Canadian Shipper JanuaryFebruary 2014

JANUARY/FEBRUARY 2014

PUBLISHED SINCE 1898 | FORMERLY CANADIAN TRANSPORTATION & LOGISTICS

European Trade New trade deals, inland networks and container traffic offer opportunities for European growth

PHARMACEUTICALS Regulations rule in pharma logistics TOP TIER Equipment and services guide for the nation’s top-ranking motor carriers

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CONTENTS

JANUARY/FEBRUARY 2014

DEPARTMENTS

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6 | Viewpoint Our publication enters its 116th year with a new design, increased frequency, and a change in our delivery method. The print issue moves to six times per year with twice the number of pages, and we’re adding 12 digital issues per year that will focus on each of the modes of transport.

ON THE COVER European Trade A view of the Düsseldorf, Germany skyline and its landmark Rhine Tower. One of Europe’s great waterways, the Rhine is host

8 | News Focus A Canada Post decision to phase out home delivery of mail creates questions, and some confusion, about the future and strategies around parcel deliveries in the country.

to a new wave of container traffic in the region.

52 | Inside the Numbers Forecasting freight is a challenging task but shippers remain in a positive frame of mind when it comes to expected freight volume growth for 2014.

54 | The Bigger Picture Top ten trends to monitor in 2014 for you, the transportation professional

FEATURES

41 Top Tier Our annual capacity and capability guide offers the most up to date data in terms of equipment, contacts and services from the nation’s largest motor carriers.

EUROPE: INLAND PORTS | 20 Featuring insight from the Port of Duisburg, in Germany’s Rhine-Ruhr region. Europe’s biggest inland port reinvented itself as a key provider via its river and rail routes, serving as a feeder port to major exporting regions in Germany and the rest of Europe.

EUROPE: HIGHWAY H2O-GREAT LAKES ST. LAWRENCE SEAWAY | 22 The Great Lakes St. Lawrence Seaway, working closely with partners in Highway H2O, increases its marketing efforts to bring in more European business through gateway incentives and new services.

EUROPE: MARINE | 24 Canada’s marine ports, shipping lines and terminal operators position themselves as key players on European trade routes.

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January/February 2014

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continued

WHAT’S ONLINE

Shipper news CANADIAN

PHARMA LOGISTICS | 28 Regulation, traceability and security are top of the agenda for pharma logistics stakeholders in 2014.

RETAIL | 34 A solid real estate strategy is key to developing the best distribution solutions.

WEST COAST PORTS | 36

Shipper CANADIAN

28

Shipper CANADIAN

Shipper CANADIAN

The latest infrastructure and service developments at Canada’s West Coast marine and air ports.

CASE STUDY DANBY PRODUCTS AND DTA SERVICES | 46

WEB TV

The struggle to audit a growing pile of freight invoices-the result of a surge in sales-led Danby Products to a successful relationship with DTA Services as its solutions provider.

Shipper Shape

Transportation Matters

Canadian Shipper’s publisher, Nick Krukowski, and associate editor, Julia Kuzeljevich, speak about the strategy behind the magazine’s rebranding.

CITA REBRAND | 50 One of Canada’s oldest trade associations, the Canadian Industrial Transportation Association, details its decision to rebrand.

Ä

FEATURES What’s the Buzz?

2014 a “year of promise” Export Development Canada’s vice-president and chief economist Peter G. Hall details six reasons to believe that things are finally on the up-and-up in 2014.

Shipper-carrier forum building understanding, respect The OTA and CITA established a joint forum in 2013 to encourage informal discussion between members.

“Ship-from-Store” is the way of the future

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Jim Hendrickson, vice president, logistics solutions at Pitney Bowes, discusses the trend toward ship-from-store as a result of an ongoing shift in shopping habits and e-commerce activity.

Find us on Twitter at: @CanadianShipper | @LouSmyrlis | @JuliaKuzeljevic | @JamesMenzies | @FleetExecutive

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THE VIEW Lou Smyrlis, MCILT January/February 2014 Volume 117 Issue No.1

Getting in shipper shape for 2014 The launch of our first Canadian Shipper issue heralds many exciting changes and additions for the publication

W

elcome to our first issue of Canadian Shipper. Our December issue was the last we published under the title of Canadian Transportation & Logistics. As much as I’d grown used to the title and appreciated the familiarity it had come to enjoy in industry circles, it was time for a change.

Canadian Shipper is shorter and easier to promote and better reflects exactly whom our editorial scope and mandate is meant to serve: proven buyers of transportation services, both inbound and outbound. Our publication is entering its 116th year – it’s one of the longest published business magazines in Canada – and has changed its title many times over the past dozen decades to keep pace with the changing nature of moving goods from origin to destination in the most efficient, secure and cost-effective manner.

We’ve also taken this opportunity to usher in a fresh new design. New award-winning art director Ellie Robinson and associate editor Julia Kuzeljevich have worked hard the past few months to create a look that is consistent with the professional image of transportation while making for more striking visuals and text that is easier to read.

What remains unwavering is our commitment to focus on the transportation link of the supply chain.This focus is actually being expanded with Canadian Shipper in several important ways.

First, to answer the trend towards increased global trade and longer, more global supply chains we are devoting a significant amount of coverage to one key global market every issue.

We start with Europe. I encourage you to work your way through our comprehensive 17-page report. Expect more of the same in upcoming issues as we turn our focus to Asia, South America and, of course, our largest export market, the US. Second, we have committed to publishing larger issues to ensure we provide more coverage of the topics you are interested in. For example, this first issue, in addition to the fourfeature report on European trade, also includes features on pharmaceutical and retail supply chains, the significant developments to Canada’s West Coast transportation infrastructure, our annual Top Tier report on the capacity and capabilities of the nation’s 100 largest motor carriers, a case study on freight audit and payment services, CITA’s new name, and the ramifications of Canada Post’s decision to end home delivery of mail on online purchase delivery. And we also continue with our regular Bigger Picture column and Inside the Numbers section with a more visual design.

The final key change involves a considerable increase in our frequency and an important change in our delivery method.We will publish 18 issues this year – six in the traditional print format with twice the number of pages and 12 digital issues, each of them focused exclusively on one of the four major modes and providing you with the latest industry data, analysis and insights that may impact your transportation purchasing decisions. Look for a new one at the end of every month. We kick off in January with an in-depth look at marine shipping.

As I mentioned last month, this move to digital editions is part of our strategy to provide information to you in a variety of platforms. Our award-winning WebTV show,TMTV, is not only a favorite on our website but is approaching half a million views on our YouTube channel. Our twice weekly e-newsletter keeps you up to date on the latest news happenings. It’s safe to say we have conducted more research on the transportation industry over the past 10 years than any other industry organization by a long stretch. Our own Surface Transportation Summit is becoming recognized as one of the best educational and networking opportunities in transportation today. And our social media presence on Twitter and LinkedIn is second to none in the industry.

So have a look at the new Canadian Shipper and all the rest of our educational products. I hope you like what you see and remember that Julia and I always love to receive your feedback and suggestions.

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EDITORIAL DIRECTOR Lou Smyrlis (416) 510-6881 Lou@TransportationMedia.ca ASSOCIATE EDITOR Julia Kuzeljevich (416) 510-6880 Julia@TransportationMedia.ca PUBLISHER Nick Krukowski (416) 510-5108 nkrukowski@canadianshipper.com ART DIRECTOR Ellie Robinson erobinson@bizinfogroup.ca CONTRIBUTING EDITORS Carroll McCormick, Leo Ryan, James Menzies, John G. Smith, Ian Putzger, Ken Mark, Carolyn Gruske 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 Shipper is written for Canadian transportation and logistics professionals who manage product flow from manufacturer to point-of-­sale. Edit­orial is focused on re­porting, analysis and interpretation of Can­adian log­ istics 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: canadianshipper.com (click on sub­scription button)

SUBSCRIPTION RATES: Canada: $65.95 + applicable taxes, per year; $107.95 + applicable taxes, for two years.

U.S.A.: US$107.95 per year. All other foreign: US$107.95 per year. Single copies $8 except for the annual Logistics Buyers’ Guide (Aug) $60.95 + applicable taxes, (not including HST) plus $2.00 for postage. USA: US$68..95, Foreign: US$68.95 ISSN 2292-2490 (print), ISSN 2292-2504 (Digital), (Can­adian Shipper.) Indexed by Canadian Bus­iness Period­icals Index.

Printed in Can­ada. All rights re­served. The contents of this publication may not be reproduced either in 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.

PUBLICATIONS MAIL AGREEMENT 40069240 We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage MEMBER CANADIAN BUSINESS PRESS CANADIAN CIRCULATIONS AUDIT BOARD

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NEWS FOCUS

Canada Post to end home deliveries Prepared by the HR ADWORKS already Service Team

BY IAN PUTZGER REP.

thirds of Canadians DESIGNER Strategic Solutions, remarked that not delivering parcels to the door get their mail through comPROOFED would be a dangerous decision munity mailboxes, grouped ESTIMATED that could well undermine or lobby mailboxes or rural SENT Canada Post’s competitive pomailboxes. The changes afsition vis-a-vis other parcel fect mainly residential arAll prices exclude taxes delivery companies. eas in urban centres.

Like other postal organiDetails of the planned Insertion Date Ad Size Price zations, Canada Post has emroll-out of the new regime, Jan 1, 2014 4.5 x 4.87 braced the delivery of merchandise purwhich is slated to commence in the second 1/3 PAGE SQ chased online as a strategic growth area. In half of 2014, are yet to be released.

Feb 24, 2014 4.5 x 4.87 September it started same-day delivery Horst Manner-Romberg, founder and PAGE SQ projects with Wal-Mart, Best Buy and Inprincipal of M-R-U, a 1/3 parcel and letter loFeb 24, 2014 and consulting 4.5 x 4.87firm based digo and adopted the slogan “Delivering gistics research PAGE the Online World”. in Hamburg, Germany,1/3 noted thatSQ no other In 2013 3.7 percent of the total retail G8 country has moved towards eliminating sales in Canada were conducted online. In residential delivery.

TOTALconfusion PRICE the US online shopping accounted for The announcement caused about 9 percent of total retail volume in in the business community in how far this that year. would affect the delivery of parcels. Gary Manner-Romberg said that typically Breininger, president of BGR Coaching & letter mail and parcel are separate delivery streams, so it should be viable for Canada Post to maintain its existing delivery model for parcels while shifting letters to community mailboxes.

Annick Losier, a spokesperson for Canada Post, said that the action plan is aimed at the delivery of letters.

“Parcel delivery will remain essentially the same - but if some parcels are smaller MacDon sets the bar for harvesting technologies, innovations, and and can fit in the larger compartments of manufacturing. As a family owned company, we are proud of the relationships the community mailbox, we will deliver in formed with our employees, many of whom have been with us for more than three that box - which is locked and will be condecades. We are committed to providing a safe and challenging workplace, allowing veniently located within the neighborhood. our employees to achieve their full potential. We offer a full range of Company What we know is that about one third of funded benefits including medical, dental, life insurance, vision, E.A.P. and pension.

Canadians work during the day and by enabling parcel delivery in secure boxes will VICE PRESIDENT OF GLOBAL PARTS OPERATIONS – WINNIPEG, MB further add peace of mind,” she commented.

MacDon is looking for a Vice President of Global Parts Operations. You will have a In an emergency session at the House minimum of 10 years of experience leading an aftermarket agricultural parts entity of Commons Transport Committee, Canawith Profit and Loss responsibility. You will have related post-secondary education da Post CEO Deepak Chopra indicated in Business and Certification in Inventory Management (APICS would be an asset). that parcel streams would go to community The Vice President of Global Parts Operations will be responsible for all of MacDon’s mailboxes. The shift to these would free up more quality time for busy families by service parts operations including North American and International sales, storage, making it easier for them to receive online inventory levels, and distribution channels. The successful candidate will have full purchases at secure locations, he declared. budget responsibility for his/her areas of responsibility and will be tasked with This has e-tailers wonder how exactly identifying opportunities for expansion. This position will require regular domestic Canada Post will get their merchandise to and some international travel. consumers, and what choices they themFor more information or to apply visit our website at www.macdon.com/careers selves have to control the process. For most or email Heather Horton at hhorton@macdon.com. e-tailers it is crucial to offer the consumer a choice of multiple delivery options, Manner-Romberg pointed out. In many Come help us feed the world. cases delivery options are a factor that de-

Canada Post’s revelation of plans to end home delivery of mail has business executives scratching their heads over the ramifications for the delivery of parcels, particularly merchandise purchased online.

On 11 December Canada Post announced a five-point action plan to return PROOF & ESTIMATE by 2019. It had ket Media to financial sustainability Section reported a pre-tax loss of $109 million in -137 Canadian Shipper CAREERS the third quarter of 2013, with mail volume down 5 percent in the first nine -137 Materialsmonths Management CAREERS of the year. & Distribution At the core of the plan to achieve cost -137 Purchasing B2B of $900 million CAREERS savings is the decision to phase out residential deliveries over the coming five years, alongside a 35 percent rise in the price of stamps and the elimination of 8,000 jobs. Instead of receiving mail at their door, Canadians will have to collect it from community mailboxes. According to Canada Post, at this point two-

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NEWS FOCUS

termines whether a consumer orders a product from a vendor or abandons the purchasing process, he added.

Losier indicates that Canada Post is working on solutions for parcel recipients.

“In fact, we have bigger plans for consumers - but they are not quite ready to announce,” she said.

Neither Breininger nor Manner-Romberg sees any cause to worry for consumers or businesses if Canada Post were to drop the ball in the parcel delivery game. Private courier firms would be ready to jump in and fill such a gap, they said.

“I believe that this announcement will remind customers that they do have options, based on their needs, when it comes to choosing a carrier. We are well positioned to absorb additional volumes across Canada,” said Mike Tierney, president of UPS Canada. CS Photos ©iStockphoto/Thinkphotos

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EUROPEAN TRADE

EUROPEAN TRADE UPDATE FREE TRADE WITH EUROPE COULD SOON BE A DONE DEAL FOR CANADA– HERE’S A LOOK AT THE EXPORT– IMPORT CLIMATE AHEAD

By Julia Kuzeljevich

Canada has embarked on one of the most ambitious, transparent and inclusive trade agreements in its history, concluding an agreement in principle in the fall of 2013 for the Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA). The Agreement provides Canada with preferential market access to the EU’s more than 500 million consumers and to its annual $17 trillion in economic activity.

With full ratification not expected for at least two years, Canadian Shipper’s focus on European trade takes a closer look at stakeholder plans for increased business in the region, as well as current trends, statistics and issues affecting trade.

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EUROPEAN TRADE

A A view of the Düsseldorf skyline and the Rhine river, one of Europe’s most important waterways for containerized trade.

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new free trade agreement between Canada and the European Union, the CETA, or Comprehensive Economic and Trade Agreement, was signed in Brussels on Oct. 18 by Prime Minister Stephen Harper and EU President Jose Manual Barroso.

Following ratification of the deal, Canadian exporters could benefit from free access to EU markets if the deal succeeds in removing 98 per cent of EU tariffs on a wide range of Canadian products, including agricultural, seafood, metals and mineral products.

The deal would also allow Canadian automakers to export more cars and Canadian farmers to export more beef, pork and bison.

It’s expected the deal would also provide full elimination of duties on all non-agricultural goods, with 99 per cent of industrial goods duty free immediately (100 per cent after seven years), including forestry, chemical and plastic products that will be duty free on Day 1.

About 95.5 per cent of fish and seafood products will be duty free immediately (100 per cent after seven years), including live lobster, frozen lobster and frozen shrimp, 94 per cent of www.canadianshipper.com

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EUROPEAN TRADE

Stifel Logistics Confidence Index indicates record levels for both sea and air freight across European trade lanes.

December figures for the Stifel Logistics Confidence Index, (LCI), a monthly survey of international shippers and forwarders measuring freight activity across several European-based trade lanes, indicated that the Index remained above the 50.0 threshold for both air and sea freight, reaching another record level since its March 2012 inception, said Stifel and U.K.-based Transport Intelligence, who partnered to create the index.

The index has remained above the 50 level since February and not only is it at its highest level but November stats also marked the first time that the individual air and sea indices are above the 50-level.

The index’s results are a blended indicator of present conditions and six-month expectations in both airfreight and ocean freight volumes. “Sentiment in the present situation continues to trend upward, with December posting readings above normal seasonal expectations for a second month in a row. These results continue to suggest, in our view, that forwarding activity in Europe-based trade lanes is recovering from its long slump. However, slow market growth, yield pressure, and excess capacity continue to be a challenge for the overall forwarding market,” said analysts.

In terms of the overall Logistics Confidence -a - composite of the current situation and the six-month outlook for both intercontinental modes-was 19.7 per cent higher than last year’s 48.0 reading, and 0.7 per cent higher than last month’s 57.1. For the present situation, volumes in Europe-based lanes were up 2.3 points sequentially, and remained in positive territory after having exceeded the 50.0 threshold last month for the first time since the index began in March 2012.

“Slow, but continued recovery of the European economy has brought the forwarding markets back within the normal, seasonal volume threshold, in our view. Near term, we expect continued, but modest growth in the European forwarding market,” said Stifel analysts.

Sentiment for current ocean freight volumes remained on par with slightly above normal seasonal levels on all European trade lanes. In fact, volumes continued to improve on all lanes but one.

The Europe-to-Asia lane fell 0.9 index points to 54.8, while the Asia-to-Europe lane, Europe-U.S. lane, and U.S.-to-Europe lane recorded gains of 7.8 points, 1.5 points, and 2.0 points, reaching 60.2, 53.7, and 56.3, respectively. Optimism for the six-month outlook ticked backwards for European export lanes, but continued growing sequentially in Europe import lanes.

On a lane-by-lane basis, Europe to Asia and Asia to Europe grew 3.0 and 7.4 index points, respectively, while the Europe-to-U.S. and U.S.-to-Europe lanes fell 3.8 and 0.3 points, respectively.

“What’s happening today is we’re one of the top five producers for beef and pork globally. The way things are moving forward we’re seeing that Canada is playing a major role globally in the food supply chain.”

Girish Nair, Market Manager, Intermodal International, CN.

agricultural tariffs will be eliminated, with tariffs immediately eliminated from items including maple syrup, fresh and frozen fruits, cherries, fresh apples and cat and dog food.

Canadian beef producers will be able to sell 50,000 tonnes of beef; pork producers will be able to sell 81,000 tonnes of pork, and there will also be duty free, quota free access to the EU dairy market.

But after an internal EU analysis looking at the agreement, some analysts said that European Union exporters would save more than $670 million annually in duty payments compared with about $225 million annually for Canada’s, because the gap on tariff elimination is that Europe currently exports more to Canada than the reverse, meaning EU exporters currently pay more duties Canada’s International Trade Minister Ed Fast said the federal government would more than make up for the lost $670 million in tariff revenues.

“We expect that the gains on the economy will more than outstrip the tariff losses. At the end of the day, this will be a net fiscal benefit to Canada,” he said.

Girish Nair, Market Manager, Intermodal International , with CN, who specializes in cold supply chain for foodstuffs and agroproduce, said that government policy supporting Canada’s role in the global food chain can only improve the situation for stakeholders.

“What’s happening today is we’re one of the top five producers for beef and pork globally. The way things are moving forward we’re seeing that Canada is playing a major role globally in the food supply chain,” he said.

In January 2012, Canadian beef access to South Korea markets was increased (to beef cattle aged up to continued

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continued from p. 12

30 months), the Japanese market saw access increase from 20 months to under 30 months, and additional plants have been given clearance for export to China up to February 2014.

“The market is now potentially in the

region of $110 million. As a result Canada is a very attractive economy for producers coming and investing. US investors are also coming in to expand some agro-food facilities.With the state of the economy the last couple of years the only way forward is

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through a comprehensive trade agreement with Europe with its population of over 500 million.We are already accessing this market through exports of horse meat, amounting to roughly 13,400 tonnes in 2011. If this market opens up we’re looking at a far bigger chunk in terms of horse meat and beef,” said Nair.

“Canadian exports to the EU faced tariffs as high as 14 per cent. Now we expect these to be eliminated completely,” said Nair.

The CETA agreement must still be fully ratified by governments on all sides (Canadian provinces and all EU member states), then will go through a further legal examination and translation into 20 languages.

Two years is a conservative estimate for this process, said Laura Dawson, a trade expert with the The Fraser Institute think tank. Dawson said the completion of negotiations for the CETA is a major economic milestone for Canada, which could produce gains of up to $12 billion a year.

“In terms of strategic benefits, by completing an agreement with the EU before the United States, Canada has first-mover advantage. It is likely that the U.S.-EU agreement will utilize the Canadian agreement as a template so Canada can have some assurance that the U.S.-EU negotiations will not stray too far from our interests,” Dawson said in an editorial for Troy Media.

“Access to the EU’s $2.7 trillion government procurement market is a huge plus for Canada. (Think of buses, trains, engineering and construction services.)

Yes, Canada, will have to give up some of its local preferences in exchange but many European companies are already considered “locals” in government procurement terms because they have a Canadian branch office. Canada’s smaller companies tend not to have the capacity to locate overseas and must compete from afar. Access to the EU procurement market will open a new universe of opportunities for our companies,” she said.

The negotiation of a little-talked-about side agreement called a Strategic Partnership Agreement (SPA) could also delay the CETA deal.

The SPA includes commitments on peace and security, protecting human rights and sustainable development that have never been included in any of our trade agreements with other countries, Dawson commented.

“Canada’s existing free trade agreecontinued

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continued from p. 14

ments include side agreements on labour, the environment and even human rights, but these commitments are the sorts of things that Canada does as a matter of course. The SPA is quite different. In an effort to add heft to its foreign policy influence around the world, the EU requires that all trading partners sign the SPA and that failure to comply will result in a suspension of CETA benefits.

While the Canadian government may agree with the principles of the SPA, the scope and implications of the agreement and its restrictions on Canadian sovereignty may be more than this government is willing to swallow,” said Dawson.

EU market access for autos is another important gain. It was uncertain during the negotiations how Canada was going to get export access it could use because there is no such thing as a purely Canadian car. All vehicles produced here have a significant percentage of foreign (mostly American or Mexican) content.

“CETA appears to provide a liberal enough interpretation of origin rules that some 100,000 of Canada’s NAFTA-mobiles will be accepted duty-free every year,” Dawson said.

This will surely be a boost for the automotive industry in Canada. Toyota’s Yaris make of automobile, manufactured in France, tran-

sits through the Port of Halifax to markets in eastern Canada, Quebec, and Ontario.

Jean-Roch Hamel, Account Manager, Automotive, for CN, which operates the Autoport facility out of the Port of Halifax, said the advantage of Halifax is its close proximity to the final market compared to the US eastern seaboard ports.

“The second advantage is the availability of rail car supply. We bring in railcars with other vehicles to be unloaded, and our transit time out of Halifax to Quebec, Montreal, Toronto is very good. For lower volume destinations, the advantage is they can co-load on the same railway,” he added.

CN provides value-added services through its Autoport facility.

“For the Yaris, each vehicle gets some work. We add some fuel to the tank, the radio, and the user guide/manual. With some of the other manufacturers we do vehicle prep when the car gets off the boat. Some manufacturers will do a special program on the vehicle, which could go from installing a radio to GPS systems. If someone wants a high end vehicle in a different colour we will also do special paint jobs for them,” he said.

While it’s early days, Hamel said with the CETA free trade agreecontinued

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continued from p. 16

T CN Rail’s Autoport facility at Dartmouth, N.S. services automotive products for Toyota coming out of the European market.

T >

>

>

ment “we anticipate some activity on the export side to Europe, and opportunities for some of the manufacturers with plants in Canada to use the Port of Halifax as a gateway to Europe.”

“We have at least one vessel coming from Europe loaded with different European vehicles. These vessels go down the US eastern seaboard and back to Europe almost empty, so there’s the opportunity to reload product out of Halifax going back to Europe,” he added.

Aside from deals such as the CETA, the EU also has plans to change tariffs for developing countries, reducing the number of nations eligible for its Generalised System of Preferences from 177 to 90, which some suggest gives preferential access to the world’s poorest countries while removing high and upper-middle income countries from the trade benefits altogether.

In terms of its customs regime, however, the European Commission has proposed standardizing customs penalties across the European Union, harmonizing offences and recommended fines and fees.

The aim is to create a more level playing field for businesses and a more uniformly managed customs union. Across the 28 states the penalties for customs offences currently vary. Sanctions would be levelled in the case of unpaid duties, a failure to declare goods, falsified or incorrect documents, the unauthorized removal of goods from the customs area, and other offences.

Punishment for minor customs violations, such as inadvertent errors, could be equivalent to one per cent of the value of the goods being shipped.

For the most serious offences, the EC proposes to levy a fine of 30 per cent of the goods’ value.

The commission said these fines would also take into account “the nature and circumstances of the infringement, including the 18

January/February 2014

frequency and duration, whether a trusted trader is involved, and the level of tax evasion.”

The EU and the International Road Transport Union, meanwhile, following a third conference together in Vilnius, Lithuania this fall, announced they would continue to focus on amending appropriate weights and dimensions rules to allow aerodynamic efficiency gains and road safety improvements for vehicles and equipment, and to promote efficient connections between modes.

“Countries want to have long-lasting and reliable transport and logistics policy across international borders. Participants should develop more effective and streamlined mechanisms for international road transport and trade facilitation,” said Rimantas Sinkeviius, EU Transport Council President and Minister for Transport, Republic of Lithuania.

“It should be remembered that commercial road transport is the only transport mode which provides door-to-door service and complements all other modes and so I welcome the recognition of the need for even closer partnerships with the road transport sector in order to meet today’s challenges.I can only stress how such close co-operations are necessary to challenge for instance unilateral decisions taken by countries to change their compliance with international agreements, such as the United Nations TIR Convention,” said Janusz Lacny, IRU President. CS Associate editor Julia Kuzeljevich has been writing about transportation issues for more than a decade. Her meticulously researched articles have

Dan Jam Meh Mer Gilli Cyn Fah Albe Deb Kare Wad Kath Jenn Mel Sara Bru Kell Kare John Caro Stev Trev Darc Kim Gan Siew

garnered several transportation and Canadian Business Press writing awards.

www.canadianshipper.com

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Certified Trade Compliance Specialist

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For information about the CTCS Program, visit cscb.ca/ctcs or call 1-613-562-3543 CTCS/CTL AD.indd 1 p10-27 CdnShipper JF2014_Europe1.indd 19

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INLAND PORT FOCUSES ON CONTAINERIZATION

By Julia Kuzeljevich TO ATTRACT GROWTH

T

he Duisport Group, which owns and manages the Port of Duisburg in Germany’s Rhine-Ruhr region, expects container volume by ship, rail and truck to increase a record 16 per cent year in 2013 to surpass three million TEU. With a new record total of 3 million TEU, Duisport said it has secured its position as the world’s largest inland container port.

Speaking at the recent St. Lawrence Seaway’s Highway H2O conference in November, Duisport CEO Erich Staake noted that “this impressive growth in the container sector shows that one can generate growth with integrated transport and logistics concepts, even when there are stagnating handling figures in the sea ports.”

According to current projections, overall cargo tonnage for the full year will remain flat at 60 million tonnes.

“Acquiring new customers in contract logistics and the associated container volumes have been the main drivers of [container] growth. In addition, by targeted development and new construction of terminal capacities we have created the conditions for further growth,” said Staake.

Duisport had just concentrated on bulk handling and operating in a landlord function until 1998, but the high dependency on bulk cargo was not competitive with losses in bulk cargo over the years.

“At the end of the 1990s the EC started liberalizing the rail mar-

ket. They started to discriminate against the private carriers so we, along with the shippers, started to support the private lines.

Duisport also operates daily shuttle trains between various seaports including with Rotterdam, by far the most efficient. When I started we had one daily barge link to Rotterdam, now there are five daily rail shuttles, and three daily barges. The intermodal corridor was very much driven by rail but also by barge transportation,” said Staake.

Container traffic is the only growing segment for barge traffic in Europe, as a result of the economy and because of the drop in coal and steel volumes. “Everything that can be stuffed in a container is going to be stuffed in a container,” said Staake. “The containerization rate is at around 85 per cent. It’s the driver for barge transport,” he said.

Staake said the port acquired at least 30 international clients over the last ten years, of the 70 business settlements it concluded.

“As an inland port the big ships cannot call you, so how can you participate? That was the real challenge.The port is busy, with 20,000 ships per year and 20,000 trains. We have become one of the most important hinterland hubs in Central Europe. We are well located for European standards-30 million consumers within a radius of 150 km, and located directly on the Rhine-Europe’s most important waterway, at the intersection of international motorway axes,” said

Containership vessels on the Rhine Copyright “duisport / Köppen”

20 January/February 2014

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Staake.The Duisport business model aimed its focus on overcoming disadvantages.

“The answer was we have to look at what was already available and what was not?

We saw that we had a variety of services that were on the level of the bigger Seaports.The Duisport agency was developed to optimize the process for shippers, transshipment and logistics services. Duisport rail was another activity we founded some 12 years ago, initially as a feeder company for local and industrial activities. It is a very important tool for our growth,” Staake noted.

There are dozens of industrial companies with dedicated rail service into their facilities, Staake noted.

The port has invested very heavily in infrastructure and superstructure as a precondition for its gateway development.

Two roll-on-rolloff facilities with 220, 000 sq m for automobile logistics now have built on the intermodal concept and the next step is towards improvement of network connections to increase the utilization of infrastructure aggregation of maritime and continental cargo flows in Duisburg.

“The challenge is always the same-you have to best utilize your barges or rail activities or you cannot build such a system.”

“Our rail links are substituting at least 50 per cent of airfreight and are being used substantially by companies like HP. We are trying to act as a solutions provider, using a full service approach with logistics transport chains developed according to needs, offering the possibility of multimodal access to road, rail and water.”

“The development of Duisport has been largely influenced by putting our focus on the optimization of processes within value chains. This is how we could develop from a traditional landlord into an integrated solutions provider. We just finalized a deal to build and start the biggest CKD center for Audi, worldwide.”

The anticipated trimodal logistics center will be specifically tailored for Audi’s needs and will include a terminal integrated warehouse with in-house rail connection, neighbouring empty container depot, and container transport to seaports, mainly Antwerp by rail and barge, with transshipment at Antwerp Gateway terminal, and onward sea transport to China, India and Mexico, replacing more than 13,000 truck movements per year.

Volkswagen’s parent company has also signed a contract for 50,000 TEU containers to be exported from VW and Audi.

“We would never have had the chance to sign such contracts without having developed the services. I was in Shanghai to talk to Cosco (the carrier for VW and Audi) to make sure that this works and that we are not carrying costs that would make such deals impossible,” Staake added. CS

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Associate 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.

www.canadianshipper.com

January/February 2014

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HIGHWAY H2O SETS SIGHTS ON EUROPEAN BUSINESS T he Great Lakes St. Lawrence Seaway has committed to several marketing efforts abroad, with one of its focuses being Europe.

Alan Taylor has been the European representative for Highway H2O (The Great Lakes St. Lawrence Seaway System) since 2006. He took on the role of marketing the Seaway in Europe to give potential clients a sense of what the Seaway offers.

The Seaway regularly exhibit at shows like Breakbulk Antwerp and Transport Logistik Munich as well as at exhibitions pertaining to wind energy.

“My role is not to give them rates but to introduce them to the ports and carriers in the system, in a sense to get them to exit their comfort zones about East Coast Ports, and to come directly into the Lakes because that’s where your freight ends up,” he said.

Taylor keeps a close eye on the grain trades, looking at marketing perspectives both sides of the Atlantic, in order to go back to Seaway stakeholders to give them some perspective about what’s going on.

“The Canadian side of the Seaway has been traditionally more marketing-oriented. We spend a lot of time talking about carriers and the various European ports they could call at. Regrettably 2008 did a lot of damage and we haven’t recovered from that nor has the world recovered.

As far as the EU is concerned, the UK and Germany are probably slowly coming out in a positive way but we still have a long way to go. If people did have business, they were trying to source closer to home,” said Taylor.

With the closure of some steel works along the Seaway System, recovery has been slow.

Speaking at the Highway H2O conference this November, Bruce Hodgson, Director of Market Development, St. Lawrence Seaway Management Corporation said the Seaway is looking at other gateways and will be announcing a gateway incentive tool to entice cargo into the system.

“It’s been a very desperate time for all concerned-a long way to go before we get back to the really ‘heady days’. Overall the tonnages have not got back. As far as the EU is concerned, doing business with Europe is easy. The biggest obstacle has been the recession. I would think probably the most exciting thing that’s happened in the last 12 months is the Cleveland- Europe express service and the prospect of getting that off the ground.They haven’t decided on a European port yet but there are probably four or five in the mix,” noted Taylor.

The Port of Cleveland unveiled plans this fall to start a regularly scheduled express freight shipping service between the Cleveland Harbor and Europe, starting in April.

The Cleveland-Europe Express Ocean Freight Service will be the only scheduled international container service on the Great Lakes, operating in partnership with the Dutch Spliethoff Group, which plays a leading role worldwide in the transport market for various cargoes, such as heavy lift, general cargo, forest products, project based machinery, and yachts. The company owns and operates a fleet of about 100 multi-purpose, heavy-lift, and ro-ro vessels ranging in size from 9,500 to 21,000 tons, all of which fly under the Dutch flag.

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BY JULIA KUZELJEVICH

The Port of Cleveland to start a regular service to Europe in April.

“Currently, local manufacturers use East Coast ports to ship goods to Europe, incurring additional rail and truck costs along the way,” said Will Friedman, president & CEO of the Port of Cleveland. “The Cleveland Europe-Express will allow local companies to ship out of their own backyards, simplifying logistics and reducing shipping costs.”

“We do have a bulk terminal doing about 300, 000 tonnes a year of iron ore and limestone. We are reliant on imported steel from Europe. There is not a lot of diversification and cargo growth.

The strategic opportunity is to grow our cargo base. At 355 million tonnes of general cargo, we are still trying to climb back up to the levels of six or seven years ago,” said David Gutheil, Vice president for Maritime and Logistics, Port of Cleveland.

In terms of structural challenges, Gutheil noted that very few ocean carriers are serving the market on a regular basis.

“Seasonality, locks, and vessel size issues are still going to exist.

Existing carriers don’t have a high incentive to expand their business.

Most Ohio and Midwest cargo moves through East Coast ports due to lack of scheduled vessel capacity on the Lakes. So the solution is we will charter the vessel ourselves,” he said.

“We believe there is a huge hole there that we’re missing by not offering direct liner service.

Huge risk and lots of money spent but the bigger risk is status quo. We can’t continue to not look for additional cargo, and we will go after opportunities that are currently going through other Great Lakes ports,” said Gutheil.

The Port will not have to invest any capital costs to start the service and has designed the service to be revenue generating, which it will reinvest in maintaining job producing infrastructure, cleaning up ship channel infrastructure, and opening up the waterfronts to public access. CS Associate 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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EUROPEAN TRADE

MARINE INDUSTRY TO SEE TRADE BENEFITS

BY LEO RYAN

F

or Canadian ports, shipping lines and terminal operators, especially in Eastern Canada, vastly-enhanced European horizons are beckoning. Although last fall’s Canada-European Union Comprehensive Economic and Trade Agreement (CETA) in principle may not be ratified or implemented until late 2015 or in 2016, the potential benefits of virtually total free trade across the Atlantic for shippers and the marine shipping are already high up on the radar screens.

On several occasions recently at industry events, Transport Minister Lisa Raitt went on record as an avid booster of CETA, hailing it as an important opportunity to diversify Canada’s trade. “The US is important but the EU represents an even bigger market.”

Wendy Zatylny, president of the Association of Canadian Port Authorities, has declared that the expected future “increased volume of cargo will have a direct positive impact on Canadian ports.”

But she has also cautioned that the ports need additional infrastructure funding from the federal government complementing private investments to cater to growing cargo demand. She refers to a study conducted by the Association and Transport Canada pointing to “a $5.8 billion gap in funds needed to pay for port infrastructure needs.”

While some analysts question federal claims from a joint study that CETA will boost economic activity in Canada by as much as $12 billion and create about 80,000 jobs by obtaining privileged access to a market of 500 million people, there is a wide consensus that the historic accord will boost trade – the great bulk of which moves by ship. In sectors like agriculture, strong gains are foreseen for Canadian exports. In others, like commodities, the gains may be marginal, at least initially, due to global market conditions. In certain finished goods, advances are anticipated.

With two-way merchandise trade of nearly $90 billion, the 28-nation European Union is Canada’s second largest trading partner after the United States in goods and services. The trade balance is largely in the EU’s favor. Generally-speaking, the Canadian exports affected include passenger cars, auto and aerospace parts, medical and IT equipment, chemicals and plastic products, grains and oils, dairy products, forest and lumber products, seafood products, metals, minerals, iron and steel.

Among Canadian carriers, Fednav’s FALLine, which has been operating a regular service between northern Europe and the St. Lawrence Seaway-Great Lakes corridor for many years, appears well positioned to expand its business. Montreal-based Fednav is the largest ocean-going user of the waterway, accounting for approximately 40% of the deep-sea vessel transits.

Comments Mark Pathy, co-CEO of Montreal-based Fednav: “We would expect the agreement to improve the economics of both traditional FALLine cargoes inbound, namely steel and general cargo, as well as agri-exports outbound, which could be quite positive for the Seaway.”

Terence Bowles, president of the St. Lawrence Seaway Manage-

Aerial view of the Port of Montreal.

continued 24 January/February 2014

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Courtesy Montreal Port Authority

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continued from p. 24

ment Corporation, agrees that CETA “holds promise for increased Seaway cargo.”

In the past few years, traffic on the bi-national waterway has slipped below 40 million tonnes. Operating at below 50% capacity, there is clearly room to grow beyond the success of various incentives encouraging new cargo.

With the prospect of the elimination of EU tariffs averaging about 14 per cent on agricultural products,Tim Heney, president and CEO of the Port of Thunder Bay on the tip of Lake Superior, says: “We are a natural port to benefit from shipping increased grain exports to Europe. Quality wheat from the Prairies remains in high demand, and we have the largest storage area in North America for grain products.”

During the peak years of the early 1980’s, prior to a major shift of Canadian grain exports away from Europe to Asia via the West Coast, Thunder Bay handled as much as 16 million tonnes annually.

Current levels of 6 million tonnes should evolve upwards, particularly if increased imported steel brings more ocean vessels through the Seaway, suggests Heney. These vessels would carry more grain to Europe on their backhaul voyages.

According to the Canadian Agri-Food Trade Alliance, once in force, CETA will bolster Canadian agriculture and food exports to Europe by $1.5 billion on an annual basis. This would encompass $600 million in extra beef sales, $400 million in pork, $100 million in grains and oilseeds, $100 million in products containing sugar and $300 million in processed foods, fruits and vegetables.

Exports to Europe of Canadian beef, mainly from Alberta, will increase fourfold to an estimated 65,000 tonnes. The annual quota for Canadian pork exports, chiefly from Quebec, is to soar from a current 6,000 tonnes to some 80,000 tonnes.

Port of Montreal well placed among St. Lawrence ports One port that appears especially well-placed to benefit from CETA is Montreal.

Indeed, when the tentative deal was announced in late October, Sylvie Vachon, president and CEO of the Montreal Port Authority, was quick to remark: “We are the leading port on the North American East Coast for (container) trade between Northern Europe and North America’s industrial heartland.Within the context of the new free trade agreement with the European Union, our vision to expand the port to our land at Contrecoeur (on the St. Lawrence River) takes on added significance.”

“It’s a home-run for Canada, and certainly opens the door, for instance, to increased exports in reefer containers of beef and pork as well as some manufactured products,” enthusiastically declares Kevin Doherty, CEO of Montreal Gateway Terminals Partnership, biggest container operator at the port.

European markets presently account for two-thirds of Montreal’s container throughput of 1.3 million TEUs. In an interview,Tony Boemi, vice-president of growth and development, agreed that the advent of CETA was a key factor sparking the creation on port territory of a facility specialization in the containerization of agricultural products for local and international markets. It is slated to open in the second quarter of this year.

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“We are the leading port on the North American East Coast for (container) trade between Northern Europe and North America’s industrial heartland...”

Sylvie Vachon, president and CEO of the Montreal Port Authority For his part, Mario Girard, president and CEO of the Quebec Port Authority, has qualified CETA as “excellent news not only for the Port of Quebec but also for the region and the country as a whole.” The port trades with 10 European countries, notably in agro-food and energy products, metals and minerals.

On the north shore of the St. Lawrence River, the Port of SeptIles is enjoying a tremendous boom as North America’s leading iron ore port thanks to a surge of mining developments in the Labrador Trough, with 2013 cargo likely surpassing 31 million tonnes and much more predicted in the years ahead.

But Pierre Gagnon, president and CEO of the Sept-Iles Port Authority, stresses that China-led Asia constitutes the leading market rather than Europe in the foreseeable future. In an opinion shared by the management of local aluminum producer Aluminerie Alouette, the reduction or elimination of customs duties alone is not a sufficient element to provoke a significant transfer of markets in Europe from current world commodity and metals suppliers.

Global alliances maintain Atlantic commitment On the Atlantic Coast, the Port of Halifax, which is operating at under half capacity, has been a long-time supporter of freer trade with Europe.

Karen Oldfield, president and CEO, sees CETA contributing to increased cargo (including seafood exports) through the Nova Scotia port that has invested heavily in new infrastructure and can today handle the largest containerships calling on the North American East Coast.

CETA could also be potentially beneficial for proposed container terminal projects in the Strait of Canso and Sydney, Nova Scotia going back several years. But the viability of these projects still not fully launched in construction remains a question mark for industry observers.

Meanwhile, there seems no danger that Canadian shippers and the ports of Montreal and Halifax will be negatively affected by major rival, global shipping alliances focusing on the giant US market and revamping their schedules. Maersk Line, MSC and CMA CGM recently announced they will include the transatlantic trade lane alongside the Far East-Europe and Transpacific routes in their P3 network alliance from the second quarter of 2014. And HapagLloyd, a member of the G6 alliance, has indicated it will continue to operate its two Montreal services of SLCS 1 and SLCS 2. CS

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THE PUSH IS ON Regulation, security, traceability key drivers for pharma logistics players

I

n the world of pharmaceutical logistics, security and traceability have become paramount.

Monitoring technologies and environmental condition monitoring have started to merge, allowing for the monitoring of temperature and light conditions, for locating the shipment at the time of any excursion, and all done in real time.

In the past, tracking technology allowed for visibility into the shipment but you had to wait until arrival at your facility to download the environmental conditions and then backtrack to see where and when the problem may have occurred. The result is that today, you can monitor if an excursion is happening and depending upon your communications and contact with the carrier fix the problem before it can harm your products in route, noted Brad Elrod, Director, Global Conveyance Security, Pfizer Global Logistics Compliance, and a speaker at the recent IDGA’s (Institute for Defense and Government Advancement’s) 2nd Annual Cargo Security Summit.

FedEx, which recently won the Best Supply Chain Integrity In-

novator of the Year at the 2013 Cool Chain Excellence Awards, launched its SenseAware solution in 2009 in the US and has since expanded into a number of international markets with the service, which provides near real-time access to a package’s vital statistics within the in-transit supply chain or stationary inventory monitoring.

Along with increased monitoring, the pharma logistics industry is also seeing a push toward stricter regulations along the chain.

According to Health Canada spokesperson Blossom Leung, Health Canada has commenced revisions to version 2 of GUI-0069, (Guidelines for Temperature Control of Drug Products during Storage and Transportation), or “Guide 69” in industry parlance.

“Given the recent release of updated international standards (European) and internal discussions regarding evolving temperature control practices within the pharmaceutical industry, Health Canada anticipates releasing this revised version of Guide-0069 for public consultation in late Fall of 2014. The timing of this revision and recent change in international standards make for an excellent oppor-

k/Thinkphoto

UPS Supply Chain Solutions’ Burlington, Ontario cooler facility Photos courtesy: Carolyn Gruske

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both needs, we become stronger,” says Pat O’Connor, IWLA’s Washington representative.

The traceability system is based on an ownership model whereby transaction information is provided upon a change of ownership rather than a change of possession. The traceability obligations require businesses to provide transaction information, history and statements, to each subsequent owner, and keep transaction information for six consecutive years following the transfer.

“This is the first federal statute to contain a strong definition of a 3PL’s place in the supply chain,” O’Connor said. “The impact is now we can point to this law on other issues affecting 3PLs.” The Act also sets uniform national licensing standards for warehouse-based 3PLs, noted IWLA. While security and traceability measures are ramping up overall, client-specific requirements also drive the targeted solutions providers such as DB Schenker offer in their range of services.

Scott Barker, key account manager and expert in pharma logistics with DB Schenker, said security measures in pharma logistics tend to be client-specific.

“Each client has different security measures. Some have gone to total dedicated units from the factory to the airline to us. In some cases we’ve had security actually follow the units. This depends on the dollar value and on the drop locations, and is a huge factor in every pharmaceutical company you’re dealing with, especially if it’s a front line pharmaceutical product,” said Barker.

“In many countries pharmaceutical companies are consolidating distribution. India is a fun market to deal with as there is not as much direct lift coming into North America. Cargoes are often routed over London Heathrow, or Belgium,” noted Barker.

In some cases issues with handoffs or monitoring in the air cargo mode has led the air cargo industry to push IATA to increase its efforts to make air cargo more reliable, because of lack of SOPs in place throughout the system.

“It’s a tough problem for IATA because (in some parts of the world) there is a lack of direct lift and facilities. In many cases there are not enough facilities to handle the product.

Some airlines will have chill facilities, some will not. Generally in North America the situation is not that difficult because if cargo has to lay over there are secure and chilled areas.

I’m finding more and more companies are looking at marine, trying to get bigger volumes, looking at reefers. But generally it comes down to production and need.

A lot of this product needs to fly because it’s need-

tunity to further align with international regulatory partners,” Leung told Canadian Shipper.

Health Canada has taken an additional measure to strengthen the supply chain as part of its recent implementation of regulations respecting good manufacturing practices for active ingredients.

“Every fabricator, packager/labeller, distributor, wholesaler and importer of an active ingredient, will be required to include, on the container label or on other documentation accompanying the drug, directly following the information provided by any previous party (a) the regulated party’s name, contact details, and Establishment Licence number, if applicable; (b) whether it has fabricated, packaged/ labelled, distributed, wholesaled or imported the drug; (c) the date of that activity; (d) the expiration or re-test date of the drug; and (e) the lot number of the drug. This record-keeping amendment fostering the traceability of active ingredients will help to protect the health and safety of Canadians in several ways. It will allow for more rapid and targeted investigation and recall of problematic active ingredients. It will also make the introduction of illegitimate, substandard active ingredients into the supply chain more difficult as verification of an active ingredient’s provenance will be simplified,” Leung said.

In the fall of 2013, USCongress and President Barack Obama passed and signed the Drug Quality and Security Act, Public Law 113-54.The new law contains important provisions for tracing pharmaceuticals in the supply chain.

The new law “creates a uniform, national licensing standard for wholesale distributors and third-party logistics providers to safeguard the pharmaceutical distribution system. It replaces the fragmented and piecemeal system that differed from state-to-state.”

The International Warehouse Logistics Association (IWLA) applauded the legislation which caps a nearly three-year effort “that has multi-faceted impacts on the third-party logistics industry”, the association said.

“When dealing with supply chain security and safety, the influence stems from being recognized as an equal partner to the pharmaceutical manufacturers, primary and secondary wholesalers and distributors and pharmacies. By working with everyone in the sector, supporting

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©everythingpossible/iStock/Thinkstock

©Zoonar RF/Thinkstock

By Julia Kuzeljevich

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Above: Amgen Director of Supply Chain Ralph Mueller speaks with Canadian Shipper’s Julia Kuzeljevich at the UPS Canada Burlington facility.

ed in the market. You can’t wait for 15-18 tonnes to be put in a reefer box. They have to get the product ramped up and marine will become more important,” said Barker.

He noted there is still work to be done with IATA and the airlines on sign-offs.

“We’re asking carriers to come to the facilities and watch products being loaded into Envirotainers so they can do a proper sign-off. Some of the larger carriers will actually come to the facility to do so. About 20 % are our own and the balance are the airlines’ containers.

DB Schenker is also an agent for Envirotainer so that’s actually a selling tool,” said Barker.

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to have temperature and security seems to be the biggest factor.

“How we are protecting their product and what are the costs involved?

That’s really the focus right at the moment, especially in Canada,” he said.

UPS’ 2013 Pain in the (Supply) Chain survey, an annual survey of global healthcare executives in the pharma, biotech and medical device industries, found that the top supply chain, business concerns and investment plans for these industries centered around regulatory compliance, product security and cost management.

Other topics included challenges and strategies around product protection, global expansion and technology, as well as impacts of the recent economic downturn and evolving legislation around the world.

Robin Hooker, Director of Global strategy, with UPS Healthcare Logistics, told Canadian Shipper that the survey’s findings also delved deeper into the successful strategies partner clients were employing to make a more effective health care supply chain, as well as their top “pain points.”

“What we’re seeing in the marketplace is that some of the standard solutions are not enough. In Europe we’re experiencing new guidelines with GDP that are quite stringent, and we’re at the table with top pharma there,” said Hooker.

UPS maintains an active regulatory “arm” of compliance experts to address issues in these areas.

“We need to push for strong standards that are accepted universally, and that raise the bar across countries. Looking at the survey, regulatory issues maintain the position as the number one concern, and the top concern from a global perspective.

Having standards out there will enable manufacturers to access more global markets,” said Hooker.

UPS Supply Chain Solutions celebrated the opening in December of a dedicated pharma facility at its Burlington, Ontario campus, as well as a five year renewed commitment to a partnership with Amgen Canada, in place for 15 years already.

“Drug manufacturers face distribution issues such as contamination, shortages, and

counterfeiting that can compromise product quality. Biologics are much more complex to manufacture, and they have the ability to change lives, so it’s critical that we can serve every patient every time.

UPS is a company that upholds the same standards for regulatory compliance as we do and we are proud to be aligned with them,” said Ralph Mueller, Director of Supply Chain for Amgen, which handles orders in the area of 20,000 shipments per year.

Amgen is an anchor client in UPS’s multi-client cooler facility, said J. Kevin McConnell,Vice President, Canada Distribution, UPS Supply Chain Solutions. continued

caption

Photo courtesy: CP

Photo courtesy: CP

i

Above: J. Kevin McConnell, Vice-President, Canada Distribution, UPS Supply Chain Solutions, addresses guests at the official opening of the Burlington campus cooler facility.

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PHARMA LOGISTICS

continued from p. 30

With tremendous growth in healthcare products, said McConnell, the strategy for the Burlington campus’ cooler facility saw the company “build ahead”, anticipating growth around the clients’ world projections.

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sponse solution developed by UPS creates a collaborative action plan for clients in the event of a disruption of service.

“If there are deviations from key checkpoints there are intervention checkpoints where we can pull the package off the vehicle, re-ice, add de-ice, courier outside the standard network if necessary.

We’ve also added a financial instrument: UPS proactive response secure insurance, up to the retail value of the commodity being shipped. We’re getting a lot of uptick in terms of the interest in the product.

It was launched in July and is unique in the marketplace. No other competitor is blending the enhanced visibility with an answer related to the insurance side,” said Hooker.

Accessing multi client distribution facilities will be one of top strategies going forward, noted Hooker.

“Multi-client facilities enable a nimble core concept profile. They allow supply chain leaders to handle regulatory compliance, inventory distribution in their home countries and targeted economies, using an approach that emphasizes agility, and that maintains strong brand recognition,” he said.

The overarching themes out of the ‘Pain in the Supply Chain survey’ are that partnerships are being leveraged for cost management, and for accessing global markets.

“Right now there is a lot of pressure and a need to transform in the industry.We don’t want to underplay the fact that the status quo cannot be the operating mode.

Clients need to access new markets but in a way that keeps them nimble and cost effective. They need to maintain compliance and step up to new guidelines. The solutions we’re seeing do center around partnership models-not necessarily at the large multinational level but even at the small biopharma levels that are experiencing rapid growth,” said Hooker. CS

C

N b a

W o w T

Associate editor Julia Kuzeljevich has been writing about transportation issues for more than a decade.

CANADIAN INTERNATIONAL FREIGHT FORWARDERS ASSOCIATION

Her meticulously researched articles have garnered several transportation and

TF

Canadian Business Press writing awards.

32 January/February 2014

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RETAIL LOGISTICS

Getting down to the ‘bricks and sticks’ of the retail supply chain The interplay between logistics and real estate is key to informing a distribution strategy

I

n retail supply chains, real estate and transportation form a tight relationship.

A country like Canada, where industrialization came about later, and more evenly than in the US, also has a very different retail history, notes Ian Gragtmans, executive vice president of brokerage house Colliers International, which services clients in the 3PL and consumer packaged goods sectors.

A speaker at the recent Surface Transportation Summit, sponsored by Transportation Media and Dan Goodwill & Associates, Gragtmans is also the co-author of a white paper, along with Colliers vice president Kate Hay, called ‘Distance Over Time: The interplay between logistics and real estate that has characterized retailing in Canada. A history and a glimpse at what the future holds.’

Canadian retailing has been shaped in large part by distance; distance between points in time and distance between points in space, note the authors in the white paper.

“It is clear to us that distance will play a key role in shaping the future of retailing in Canada, and that those who can deal with it effectively will be best positioned to succeed in the new retail reality,” the paper says.

Industrialization in the United States was a relatively rapid event that occurred in and around the mid-1800s across much of the country.

Conversely, industrialization occurred more slowly in Canada and even today it is not inaccurate to describe Canada as a country with a small population spread over a large mass of land.This “directly contributed to the fact that industrialization in Canada ran unevenly and almost two decades behind the United States in some provinces (Ontario, British Columbia and Quebec) and even further behind in others.”

The retail format that emerged out of industrialization – in both the United States and Canada – was the urban department store; a success due to its ability to provide a range of products and services under one centrally-located roof.

However, other than the timing of their development (and perhaps a consequently slightly more mature retail industry in the United States), by 1900 there were few differences between the United States and Canadian retailing environments. In the early 1900s, when chain stores made an appearance in the United States these began to quickly compete with traditional department stores.

Chain stores did not gain the same traction in Canada as in the United States, because of the significant logistical challenge distributing products to a number of stores positioned in remote urban centres nationwide.

“That challenge remains a Canadian retail reality today,” the paper states.

Canadian culture, discernibly different from that of the United States, is another key factor in how the retail landscape played out in the country.

Canada’s strong stated commitment to multi-culturalism “has led to a society in which people keep the traditions and preferences of 34 January/February 2014

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By Julia Kuzeljevich

their countries of origin. The results of this commitment are pronounced regional (and intra-regional) differences in tastes and preferences, and made (and still makes) the chain store model a difficult one to implement successfully in Canada.”

But with increasingly shared media and the continued entry of international retailers into Canada, the effect of this difference on the Canadian response to ‘chain’ retail is diminishing and should be expected to continue to diminish, the paper suggests.

Gragtmans says Canada has a more complicated and more difficult vendor structure.The perfect distribution formula has yet to arise here, he says, and a lot of time is spent with CEOs on corporate strategy as a result.

Today’s “blurring of retail formats” sees a mix of big box to small box, in store and online retailing (dual channel: ecommerce and bricks and sticks), and an incredible shift of product sourcing, from North America to Asia.

Onshoring will not happen overnight, and there is a considerable amount of product flow overseas.

Managing the transfer of product from intermodal transport to distribution centres is a key issue.

While some see an American “invasion” in the retail arena, Gragtmans sees more of an “internationalization” of the Canadian landscape.

The Canadian difference?

“There is a seeming Canadian affection for oligopolies, and a logistical challenge related to gaining a footprint in urban centres dispersed over a large geographic area,” he says.

The increase in non-store retail is resulting in a varied array of retail footprints.

“There is an increased use of technology in all phases of the supply chain, the requirement for a globally networked supply chain, for the rethinking of the role of logistics and supply chain in corporate strategy.

It’s important you be at the table for setting the strategy with your client.

You better offer more than you traditionally have in the past,” he says.

With the continued move to dual channel, and the pressures of JIT, offering more than just transportation will be the demands on transport.

“Vendor inventory management will be something you’ll see more and more-we want you to hang on to the product and we’ll let you know when we want it delivered to the person who ordered it.

3PLs will have to have more customers with different product coming out of the same DCs. There will have to be more collocation amongst vendors and retailers to come up with a remotely rational model for pricing under the same roof,” says Gragtmans.

One of the trends witnessed today is a return to urban shopping, but new urban stores are often part of mixed use developments – combining some residential and office components with a mix of retail formats. Many retailers, especially those who came of age during the power centre or ‘big box’ era are rethinking their traditional stores and realizing that a mixture of box sizes, configurations and product offerings is better suited to the realities of retailing in Canada today.

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RETAIL LOGISTICS

©Anatoliy Babiy/iStock/Thinkphoto

This also entails a ‘rethink’ of product distribution networks and facilities that for a large part were located and built to the requirements and specifications of a different time. Therefore, retailers and their suppliers are rethinking the real estate and logistics required to support this new “hybrid” of retail integrated with something else.

Issues include: getting product in and out of urban locations in a traditional tractor-trailer, higher costs for downtown real estate making large amounts of stock-room or storage space cost prohibitive, and small stores resulting in smaller inventory of the same product on store shelves in order to effectively maximize the offering, says the paper.

Gragtmans also notes that in spite of its large geographical area, Canada’s desirable available retail real estate is relatively limited – Toronto has 22.4 square feet of retail space per person and Vancouver has 14.1 square feet of retail space per person.

This makes competition for and the price of that real estate intense, which results in sticker shock for a lot of entrants and adds an additional layer of complexity to the expansion of their networks.To the extent that their networks are not robust they remain harder to support from the perspective of supply chain and logistics.

There is a lot of discussion around the future of retail in Canada as retailers grapple to determine the correct channels through which to offer their goods. The questions arising from this discussion generally group around a few issues: 1. Are goods to be offered in store or on-line? Or both. a. If goods are to be offered in a physical retail store, what form should that store take? Small and urban supported by larger distribution centres? A showroom more than anything else? b. If goods are offered online how will they get to the customer?

Should they come to the closest store to pick them up?

If on-line and customers can order anywhere in the country

where do we have to store our goods in order to ship efficiently?

How are we delivering to the consumer?

“Though critical, the ‘right’ answers to the questions set out above will vary from retailer to retailer and we would submit that there is still the opportunity for a smart ‘first mover’ to gain some advantage by answering its questions and quickly moving towards implementing new processes and technologies based on those answers.We are seeing an increase in the use of technology in all parts of the supply chain and we should expect to see even more technological advances in this area – as evidenced by the recent acquisition of Kiva Systems (and its fulfillment robots) by Amazon for $775Million (USD),” says the paper.

Retailers are contemplating the costs and benefits of such things as JustIn-Time inventory, white glove shipping, small and short-notice shipments, and requiring vendors to play a larger role in inventory management.

“Along with the change in the way we retail is a rethinking of the role of logistics and supply chain in the corporate retail organization.

To the extent that they do not already, there is a general movement towards involving logistics and supply chain earlier and more deeply in setting corporate strategy.We would suggest that external suppliers of logistics and supply-chain related resources – from real estate, to transportation, to packaging – also request a seat at the table when retailers are setting their strategy, as opposed to being order takers to the business once the strategy is set.” CS Associate 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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Courtesy: Deltaport

WEST COAST

Aerial view of Deltaport overpass. Completion is targeted for late 2014.

WEST COAST PORT PROJECTS ATTAIN ‘UNPRECEDENTED’ DIMENSION

O

n the West Coast, home to Canada’s Asia-Pacific Gateway for trade with the fastest-growing region in the world, current port expansion projects have reached never-attained proportions, with some analysts even suggesting that it’s just the tip of the iceberg.

Captain Stephen Brown, President of the Chamber of Shipping of British Columbia, categorizes 2014 as “a truly pivotal year” as project-related discussions surrounding resource development and First Nations Treaty and Land Rights claims take centre stage.

“Expansions of terminal capacity, infrastructure development and new project proposals are all moving ahead at an unprecedented pace across the length of the Asia-Pacific Gateway,” Capt. Brown told Canadian Shipper.

“These encompass the oil and gas sector, dry bulk cargoes and containers, highlighted by the proposal to build a state-of-the-art 2.4 million TEU capacity container terminal at Roberts Bank in Port Metro Vancouver with a completion date of 2024. These developments will require what is already being coined as a Phase 2 of supporting infrastructure needs as ports assess future truck, rail and marine traffic flows underpinned by proven environmental and financial sustainability.”

Ruth Sol, president of the Western Transportation Advisory Council (Westac), adds a cautionary note: “Today’s big unknown is the lengthy and costly process to get the approvals to carry out these expansions. As never before, the public must have its say, and sometimes it says no.”

Port Metro Vancouver (PMV), the biggest Canadian port with annual throughput of 124 million tonnes, constitutes Canada’s dominant player in maritime trade.The more remote port of Prince Rupert in northern British Columbia has emerged in the past few years as the fastest-growing port in the Pacific Northwest for total and Journalist Leo Ryan has reported on key transportation and trade developments in Canada for more than two decades. A former Montreal bureau chief for The Journal of Commerce, he specializes in port and shipping issues and was awarded the Medal of Merit in 1992 by the then Canadian Port and Harbour Association.

36 January/February 2014

By Leo Ryan

container traffic. Among other ports, just partly-developed Kitimat, 210 kms south of Prince Rupert, is making strong efforts to ride a potential LNG and oil export boom.

Soon after winning the election, the Harper Conservative government introduced revamped legislation in 2006 called the AsiaPacific Gateway and Corridor Initiative (AGPCI) with a price tag of $590 million to be spent on a dozen infrastructure projects in both British Columbia and Alberta. This outlay was subsequently increased, and total corridor expenditures including private industry infusion for APGCI have now well exceeded $3 billion.

Canada’s trade with China-led Asia-Pacific countries amounted to $140 billion in 2012 versus $120 billion in 2010. The great bulk of this trade moves by freighters across the Pacific Ocean. And all signs point to steady increase especially of Canadian resource product exports and of imports from Asia of consumer goods.

Having sufficient container-handling capacity and other infrastructure has been a growing challenge particularly for Port Metro Vancouver, whose container cargo in 2012 rose by 8% to 2.7 million TEUs. The port is presently in the midst of more than $700 million in road and rail projects to notably smooth the flow of traffic in and out of its terminals.

In this regard, construction began last March of a causeway overpass at Roberts Bank to separate rail and road traffic at increasingly-congested Deltaport, Canada’s largest container terminal. Completion target for the Deltaport Terminal, Road and Rail Improvement Project is late 2014.

As part of a container capacity improvement program, PMV has worked with the Province of BC and Deltaport operator TSI Terminal Systems to upgrade infrastructure to increase Deltaport’s capacity by 600,000 TEUs to 2.4 million TEUs. Last March, too, PMV announced field studies preliminary to the proposed construction of Terminal 2, which would represent a second 2.4 million TEU terminal at Roberts Bank. Upon regulatory and environmental approval, such a big terminal would be part of a long term strategy to meet container shipping demands to 2030.

In other recent developments, Kinder Morgan announced plans to expand and twin their existing 50-year old pipeline between PMV and

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WEST COAST

the Alberta oil sands. Fraser Surrey Docks is building a coal transfer facility to handle coal from the Power River Basin in the US and move it by barge to a shiploading facility on Texada Island in the Strait of Georgia for shipment to Asia. Neptune Terminals on the North Shore of Vancouver’s Burrard Inlet is boosting its coal-handling capacity to 18.5 million tonnes a year.

Robin Silvester, PMV President and CEO, has acknowledged that a growing preoccupation of the past few years has been the erosion of the port industrial land base as urban encroachment escalates. One regulatory reform that he feels should be undertaken is to replicate today’s concept of Agricultural Land Reserve through the creation of an Industrial Land Reserve.

For its part, the formerly struggling Port of Prince Rupert has clearly had the wind in its sails since launching a container terminal in 2007, benefiting from its location as the closest West Coast gateway to Asia on the Great Circle Route and from the rapid CN double-stack service to the strategic US Midwest market and beyond. Since its opening, Fairview Container Terminal has handled close to 2 million TEUs – and further capacity expansion to 2 million TEUs annually remains on the agenda.

A record 22.2 million tonnes of cargo – chiefly grain and coal - were processed through its terminals in 2012.This record is likely to be broken in 2013 when final figures are tabulated.

At an annual public meeting last June, Don Krusel, President and CEO of the Prince Rupert Port Authority, reported that in 2012 alone new infrastructure, marine terminal and expansion projects invested more than $200 million. He also affirmed that proposed projects represent the potential for about $20 billion in new terminal developments by 2020.

Next December is slated to mark the completion of the first phase of construction of Prince Rupert’s $90 million Road, Rail and Utility Corridor project.

The corridor is conceived as a catalyst for significant terminal developments being advanced through private sector investment on the Ridley Island industrial site at the Port of Prince Rupert.

This project includes the construction of five parallel rail tracks, a two-lane roadway, and a port-owned power distribution system along an 8-km corridor. It will provide shared-use infrastructure for proposed

potash, LNG and other terminals on Ridley Island.

Meanwhile, the Port of Kitimat has been identified as a key potential partner in Enbridge’s Northern Gateway $6 billion pipeline project (yet to receive federal cabinet approval in Ottawa) for delivering Alberta

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heavy oil to Kitimat to be shipped by tanker to Asian markets. A giant 500,000 barrels-aday refinery has been proposed to refine the bitumen shipped from the oil sands to the port. Kitimat has also received several expressions of interest from companies looking at building LNG export plants. CS

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January/February 2014

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WEST COAST

WEST COAST AIRPORTS TARGET CARGO GROWTH

P

rince George is not a typical fuel stop for freighters flying from the eastern part of North America to Asia, but the airport authority hopes that some will embrace this scenario. Work on a fuel farm with a capacity of some 600,000 litres was nearing completion before Christmas, and the authority is looking to get a second tanker truck, which will make it possible to fuel a B747 freighter in less than 90 minutes, according to Al Ridgway, director of cargo development.

Asian carriers are usually full flying into North America but have vacant space on the return leg to Asia, so the idea is to stop in Prince George to refuel and top up on cargo, he explains.

“We have identified that there is a market for perishables exports from Central BC,” he says, adding that he hopes to complete a 25,000 sq ft cross-cocking facility for perishables shortly.

Besides seafood, berries and cherries, Ridgway is looking to live animal shipments to Asia to attract Asia-bound freighters. Traffic related to the $70 billion worth of resource and energy infrastructure projects in the region should provide another stream of cargo for freighter operators.

“I think there is a good chance to develop project work,” comments Ridgway. A pipe manufacturer has expressed interest in using Prince George as a staging area, and some engineering firms have set up offices in town, he notes.

The airport’s runway is 11,450 feet long - enough to accommodate any freighter, including the 150-ton Antonov-124, which touched down at Prince George in 2012 to ferry six helicopters to Africa.

In pursuing project traffic, Prince George faces stiff competition from Edmonton, which has hosted a good deal of oil and gas-related shipments. This traffic has brought a steady stream of freighter charters to the Alberta airport, pushing up its throughput by 6 percent.

Besides the oil and gas sector, mining has been a driver for cargo growth, which has been further fuelled by rising volumes of perishables and pharmaceuticals.

Last summer work kicked off on a cargo building for forwarders and customs brokers with a footprint of 55,000s q ft. According to Norm Richard, director of air service development, this is on course to open in the spring.

The project marks the second phase of the overhaul of Edmonton’s cargo area, following the opening of the airport’s cargo village in 2012, which comprised of a 50,000 sq ft complex with three buildings and access to 236,000 sq ft of apron space. Those facilities are fully occupied.

The development plan calls for the establishment of an area of some 32 hectares at the south side of the airport for light industrial use, mostly logistics and warehousing and light manufacturing.

Richard and his team are currently working on three cargo facility projects which he hopes to unveil some time in 2014.

“What we have been doing over the last two years and what we 38 January/February 2014

By Ian Putzger

continue to do is building relationships and listen to our customers,” Richard says, adding that the latter group includes manufacturers and their logistics providers. This dialogue has involved key industry groups, such as the Canadian Manufacturers and Exporters Association, the Canadian Association of Importers and Exporters and CIFFA, the Canadian freight forwarder organization. They have been stressing logistics solutions using gateways in Alberta and have made efforts to promote such concepts, most recently with the Roads.Rails.Runways conference, a two-day event in Edmonton at the end of last September.

“The key is to add value to the handling aspect. Cargo gateways that add value will see increased business.”

Mark Ruel, director of air service development and industry relations, Calgary Airport Authority Edmonton’s push for cargo is not helped by the proximity of Calgary, which has more widebody connections, more international flights and more cargo. Richard sees more common ground than rivalry between the two and insists that the real competition is further away.

“It is not one market versus another. Our objective is to ensure supply chains are flattened and originate in Alberta,” he comments, adding that the main objective is to draw in cargo that is trucked to large US gateways.

Like Edmonton, Calgary is in the middle of a major expansion of its cargo infrastructure. It has completed a multi-tenant facility with a footprint of 110,000 sq ft that houses Air Canada, Cargojet, WestJet, multinational handling firm Menzies and the CBSA. The new cargo area in the northern part of the airport has an adjacent apron for freighters.

The facility is fully leased, and the airport authority is now working on the second phase of the development project. Details have yet to be released, but the plan calls for a $70 million investment in further warehouse and apron space.

This will not just add more square footage for handling. A key component of the plan is the development of infrastructure to handle special cargo. Calgary took a major step in that direction a couple of years ago with the opening of a live animal facility with 28,000 sq ft of warehouse space and a 14,000 sq ft loading area.

According to Mark Ruel, director of air service development and industry relations, the facility was designed to make the passage of animals through the airport faster, safer and more humane. continued

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WEST COAST

continued from p. 38

“Instead of working with handlers that just look to cut rates and cost, we look at adding value to the chain,” he says. “The key is to add value to the handling aspect.

Cargo gateways that add value will see increased business.”

The concept appears to be working.

According to Ruel, Calgary has drawn in animal traffic from all over North America, from show jumping horses to pigs headed to China and cattle shipped to Kazakhstan.

The airport’s throughput is up 3 per-

“The key is to add value to the handling aspect. Cargo gateways that add value will see increased business.”

Mark Ruel, director of air service development and industry relations, Calgary Airport Authority cent this year. In the main, this has been driven by growing international cargo, while domestic traffic has been steady.

Charter traffic fluctuates between one and three flights a week, while scheduled service saw the addition of a third weekly frequency of Cargolux, which runs B747 freighters through Calgary to Luxembourg.

Ruel is in pursuit of a scheduled freighter link to Asia, but discussions with Asian carriers have not yielded any tangible results so far. To Europe, on the other hand, he can look forward to significant capacity growth on some key routes. Air Canada intends to replace B767s on its London and Frankfurt flights with B777s this summer, and KLM plans to use a B777 in lieu of the A330 fielded so far. With 40 tons payload, the 777 can carry as much cargo as a mid-sized freighter.

Vancouver, Canada’s premier gateway in the west, has no cargo infrastructure projects in progress at the moment, and its freighter links are unchanged. Bellyhold capacity is on the rise, though, with two new international carriers entering the market in 2014.

All Nippon Airways is launching flights to Tokyo Haneda airport with the onset of the summer schedule, and Icelandair will start twice-weekly flights to its Reykjavik hub with onward connections to a host of European destinations in May. CS Ian Putzger is an award-winning journalist with more than 20 years experience covering transportation and logistics issues. He is a former writer and editor with the Hong Kong-based Asian Sources Media Group, and Airtrade, a British magazine covering the global air cargo industry.

40 January/February 2014

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14-01-20 11:00 AM

TOP TIER

THE TOP TIER

hich Canadian trucking fleets are growing? Which best fit your transportation requirements?

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January/February 2014

41

14-01-17 9:19 AM

THE TOP 100

A CAPACITY AND CAPABILITY GUIDE FOR THE COUNTRY’S LARGEST MOTOR CARRIERS Fleet Name Apex Motor Express Armour Transportation Systems Arnold Bros. Transport Arrow Transportation Systems AYR Motor Express B&R Eckel’s Transport Big Freight Systems Inc. Bison Transport Inc. BLM Group Bruce R. Smith Ltd. Calyx Ground Transportation Solutions (National Fast Freight, Totalline) Calyx Transportation Group Canada Cartage Canadian Freightways (TransForce) Canadian National Transportation Ltd. Canpar Courrier (TransForce) Caravan Logistics Inc. Caron Transportation Systems Cascades Transport Inc. CAT Inc. Celadon Canada Challenger Clarke Transport Inc. Consolidated Fastfrate Inc. Contrans Flatbed Group LP (Contrans) Contrans Group Inc. Con-Way Freight Canada Cooney Group of Companies Day & Ross Freight (Day & Ross) Day & Ross Dedicated Logistics (Day & Ross) Day & Ross Transportation Group DCT Chambers Trucking Doug Coleman Trucking Ltd. Entrec Transportation Services Ltd. Erb Group of Companies Gibson Energy Inc. Groupe Boutin Inc. Groupe Guilbault Ltee.

Groupe Robert H & R Transport Ltd. Hercules Forwarding Inc. Highland Transport (TransForce) Hudson’s Bay Company Hyndman Transport (Celadon) International Truckload Services Inc. (ITS) JC Germain (TransForce) Kindersley - Siemens Transportation Group Kingsway Transport (TransForce) Kleysen Group LP Kriska Laidlaw Carriers Tank LP (Contrans) Laidlaw Carriers Van LP (Contrans) Landtran Systems Inc. Loomis Express (TransForce) Mackie Group Manitoulin Transport Group Maritime-Ontario Freight Lines McKevitt Trucking Meyers Transport Ltd. Midland Transport Ltd. Muir’s Cartage (Calyx) Mullen Trucking LP Musket/Melburn Transportation Ltd. ** 2012 numbers *** Tentative purchase by TransForce Listings are in alphabetical order 42 January/February 2014

p41-45 CdnShipper JF2014_Top100_a.indd 42

D — Dedicated Contract DB — Dry Bulk E — Expedited F — Flatbed

Headquarters

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Website

Brampton, ON Moncton, NB Winnipeg, MB Vancouver, BC Woodstock, NB Bonnyville, AB Steinbach, MB Winnipeg, MB Kitchener, ON Simcoe, ON Concord, ON Concord, ON Mississauga, ON Calgary, AB Concord, ON Brampton, ON Oakville, ON Sherwood Park, AB Kingsley Falls, QC Coteau-du-Lac, QC Kitchener, ON Cambridge, ON Concord, ON Woodbridge, ON Hagersville, ON Woodstock, ON Mississauga, ON Belleville, ON Hartland, NB Brampton, ON Hartland, NB Vernon, BC London, ON Calgary, AB New Hamburg, ON Calgary, AB Plessisville, QC Quebec City, QC Boucherville, QC Lethbridge, AB New Westminster, BC Markham, ON Brampton, ON Wroxeter, ON Belleville, ON Trois-Rivieres, QC Saskatoon, SK Toronto, ON Winnipeg, MB Prescott, ON Woodstock, ON Puslinch, ON Edmonton, AB Brampton, ON Oshawa, ON Gore Bay, ON Brampton, ON Thunder Bay, ON Belleville, ON Dieppe, NB Concord, ON Aldersyde, AB Mississauga, ON

800-895-2739 506-857-0205 800-665-8085 604-324-1333 800-668-0099 780-826-3889 800-665-0415 800-462-4166 800-265-2743 888-277-6484 800-563-2223 905-695-3841 800-268-2228 888-868-7923 888-668-4626 800-387-9335 888-828-1727 780-449-6688 819-363-5800 800-363-5313 800-265-6467 800-265-6358 800-387-3558 800-268-1564 800-263-8383 800-819-5259 866-426-6929 613-962-6666 866-329-7677 905-799-6500 866-329-7677 250-549-2157 800-308-2574 403-777-1644 800-665-2653 403-206-4000 800-267-4509 800-361-2093 800-361-8281 403-328-2345 800-822-4512 800-268-1729 416-644-2700 800-265-3071 800-267-1888 819-370-3422 800-667-8557 800-856-5559 888-488-5550 800-461-8000 800-465-8265 800-263-8267 780-468-4300 855-256-6647 800-565-4646 800-265-1485 888-748-4388 807-623-0054 800-565-3708 888-643-5263 800-646-2013 800-661-1469 905-823-7800

www.apexltl.com www.armour.ca www.arnoldbros.com www.arrow.ca www.ayrmotor.com www.breckels.com www.bigfreight.com www.bisontransport.com www.blm.com www.brsmith.com www.calyxinc.com www.calyxinc.com www.canadacartage.com www.canadianfreightways.com www.cn.ca www.canpar.com www.caravanlogistics.ca www.carontransport.ca www.cascades.com www.cat.ca www.celadoncanada.com www.challenger.com www.clarkelink.com www.fastfrate.com www.contransflatbedgroup.com www.contrans.ca www.con-way.com/en/freight www.cooney.ca www.dayross.ca www.dayross.ca www.dayrossgroup.com www.dctchambers.com www.dougcolemantrucking.com www.entrec.com www.erbgroup.com www.gibsons.com www.boutinexpress.com www.groupeguilbault.com www.robert.ca www.hrtrans.com www.herculesfreight.com www.highlandtransport.com www.hbc.com www.hyndman.ca www.itstruck.ca www.transforcecompany.com www.kindersleytransport.com www.kingswaytransport.com www.kleysen.com www.kriska.com www.contrans.ca www.contrans.ca www.landtran.com www.loomis-express.com www.mackiegroup.com www.manitoulintransport.com www.m-o.com www.mckevitt-trucking.com www.shipmts.com www.midlandtransport.com www.muirscartage.com www.mullentrucking.com www.musket.ca

HG — Household Goods I — Intermodal L — Logistics LB — Liquid Bulk

LTL — Less than Truckload P — Package S — Specialized TC — Temperature Controlled

www.canadianshipper.com

14-01-17 9:19 AM

m

m

TOP TIER

BY WORDSMITH MEDIA INC. Operating Area

Service

Multi-Regional Multi-Regional, North America, International Multi-Regional, North America North America North America Multi-Regional North America Multi-Regional, North America, International North America Multi-Regional, North America North America North America Multi-Regional, North America North America North America Multi-Regional, North America, International North America Multi-Regional, North America North America Multi-Regional, International Multi-Regional, North America, International Multi-Regional, North America, International Multi-Regional, North America North America North America Operating Group North America Multi-Regional, North America North America North America Operating Group Multi-Regional, North America Multi-Regional Multi-Regional Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America, International International North America Multi-Regional, North America Multi-Regional Multi-Regional, North America Multi-Regional, North America, International Multi-Regional, North America North America Multi-Regional, North America North America Multi-Regional, North America North America North America International Multi-Regional, North America, International North America International Multi-Regional, North America North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America North America Multi-Regional, North America

D,TL,LTL,W D,E,F,I,L,LB,LTL,P,TC,TL,W D,E,F,L,P,TC,TL D,DB,F,I,L,LB,TL,W TL D,DB,E,F,I,L,LB,LTL,TC,TL,W D,F,I,L,TL,W D,E,I,L,TC,TL,W D,E,F,LTL,TC,TL D,F,L,LTL,TC,TL E,I,TC D,E,I,LTL,TC,TL D,DB,E,F,HG,L,LB,LTL,TL LTL D,E,F,I,L,TC,TL,VC P D,DB,E,LTL,TC,TL,W D,DB,F,L,LB,TL L,LTL,TL D,DB,E,L,TL D,E,I,L,LTL,TL D,DB,E,F,I,L,LTL,TC,TL,W D,F,I,L,LTL,TC,TL D,E,I,LTL,P,TC,TL F,TL

TL — Truckload VC — Vehicle Carrier W — Warehousing Regional — One province/state

Straight Trucks

Tractors

Trailers

Containers

Terminals

110 150 3

200 900 225 400 215 251 200 1250 125 250 9 154 1717 296 900 74 250 300 130 378 715 1500 333 483 251 1493 176 220 1177 420 1668 246 150 300 645 675 270 325 1200 550 202 170 45 196 380 191 637 269 225 400 234 246 300 55 225 825 438 180 190 730 230 3800 210

500 3000 485 1050 700 1300 400 3500 400 770 733 1723 2207 1,002 7000 310 750 650 575 1200 1800 3300 782 920 422 2541 359 1000 2162 1140 3486 680 400 600 1134 1818 650 1200 4000 1200 398 427 604 520 1250 528 1760 646 800 1300 362 619 725 339 420 2230 952 500 624 1817 405 7500 350

100 400

14 26 5 33 3 16 6 6 2 7 6 9 24 25 16 50 3 6 4 8 9 5 11 17 5

V,R,C V,R V,R,C R V V,R V,R,C V,R,C V V V,R,C V,R,C V,R,C V,R,C V,R V,R,C V,R,C V V,R,C V,C V,R,C V,R,C V,R,C V,R,C

11 7 34 15

V,R,C V,R,C V,R,C V,R,C V,R,C V,R V,R,C V V,R R V,R,C V,R,C V,R,C V,R,C V,R,C V,R C V V,R,C

150

6 14 371 53 790 5 1

3 40 1 39

LTL,TL D,DB,F,I,TL LTL,TC,TL D,L,W

191 140 507

D,DB,F,LB,TL E,LTL,TL DB,L,LB,LTL D,E,L,LTL,TC,TL DB,LB D,E,F,I,L,LTL,TC,TL D,I,L,LTL,TC,TL D,DB,E,F,I,L,LB,LTL,TC,TL,W I,L,TC,TL,W LTL,TL E,L,TC,TL D,I,L,TL D,E,HG,L,TL D,E,F,I,L,TC,TL D,DB,F,HG,LTL,TC,TL E,F,HG,I,L,LTL,P,TC,TL I,LTL DB,F,I,L,TC,TL L,TC,TL,W DB,LB,TL TL D,E,F,L,LTL,TL,W P D,E,HG,I,L,LTL,TL,VC,W D,E,F,I,L,LB,LTL,P,TC,TL,W D,DB,E,F,I,L,LB,LTL,TC,TL D,F,L,LTL,TC,TL D,E,L,LTL,TC,TL D,E,I,L,LTL,P,TC,TL,W D,TL TL I,F,L,LTL,W

Multi-Regional — Selected provinces/states

44 157 75 5 5 15 53

41 12

15 840 30 109 146 6 7 209 7 500

North America — Canada, U.S. International — Canada, U.S., Mexico/other

p41-45 CdnShipper JF2014_Top100_a.indd 43

20 118

171 171

7000 50

190 386 490

1200

7 61 400 550

20 450

6 424 35 173 450

5 9 13 11 15 7 13 24 8 24 4 5 2 7 2 19 12 9 3 4 3 14 78 4 71 22 4 10 29 3 140 3

Web

V V,R,C V,C V,R,C

V,R,C V,R,C V,R,C V,R,C V,R V,R,C V,R,C V,R,C C V,R,C

continued WEB V - Visibility (tracking freight) R - Reports (generates reports regarding business) C - Custom (customized reports)

www.canadianshipper.com

January/February 2014

43

14-01-17 9:19 AM

THE TOP 100 Fleet Name Normandin Transit Northern Industrial Carriers Paul’s Hauling Ltd. Penner International Inc. Purolator Courier Quik X Transportation & Quick Trax Intermodal (TransForce) Rosedale Group Rosenau Transport Ltd. Schneider National Inc. SGT 2000 Inc./ SGT Group Shadow Lines Transportation Group Simard Transport SLH Transport Inc. Sokil Transportation Group Speedy Transport Inc. Thomson Terminals Ltd. Total Logistics Trucking TransForce Inc. Transfreight Transport Bourassa Transport Hervé Lemieux Trans-West Inc. TransX Group of Companies Travelers Transportation Services Trimac Transportation Ltd. TST Overland Express (TransForce) UPS Freight VA Inc. Van Kam Freightways Ltd. Verspeeten Cartage Ltd Vitran Express Canada *** Warren Gibson Ltd. Williams Moving and Storage Wilson’s Truck Lines Ltd. XTL Transport Inc. Yanke Group of Companies (Celadon) ** YRC Reimer Express Lines Ltd.

continued from p. 43 Headquarters

Customer Line

Website

Napierville, QC Edmonton, AB Winnipeg, MB Steinbach, MB Mississauga, ON Mississauga, QC Mississauga, ON Edmonton, AB Guelph, ON St-Germain-de-Grantham, QC Langley, BC Lachine, QC Kingston, ON Edmonton, AB Brampton, ON Rexdale, ON Toronto, ON Montreal, QC Kitchener, ON St-Jean-sur-Richelieu, QC St-Laurent, QC Lachine, QC Winnipeg, MB Brampton, ON Calgary, AB Mississauga, ON Mississauga, ON Laurier Station, QC Surrey, BC Ingersoll, ON Concord, ON Alliston, ON Coquitlam, BC Etobicoke, ON Toronto, ON Saskatoon, SK Mississauga, ON

800-667-8780 780-465-0341 204-633-4330 866-729-7134 888-744-7123 800-461-8023 877-588-0057 800-371-6895 800-461-3168 800-363-4216 800-663-1421 888-282-9321 800-661-2146 800-661-9923 800-265-5351 800-771-7487 888-827-8521 514-331-4000 888-890-0400 800-363-9254 800-561-2923 905-602-5427 800-665-7392 800-265-8789 403-298-5100 888-878-9229 800-742-5877 800-363-8175 888-229-9889 800-265-6701 800-263-9588 800-461-4374 866-967-6683 416-621-9020 800-361-5576 800-667-7988 877-330-3321

www.normandintransit.com www.nictrucking.com www.paulshauling.com www.penner.ca www.purolator.ca www.quikx.com www.rosedalegroup.com www.rosenau.org www.schneider.com www.sgt.ca www.shadowlines.com www.simard.ca www.slh.ca www.speedy.ca www.thomsongroup.com www.totallogistics.com www.transforcecompany.com www.transfreight.com www.bourassa.ca www.transportlemieux.com www.groupetranswest.com/en/ www.transx.com www.travelers.ca www.trimac.com www.tstoverland.com www.ups.com www.vatransport.com www.vankam.com www.verspeeten.com www.vitran.com www.warrengibson.com www.williamsmoving.com www.wilsonlogistics.ca www.xtl.com www.yanke.ca www.yrc.com

Headquarters

Customer Line

Website

THE NEXT 25 Fleet Name ATS Retail Solutions (TransForce) Besner (TransForce) DeckX (TransX Group of Companies) Empire Transportation Ltd. Fluke Transportation Group Gosselin Express Grégoire (TransForce) Groupe Goyette GTL Transportation Inc. ICS Courier (TransForce) Laidlaw Carriers Bulk LP (Contrans) Muskoka Transport Papineau International (TransForce) ProNorth Transportation Inc. Sameday Worldwide (Day & Ross) Sunbury Transport Ltd. Trans 4 Logistics (TransForce) Transport Bernieres Transport Bourret Inc. Transport Couture (TransForce) Transport Jules Savard Transport St-Michel Inc. Tri-Line Carriers LP (Contrans) TVM Ltd. TYT Group 44 January/February 2014

p41-45 CdnShipper JF2014_Top100_a.indd 44

Toronto, ON St-Romuald, QC Winnipeg, MB Grimsby, ON Hamilton, ON Thetford Mines, QC Plessisville, QC Saint-Hyacinthe, QC Dartmouth, NS Toronto, ON Woodstock, ON Bracebridge, ON Saint-Jerome, QC North Bay, ON Mississauga, ON Fredericton, NB Mississauga, ON Quebec City, QC Drummondville, QC Saint-Éphrem-de-Beauce, QC Jonquiere, QC St-Michel, QC Rocky View, AB Cottam, ON Drummondville, QC

800-265-6085 800-463-4460 800-993-3259 800-263-0240 800-263-4843 800-463-3138 800-461-8813 800-387-0346 902-468-3100 888-427-8729 888-209-3867 800-461-5808 800-363-3666 800-265-9370 877-726-3329 800-786-2879 905-212-9001 418-684-2420 800-567-1470 418-484-2104 800-463-9621 866-554-9903 800-661-9191 877-272-6266 855-898-4768

www.atssolutions.ca www.besner.com www.deckx.com www.empiretrans.com www.fluke.ca www.gosselinexpress.com www.transportgregoire.com www.groupegoyette.com www.gtltransportation.com www.ics-canada.net www.contrans.ca www.muskoka-transport.com www.transforcecompany.com www.pronorth.com www.sameday.ca www.sunbury.ca www.trans4.com www.bernieres.ca www.bourret.ca www.tcfl.com www.julessavard.qc.ca www.transportmichel.com www.contrans.ca www.tvmltd.ca www.groupetyt.ca

www.canadianshipper.com

14-01-17 9:19 AM

TOP TIER

Operating Area

Service

North America North America Multi-Regional, North America North America International North America Multi-regional, North America Multi-Regional Multi-Regional, International International North America Multi-Regional Multi-Regional, North America North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America Operating Group International North America Regional North America Multi-Regional, North America, International North America, International North America North America International North America Multi-Regional, North America Multi-Regional, North America North America Multi-Regional, North America North America Regional North America North America Multi-Regional, North America, International

E,L,LTL,TC,TL,VC D,E,I,TL D,DB,E,L,LB,TL,W D,E,L,TL,W D,E,LTL,TL LTL D,E,I,L,LTL,TC,TL,W D,E,F,LTL,P,TC,TL,W D,DB,E,I,L,LB,TL D,E,F,HG,I,L,LTL,TL,W D,E,I,LTL,TL,W D,E,I,L,LTL,TL D,E,I,L,LTL,TL,W D,E,F,I,L,LTL,P,TC,TL LTL D,E,F,L,TC,TL,W D,E,F,I,L,LTL,TC,TL

Operating Area

Service

Multi-Regional North America Multi-Regional, North America Multi-Regional, North America, International North America North America North America Multi-Regional North America Multi-Regional, North America North America Multi-Regional, North America Multi-Regional, North America Multi-Regional North America, International North America North America North America International Multi-Regional, North America Multi-Regional, North America North America Multi-Regional, North America Multi-Regional, North America North America

E,I,L,LTL,P,TL D,L,TC,TL D,E,F,I,L,TL D,E,F,TL D,DB,E,F,L,LTL,TC,TL F,L,TL,W TL LTL,TL D,I,LTL,TC,TL P TL F,L,TL D,HG,L,LTL,TC,TL F,LTL,TL,W E,HG,L,LTL,P,TC DB,E,F,L,TC,TL D,I,L,LTL,TL D,L, LTL,TC, TL E,HG,I,L,LTL,TL,W L,LTL,TL DB,F,LTL,TL,W L,LTL,TL,W FB,TL D,L,TL D,E,F,HG,I,L,LTL,P,S,TC,TL,VC,W

Straight Trucks

Tractors

Trailers

1

12 35

328 100 251 375 460 160 250 300 390 358 289 353 700 175 179 300 200 3860 222 168 300 150 1520 275 1076 321 145 250 350 280 428 280 94 190 425 326 627

900 500 575 825 1171 512 650 1200 1100 1100 962 350 3300 600 624 800 375 11060 2065 382 250 400 4200 800 2579 1022 282 795 700 518 1345 1250 225 690 1200 755 1281

Straight Trucks

Tractors

Trailers

151

32 90 150 68 150 80 83 60 85 1 133 140 98 125 60 150 135 98 110 79

165 265 200 311 300 300 264 283 250 3 279 350 270 350 169 350 263 255 300 318 300 350 208 285 370

10 164 2 55 60

5 65 5 100 80 2 3615

D,E,I,L,LTL,TL D,E,F,HG,L,LTL,TC,TL,VC,W D,F,I,TC,TL I,TC DB,F,L,LTL,TC,TL D,E,F,L,LTL,TC,TL D,DB,F,I,L,LB,W LTL E,I,L,LTL,P,TC,TL D,L,LTL,P,TL,W D,E,F,HG,I,L,LTL,P,TC,TL D,I,TL E,I,LTL,TL F,I,TL,W D,E,F,HG,I,L,LTL,TL,W D D,TL,W D,E,I,TL LTL

1 39 9 6 19 2804 25 10 102 113

1 10

314 3 3 176 10 10 1 100

85 151 124 70

p41-45 CdnShipper JF2014_Top100_a.indd 45

Containers

Terminals 1 4 6 7 123 12 14 23 3 8 6 7 13 5 5 10 6

304

435 230 120 560

Web V,R,C V,R,C V,R V,R V,C V,R R,C V,R,C V R,C V,R,C V V,R,C V,R,C V,R,C V, R

671 12 1 3 3 13 5 49 17 48 5 12 1 21 2 9 2 5 8 21

900 110

540 100 250

210

Containers

www.canadianshipper.com

112 65

32

45 28

Terminals 15 4 4 1 1 3 2 8 2 30 2 3 2 5 32 4 1 3 2 2 4 2 2 6

V,R,C C V,R,C V,R,C V,R V,C V,R,C V,R,C V,R,C V,R,C V,C V,R,C V R,C C V,R,C V,R V,R,C

Web V V,R,C V,R,C V V

V,R,C V,R C

V,R,C V,R,C V,R,C C V,R,C V,R,C V,R,C V,R,C V V,R.C

January/February 2014

45

14-01-17 9:19 AM

CASE STUDY

DANBY’S DASHBOARDS Danby Products has outsourced freight audit and payment to DTA Services – and the results have been just dandy

D

anby Products had become a victim of its own success.

First established in 1947 as a maker of small electrical appliances, the Montreal-born brand was already a household name in everything from air conditioners and refrigerators to microwaves.

But as sales began to surge -- particularly in the U.S. -- the transportation team behind North America’s leading supplier of compact and specialty appliances faced a related challenge.

It struggled to audit the growing piles of freight invoices.

One staff member had already been dedicated to studying the documents from a network of five drayage companies, four couriers, three warehouse providers and 14 core carriers. And Eian Campbell, the Director of Operations, personally contacted transportation freight representatives to discuss any reduced payments linked to the billing errors. With some troublesome transportation providers, this meant reviewing changes to as many as 20 invoices a week.

Every time an error was identified, Campbell was also left with the nagging question of whether something else had been overlooked. “It just got overwhelming,” he says. “We were tying up all our time dealing with freight payment issues rather than [focusing on ways] to execute things through the supply chain easier, cheaper and more efficiently.”

The answer emerged through DTA Services, contracted to audit freight invoices, pay transportation partners, and feed data through an online portal which offers quick answers about everything from a payment status to the reasons behind any deductions.

By John G. Smith

“We’re auditing every single invoice, which quite frankly our clients are not able to do,” says Glen Berg, vice-president of business solutions for DTA Services, which processes thousands of freight invoices every day on behalf of hundreds of manufacturers and distributors. “They don’t have the resources.They don’t have the time. They don’t have the people.”

The data that emerges is also fed through a series of computergenerated “dashboards”, which can generate customized reports by the week, month, quarter, year or two-year span. Customers such as Danby can review information such as the Top 10 carriers by dollar, weight or cost per hundredweight, along with vital data such as accessorial fees as a percentage of freight charges.

“You could really see their ears perk up when we started to speak about the benefits of DTA’s transportation analytics – in other words, the dashboards and the reporting capabilities,” Berg recalls of the early meetings with Danby Products. “They wanted to be able to take the large numbers and break them down into components such as the cost per customer, and the cost per shipment.”

It is more than a paper shuffle. The details can help to shape daily business decisions. For example, shipments of air conditioners which were being returned because of a cool summer in Western Canada were quickly rerouted to central regions, feeding big box retailers in sweltering areas of the U.S. continued Danby’s Guelph, Ontario headquarters.

1

C

Im S N m

E

Im M v y th

D

M R D R

46 January/February 2014

www.canadianshipper.com

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CASE STUDY

continued from p. 46

“We’ve changed our people from being data-entry staff into analysts,” Campbell adds. “We’re able to get data out of [the DTA] computer system that is helping us manage our business better ... By taking the freight audit and pay portion out of the equation, it’s allowing our supply chain staff to focus on growth, and to work with our transportation partners to make sure that we execute flawlessly any new business and any existing business that we have.” It means the transportation team can focus on finding ways to control costs in the supply chain, improve transit times, and adapt to a changing marketplace which increasingly involves online orders, exchanges of home deliveries, and direct shipments to stores.

It has also increased audit-related savings by as much as 5%, identifying previously unidentified billing errors, doubled bills, misallocated fuel surcharges and more. “Where I thought I was doing a good job and my team was catching them all, [DTA Services] are catching more,” Campbell says.

The first phase of the work involved a focus on truckload and LTL shipments, which account for about 80 per cent of Danby Products’ business, and reflected all the appropriate General Ledger codes.

Couriers and a handful of remaining niche carriers will be shifted to

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48 January/February 2014

p46-49 CdnShipper JF2014_Danby.indd 48

Danby’s warehouse facility.

Photo courtesy Danby Products

DTA Services in 2014, giving Danby Products the chance to ensure charges for couriered freight are applied to the right customer, and accrue costs for the appropriate Profit and Loss statements. Drayage operations will represent the final step.

Perhaps most promising of all, the Canadian project is also expanding to include U.S. freight, offering a system that will reflect American class structures, discounts off tariffs, and cube rules. “In the U.S. we’re in rapid-growth mode,” Campbell adds. Danby Products may enjoy a time-tested transportation network in Canada, but now it is meeting growing demands in regions where it has limited experience. “We’re looking to have information in the dashboard to give us either early warning signs that our freight accruals are not large enough for [a new power retailer], or that we’ve overestimated.”This will lead to better forecasts and accurate business plans. Some of the biggest gains from the Canadian-focused dashboards have already emerged in the form of increasingly accurate accruals like these.

DTA Services has also maintained Danby Products’ tradition of meeting Net-30 payment terms. “Carriers were still getting their money within that 30-day time period,” Campbell says. The benefit of that commitment was not limited to the transportation providers alone. “It was important for us to get the right expenditure in the right accounting period, too. If you delay some of those payments it can really affect our cash flow,” he says.

For their part, carriers are able to log into a DTA Services portal to see when an invoice was submitted, how long it took to process, and when it was paid. “Carriers are always looking to be paid, and at DTA we strive to ensure they are paid within their terms,” Berg says.

The benefits have even extended well beyond the transportationfocused teams. Danby’s sales and marketing personnel, for example, are now able to explore freight costs by region and account with ease.

They can see how much can be saved by consolidating a truckload shipment rather than relying on several LTL shipments. “It’s opened up their eyes to data that they hadn’t seen before,” Campbell explains.

“The reports are customized to each group’s finance requirements,” Berg says. Finance teams may be interested in payables or shipments by date, or accounting summaries by General Ledger.

(The ability to track General Ledger entries by customer, requested

by Danby, will be offered early in 2014.) They can see exactly how

www.canadianshipper.com

14-01-17 9:22 AM

CASE STUDY

“We’re looking to have information in the dashboard to give us either early warning signs that our freight accruals are not large enough for [a new power retailer], or that we’ve overestimated.”

Eian Campbell, the Director of Operations freight expenses are allocated, right down to the carrier, invoice number, shipping date, paid date, Purchase Order number, the cost of transporting goods, and General Ledger allocation codes. Accessorial charges such as fuel surcharges, waiting time, appointment deliveries and dangerous goods add to that. For their part, transportation teams can review shipping patterns with data about origins, destinations, drop ship locations, actual weight, cube weight, customer or supplier names, transfers between locations and other specialized information.

The data can even be used to audit DTA Services’ own performance. The Review of Services dashboard offers a virtual report card which tracks details such as the number of pro bills that were paid, overbilled shipments, and duplicated invoices. It also highlights the “reactive recommendations” from a dedicated client manager, including such things as reduced fuel surcharges identified in certain lanes, or other suggestions about ways to improve the business of moving freight.

“We provide clients with benchmarking exercises,” Berg says, referring to comparisons with customers in a similar lane.

“We have databases full of information. We can look at Danby and look at what they’re paying for a particular weight in a particular lane.”

They are the details which can lead to different choices among transportation providers. Few changes were expected in Canada, where Danby Products had chosen specialized carriers that were equipped to protect products from damage. (“There are particular carriers that specialize in appliances, and their trailers are set up differently,” Berg says.) But Campbell still found savings here. Looking at shipments in Western Canada, for example, DTA Services highlighted new options for outbound shipments from Calgary to major destina-

tions like Edmonton. The transit times were unchanged, and equipment was available when needed, but the costs were lower. “We just didn’t have the time or the computer programming experience to be able to do that,” Campbell says.

There are more gains to come. Courier invoices, while a smaller share of the business, still represent some of the most complex tasks for Danby Products’ internal auditing efforts. “Courier statements are

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extremely lengthy. There could be 50 pages for one week, and there could be 10, 12, maybe 20 shipments per page,” Berg says.

“Imagine if you are on the receiving end and have to process that manually.” Now even the smallest couriers without EDI capabilities will be able to use DTA Services’ templates, offering Danby Products more insight into the freight invoices than ever before.

That’s just a Danby idea. CS

Operating from seven terminals in Canada and the USA, we offer swift and reliable truckload service to most of North America.

That, combined with our no nonsense commitment to customer service has helped Penner become the transportation provider of choice for companies who need to keep their promises, wherever they need to ship in North America.

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January/February 2014

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14-01-17 9:22 AM

CITA REBRAND

Canadian Industrial Transportation Association announces rebrand

T

he Canadian Industrial Transportation Association announced that it has rebranded the organization’s name and logo and has also redesigned its website to reflect the change. The organization, established in 1916, said it is “the only association in Canada that fights for a better freight transportation system.”

The association’s name change- from the former Canadian Industrial Transportation Association - Association canadienne de transport industriel to the Freight Management Association of Canada - Association canadienne de gestion du fret, occurred as a result of significant market research within the past year and a half which confirms that a new name and logo “will complement association objectives and help foster growth,” said FMAC-ACGF. The new identity will satisfy the existing mandate of the organization but will also help introduce the new mission and vision: Satisfying new objectives and moving the brand forward will acknowledge that the association is the respected voice for the shipper community in Canada and has the focus and expertise to advance the transportation industry in an ever-changing global economy, FMAC-ACGF said in its announcement.

To keep things simple the association will not be changing the company slogan as it still represents the shipper community.

“I think this all came to be when we formed a marketing committee back in Aug 2011 with CITA comprised of five or six directors that consistently sit on the board. The whole purpose was to look at how we can target new age groups, and new marketing strategies. Everyone is out there competing for an association dominance-so we were really trying to get the point out about what the association is,” said Mike Cormier, Chair of the association and vicepresident, supply chain, with Scotia Investments. “‘Industrial transportation’ may have surpassed its useful life. We had a lot of good conversation and debate amongst the directors and it took us a while to come up with something that everyone felt good about. But over 90 % of the membership agreed to a name change. One thing kind of led to another as we went down the path.

We were looking into new areas of membership growth. All the directors are excited about where we’re heading and where we’ve been,” he added.

50 January/February 2014

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Bob Ballantyne, president of the association, noted that ‘industrial transportation’ is kind of an archaic term, and echoes back to the days when railways had traffic departments and industrial transportation referred to freight traffic.

“It was time to change and bring the language into more modern usage, especially when people are using search engines like Google. With some validity, the name CITA was around for almost 100 years. The old names do build up something of a brand over time so you have to consider what you’re losing when you make the change. Our initial impetus was to try and grow the membership-the continuing challenge will be to keep it and grow it,” said Ballantyne.

“Companies that take out a membership do it not because it’s a charity but because they want to get value out of it,” he added.

“Overwhelmingly the membership approved it. There was no real backlash. It really does speak to the next generation coming up and it’s important to engage them and make sure they have a place that’s fresh and new to come into,” said Cindy Hick, vice president of the association.

“It’s really balancing the current generation that’s part of our membership and the generation that’s coming up in the industry.

The name change was just one element of the marketing plan. We did hire a marketing company to help us look at different names and to develop a new logo. When you say you’re with CITA it did not resonate with a lot of people. I’m fairly confident that Freight Management Association of Canada will be fairly evident,” she said.

The association hopes that through increased use of social media and established links with educational institutions like Laurier University, where it provides a bursary, and with CITT, where it offers a small award each year, that membership amongst the younger generation will grow.

Kelsey Lemieux, the association’s marketing administrator, and a recent grad of the marketing program at Algonquin College, put together a new strategy and fresh perspective reflective

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14-01-17 9:45 AM

CITA REBRAND

of the younger generation. Lemieux said she has been reaching out to organizations like the US-based Young Professionals in Transportation, which has expressed an interest in moving into a more North American platform via chapters in Vancouver, Toronto, and maybe Ottawa.

In terms of outreach efforts, Ballantyne said the association has been trying to identify and reach out to people who will do some direct sales work with potential members.

“We started this on the West Coast with a gentleman who used to work with the Port of Vancouver.We will do similar things in different parts of the country,” said Ballantyne.

“We’re trying to balance off the needs of current members and spending time on recruiting new members. This is not unique to our association,” added Hick.

Ballantyne said that members will also be made aware that one of the perks of membership is the ability to have as many people as they want participate in conference calls, such as the modal committee conference calls that occur on a regular basis. Essentially the aim is to be “communicating with the younger people in companies, so thatthere is knowledge transfer,” he said.

Members can also have as many member refs as they want, whereas previously this was more limited.

Via a Customer Relations Management system, introduced by Lemieux, the association can “target members directly with information that is related just to them.”

“With everything going out as e-mail there is no significant extra cost to open up so all our member companies can have any number of people they wanted receive e-mail blasts,” said Ballantyne. CS

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January/February 2014

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INSIDE THE NUMBERS

FREIGHT FORECAST: FAIRLY POSITIVE With the Canadian economy expected to grow at less than 3% GDP again in 2014, forecasting freight volume growth is a challenging task. Yet it appears shippers are relatively optimistic about their freight volume growth this year, according to the results from our annual Transportation Buying Trends Survey, conducted nationally in coordination with CITA and CITT. Almost 6 in 10 shippers surveyed expect their freight volumes to increase, mainly in the range of 5-10%. How will that affect pricing?

Most shippers see competition levels among transportation suppliers at normal levels, with a significant number reporting above normal competition. That’s likely because some modes such as courier and air cargo are perceived to still harbor excess capacity. CS

Shipper projections for shipment volumes in 2014

5.3%

of respondents

Up more than 20%

8.4%

Up 10-20%

45.3%

Up 5-10%

33.7%

Stay about same

4.2%

Down 5-10%

3.2%

Down 10-10

0%

Down more than 20%

Shipper views on current level of competitive activity among transportation providers

Shipper views on capacity currently available by mode

Below normal levels No opinion

5.0%

4.26

Rail

4.66

Truckload

4.26

LTL

3.29

Courier

4.44

Marine

3.52

Air cargo

3.71

Intermodal

17.5%

Around normal levels 57.5%

percent of respondents

Well above normal levels

2.5%

17.5%

Above normal levels

0% Well below normal levels

Scale of 1 to 10 with 1 representing excess capacity, 10 tight capacity and 5 balanced capacity

Annual comparison of shippers expecting shipment level increases compared to previous year 71%

60%

58%

52%

43%

27%

46%

60%

50%

53%

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

52 January/February 2014

58% 2014

www.canadianshipper.com

STS mag pa p52-53 CdnShipper JF2014_InsideNumbers.indd 52

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S

M oto rt r u C k f l e e t e x e C u t i v e , Cana dia n s h ippe r, a nd da n goodw il l & as s oC iate s presen t

Surface TranSporTaTion

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October 15, 2014 Mississauga Convention Centre

please plan on joining the Country’s

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THE BIGGER PICTURE

MAJOR FREIGHT TRENDS Transportation professionals should closely monitor these in 2014 1. The 10 Miles Per Gallon Truck

At a time when most truckers are striving to operate their fleets at 6 miles per gallon, talk of 10 MPG may seem like science fiction.The good news is that fifteen industry manufacturers have joined together in the 21st Century Truck Partnership. Led by Daimler, Navistar and Peterbilt and a joint venture with Cummins and Peterbilt, they plan to have working prototypes within two years.

The four projects that fall within this initiative are experimenting with engines and heavy duty hybrids, vehicle power demands, idle reducing technology and new lightweight materials such as carbon fibre and high strength steel.

2. Omni-Channel Distribution will Transform Retail Shipping

Major retailers are experimenting with a variety of different retail/distribution models to serve consumers today.They are also experimenting with the size and design of local retail outlets. Some are opening stores with smaller footprints.While still offering a range of merchandise, they are also serving as local distribution centres for consumers wishing to stop by for a pick-up and as e-commerce fulfillment centres.

3. Shipper-Shipper and Shipper-Carrier Collaboration

This has been a popular theme for the last decade or more.

The trouble has been that the theory has not matched up with reality. At the recent 2014 Surface Transportation Summit, the President of Meyers Transport made an impassioned plea for shippers and carriers to collaborate. The post-Summit survey results 54 January/February 2014

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indicated that this message resonated with the audience and the time is ripe for a more unselfish collaborative approach. This message seems to be hitting home.

4. Moving from Re-Shoring to Right-Shoring

Much has been written in recent years about the expected re-shoring (aka near shoring and insourcing) movement.

Many companies are employing a “Right-Shoring” model. They are weighing the size and location of the consumer market, the location of key vendors, distribution costs, the time to ship to market, the level of manufacturing skill required, currency factors and other items and making a thoughtful determination as to the one or more locations where their factories should be located.

5. Supply Chains in the Energy Sector are going through Major Change

Alberta’s Energy sector growth has largely been influenced by new capital investment. Within the next year or two, the level of capital investment supporting new development of the Energy sector will be surpassed by MRO (maintenance, repair and operations) expenditures. This will affect supply chains and the future growth of industry in Alberta and across Canada.

6. “Designed by Me” will change Manufacturing and Freight Transportation

Since at least the early ’90s,

we’ve been hearing that Mass Customization was going to change the consumer landscape. With the exception of custom-crafted luxury goods like bespoke tailored suits, most of our purchases are still very standardized. But despite the slow progress, we may finally be on the cusp of a new era in product design, in which truly “designed by me” products will be available in a range of categories. The most successful manufacturers of the next ten years will be those that seize this opportunity before their competitors do.

7. Digitization, Miniaturization and Packaging Improvements will be Game Changers

We have all witnessed the digitization of music, books and movies. We are seeing other products shrink in size as we move from desktop computers to laptops to tablets. These are all game changers for freight transportation. Trucks are now hauling loads of tablets rather than PCs, sound systems and cameras. Better packing means better cube utilization and fewer trucks.

8. Asset Light Companies, Networks and Partnerships to Increase in Importance

In my Top Transportation Trends in 2013, I highlighted the evolution of asset light companies. I expect this evolution to grow in several directions. First, the asset light LTL carriers (e.g. Roadrunner) offer a flexibility and

nimbleness that the large asset based carriers don’t have.

Carrier partnerships in all sectors are likely to increase as asset based companies seek to open new markets without adding assets. Whether on a local, regional, or national/ international basis (e.g.

Reliance Network, Landstar), this model should grow in prominence.

9. Data Mining comes to Freight Transportation

Shippers are starting to better understand the impacts of density, product description, packaging, weight per shipment, lane balances, seasonality, loading and unloading times on their freight rates. They are gaining an understanding of shipment consolidations, pooling, collaboration and other tools to control freight costs. Good freight data is the key to taking advantage of cost saving opportunities, of maximizing cubic capacity and of optimizing modes and carriers.

10. Last Mile Deliveries to become the New Battleground for Freight

Omni-channel marketing and same day deliveries are pushing warehouses and retail outlets closer to customers. Miniaturization, product customization and improved packaging are resulting in smaller products, manufactured and distributed closer to the end consumer.

This all adds up to a very attractive scenario for last mile, small package delivery services. CS

If co -

Dan Goodwill, president of Dan Goodwill and Associates has more than 20 years of experience in the logistics and transportation industries in both Canada and the US. Goodwill is currently a consultant to manufacturers and distributors, helping them improve their transportation processes and save millions of dollars in freight

F

W C

spend. He has held several executive level positions in the industry.

He can be reached at dan@dantranscon.com.

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14-01-17 11:12 AM

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