?

Protect against the risk of currency erosion • Bridging the physical and the financial: using supply chain finance could release cash “stuck” in the chain

Blog bits Search our blog archives at ctl.ca

• Yard Management – an inside look at how NSSL delivers a cost effective solution to a long neglected link in their supply chains

Carolina Billings: What makes a leader?

Dan Goodwill: Two New Studies provide insights into the LTL Freight Industry

Laurie Turnbull: RFID costs still problematic

www.ctl.ca

Find us on Tw i t t e r a t : @ @ @ @

CTLMag LouSmyrlis JuliaKuzeljevic JamesMenzies

ct&l september 2013

7

in thenews Canadian ports conference emphasizes vital benefits of partnership-building

By Leo Ryan

Canadian ports and stakeholders have underlined the importance of strategic alliances and partnerships built on trust to remain competitive in today’s challenging global environment and to ensure an efficient flow of Lisa Raitt cargo through the supply chain. Building Partnerships was the general theme of the 55th annual conference of the Association of Canadian Port Authorities (ACPA) staged in Nanaimo, BC, on August 18-21. Some 200 delegates attended an event featuring an address by federal Minister of Transport Lisa Raitt.

Headed by executive director Wendy

Zatylny, the Association groups together 18 federal Port Authorities across Canada that handle more than 310 million tonnes of cargo, representing $162 billion worth of goods, while generating 250,000 direct and indirect jobs.

In her first public speech as Minister of Transport, following the July cabinet reshuffle by the Harper Government, Raitt was on familiar territory, having run the Port of Toronto for several years prior to entering politics in 2008.

In addition to extolling the contribution of the marine transportation system to the Canadian economy, Raitt highlighted the importance of trade and close collaboration with the United States on such initiatives as the Beyond the Border Action Plan.

She noted in this regard the participation of the Port of Prince Rupert in a pilot project to improve the efficiency of shipping international goods by rail through Ca-

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nadian ports to U.S. markets by eliminating the duplicate screening of containers as they cross the border.

“Our government is convinced,” Raitt said, “that by working together, we are making Canada’s transportation system even safer and more secure while balancing the needs of our economy. Through partnerships between government and the private sector, Canadians continue to realize the benefits of our strategic gateways and have the right environment for Canadian industry to grow and prosper.”

She recalled that recent measures supporting sustainable transportation include the establishment of a world-class Tanker Safety System and Clean Transportation Initiatives that address the concern of having too many trucks idling in line-ups around ports. Also mentioned was the Shore Power Technology for Ports Program.

In concluding, Raitt said that during the recession, Canada’s transportation industry re-thought its strategies and practices and became more competitive. The challenge now is to pursue this momentum by “finding new approaches and new opportunities, so in all sectors, we can continue our efforts to increase trade and strengthen the economy.”

Anne Callaghan, US consul general in Vancouver, paid homage to the overall cooperative Canada-US bilateral relationship in security, trade and many other areas.

“You have partners, too, in the US Embassy,” she said.

Both countries, Callaghan said, “support an integrated multi-modal approach.”

She also singled out “Canada’s Asia-Pacific Gateway as a great model in infrastructure development.”

Intermodal partnerships given prominence Partnering with ports was emphasized by Elaine Holmes, Toronto-based director international intermodal, pricing and sales support, for Canadian Pacific (CPR) and by Michael McLellan, Vancouver-based vicepresident, strategic initiatives for TSI Terminal Systems (Canada’s largest container terminal operator).

Holmes said that partnership agreements with shipping lines and with the Port of Montreal and Port Metro Vancouver (PMV) have been highly productive.

Benefits have included a reduction in ondock dwell time by one day for containers www.ctl.ca

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CITT Grad In

supply chain & logistics

cred-ability No other professional credential says “logistics expert” as decisively as CITT. CITT is proud to present the logistics professionals who earned their designation from CITT between July 2012 and June 2013. Congratulations to the more than 80 dedicated supply chain and logistics professionals who now join the ranks of the industry’s elite.

George Abousawan, CITT Brampton, ON

Parijat Bhatnagar, CITT Mississauga, ON

Gregory Callaghan, CITT Trenton, ON

Jaime DeKelver, CITT Saskatoon, SK

CITT Grad Insert for CTL - 2013.indd 1

Rocco Agostino, CITT

Qazi Ahmed, CITT

Jacqueline Barroso, CITT

Rodney Bennett, CITT

Tomas Billik, CITT

Cory Lyn Boden, CITT

Robert Bowman, CITT

Chunji Cai, CITT

Jeremy Carter, CITT

Kenneth Chow, CITT

Clifford Cook, CITT

Sheldon Corber, CITT

Marc Dionne, CITT

Kevin D’Sa, CITT

Juliana Feteanu, CITT

Bradley Hall, CITT

Mississauga, ON

Milton, ON

Winnipeg, MB

Dorval, QC

Mississauga, ON

West Kelowna, BC

Vancouver, BC

Winnipeg, MB

Brampton, ON

Thornhill, ON

Edmonton, AB

Mississauga, ON

Winnipeg, MB

Milton, ON

Thornhill, ON

Brampton, ON

8/16/2013 11:29:00 AM

Terry Hallman, CITT

Sean Hassan, CITT

Jibu Jose, CITT

Shaukat Khan, CITT

Burlington, ON

Edmonton, AB

Kandys Manbodh, CITT Toronto, ON

Mississauga, ON

Mississauga, ON

Roxana Mares, CITT Mississauga, ON

Rena Hawkins, CITT

Petra Heymans, CITT

Ziauddin Khedri, CITT

Janie Lauzon, CITT

Cambridge, ON

Calgary, AB

Brenda Mattie, CITT Mississauga, ON

Guelph, ON

Hamilton, ON

Sharona Mazgaonkar, CITT Richmond Hill, ON

Michael Houston, CITT Winnipeg, MB

Jie Li, CITT Richmond, BC

Michael McCallum, CITT

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Mississauga, ON

Ph

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Anth

Bav

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Moy Robert McInnes, CITT Halifax, NS

Craig McLean, CITT Mississauga, ON

Francis Monteiro, CITT Mississauga, ON

Victor Moran, CITT Toronto, ON

Ivy Neri, CITT

Concord, ON

Darr

Jona

Ada

Jaso

Mic

Nath

Dim

Dav

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Syb Craig Palz, CITT Winnipeg, MB

CITT Grad Insert for CTL - 2013.indd 2

Hansa Patel, CITT Mississauga, ON

Dwight Paul, CITT Mississauga, ON

Marc-Antoine Pouliot, CITT St. Gilles, QC

Sal Radcliffe-Corneil, CITT Moncton, NB

8/16/2013 11:29:12 AM

ww

CITT Grad In

CITT

Carissa Reid, CITT

Sukhpreet Singh, CITT

Sandra Spitzer-Byer, CITT

Neal Sukhraj, CITT

Daniel Tabares, CITT

Michelle Tamburro, CITT

Demi Todorov, CITT

Shaun Tuck, CITT

Olga Vindberga, CITT

Jyoti Waghela, CITT

Red Deer, AB

Woodbridge, ON

Mississauga, ON

Mississauga, ON

Brampton, ON

Whitecourt, AB

Saskatoon, SK

Bedford, NS

Milton, ON

Mississauga, ON

supply chain & logistics

, CITT

recognize-ability Photographs of these 2013 CITT-Certified Logistics Professionals were not available: Tracey Aggus, CITT, Markham, ON

Stephen Hayne, CITT, North Bay, ON

Anthony Arcouette, CITT, Morinville, AB

Karen Karageusian, CITT, Toronto, ON

Bavendran Atchuthampillai, CITT, Toronto, ON

Alexander Kostin, CITT, Edmonton, AB

Ryan Bloor, CITT, Aurora, ON

Lynda Kretchmann, CITT, Thompson, MB

Moya Campbell, CITT, Concord, ON

John Marcon, CITT, Mississauga, ON

Darren Carter, CITT, MacKenzie, BC

John McEwen, CITT, Mississauga, ON

Jonathan Cheung, CITT, Richmond, BC

Catherine Moseley, CITT, Calgary, AB

Adam Coughlin, CITT, Georgetown, ON

Raymond Murray, CITT, Mississauga, ON

Jason Czarnecki, CITT, Kingston, ON

Olena Nikonova, CITT, Milton, ON

Michael Di Girolamo, CITT, Kleinburg, ON

Waqas Shaikh, CITT, Concord, ON

Nathan Eldridge, CITT, Winnipeg, MB

Zhang Zheng Tao, CITT, Saskatoon, SK

Dimitri Fleitman, CITT, Richmond Hill, ON

Randolph Tapia, CITT, Vaughan, ON

David Fulton, CITT, Calgary, AB

Kyle Thiessen, CITT, Brampton, ON

Stephen Gladwish, CITT, Mississauga, ON

Thomas Van Dam, CITT, Winnipeg, MB

For more information about logistics courses and professional certification from CITT, visit www.citt.ca or contact us at 416-363-5696 or info@citt.ca

Sybille Hausberg-Bowen, CITT, Rockport, ON CITT

11:29:12 AM

www.citt.ca • info@citt.ca • 416-363-5696 CITT Grad Insert for CTL - 2013.indd 3

8/16/2013 11:29:17 AM

in thenews in Vancouver, resulting in a faster transit on service to the US Midwest and a twofold increase in traffic on that corridor since 2009. CP operates 40 dedicated intermodal trains per week to and from the Port of Montreal.

The CP intermodal executive also out-

lined the evolution of the railway’s socalled Dynamic Export Management concept to more effectively link exports to ship schedules by, when appropriate, adjusting cut-off days.

McLellan of TSI said it was vital to invest the time and effort necessary to sustain

partnerships, whether they be with the port, ocean carriers, railways, trucking firms, importers and exporters, beneficial cargo owners, transload warehouses, or Third Party logistics providers. He mentioned in particular that the Service Level Agreements with CN and CP have markedly reduced the average import dwell times at the Vanterm and Deltaport box terminals.

What makes a good partnership? Here, McLellan cited a number of essentials ranging from “making sure you have transparent goals” to being “forthright in sharing information” and to “closely monitor service performance.” And overriding everything was “the creation of a bond of trust” through constant communication.

Building community partnerships Still on the partnership theme, a business session was devoted to the challenges facing ports in reaching out to their host communities so that the added benefits of port activities are reflected in positive and ongoing relationships.

Michael Buda from the Ottawa-based Federation of Canadian Municipalities pointed out that municipalities had increasingly limited capacity to finance much of the infrastructure and services ports rely on.

At the same time, federal funding programs supporting municipal infrastructure to enhance trade are showing signs of stagnating.

What Buda termed “the tough political equation” was as the need to “balance improvements to port efficiency with mitigation of the port’s local impacts.”

Department of Homeland Security funding port security

The US Department of Homeland Security is allocating $93.2 million in annual port security grants to protect against, mitigate and respond to terrorist attacks.

The port grants represent a small portion of $1.5 billion in preparedness grants awarded to states, cities, and towns by DHS’s Federal Emergency Management Agency, said a release.

Port authorities, facility operators and state and local government agencies are eligible for the port security grants, which can be used for risk management programs, domain awareness, training, detection technologies, physical barriers, security cards for transport workers and other 12

ct&l september 2013

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in thenews protective investments.

The eight highest risk port regions, such as New York-New Jersey, Long Beach-Los Angeles and the Delaware Bay, were eligible to compete for $53 million, while smaller port regions split the remainder of the funding. Congress two years ago also consolidated separate grant programs under a single management, putting port security in competition with six other grant categories, including transit security, emergency management, and state homeland security, said the release.

Conference Board report says Canada a leader in public-private partnerships

Canada has emerged as a leader in the creation of efficient public-private partnerships (P3) for building infrastructure, said a Conference Board of Canada report which found that 83 per cent of projects met the goal of being completed early or on time.

“P3 delivery is enhancing the long-term

quality of public infrastructure and delivering value for taxpayers. Canadian companies are also developing expertise in P3 projects, which is creating opportunities to export their services around the world,” said Vijay Gill, Principal Resource Associate, Conference Board of Canada.

“But the P3 model is not intended to replace traditional procurement processes altogether – it is one tool in the toolbox. Any potential P3 project must be rigorously evaluated to ensure that the benefits outweigh the costs.”

The report, Canada as a Global Leader: Delivering Value through Public-Private Partnerships at Home and Abroad, builds on the 2010 Conference Board research, Dispelling the Myths: A Pan-Canadian Assessment of Public-Private Partnerships for Infrastructure Investments. Financial support for this research came from the Government of Alberta, Infrastructure Ontario, Infrastructure Québec, Partnerships British

Columbia, PPP Canada, and The Canadian Council for Public-Private Partnerships.

The public sector has turned to P3 projects as an alternative way to build and maintain roads, institutions, waste management facilities and other public infrastructure.

Traditional infrastructure projects are built by private firms funded by the public sector.

In contrast, P3 projects are financed by the private sector, which is paid partly depending upon the results – such as the completion of the project on time and on-budget, and/or ongoing operations and maintenance.

“The public is increasingly aware that Canada’s infrastructure of roads, transit and health and community facilities is aging and in need of renewal. Meanwhile, there has been a growing public acceptance of a greater role for the private sector in providing infrastructure across the country,” said Gill in the report, released August 21.

Of the last 42 projects assessed in the study, 35 were completed on time or early.

“Providing quality transportation and supply chain solutions that are reliable, safe, and aligned with our employee commitments and customer needs.”

Truckload | Temperature Controlled | Special Commodities | Waste Haulage | Logistics | Warehousing

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ct&l september 2013

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Moreover, 90 per cent of the projects (38 of 42 projects) were delivered no more than four months after the planned completion date; and 95 per cent (40 of 42 projects) were completed no more than six months later than expected.

Provincial governments – especially Alberta, British Columbia, Ontario and Quebec – continue to be the most significant public players in the Canadian P3 arena. Further federal support has come from the P3 Canada Fund, which has to date committed over $700 million covering 15 projects in six provinces and territories, said the report.

great strategic fit with our expanding Edmonton terminal hub and is a very important part of our growing crude by rail terminal network.”

In addition to the construction of the Alberta Crude Terminal, Kinder Morgan

and Keyera are independently planning modifications to their respective facilities in the Edmonton area to facilitate delivery of crude oil to the Alberta Crude Terminal.

Kinder Morgan is proposing to construct a 16-inch pipeline to connect its North 40

Keyera, Kinder Morgan to construct crude oil rail loading terminal in Edmonton

Keyera Corp. and Kinder Morgan Energy Partners L.P. have announced a 50-50 joint venture to build a crude oil rail loading facility in Edmonton, Alberta called the Alberta Crude Terminal. When complete, the Alberta Crude Terminal will be able to accept crude oil streams handled at Kinder Morgan’s Edmonton Terminal for loading and delivery via rail to refineries anywhere in North America, the companies said.

“Kinder Morgan’s access to multiple crude streams, together with our location and facility capabilities, combines crude oil supply with the necessary infrastructure, land and rail connectivity to help address some of the crude oil delivery constraints currently being experienced by the Alberta energy sector,” said David Smith, President and COO of Keyera.

The Alberta Crude Terminal will be constructed next to Keyera’s Alberta Diluent Terminal on land recently acquired by a Keyera subsidiary. The Alberta Crude Terminal, which will be operated by Keyera, will have 20 loading spots capable of loading approximately 40,000 barrels per day of crude oil into tank cars and will be served by both Canadian National Railway and Canadian Pacific Railway.

“Keyera is a key and significant midstream company in Western Canada and we are pleased to be able to join forces with them to enable additional market export options for the Canadian producer and supply options for the North American refining industry,” said Bill Henderson, Vice President for Kinder Morgan Canada Terminals. “The Alberta Crude Terminal is a www.ctl.ca

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ct&l september 2013

15

in thenews Edmonton Terminal to Keyera’s Edmonton Terminal. Keyera plans to construct a new 16-inch crude oil pipeline across its Edmonton Terminal to join to the existing Alberta Diluent Terminal connector pipeline

and install additional pumping capacity. In conjunction with this project, Keyera is also proposing to construct a new 12-inch condensate pipeline connecting the Alberta Diluent Terminal to Keyera’s Fort Saskatch-

ewan Pipeline System.

Engineering work is well underway on these initiatives, and commissioning of the new terminal is targeted for the second quarter of 2014, assuming receipt of regulatory approvals and delivery of long-lead items on a timely basis. Keyera’s share of the cost of the Alberta Crude Terminal, as well as the land purchase, pipeline construction and other facility modifications, is expected to be approximately $65 million. Kinder Morgan’s share of the cost of the Alberta Crude Terminal including modifications to the Edmonton North 40 terminal and connections to Keyera is expected to be approximately $33 million.

Construction of the Alberta Crude Terminal is underpinned by a five-year agreement with a major refiner.

In anticipation of additional demand for crude oil loading services, Kinder Morgan and Keyera are currently evaluating a possible expansion of up to 125,000 barrels per day of additional crude loading capacity and the possible addition of a diluent recovery unit. The commercial discussions to determine customer support for such an expansion are expected to begin shortly, the companies said in a release.

US bill could see fees levied on imports from Canada, Mexico

appsexpress.com • 1.800.465.2513 275 Orenda Road, Brampton, ON L6T 3T7 16

ct&l september 2013

A US Senate bill could go forward this fall proposing a repeal of the existing Harbor Maintenance Tax (HMT) replacing it with a fee to be levied on goods imported by road and rail from Canada and Mexico.

The HMT is a federal tax imposed on the value of the goods being shipped through US ports, and its revenue is placed in a trust fund, which is supposed to be used for maintenance dredging of federal navigational channels. The HMT is not assessed on importers who route cargo through non-US ports and afterwards move their goods into US markets by land.

The “Maritime Goods Movement Act for the 21st Century” would repeal the HMT and replace it with a Maritime Goods Movement User Fee (MGMUF), the proceeds of which would be fully available to Congress to provide for port operation and maintenance. The legislation would change the HMT and could give shippers new incentives to move their goods through American ports. www.ctl.ca

THE TOP An impressive field of 53 carriers rose to the top in our annual Shipper’s Choice Awards survey. Read on to discover how their performance set them apart.

An impressive field of 57 carriers rose to the top of the heap as part of our annual Shipper’s Choice Awards Survey. Read on to discover how their performance last year set them apart.

best of the best Our 12th Annual Shipper’s Choice Awards Survey sets industry benchmarks for performance excellence and identifies the 53 carriers who exceed them

W

hile success in transportation may seem simple on the surface (get it to the right destination, at the right time, with no damage) the reality is the challenges facing Canadian transportation providers have shifted considerably over the past few years.

Geographic Distribution of Respondents

Western Canada 20% Eastern Canada 51%

Other Industries 28%

Central Canada 29%

Manufacturing 43%

7% 3PL 10%

Freight Forwarding

Retail 12%

During the recession, carriers who had become used to the challenge of providing exemplary service while keeping up with rapid freight growth with sharply rising rates as the reward had to suddenly shift gears to right size their operations and provide more economical services. During the slow recovery they’ve had to shift gears again to provide exemplary service under the reality of only modestly improving freight volumes and rates while having to find ways to renew their aging fleets.

Looking forward, if the economy continues on its slow and uneven recovery, there will be continued pressure on providing flexible and cost-effective transportation solutions that don’t fall short of what was promised. Who can afford to lose a customer these days?

It makes for a difficult balancing act but the history of our survey shows clearly that no matter what the challenge, some carriers are able to rise to it. This year 53 carriers managed to surpass the Benchmark of Excellence in our 12th Annual Shipper’s Choice Awards Survey. Particularly impressive are the carriers who have scored above the benchmark of excellence for five years in a row to be awarded our special “Carrier of Choice” designation. To see these winners, turn to the final page of this report.

The research is our annual attempt to provide buyers of transportation services with consistent, national and scientifically derived benchmarks of excellence for carrier performance in each mode.

Our survey provides shippers, 3PL service providers and freight forwarders across Canada with the opportunity to set benchmarks for carrier performance on eight key performance indicators (KPIs) and to rate their top carriers against those benchmarks. Aside from identifying the best carriers across all modes through this process, survey respondents also provide clear indications of the different values Canadian buyers of transportation services place on each key performance indicator (KPI) based on mode as well as a comparison of how high these standards are set for each mode. (For example, transportation buyers set their highest standard on information technology for couriers while expecting TL carriers to live up to the highest standard for competitive pricing.)

The importance survey participants place on the KPIs for each mode (based on a five-point scale) is used as a weight in calculating carrier evaluations. Survey

IMPORTANCE OF PERFORMANCE CRITERIA Mode

On-time Quality of Equipment Information performance and operations technology

LTL Trucking 4.761 TL Trucking 4.852 Ocean Carriers 4.601 Couriers 4.889 Air Carriers 4.920 Rail Carriers 4.531 18

ct&l september 2013

4.265 4.482 4.405 4.339 4.510 4.370

Competitive pricing

4.020 4.172 4.330 4.558 4.512 4.277

Customer Leadership in Value-added service Problem solving services

4.691 4.734 4.783 4.740 4.629 4.762

Sustainable practices

4.670 4.378 3.579 4.666 4.413 3.905 4.642 4.410 3.967 4.675 4.384 3.845 4.726 4.514 4.044 4.562 4.309 3.768

4.069 4.206 4.177 4.166 4.194 4.161 www.ctl.ca

All-Connect and Shuttle Express would like to convey our appreciation to all of our customers who have recognized us for exceeding and setting the industry standard in both Truckload & LTL service for the 3rd consecutive year.

NORTH

AMERICA

Thank You!

1.800.388.7947 www.allconnect.ca

we’re putting

value in motion

Annual Supply Chain Budget Less than $100,000 17% of respondents $100,000 to $500,000 26% $501,000 to $1M 13% $1 million to $5M 18% $5M to $10M 9% $10M to $20M 6% More than $25M 11% % of respondents

participants then rate up to three of their main carriers in each mode (again on a five-point scale.) The final weighted score for each carrier is derived by multiplying the carrier’s average performance score by the average importance rating for each key performance indicator for that mode.

Because survey participants are first asked to rate the importance they place on each of the eight KPIs when making their carrier selections, and that data is used as a weight on their carrier evaluations, we feel that the benchmarks set are truly standards of excellence. In other words, carrier performance is judged against an ideal of what shippers expect and the areas given the most weight are the ones that matter most to buyers of transportation services. As a result, of the hundreds of carriers rated in our survey, only a very few are deemed by participants’evaluations as providing a service so superior that it warrants a Shipper’s Choice Award.

Carriers receive the Shipper’s Choice Award when their total score meets or surpasses the total benchmark of excellence for their mode. Only those carriers who exceed this benchmark have their names and scores included in the following tables.

Average shipper satisfaction ratings for each KPI are shown by mode.

The final column on the right shows the total benchmark of excellence set for each mode. The benchmarks for each of the eight KPIs per mode are indicated with each modal table on the following pages.

Invitations were sent to more than 6,000 of our readers who are buyers of transportation services in the manufacturing, retail and other sectors as well as to individuals responsible for managing shipments within the freight forwarding and 3PL sectors.

Carriers must receive a minimum number of evaluations in order to qualify for the award. It should be noted that this year winning was made all the more difficult because we once again raised the number of evaluations necessary to qualify for the award for almost every mode. In order to boost response, carriers were given the opportunity to forward the survey to their own customer lists. Not all carriers chose to do so, however. To prevent

SHIPPER SATISFACTION RATINGS BY MODE Mode On-time Quality of Equipment Information Competitive Customer Leadership in Value-added Sustainable Total satisfaction performance and operations technology pricing service Problem solving services practices Score LTL Trucking 20.44 17.94 15.88 19.59 19.76 17.57 14.21 16.46 141.855 TL Trucking 21.67 19.50 16.65 20.33 20.46 18.36 15.71 17.53 150.207 Ocean Carriers 19.64 18.36 17.64 19.81 19.28 17.16 14.86 16.52 143.262 Couriers 20.97 18.22 18.92 19.03 18.40 16.39 14.30 16.36 142.583 Air Carriers 21.01 19.17 18.06 18.68 19.22 17.56 15.50 16.42 145.620 Rail Carriers 16.96 16.58 16.04 17.81 16.22 14.44 12.31 15.58 125.926

Thank You for Naming Armour Your Shipper of Choice!

We are honoured to receive the 2013 Shipper’s Choice Award. Thank you to our valued customers for your continued support and selecting Armour Transportation Systems as your Shipper of Choice!

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“It’s hard to express how great it feels to be recognized by the industry in this fashion. Our company has worked hard to get here. To be appreciated for what we’ve accomplished in the areas of service that matter most to our customers is phenomenal.”

Frank Prosia, President Transpro Freight Systems

THANK YOU FOR VOTING US YOUR #1 CARRIER FOR TRANSBORDER LTL & TL SHIPPING

LTL Truckload Logistics

Warehousing Distribution

Hercules w

% Spent on Transportation 19

1-10% of Supply Chain Budget 11-20% 11 21-30% 31-40% 4 9 41-50% 51-60% 4 61-70% 3 12 71-80% 7 81-90% 11 91-100%

21

% of respondents

tampering, we check for multiple cases submitted by known respondents.

If there is more than one case, then only the newest one is considered.

Likewise, we check for similar IP addresses. As a final check on tampering, we separate and check the evaluations submitted by participants from our own e-mail list versus the e-mail lists of carrier customers. Winners must have evaluations submitted by transportation buyers from our own e-mail list to qualify for the award.

More than 2,000 buyers of transportation services participated in our survey, which makes Shipper’s Choice the largest of the several surveys we conduct annually. We thank all those of you who took the time to complete our survey. (Participants receive an advance electronic copy of the results.)

More than 10,000 evaluations of carriers from all modes providing services in the Canadian market were cast.

As with past years, survey participants represent every region across Canada and buy transportation services for companies with annual sales ranging from less than $5 million up to more than $2 billion. Their annual supply chain budgets range from less than $100,000 up to more than $25 million. More than a third spends over 70% of their supply chain budgets on transportation.

The Shipper’s Choice Awards Survey was undertaken once again in partnership with CITT and the Canadian Industrial Transportation Association (CITA), two associations whose members responsible for the purchase of transportation number in the thousands. And, as in previous years, the research was conducted by an independent research firm (the same research firm that conducts our industry-leading Annual Survey of the Logistics Professional).

Winning carriers are listed alphabetically, and not by their total score.

Those wanting to compare the scores among the winners should keep in mind the high probability that these carriers, although they are being compared to an industry benchmark, have been evaluated by different shippers.

This survey is intended as a measure of which carriers exceed industry expectations and not a ranking of the carriers involved.

LTL MOTOR CARRIER AWARD WINNERS Total no. of shippers evaluating carriers this mode: 2359

Carriers

On-time performance

Equipment and operations

All Connect Logistical Services 22.96 Apps Transport 20.26 Armour Transportation Systems 20.38 Big Freight 20.15 Bourret Transportation 20.79 Cavalier 22.53 CCT Logistics 21.37 Guilbault Transport 21.80 GX Transportation 22.26 Hercules 22.05 Maritime Ontario 19.85 MSM Transportation 21.96 Normandin Transit 20.76 Polaris 21.25 Rosedale Transport 20.12 TransPro Freight Systems 22.81 Minimax Express Trans. Inc. 20.93 Benchmark of Excellence 20.44 22

ct&l september 2013

19.90 17.63 18.09 18.05 19.56 19.79 18.31 19.27 19.69 18.95 17.73 19.20 19.43 18.23 16.98 20.09 18.50 17.94

Total carrier evaluations: 3746

Information technology

Competitive pricing

18.30 15.51 15.96 17.42 16.96 16.64 15.69 17.28 18.59 17.30 15.96 17.00 16.76 17.71 15.02 18.24 15.97 15.88

Benchmark of excellence: 141.855

Customer service

Problem solving

Value-added services

Sustainable practices

22.36 22.92 20.80 16.70 20.94 20.05 17.88 14.88 19.48 20.19 17.98 14.85 19.55 19.97 18.39 14.18 19.91 19.93 17.63 15.69 21.74 22.43 20.31 16.17 19.57 21.87 17.94 14.21 20.50 21.38 19.68 15.20 21.02 22.22 20.56 16.41 21.51 22.02 19.74 15.93 20.61 19.60 17.84 14.28 20.39 22.00 19.69 15.97 18.37 20.94 18.93 15.01 20.11 20.02 17.56 14.36 19.20 20.44 18.41 14.76 21.71 22.74 20.70 16.59 20.51 19.70 18.19 14.36 19.59 19.76 17.57 14.21

18.73 16.67 16.75 16.86 16.72 17.84 17.27 17.57 18.35 18.00 17.06 17.79 17.55 16.74 17.38 19.04 16.57 16.46 www.ctl.ca

Hercules warehouse Ad-8.125x10.875:Layout 1 12-04-24 9:06 AM Page 1

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Travelling separate roads

B

uyers of truck transportation services – whether Truckload or Lessthan-Truckload – care most about the same things, namely: on-time performance, always ranked as the top priority, followed by competitive pricing and customer service.

But the similarities in how buyers of truck transportation view TL and LTL seem to end there. Truckload has faced the tougher expectations and the toughest Benchmark of Excellence for many years now and this year was no different. The Benchmark of Excellence is a reflection of both shipper demands and how well the best carriers are meeting them. For TL this year the Benchmark of Excellence was set at 150.207, following our tabulations, by far the highest of any mode. Air carriers are the next highest at 145.620.

Respondents to our survey had the highest expectations from TL than any other mode when it came to quality of equipment and operations as well as sustainable practices. And the Benchmark of Excellence, remarkably, was highest for TL in seven of the eight key performance indicators our survey tracks: On-time performance; quality of equipment and operations; competitive pricing; customer service; leadership

in problem solving; value-added services; and sustainable transportation practices.

TL carriers have higher benchmarks to surpass for on-time performance and customer service than couriers and a higher standard for quality of equipment than airfreight carriers. Yet, buyers of TL services also expect competitive pricing, as noted, and the Benchmark of Excellence for TL when it comes to competitive pricing is the highest for all modes, even now surpassing what is expected from ocean carriers. (LTL’s Benchmark of Excellence in this regard is ranked third highest among all the modes.)

The TL and LTL service providers also receive the greatest scrutiny by our survey respondents. Almost 6,000 ballots were part of this year’s awards.

The winners for both LTL and TL, along with their scores for each of our eight KPIs, are shown in alphabetical order and only those scoring above the total Benchmark of excellence are included.

The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right.

In all, 17 LTL and 19 TL carriers surpassed the Benchmark of Excellence for 2012.

TL MOTOR CARRIER AWARD WINNERS Total no. of shippers evaluating carriers this mode: 1635

Total carrier evaluations: 2253

Benchmark of excellence: 150.207

Carriers On-time Equipment and Information Competitive Customer Problem Value-added Sustainable

performance operations technology pricing service solving services practices All Connect Logistical Services 23.65 21.40 19.39 22.70 22.75 21.17 17.72 19.44 Armour Transport 21.75 19.65 17.18 20.56 20.92 19.35 17.10 17.88 Big Freight Systems 21.37 19.90 18.86 19.52 20.96 18.58 16.58 17.62 Cavalier Transport 23.71 21.77 18.95 22.72 22.93 21.43 18.48 20.21 Con-Way 22.07 19.85 17.42 19.84 20.44 18.88 15.72 18.40 Erb Transport 22.64 21.66 18.54 21.83 20.22 19.21 17.00 17.09 Guilbault Transport 22.99 20.84 18.88 21.11 21.42 20.55 17.15 19.03 Hercules 23.11 20.92 19.63 22.77 22.60 21.20 18.23 19.52 Highland Transport 21.02 20.17 18.08 21.10 20.41 18.02 16.60 18.51 International Truckload Services 23.37 20.88 17.57 22.30 21.49 18.23 15.01 18.70 Kriska Transportation 22.04 20.30 17.06 20.46 21.19 17.27 15.77 17.77 MacKinnon Transport Inc. 22.03 20.84 18.39 20.54 21.44 20.17 17.57 19.33 Manitoulin Transport 22.96 19.57 17.31 19.75 20.26 18.61 15.13 16.94 Maritime Ontario 21.48 19.87 17.23 20.68 20.96 19.12 16.80 18.26 MSM Transportation 22.82 20.21 17.43 20.67 22.08 19.75 17.35 18.46 Penner Truck Lines 23.02 21.56 19.50 20.92 21.70 19.80 15.77 19.28 Robert Transport 21.13 19.95 17.36 20.01 19.87 18.65 16.47 17.72 Transpro Freight Systems 23.95 21.51 19.25 22.49 23.00 21.39 18.33 19.91 XTL Transport 22.11 19.92 18.27 19.78 21.78 20.00 16.80 18.60 Benchmark of Excellence 21.67 19.50 16.65 20.33 20.46 18.36 15.71 17.53 24

ct&l september 2013

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CTLAug13M

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A need for speed and a fair price

C

ouriers have a particularly tough set of challenges in meeting the demands of shippers. While on-time performance remains the top priority for buyers of courier services, over the past few years competitive pricing has become solidly entrenched as the second highest priority. If trying to provide quality on-time performance on a budget is not challenging enough, this year’s survey reveals two other challenges: customer service, which many couriers will assert comes at a price, now rounds out the top three performance indicators as chosen by shippers responding to our survey. And the requirement to invest in information technology, another expensive endeavour, is ranked higher for couriers than any other mode.

Courier winners and their scores for each of our eight KPIs are shown in the table below. The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right. The winners are shown in alphabetical order and only those scoring above the total Benchmark of excellence are included.

COURIER AWARD WINNERS Total no. of shippers evaluating carriers in this mode: 1442 Total carrier evaluations: 2512 Benchmark of excellence: 142.583

Carriers On-time Equipment and Information Competitive Customer Problem Value-added Sustainable

performance operations technology pricing service solving services practices Custom Courier 22.49 19.01 19.44 20.42 20.83 19.22 17.13 18.02 A & B Courier 22.13 18.04 18.68 21.31 20.96 18.52 16.66 17.42 DB Schenker 21.80 19.12 19.08 22.17 18.62 17.01 16.38 18.24 Midland Courier 21.47 18.38 19.01 19.21 19.85 18.47 16.17 17.17 Fed EX 21.62 18.55 18.43 19.85 19.71 17.84 15.07 17.07 Greyhound 21.68 19.07 20.18 18.89 19.23 16.90 14.67 16.87 ICS 22.39 18.27 17.75 21.58 18.82 16.61 15.27 16.44 K&H Courier 22.13 17.06 16.23 21.20 17.80 16.58 16.64 16.86 Purolator 19.90 18.61 18.64 18.25 19.78 17.54 14.26 16.34 Benchmark of Excellence 20.97 18.22 18.92 19.03 18.40 16.39 14.30 16.36

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ct&l september 2013

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P04973 Guil

THANK YOU

for going with the guilbault group!

For the second year in a row, the shipping industry has recognized the excellence of our services with awards in both the TL and the LTL categories.

Thanks to our advanced technologies, such as the exclusive i3G mobile tracking system, our know-how, and above all- your contribution, we are a carrier that proudly goes the distance.

On the road with you since 1929

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08/20/13 11:29 AM

Expected to rise above the rest

A

AIR CARRIER AWARD WINNERS

ir cargo carriers have emerged from the recession scathed by excess capacity, a situation they still have not fully resolved during the slow global recovery. Downward pressure on pricing has left them looking for ways to reduce their own costs. Yet the demands of buyers of air cargo services have not subsided. Not only is on-time performance the most important criteria for shippers when purchasing air cargo services, expectations for ontime performance ranked higher for air cargo than any other mode. Customer service is ranked next and also carries the highest shipper expectations for any mode. But it doesn’t stop there. Shipper expectations for quality of equipment and showing leadership in problem solving were also higher for air cargo than any other mode.

Air carrier winners and their scores for each of our eight KPIs are shown in the table below. The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right. The winners are shown in alphabetical order and only those scoring above the total Benchmark of excellence are included.

Total no. of shippers evaluating carriers in this mode: 725 Total carrier evaluations: 411 Benchmark of excellence: 145.620

Carriers

On-time Equipment and Information Competitive Customer Problem Value-added Sustainable performance operations technology pricing service solving services practices

Cargo Jet Lufthansa British Airways Benchmark of Excellence

22.26 19.81 16.91 19.18 20.90 19.19 16.71 16.99 22.07 20.75 21.01 14.68 20.66 18.33 16.05 17.32 21.16 19.36 18.80 20.28 20.13 18.34 15.67 16.96 21.01 19.17 18.06 18.68 19.22 17.56 15.50 16.42

Y

D

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Thank you for naming Cavalier your 2013 LTL Shipper’s Choice!

LTL PLUS™

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For 35 years Cavalier has provided a vital link between Canada’s busiest traffic lane, Ontario-Quebec and Canada’s largest trading partner, the USA. Today this family owned and operated business provides a full array of transportation services and strives daily to accomplish its vision of expanding customer service through innovation, creativity and teamwork!

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Crest of approval

B

uyers of marine services are particularly focused on competitive pricing. Not only is that the KPI they value most when selecting marine service providers, according to our survey, but the demands for competitive pricing are the second highest for the marine sector, right behind those for TL trucking. There are not many marine carriers who do meet our Benchmark of Excellence but those who do set a high target, particularly with their scores in the competitive pricing and value-added services categories. Marine winners and their scores for each of our eight KPIs are shown in the table below. The bottom row of the table shows this mode’s Benchmark of Excellence for each KPI. The total Benchmark of Excellence is indicated on the top right. The winners are shown in alphabetical order and only those scoring above the total Benchmark of excellence are included.

OCEAN CARRIER AWARD WINNERS Total no. of shippers evaluating carriers in this mode: 627 Total carrier evaluations: 645 Benchmark of excellence: 143.262

Carriers

On-time Equipment and Information Competitive Customer Problem Value-added Sustainable performance operations technology pricing service solving services practices

Evergreen Hanjin Mitsui OSK Lines/ MOL NYK Atlantic Container Line (HM) *Honorable Mention

Benchmark of Excellence

18.60 17.09 19.09 20.09 22.65 19.05 16.34 18.90 20.86 19.97 20.49 20.72 20.11 17.94 15.15 16.06 19.84 19.00 17.59 18.83 19.44 17.64 17.36 17.00 19.06 18.80 18.65 19.77 19.19 17.27 15.87 16.01 19.55 19.09 18.28 18.93 19.92 17.27 14.20 15.66 19.64

18.36

17.64

19.81

19.28

17.16

14.86

16.52

Thanks To our CusTomers For Delivering This one To us!

NORMANDIN TRANSIT INC. LTL and TL trucking services CANADA-USA Sensitive Cargo, Temperature Controlled environment and Critical Delivery service. www.NormandinTransit.comÂ

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2628-37 MOL Canada Ad CTL F_8.125 x 10.875 8/20/13 2:02 PM Page 1

We’re proud of our Canadian legacy.

And excited to be opening new doors.

MOL (Canada) Inc. has opened new offices in Toronto, Vancouver and Montreal. Building upon MOL’s tradition of excellence in Canada, we’re taking what we’ve learned and making it better with exceptional service and performance. We’re charting a course you can count on. To view our most current results, visit CountOnMOL.com.

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Introducing the

Carriers of Choice Consistency of performance deserves a special award

C

arriers are presented with this particularly prestigious award if they have demonstrated the consistency necessary to attain the highest levels of service by surpassing the industry benchmarks of excellence set in the Shipper’s Choice Awards Survey for a minimum of five consecutive years. This is a particularly difficult task because aside from having to maintain consistent excellence in their operations, carriers will have to meet a likely rising standard set by shippers from year to year while also responding to changing priorities. The carriers named to this elite club this year include:

This award will continue to be presented every year. To remain part of this exclusive fraternity, carriers must requalify each year by having surpassed the Shipper’s Choice Awards benchmark of excellence for five consecutive years.

BAX/Schenker

Highland Transport

Bourret Transportation

Kriska Transport

Cargojet

MacKinnon

FedEx

Midland

Hercules

MSM Polaris

32

ct&l september 2013

www.ctl.ca

OUR PEOPLE MOVE FREIGHT We strive for perfection in all things transportation, offering an expanded list of services for the added convenience of our customers.

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ports infrastructure

growing Aerial view, Fairview Cove, Port of Halifax

ambitions

Halifax, Sydney and Melford are jockeying for position to attract Suez Canal traffic.

An inside look at their ambitious plans

By Carroll McCormick

34

ct&l september 2013

A

n embarrassment of riches is what some might call having three super post Panamax vessel-capable container terminals in Nova Scotia. If the new port developments in Sydney and Melford play out as planned, they will join the Port of Halifax in laying claim to being the closest North American mainland ports to the Suez Canal and a day and a half sailing time closer than Norfolk, to which these ports are regularly compared.

The Sydport container terminal project, under the guidance of the Cape Breton Regional Municipality (CBRM), and the Maher Melford Terminal project, driven by Melford International Terminal Inc., have made a lot of progress. Land acquisition, dredging and equity commitments are among them. www.ctl.ca

ports infrastructure

The Port of Halifax, deep and serious negotiawhich has had container tions to secure cargo comterminals for decades, is mitments and we are doing not sitting on its laurels, our due diligence. This is however. It has invested likely the only project mile$147 million in improvestone to overcome,” Mann The Berlin Express, 7506 TEU vessel calls on Ceres at Port of Halifax. ments over the past five says. photo credit: steve farmer years. They include 400 Last fall Melford took its new reefer plugs, sub-station investment commitments to upgrades, a truck marshaling area, new the Nova Scotia government and said it was crane rails for post-Panamax cranes and ready to finalise the purchase of the land dredging. required for Phase 1. ”The Port of Halifax This January the Port of Halifax anPhase 1 includes infilling with aggrenounced a $35-million project at the gate to creating 60 acres of land where has two super South End Container Terminal. Deepenthere is now water. “All of the aggregate post Panamax ing the berth to 16 metres and making the we require to give us 60 feet of dock pier longer and wider will allow it to sidepth is on site. This is one of the reasons ready container multaneously berth and service two fullwhy the terminal construction cost is low sized post-Panamax vessels. “This project by terminal construction standards,” terminals with ensures that Halifax continues to be able Mann explains. to handle any size ships with operational Work is also underway acquiring land four super flexibility,” says Michele Peveril, senior from property owners for the 20-mile rail manager, strategic relations, Halifax Port corridor between the terminal site and the post Panamax Authority. “The Port of Halifax has two Cape Breton & Central Nova Scotia Railsuper post Panamax ready container terway (CBNS). “We have had surveyors and berths. It can minals with four super post Panamax land acquisition people out dealing with accommodate berths. We can accommodate the largest this. We expect that will be completed becontainer ships afloat.” fore long,” Mann says. the largest Mann is heartened by Gennese & Wyoming’s purchase last October of Rail Amercontainer ships Melford ica, whose railroads included the 245-mile Despite the challenges and delays during long CBNS. “We are very encouraged by afloat.” the recession following the US-caused globG&Y. They have been here. They have an al financial meltdown, Melford Internationexcellent reputation with CN. The huge al Terminal Inc. is making steady progress benefit to us is that the line between Meltoward its goal of building a 1.5-million TEU container terminal in ford and CN does not require substantial upgrading.”

Melford. Located on the western shore of Nova Scotia’s Canso The terminal has been designed as a pure rail terminal, so Strait, it will be able to accommodate any vessel afloat or planned. there are no significant road infrastructure issues, Mann says.

Maher Terminals has signed on to operate the terminal. Financ- “Very few containers will be trucked. The terminal is already on ing for land acquisition and construction is in place, says Richie a truck road. We would be responsible for intersecting existing Mann, vice president of marketing, Maher Melford Terminal Inc. trunk roads – building a loop road at our cost. The Nova Scotia “We have enough equity commitment in place to finance the and federal governments have both indicated they will do high$350-million project for the two-berth Phase 1, 315-acre container way upgrades, but our traffic studies and the volume of trucks terminal, the first 250 acres of logistics park and the required rail anticipated indicate that the highway does not require upgrading spur line. We hope to see shovels in the ground this year and Phase to a different class of highway.”

1 completed in a couple of years.”

Asked about the CBRM container terminal project, Mann offers The recession delayed landing contracts committing cargo to the a few comparisons: “Sydney makes no mention of operational partterminal, but Melford may have turned that corner. “We are in ners or carrier partners. It is difficult to assess the project. Also, 36

ct&l september 2013

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ports infrastructure substantial upgrading of the rail line [out of Sydney] is required. I know how long it’s taken us to get here. We are quite comfortable. Our site has a tremendous amount of credibility. Plus, we are a lot larger, and have 15,000 acres in reserve.”

A lot of that credibility, Mann says, comes from the partnership with Maher and its performance at its Fairview Terminal in Prince Rupert, British Columbia. “We in-

tend to use the same operational model as in Prince Rupert. We have a 36-hour sailing time advantage over Norfolk. We can have cargo to the US Midwest even before a ship gets to Norfolk.”

Sydport

The CBRM is building its container terminal on a 350-acre green field site it owns in

Sydney harbor. A $40-million dredging project, completed in February 2012, added 150 acres to top up the site to 500 acres.

CBRM reports that the channel can now accommodate the largest vessels in the world. The cost of Phase 1 of the development, with two berths and 1.25 million TEU capacity, is pegged at $400 million.

The site has all the federal, provincial, local, environmental and building permits required to proceed to building a container facility. “The permitting is to the point where the project is deemed by the financial community as a viable project,” says Edward M.A. Zimny, principal at P.F. Richardson Associates, Inc., Holmdel, New Jersey. His firm has provided advisory services from the project’s beginning, and has participated in the master planning, negotiating, discussing and due diligence.

Phase 1 construction would begin after an agreement is reached with a concessionaire, according to Zimny. “We are working with CBRM with finalizing an expression of interest. We are speaking with operators, financiers and ocean carriers. Any combination of these could operate the terminal. It is about to enter the final stage of negotiating a financial transaction,” Zimny says.

Although work was well underway last year on twinning Highway 125 from the exit at Kings Road to the intersection with the Sydney-Glace Bay highway, the port plan does not envision moving many containers by truck. Most containers will be moved either by rail or will be transferred to smaller vessels destined for ports along the eastern seaboard.

The CBNS rail line extends into Sydney, but some rail infrastructure will be required on the terminal site. CBRM does report that improvements are required on some sections of the Sydney subdivision of 38

ct&l september 2013

www.ctl.ca

ports infrastructure before a ship going directly to a US port arrives appears equally applicable to Melford and Halifax. So does the argument that ships coming into a Nova Scotia port can take cargo down the coast without violating the Jones Act. This gives all three NS ports an edge over foreign ships entering US ports that might hope to move cargo to another US destination.

“Do I think all three ports can come on

line immediately? No,” Zimny comments.

But Canada has a bright future with its CT&L proximity to the Suez Canal.”

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

the CBNS line east of the Canso Causeway. Zimny notes, “Some people point out that a tremendous amount of [rail] work is required, but the line is already used weekly. It is functional. CBNS has the capacity to offer the service, but it needs some deferred maintenance. In relative terms it is minor, compared to the [cost of] the build out at Melford.”

As for tying in the terminal with the rail line, there are several possible configurations, Zimny says. “It could have single or parallel track, depending on the type of operation. Conceptual plans have up to five or 10 rail sidings supplying 10,000foot trains. It all depends on what the operators require or want.”

It is no small question whether Melford or Sydport has the edge. Mann cites the partnership with Maher Terminals and the lower development cost, thanks to water deep enough that there is no need for dredging. He also notes that the project has an additional 1,500 acres adjacent to the property under its control.

Zimny thinks Sydney’s existing rail infrastructure is a plus, compared to the cost of linking CBNS to the Melford terminal.

Comparing Sydport to Halifax, Zimny comments, “Rail-wise, Halifax is constrained, relative to Sydport, because Halifax is a centre-city operation. A centre-city operation costs more money. It is also about velocity, getting cargo in and out efficiently.

We envision Sydport being more reliable than the other offerings.”

The Port of Halifax argues that its investments are part of the Halifax Port Authority’s long-term strategy for maintaining the port’s competitiveness in cargo - its core business.

Zimny’s argument that cargo transshipped at Sydport could be at a US port www.ctl.ca

ct&l september 2013

39

global trade

a measure of control when things

spiral

By Ken Mark

S

upply chain insurance now has four legs thanks to the recent inclusion of trade disruption insurance (TDI) coverage. The addition strengthens the existing three-legged approach centred on loss, damage and delay.

The update shifts insurers’ attention to shielding organizations from potential profit losses caused by supply-chain stoppages. Before, their major concern was protecting the value of in-transit goods. Trade-disruption coverage deals with contingent business interruptions triggered by events far beyond insurance buyers’ control.

“This can cover power supply, infrastructure (roads, airports, ports) access and direct suppliers of material and/or services,” says Daniel Galvao, Toronto-based, senior vice-president - Financial Products, Marsh Canada Limited.

The culprits remain the same – natural disasters, political violence, government policies and financial failures, etc. What’s different now is not that disruptive events are more frequent but that the resulting damage is more costly.

Still, according to a recent survey of manufacturers, conducted

by Newton MA-based ChainLink Research, more than 70% of respondents said they rely solely on Tier 1 suppliers to monitor risk in their supply base.

As logistics practitioners increasingly help firms assess supply chain risk, their judgments become strategic rather than tactical making their input more visible and valuable.

That’s because executives realize that corporate success de40

ct&l september 2013

pends on the seamless functioning of their far-flung supply chains.

“As a result of globalization, supply chain risk has become a ‘topof-mind’ concern for everyone in business today,” says Daniel Primeau, vice-president, program and customer service with Ottawa-based Export Development Canada.

As proof, Primeau cites the example of the earthquake-tsunami that struck Japan’s Sendai district in March 2011. It forced the shutdown of the GM truck assembly plant in Shreveport, La. for lack of parts.

Such breakdowns can be very painful. In the survey, ChainLink’s chief research officer, Bill McBeath notes that such glitches can cost publicly traded firms 25% of their shareholder value.

Primeau believes disruption can force small- and medium-sized firms to shut their doors.

Here is where insurance brokers earn their keep. According to Galvao, Marsh offers clients two key services. One is assessing potential clients’ exposure to supply chain risk. The second is finding optimally priced coverage to meet their needs. “We help companies build risk-intelligent supply chains,” he says. “It is impossible to eliminate supply chain risk.

“We must identify the risk and find cost-effective ways of managing those risks. That can be on the firm’s own balance sheet or by buying insurance and transferring it to the insurer’s balance sheet.” (As an insurance advisor, Marsh does not underwrite policies. It goes to the market to find suitable coverage from insurance firms including EDC.) www.ctl.ca

global trade Addressing supply chain risk intelligently can yield unexpected benefits. Galvao talks about persuading a textile-sector client to buy political risk and natural catastrophe insurance to mitigate its risk exposure to a critical overseas supplier. The coverage boosted the confidence of the client’s bank such that it offered the firm assetbacked lending to finance operations.

Since “all risk” coverage does not exist in TDI policies, firms need to establish proper priorities and probabilities about the supply chain risks they face. In insurance parlance, these are called “named risks”. Galvao points out that various exclusions still exist.

These include losses caused by volcanic ash, disease outbreaks (pandemics), bio-terrorism and nuclear explosions.

Based on specified policy terms, TDI coverage will help insured firms deal with the added costs of finding alternative sources of supply, a secondary producer as well as to help pay for increased material, utility, transportation and other related costs.

EDC has expanded its coverage of protecting Canadian exporters’ foreign receivables ensuring that they will get paid in the event of national disaster, political upheaval or financial failure. Recently it introduced its “supply pull” strategy that makes capital available to overseas giants such as Vale and Tata to encourage them to add more Canadian firms to their supply chains.

It has also boosted support for Canadian foreign direct investment in overseas affiliates or operations outside of the country. Growth in the category has recently skyrocketed. For example, in 2009 foreign affiliate sales exceeded direct exports from Canada for the first time.

From 2000 to 2009, nominal foreign affiliate sales grew at an average annual rate of 2.4%, much faster than nominal exports over the same period. Most of it occurred in emerging markets.

Closer to home, there are other risks and insurance issues on the table.

“To join our organization, all applicants must have at least $250,000 in errors and omissions liability coverage,” says Ruth Snowden, Toronto-based executive director of the Canadian International Freight Forwarders Association (CIFFA). “That’s because if there is no cargo insurance in place and there is a loss, cargo owners will come after carriers and freight forwarders.”

As for administrative delays, Canadian agencies can be as heavyhanded as their overseas counterparts. Snowden points to the Canadian Food Inspection Agency (CFIA) and its concerns over wood pallets, crates and dunnage used in containerized cargo meeting ISPM-15 standards. This is totally separate from the quality of the cargo itself.

If the wood items have not been properly treated or fumigated

or lack appropriate certificates, CFIA can have the box shipped backed to its original source. That trip can take up to six or eight weeks and triple shipping costs.

To protect themselves, importers and consignees should clearly state the acceptable types of wood packaging to be used. “They should also insist in their purchase agreements with suppliers that proper certification be part of the shipping documentation package and to ensure that all the pallets etc. are properly stamped,” says Carol Beaul, Toronto-based president, Intelli Trade Inc. “And it would be helpful to have a copy of the certificate on file in case it is not included with the shipment.”

Random Canadian Border Services Agency (CBSA) inspections can create further headaches. Snowden states that this model lacks transparency because there is no price list that breaks down inspection costs and there is no recourse.

“We estimate that such inspections can cost as much as $3,000 each – much more than the actual shipping costs,” she says. “Cargo owners must pay since the carriers’ only duty is to make the shipment available to CBSA for inspection.”

Avoiding such unpredictable inspections is difficult. To protect themselves, Beaul suggests that cargo owners join the trusted traders program that includes our own CSA (Customs Self Assessment), the US PIP (Partners in Protection) and C-TPAT (CustomsTrade Partnership Against Terrorism) and the joint Canada-US the FAST (Free and Secure Trade) initiatives. “Since government agencies consider participating firms to be ‘good guys’ with better track records and who represent lower risks than those who don’t, their shipments are less likely to be pulled out for secondary inspections,” she says.

Firms should check with their insurance brokers to find out if they are covered for such seizures and delays.

Finally, there has been a recent jump in stolen empty container boxes and container chassis left outside importers’ warehouses. Says Snowden, “Some truckers now insist on ‘live’ unloading. After the importer books a delivery time, it must unload the trailer within the specified time window before the driver takes it back.

“Ocean carriers own the containers while the chassis belong to truckers. I am not sure how many truckers have coverage for CT&L these losses.”

Veteran technology expert Ken Mark has covered supply chain management since it was called distribution and has documented its legitimization as a critical business function.

He holds an MBA from York University.

Thank you for choosing XTL as your 2013 Shipper’s Choice Award winner!

Telephone: 416-742-2345 • Toll Free: 800-665-9318 www.xtl.com SM

www.ctl.ca

ct&l september 2013

41

customs regulations

Getting ahead of the

eManifest learning curve

Carriers should “get on board sooner rather than later� says CBSA

By Julia Kuzeljevich

42

ct&l september 2013

www.ctl.ca

customs regulations

T

he fall 2013 deadline is approaching for the Canada Border Services Agency’s eManifest regulations.

When fully implemented, eManifest will require carriers, freight forwarders and importers in all modes of transportation (air, marine, highway and rail) to electronically transmit advance commercial information to the Canada Border Services Agency (CBSA) within prescribed mode-specific time frames.

Participating carriers and their supply chain partners have been working through some of the bugs and processes in the system.

Client uptake on eManifest has been good, said Michael Junek, manager eManifest Stakeholder Consultations and Implementation, Canada Border Services Agency, in a conversation with Transportation Media.

“Generally it’s a positive story for us – we have 8000 carriers with active accounts and we’ve targeted about 15,000. Whether they are choosing to submit today or not, at least they have registered. We are definitely focusing our outreach efforts on the small to medium carriers,” he said.

Junek confirmed that there had been some portal issues in the month of June but that fixes were in place.

During the month of June there was a systems upgrade of sorts that caused some portal problems, such as timeouts, missing data, login problems, and long times to link shipments to trucks.

“Almost simultaneously as we were raising these issues, the CBSA was hearing from carriers as well. On June 20 they put a fix into the system, increasing bandwith to support volumes. There were some backend fixes as well. We started to see that fix translate into the portal working smoother. Since then we really haven’t heard a lot in terms of complaints,” says Jennifer Fox, vice president customs at the Canadian Trucking Alliance.

According to the CTA, in a letter to CTA CEO David Bradley, CBSA’s president “validated the industry’s concerns regarding ACI and committed to addressing them as well as to outlining an action plan.”

The list of concerns sent to CBSA was detailed and lengthy. A sample includes: slow portal service, especially in the p.m; login issues; lengthy time (hours) to complete eManifest; false screen display errors; system randomly kicking user out; customer service; and respect for commercial drivers, the CTA said.

“We recognize that it did have an impact, but we were able to fix the issues and contingency plans were followed during the outage,” Junek said.

“On EDI, we do a lot of work directly with carriers.

We have regular conference calls and we can get up to 50 carriers participating on common issues. We do know there is a learning curve both from carriers and the trade community, and we work closely with our stakeholders www.ctl.ca

to resolve those,” he said.

But he stressed that stakeholders need to come on board early and work through the system, especially since the period of informed compliance is in effect until the fall, with no penalties associated.

“It’s a major transformative project-the sooner carriers can get on board the sooner they can get used to transmitting pre-arrival either with EDI or via the portal.

Once people do get up to speed they find that it’s a more efficient system and works very well,” he said.

Clients can also take advantage of regular walkthroughs of the portal via webinars, noted Junek.

“We have received a positive response in terms of the contingencies and the solutions they’ve put in place.

Since the end of June it’s been fairly quiet – but we are watching very closely,” said Fox. “When ACI (Advanced Commercial Information) was introduced and made voluntary there were some issues. The industry has been very patient and understands that there is going to be a learning curve.”

In June, Eric Warren, vice president business development with Hercules, contacted Transportation Media to report that two issues had been unfolding: a) drivers were still getting stopped at the border by officers not fully understanding the new lead sheets presented by drivers; and b) the customs broker community as a whole did not understand the idiosyncrasies of the “port flip” causing a higher level freight being bonded to their terminals.

In March, Hercules moved to e-Manifest prior to which the company had been using the EDI highway cargo environment also known at CSA EDI since 2001.

"With eManifest, the broker has to have the entry at the corresponding port mirror the exact timing on the PARS (pre-arrival review system) release sheets. In the past we would send a PARS lead sheet for say 12 p.m. and they should set up their PARS prior to that time. However, in the past the broker could set it up at 1 p.m. for the frontier as a PARS, and it would accept the broker entry even though our trailer had crossed the frontier. With eManifest, if the broker were to attempt to setup a PARS entry after the date/time on our PARS lead sheet, they would get a reject message saying incorrect port because we've electronically performed “port flip” required in eManifest. The port flip, regardless of where the physical truck is, requires us prior to arriving at the frontier to electronically query the border to see if the PARS entry for the cargo control number has been entered by the broker. If it is not entered by that moment, we electronically change the port from the frontier to the inland port even though our trailer is still physically on the US side. After this flip, the frontier clearance is no longer a viable option – period. Brokers who have not gotten the PARS entries in by the precise ETA on our lead sheets will receive the “wrong port” and ct&l september 2013

43

customs regulations

eManifest – Hercules process flow chart Hercules USA origin terminal

other error messages on their entry ACI data in advance CBSA confirms Physical Hercules PARS lead sheet sent to clients customs broker. ETA is not physical of trailer departure is receipt of ACI trailer departs for trailer arrival time at frontier but is a port query time and some have accused us of sending sent to CBSA data border bad data in and to ‘fix your data’, but At the ETA date/time indicated on PARS lead sheet, really just don’t understand. AddiHercules systems perform a port query with CBSA to see if tionally, it is important for all to una PARS from customs broker is entered at frontier derstand that the ‘re-arrival’ process is no longer an option under eManiCustoms broker sets up PARS or INPARS depending on date and If No – port is electronically flipped to If Yes – time of work performed inland port identified on lead sheet. no fest" said Warren.

Frontier port no longer viable change “Broker (release request) and CBSA - US/Canada Border carrier (eManifest) information needs to match in the CBSA’s sysPhysical Hercules trailer moves to Hercules terminal tem to enable the BSO to make a Hercules Canadian inland terminal release decision. In certain circumstances, brokers will receive reject notices to notify them that the release request information does NOT match the carrier’s eManifest information. Border services officers have been instructed to provide shipments coming to our inland terminals. This indicates if they do as much information as possible to allow the broker and the car- not get the PARS clearance in by the exact time on the lead sheet, rier to understand and properly amend the information prior to you will now need to set up INPARS and we supply that port inre-submitting to the CBSA for a release decision,” said CBSA formation for them. We are a service based carrier and we want spokesperson Amitha Carnadin. the shipment to be out on the street, not waiting at our terminals “Future system enhancements scheduled for July 2014 will re- for clearance. Since adding our INPARS information on our lead duce the frequency of this issue. In the meantime, the CBSA is sheets, coupled with the flowchart on our website we point everylooking at the current schedule of system modifications and de- one to, this has contributed to a dramatic reduction in the number ployments to determine if this functionality can be delivered soon- of shipments arriving inland in-bond," said Warren. er,” she said.

“Regarding drivers being held at the border, CBSA indicated to In order to better understand the changes, Hercules' response us training and communication to the officers was ongoing and we was to create a flowchart document that the company sent out to were in regular contact with the eManifest program officer. We its supply chain partners. were pleased they were receptive and we have seen a dramatic “We drew up a flowchart and to determine where the gaps of improvement. Our drivers are very happy also!" said Warren. understanding are, posted it on our website. The port flip we de“We recently launched the regional external client support initailed is not illustrated well anywhere we could find in customs tiative at the highest volume ports, where officers have been given documentation or in the press. From our change to eManifest in additional training for troubleshooting and client support, availMay the result is we still receive more shipments currently at our able 24/7,” said Junek. inland terminals uncleared than we did prior to eManifest. We reOfficers are available to trouble-shoot and provide support to ceive calls from customs brokers saying ‘You did it wrong’. We clients with processing issues on a 24/7 basis. Dedicated phone point everyone now to a link on our website with the flowchart of lines have been established and the numbers posted on the CBSA eManifest and the misunderstood port flip. Generally that fixes Web site to give clients direct access to these resources, he added. future occurrences with the same trade partner,” said Warren.

Border services officers are supported by a national network of He said that Hercules also took the step of putting INPARS chiefs of operations across all regions who are directly connected to info on lead sheets. (He noted that some carriers are choosing the eManifest project team to ensure effective two-way communinot to for their own business reasons). cations between headquarters and the operational realities at the "We chose to do it to try to reduce the number of failed PARS ports of entry.

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ct&l september 2013

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customs regulations

“The one other thing I could add is to stress the communications between supply chain partners – carriers talking to brokers.

Moving to an electronic environment, that really does become key,” said Junek.

“CBSA has also made it a little clearer in terms of the messaging coming out of the technical support unit in terms of options when the carriers are experiencing issues.

There’s a helpdesk for policy questions and e-manifest tech support. Carriers shouldn’t feel they have nowhere to go when they are experiencing problems,” said Fox. Since it’s expected there could be an influx of carriers joining at the last minute, the CTA is hoping that some of the issues won’t be repeated, and that the portal system will be robust and sustainable.

“I certainly hope that CBSA will make this mandatory sooner rather than later.

Many of the carriers have their systems and processes in place and are certainly waiting.

They don’t want to incur additional costs unnecessarily. But if they pull the trigger the system has to be sustainable and the carriers have to get their policy questions answered.

They will have a lot of problems on their hands otherwise. Do carriers know what to do if there is a problem with the system? All this needs to be flushed out. After the issues we raised to them in June they are very much aware of what they have to do before they make it mandatory,” said Fox. “In terms of the times the brokers need to set up what they need to do, that’s a tale as old as time. Carriers have always had difficulty working with brokers to get what they needed. We saw the same problem going southbound. That issue is not a CBSA issue and is certainly not going away.

The only thing we can do is reinforce to the industry that these processes are going to mean carriers and brokers have to communicate more than ever before. This is the new normal. Maybe it doesn’t even involve the carrier but the brokers and importers.”

With time, she added, things will get better.

“We saw this with the ACE program rollout. It’s more of a learning curve and more so with brokers and importers at this stage of the game. It’s all new for US shippers, brokers and importers, but there should not be a whole lot of surprises with Canadian carriers with ACI.” "The intended outcome of e-Manifest is good, is great actually, when it's all working and everyone is doing everything at the right times. So the whole program and its intention make a lot of sense. It's just getting www.ctl.ca

and communicating all the moving pieces out to the right people," said Warren.

“As of August 2013, we have seen a complete change in both the adaptation and understanding of the customs brokers and also the officers at the border, when compared to our experiences in March,” he added.

CT&L

Features editor Julia Kuzeljevich has been writing about transportation issues for more than a decade. Her meticulously researched articles have garnered several transportation and Canadian Business Press writing awards.

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45

dash board

TransCore Canadian Spot Market Freight Index 2008-2013

2008 2009 2010 2011 2012 2013 % %

Change Change

Y-O-Y M-O-M Jan

214 140 171 222 220 228 4% 25%

Feb

217 117 182 248 222 198 -11%

Mar

264 131 249 337 276 245 -11% 24%

-13%

Apr 296 142 261 300 266 229 -14%

TransCore’s Canadian Freight Index skirts traditional seasonal slump in July

TransCore Link Logistics’ Canadian Freight Index for the trucking spot market saw no change in July from June and compared to the same period last year, side-stepping the traditional summer slowdown typical for July. Load volumes in July were also at the mid-point of the last seven months. July also had two additional shipping days compared to June.

July load volumes for cross-border postings averaged 70% of total volumes. Cross-border loads destined for provinces within Canada were down 9% compared to July 2012. Conversely, cross-border loads originating in Canada destined to the United States saw an increase of 17% compared to the same period last year. Intra-Canada load volumes increased 3% year-over-year and represented 24% of the total volumes for July.

Equipment postings for July were at the highest level in the last 10 years. Month-over-month levels spiked by 10% and were 14% above posting levels for the same period last year.

July’s equipment-to-load ratio increased to 2.62 from 2.37 in the previous month.

TransCore’s Loadlink freight matching database constitutes the largest Canadian network of carriers, owner/operators, freight brokers and intermediaries. More than 13 million full loads, LTL shipments and trucks are posted to the Loadlink network annually. As a result of this high volume, TransCore believes the Index is representative of the ups and downs in spot market freight movement.

The first six columns include monthly index values for years 2008 through 2013. The seventh column indicates the percentage change from 2012 to 2013. The last column indicates the percentage change from the previous month to the current month. For the purpose of establishing a baseline for the index, January 2002 (index value of 100) has been used.

Canadian freight costs continue to decline, CGFI shows

Results published by the Canadian General Freight Index (CGFI) indicate that the Total Cost of ground transportation for Canadian shippers decreased by 2.6 % in June when compared with May’s results.

The Base Rate Index, which excludes the impact of Accessorial Charges assessed by carriers, decreased by 1.6 % when compared to May 2013.

Average Fuel Surcharges assessed by carriers have seen a 46

ct&l september 2013

-7%

May 316 164 283 307 301 252 -16%

10%

Jun

307 185 294 315 295 234 -21%

-7%

Jul

264 156 238 245 233 234 0%

Aug

219

160

240

270

235

Sep

203

180

234

263

200

Oct

186

168

211

251

215

0%

Nov 143 157 215 252 215 Dec 139 168 225 217 182 TransCore Canadian Spot Market Freight Index 2008-2013

decrease from 20.26% of Base Rates in May to 19.26 % in June.

“Cross border truckload was the main driver of the freight cost decline,” said Doug Payne, president & COO, Nulogx. “Fuel as a percentage of freight costs have dropped to the same level as a year ago.”

The CGFI is sponsored by Nulogx, a transportation management solutions provider, and is used by shippers and carriers to benchmark performance, develop business plans, and secure competitive agreements. It was developed with the assistance of Dr. Alan Saipe. The most recent results are available at the CGFI Web site: www.cgfi.ca.

Railway freight shows first monthly drop since 2009

Freight carried by Canadian railways fell 3.4% in June to 26.2 million tonnes, compared with the same month in 2012, according to Statistics Canada data. The drop marks the first decline in freight loadings for the month of June since 2009.

Within Canada, combined loadings of non-intermodal freight (i.e., cargo moved via box cars or loaded in bulk) and intermodal freight (i.e., cargo moved via containers and trailers on flat cars) decreased 4.2% to 22.7 million tonnes.

Non-intermodal freight loadings fell 4.0% to 20.3 million tonnes as freight activity was significantly pulled down by a number of commodity groupings. These included potash (down 406 000 tonnes), coal (down 388 000 tonnes), canola (down 234 000 tonnes), and wheat (down 165 000 tonnes). In total, 32 of the 64 commodity groups carried by Canadian railways fell during the month.

The drop in loadings occurred despite a strong push from a number of commodities that rose during the month. These included fuel oils and crude petroleum (up 393 000 tonnes); iron ores and concentrates (up 308 000 tonnes); and sand, gravel and crushed stone (up 105 000 tonnes).

Intermodal loadings decreased 5.4% to 2.5 million tonnes. The decline was the result of a drop in containerized cargo shipments which www.ctl.ca

offset robust growth from trailers loaded onto flat cars.

From a geographic perspective, both the Western and Eastern railway divisions in Canada saw a drop in loadings in June. The Western Division, which accounted for 58.4% of the domestic freight loadings, fell 6.6% from the same month in 2012 to 13.3 million tonnes. The Eastern Division accounted for the remainder of the loadings and declined 0.5% to 9.5 million tonnes. For statistical purposes, cargo loadings from Thunder Bay, Ontario, to the Pacific Coast are classified to the Western Division while loadings from Armstrong, Ontario, to the Atlantic Coast are classified to the Eastern Division.

Rail traffic received from the United States rose 1.9% to 3.5 million tonnes. The gain in tonnage occurred mainly on the strength of intermodal freight, particularly containerized cargo shipments.

RBC PMI signals modest improvement in manufacturing business conditions in August

Canada’s manufacturing expansion was sustained for a fifth consecutive month in August, but the rate of growth was modest and below average, according to the RBC Canadian Manufacturing Purchasing Managers’ Index.

After accounting for usual seasonal variation, the RBC PMI – a

composite indicator designed to provide a single-figure snapshot of the health of the manufacturing sector – posted 52.1 in August, little-changed from July’s reading of 52.0. Remaining above the neutral threshold of 50.0, the RBC PMI has indicated growth of the manufacturing sector for five consecutive months, although the latest expansion was modest and weaker than the series average.

The RBC PMI found that both output and new orders rose at modest rates during August. This generally reflected greater client demand in both the domestic and export markets.

“The PMI continued to make positive gains for the fifth consecutive month and moved modestly higher in August, suggesting some of the recent shocks to the economy have been mitigated by strength elsewhere,” said Craig Wright, senior vice-president and chief economist, RBC. “We expect that improving U.S. demand will continue to provide a boost to the manufacturing sector for the balance of the year.”

The headline RBC PMI reflects changes in output, new orders, employment, inventories, prices and supplier delivery times.

The monthly survey is conducted in association with Markit, a global financial information services company, and the Supply Chain Management Association (formerly the Purchasing Management Association of Canada.)

Want some insight?

Learn from the pros what the numbers mean Join us for the free Annual Survey of the Canadian Supply Chain Professional webinar on November 21st and find out why salaries are going up and what you need to do to see yours climb too.

This one-hour live webinar will include presentations of the results by Michael Power, editor, PurchasingB2B; Carolyn Gruske, editor, MM&D; Lou Smrylis, editor, CT&L; and SCMA president and CEO, Cheryl Paradowski, along with commentary from HR professionals and recruiters.

Register at www.scmanational.ca/annualsurvey Thursday, November 21, 2013 - 12pm ET Canada’s magazine for procurement and supply chain management professionals

www.ctl.ca

Addressing issues affecting Canada’s public procurement professionals

ct&l september 2013

47

BUYING MOOD?

3% 6%

Urban

12,871 Regional

6,991 2008

Longhaul

2008

Other

inside the numbers

2009

2010

6%

2011

Carriers

Freightliner

Small

2013

Small

Medium

50%

23%

Medium

No replacements

No Peterbilt replacements

50%

23%

9%

International

Western Canada for-hire carriers Planning to planningHD to replace replace truck(s) HD trucks in 2013 in 2013

2012

11,198 2012 5 year avg

2013 27 %

5 year avg

50%

G

Top 4 Brands of HD truck driven

Kenworth

WESTERN CANADA’S FORHIRE FLEETS REVEAL THEIR HD TRUCK PURCHASING PLANS

8,9042009 11,399 2010 15,823 2011 13,902 32%

Canadian motor carrier Class 8 truck purchasing plans

Carriers

part II

12%

Large

10%

Large

25% 25%

10%

19%

10% of25% fleet 61% 25% 57% 61% 10%Volvo of fleet 9%

57%

20% of fleet 20% of 8%fleet 21% 8% 23% 21%

23%

Truck trade-in 30%HD or more 17% 5% 17% 10% 5% 30% or more cycles

10%

(% of respondents)

Canadian motor carrier Class 8 truck purchasing plans

Yes No

2008

15%

15%

15%

No replacements

85%

Years

10

2009

22%

43%

41%

37%

2010

2008 24%

39%

No replacements 8-9

22% 6-7

10% of fleet

41%

10% of fleet

41%

2011

2009

47%

35%

Western Canada for-hire Planning to carriers planningHD to replace replace truck(s) HD trucks in 2014 in 2014

Yes No

18%

82%

24%

12%

20%International of fleet

30% or Freightliner more

13%

8%

Kenworth

30% or more

16%

36%

24%

37%

35%

39%

33%

49%

39% 19%

33%

49%

19%

20%

24% Mack

Peterbilt

12%

16%

19%Total

19%

20%

13%

8%

10%

15%

13%

7%

10%

Western Star 15% Volvo 13% 7%

Alberta

471

364

Saskatchewan

103

32

232

85

143

Manitoba

193

75

52

41

132

8 TRUCK 86 SALES – HISTORICAL 76 CLASS458 292 177

178

1,559

380

3,078

84

40

719

110

28

631

COMPARISON YTD JUNE 2013 903 (TRUCKS 187 SOLD)664 109

8,904

2013

36%

292

6,991

24%

2012

27% <4

British Columbia

12,871

2013

2011 6%

39% 3-5

Class 8 trucks sold in Western Canada YTD

20% of fleet

27%

43%

2012

2010

11,399

15,823

13,902

11,198

L

ast issue we looked at Western Canada’s 49% of respondents 2013 to our survey reported investing iron than their2010 counterparts in the 2008 in new2009 2011 2012 5 year avg plans to owner/operators and their Class 8 truck renew up to 10% of their fleet. Also, more than a fifth rest of the country?

Our recently completed Annual Equipment Buying purchasing plans for the rest of 2013 and of Western Canada for-hire carriers are looking to upTrends Survey found that only 15% of Western Canada next year. We found that they are more date more than 20% of their fleet. Looking towards for-hire fleets have no plans to purchase new trucks willing than their Central and Eastern next year, only 18% of Western Canada for-hire carrifor the rest of this year. This is considerably ahead of Canada counterparts to invest in new ers have no plans for new truck purchases. the national average about one quarter of fortrucks. This issue we examine the pur-RELUCTANCE Our survey also looked at the brands Western CanUNDERSTANDING MOTOR CARRIERS’ TOwhere UPDATE THEIR FLEETS hire carriers told us they have no plans to purchase chasing intentions of Western Canada for-hire carriada for-hire carriers are purchasing. Freightliner is Quality of equipment is one of the most important factors shippers consider when selecting their TL and LTL carriers. Yet Canadian new trucks the remainder of 2013. The vast majority ers. They are facing the same hefty increases in new the top selling brand nationwide but in the west it’s in motortruck carriers have been reluctant in recent years to invest in new Class 8 trucks.

At first glance, the purchasing intentions of for-hire of Western Canada for-hire carriers (64%) are looking prices but have enjoyed a stronger regional a dead heat for the lead with Kenworth.

Peterbilt is the to replace up to 10% of theirresponding fleet. That tooto is consideconomy past years than the rest ofOnly the 24% thirdEquipment most preferred, with 19% of respondents carriers for thethe rest of few 2013 look promising. of for-hire carriers our Annual Buying Trends Survey reporterably higher than the national average where only country. Are they similarly more enthusiastic about ing that as the main brand currently in their fleet.

Getting old

Carriers

Small

Medium

Large

indicated they had no plans to purchase new Class 8 trucks by the end of the year. In comparison, 36% said likewise in 2012. In fact, 2013 showed the lowest “no intent to purchase” since 2008 among for-hire But there’s10% a difference between this year’s No replacements 50% carriers.

23% numbers and 2012’s, and even 2011’s. It seems the number of fleets planning large purchases has dwindled. Whereas 13% of for-hire carriers told us they would be replacing more than 30% of their fleet that year and 15% said likewise in 2011, only 7% had similarly 10% of fleet 25% 61% carriers 57%both more willing to purchase new ambitious plans for this year. There is a regional difference, however, with Western Canada trucks and to replace a larger part of their fleet.

There are also great differences between the purchasing plans of medium-sized and 20% of fleet 8% 21%large carriers 23% and those of small carriers. Only 10% of large carriers (firms owning 100 Class 8 trucks or more) and only 23% of medium-sized carriers (firms owning 10-99 trucks) had no plans to purchase new Class 8 trucks this year. In comparison, 50% of small carriers (firms owning 5-9 trucks) had no plans to 30% or more 17% 5% 10% get into new Class 8 trucks this year.

48

www.ctl.ca

ct&l september 2013

No replacements

2008

2009

2010

2011

2012

2013

22%

43%

39%

27%

36%

24%

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the bigger picture

a question you can’t ignore When is a service (not) a “commodity”?

S

Laurie Turnbull, CITT, P.MM Laurie Turnbull is a supply chain consultant with Cole International, a leading Canadian logistics company providing Customs brokerage, warehousing and worldwide transportation services. He can be contacted at laurie.turnbull@cole.ca.

50

ct&l september 2013

hould “services” be purchased like commodities, in particular, logistics services like transportation and customs brokerage? It’s a popular practice, and yes it can be effective in some cases, but there are pitfalls to watch out for.

To begin with, let’s look at the basic differences in terminology. One dictionary I consulted defines “commodity” as “an article of trade or commerce, especially a product as distinguished from a service”. A “service”, on the other hand, is defined as “an act of helpful activity; help; aid: to do someone a service”. Seems like the proverbial comparison of apples to oranges, although commodities and services are often treated in a similar fashion.

When do buyers treat logistics services like commodities? From a service provider’s perspective, it’s most evident in the RFQ (Request for Quotation) or RFB (Request for Bid) process.

Both of these processes are well suited for commodity purchasing; typically a buyer identifies the commodity with a description (quality standard), along with other pertinent requirements, and sellers submit prices. Requests for support services such as transportation, delivery, and customs clearance in the case of international shipments, may be listed in the terms and conditions of the governing document (if at all).

Frequently however, they are not. Price negotiations in the transaction are often limited to the commodity itself, with transportation and customs clearance services being decided after the fact.

And because they are negotiated after the buyer, or seller, may have agreed to a commodity sale price they already consider too low, they want the lowest possible price for any services necessary to complete the sale. What follows is a flurry of telephone calls or e-mails where the buyer, or seller, tries to secure those services at the lowest possible cost (i.e. the commodity approach), without consideration of any mitigating factors that might affect the transaction, or impact the ability of the service provider to provide an efficient level of service (i.e. the “value add” approach).

There are many examples of the types of service requirements that are often overlooked, or not clearly specified, when buyers and sellers are simply looking for the lowest cost service. And when those factors arise “after the fact”, service providers are faced with a difficult choice – either absorb the associated costs (with an impact on our profit margin), or re-quote our original price

(never a popular option, and one that buyers frequently refer to as “nickel and diming”).

Factors that tend to be omitted, overlooked or mis-stated during the request for transportation services (and that can subsequently affect the timeliness, or cost) of a shipment include: availability of a loading dock at origin and destination, requirements for appointments, (actual) load weight and dimensions, packaging, unitization (loose or palletized, flush or overhanging), pallet size, government regulations (eg. hazardous goods or otherwise regulated), temperature control, insurance/declared value (that might require the carrier to obtain additional coverage before the shipment is moved), electronic data transmission requirements (eg. EDI), equipment type (dry van, flat deck, high cube), special handling, driver assist and inside delivery (eg. high-rise buildings), to name a few.

For international shipments there are also factors to consider regarding the customs clearance process, such as availability of documentation (certificates of origin, commercial invoices and Free Trade certifications), harmonized code classifications, shipment value, and the identity of the customs broker responsible for clearance.

And, perhaps most importantly, whether for carriage or customs clearance, the responsible party must ensure that an account has been opened with the applicable service provider, including an adequate credit limit.

As service providers we often ask “what’s more important – cost or service”? Buyers often respond by saying “service”, but the deciding factor in obtaining the business often turns out to be “cost”.

Understandable, but quality of service plays an important part. Just ask any shipper or receiver who selected the lowest quotation and then experienced delays because important information was not relayed to the carrier or customs broker when the quote was requested. The service provider often takes the blame, even though delays could have been avoided by elevating the value of the transaction to a true “service” rather than a commodity.

If we ask a lot of questions during the quotation process we’re not trying to be difficult, or look for ways to “pad” the price. We’re simply trying to ensure we have information to provide shippers and receivers with a level of service that is seamless and efficient, and adds real value to the buyer’s CT&L supply chain process. www.ctl.ca

TF

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Coming to your rescue. It’s what we do best.

No other Canadian carrier has the resources we do on both sides of the border. We enlist the people, technology and processes to speed things up, not slow them down.

We take a proactive approach to enhancing the efficiency of your supply chain on both a day to day basis and when you need action now. Who are you reaching out to?

Take another look at Vitran!

TF : 1.800.263.0791

E : ltl.cda.sales@vitran.com