Mmdsept2013de2 by Annex Business Media

September 2013 $8.00

DC Planning

Roundtable

Trusting flexibility

Publication mail agreement #40069240.

Inside

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Taking Stock Supply Chain Scan DC Planning Roundtable Datacapture Green Trends in Logistics Equipment Focus: Pallets, containers and accessories Legal Link Materials Handling Learning Curve Crunching the Numbers

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TAKING STOCK

Benefits of experience www.mmdonline.com PUBLISHER/EDITOR-IN-CHIEF: Emily Atkins (416) 510-5130 EAtkins@bizinfogroup.ca EDITOR: Carolyn Gruske (416) 442-5600 x3265 CGruske@bizinfogroup.ca ART DIRECTOR: Stewart Thomas (416) 442-5600 x3212 SThomas@bizinfogroup.ca SENIOR ACCOUNT MANAGER: Catherine Martineau (647) 988-5559 CMartineau@bizinfogroup.ca PRODUCTION MANAGER: Kim Collins (416) 510-6779 KCollins@bizinfogroup.ca CIRCULATION MANAGER: Barbara Adelt (416) 442-5600 x3546 BAdelt@bizinfogroup.ca

BIG MAGAZINES LP Executive Publisher • Tim Dimopoulos Vice-President of Canadian Publishing • Alex Papanou President of Business Information Group • Bruce Creighton HOW TO REACH US: MM&D (Materials Management & Distribution), established in 1956, is published 7 times a year by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. EDITORIAL AND ADVERTISING OFFICES: 80 Valleybrook Drive, Toronto, ON, M3B 2S9; Tel: (416) 442-5600; Fax (416) 510-5140. SUBSCRIBER SERVICES: To subscribe, renew your subscription or to change your address or information, contact us at 416-442-5600 x3258 or 1-866-543-7888. SUBSCRIPTION PRICE PER YEAR: Canada $82.95 per year, Outside Canada $157.00 US per year. Single copy price: Canada $15.00, Outside Canada $32.65 CDN MM&D is published 7 times per year except for occasional combined, expanded or premium issues, which count as two subscription issues. ©Contents of this publication are protected by copyright and must not be reprinted in whole or in part without permission of the publisher. DISCLAIMER: This publication is for informational purposes only. You should not act on information contained in this publication without seeking specific advice from qualified professionals. MM&D accepts no responsibility or liability for claims made for any product or service reported or advertised in this issue. MM&D receives unsolicited materials, (including letters to the editor, press releases, promotional items and images) from time to time. MM&D, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. PRIVACY NOTICE: From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-668-2374, Fax: 416-442-2191 Email: privacyofficer@businessinformationgroup.ca Mail to: Privacy Office, 80 Valleybrook Drive, Toronto, ON M3B 2S9 Printed in Canada Publications Mail Agreement #40069240, ISSN: 0025-5343 (Print) ISSN: 1929-6460 (Digital). We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage for our publishing activities. MM&D is indexed in the Canadian Magazine Index by Micromedia Limited. Back copies are available in microform from Macromedia Ltd., 158 Pearl St., Toronto, ON M5H 1L3

ecently, MM&D invited representatives from six vendors and consultants to debate and discuss the important issues involved in planning a new DC. Bringing this group together meant there was well over 125 years of experience in supply chain sitting at the table, and it was my goal to make the most of all that expertise and give you a feature packed full of useful advice. The advantage to gathering an assortment of experts together is they’re able to take both a very broad look at the topic and a very deep one as well. Since they work on a vast range of projects, they’re exposed to what’s happening across a variety of industries. They get to see how DCs belonging to supermarket chains, department stores, auto parts manufacturers, pharmaceutical suppliers and every other conceivable type of business, operate, which makes them able to share the best (and worst) practices they’ve come across. They also have the benefit of working in a number of juridictions in Canada, the United States and around the world. So when they see rules and regulations popping up, first in one county or municipality and then another, they’re at the forefront of understanding trends that may, one day, affect the way you’ll have to run your business. Although some may see vendors and service providers as potentially biased— they have products to promote after all—the group of panelists understood that in this circumstance, the best and most relevant information wasn’t a recitation of brand names, but was instead, observations and insights drawn on personal experience and on protcols and practices developed to ensure contracts and commitments are met and customers are left happy. While there was more good information than could even be summarized in a multi-page feature, the key takeaway was the need for transparency and cooperation on any DC project. It’s not enough to say, “I need this” or “I want this type of design or equipment.” For a project to truly be successful, everybody working on it needs to understand the business reasons why a new facility is being built and comprehend what process improvements and changes a company wants to see. It’s not enough to want a newer or bigger building. There has to be a legitimate reason for it. CRUNCHING THE NUMBERS

GLOBAL

OCCUPANCY

September 2013  Volume 58  Number 05 12

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ACTUAL AND FORECAST TOTAL OCCUPANCY COSTS PER M2 PER ANNUM AND CHANGE IN COSTS RANK (USD)

CHANGE IN LOGISTICS OCCUPANCY COSTS BY REGION, 2012 (USD)

United States

1.5%

Europe

2.9%

Global Average

Asia Pacific

DC planning

Green transport

Equipment

Our roundtable panellists share their expertise on DC planning

Airlines and trucking firms save fuel and the environment

The latest pallets, containers, shipping boxes and accessories

MM&D | September 2013

Even though warehouses around the world all serve similar functions, the cost of operating them varies by location. Research company DTZ has compared costs of warehousing space around the world in its study “Occupier Perspective: Global Occupancy Costs–Logistics 2013”.

2012 Occupancy Costs

Costs Rank 2012

2017 Occupancy Costs

Costs Rank 2017

Country/ Territory

Market

Australia Australia Australia Australia Belgium Belgium China Czech Republic Denmark Estonia Finland France France France Germany Germany Germany Hong Kong SAR Hungary Ireland Italy Italy Latvia Lithuania Netherlands Netherlands Norway Poland Romania Singapore Spain Spain Sweden Taiwan United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United States United States United States United States United States United States United States United States United States United States United States United States United States United States

Brisbane

139

155

Sydney Antwerp Brussels Shanghai Prague Copenhagen Tallinn Helsinki Lyon Greater Paris Marseille Berlin Frankfurt Hamburg Hong Kong Budapest Dublin Milan Rome Riga Vilnius Amsterdam Rotterdam Oslo Warsaw Bucharest Singapore Barcelona Madrid Gothenburg Taipei Birmingham Glasgow Leeds London (Heathrow) Manchester South East England Atlanta Boston Chicago Dallas Denver Houston Los Angeles Miami Minneapolis Philadelphia Phoenix San Diego San Francisco Seattle

152 67 68 73 81 118 102 158 70 87 66 87 110 100 271 72 101 84 87 106 93 95 91 211 103 76 215 80 78 124 164 135 149 131 313 139 180 59 92 74 67 71 69 86 102 94 75 78 99 105 98

47 4 5 10 17 39 33 48 7 20 2 22 38 30 53 9 32 18 21 37 25 27 23 51 35 13 52 16 14 40 49 42 45 41 54 43 50 1 24 11 3 8 6 19 34 26 12 15 29 36 28

168 68 73 84 86 129 114 168 72 92 68 93 115 106 242 75 131 83 88 123 108 97 94 235 108 77 248 85 79 135 183 152 162 147 337 160 193 66 99 83 73 78 77 95 114 103 81 86 208 115 108

47 2 6 15 17 38 32 48 4 20 3 21 35 27 52 7 39 13 19 37 29 24 22 51 30 8 53 16 11 40 49 42 46 41 54 45 50 1 25 14 5 10 9 23 33 26 12 18 28 34 31

Numbers

Study compares how much it costs to rent DC space around the world

Change in rank                                      

Average annual growth est. 2012-17 2.1% 3.4% 1.1% 2.1% 0.1% 1.4% 3.0% 1.1% 1.9% 2.3% 1.3% 0.5% 1.2% 0.6% 1.3% 0.9% 1.2% -2.2% 0.9% 5.4% -0.5% 0.1% 3.1% 3.1% 0.4% 0.7% 2.2% 0.8% 0.3% 3.0% 1.3% 0.5% 1.8% 2.2% 2.4% 1.8% 2.4% 1.5% 2.8% 1.3% 2.1% 1.6% 2.2% 1.8% 1.9% 2.2% 1.9% 2.2% 1.9% 1.6% 2.1% 1.6% 1.8% 1.9%

Crunching the numbers is an editorial feature sponsored by YOUR COMPANY NAME and LOGO here. Contact Emily Atkins at 416-510-5130 or eatkins@bizinfogroup.ca for more information.

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SUPPLY CHAIN SCAN

STATS

MERGER

GARTNER

Orders and sales figures for forklift and conveyors show mixed results, p 6

SCL and PMAC are now one, p 6

Emerging market challenges identified in research company survey, p 9

Sharing best practices Aberdeen asks chief supply chain officers how they handle cross-border transportation By Carolyn Gruske

Process capabilities of best-in-class supply chains

ith the vast Practice multi-round bidding majority of supTracking of total freight cost, including ply chains reaching accessories (eg, detention and stop across international charges, fuel charges and invoice dispute) borders, moving raw Practice incremental bidding as materials and finished requirements change between bid contracts goods from one national jurisdiction to another Expressive carrier bidding (ie, carriers submit alternative bids based on is a constant challenge. bundling and unbundling of lanes) It’s one of the issues chief supply chain offiElectronically assissted bid analysis cers frequently find top of mind. Strategic bid allocation based on Aberdeen Group, a business performance of carriers Boston, Massachusetts0 10% 20% based research company, surveyed senior business, supply chain and logistics executives in over 160 companies around the world to discover some of their best practices for dealing with the issues involved in cross-border shipping. When asked about the key pressures they’re facing when looking at international goods movement, the majority of respondents, 70 percent, said the volatility of fuel costs and surcharges is their most pressing concern. As well, 54 percent said there’s an increasing awareness in their organizations about the cost and service impact transportation can have. They told Aberdeen that they’re confronted with a number of transportation service pressures, including customers demanding faster and more frequent deliveries (33 percent), increased sourcing complexity due to globalization (33 percent), and carrier service and related challenges (31 percent).

Metrics Aberdeen has concluded that the strongest and best-performing supply chains are paying more attention to five important key performance indicators (KPIs) which are helping them achieve better service while balancing costs. According to the report’s findings, the best-in-class organizations do a better job in reducing their baseline freight spend year over year, getting their carriers compliant with contract requirements on total cost, and helping their carriers meet service level agreements (SLAs) and routing compliance requirements. They also take a shorter time to process and pay freight invoices (6.1 days on average for top-performing companies, compared to an industry average of 9.8 days and the 14.3 days taken by the organizations with the worst performing supply chains). 4

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75%

52%

74% 72%

62%

35% 34%

45% 44%

38%

47%

59%

56% Best-in-class

35%

30%

40%

47%

50%

56%

Industry average Laggards

60%

70%

80%

As well, the best supply chains perform more audits of their transportation invoices, with the top firms scrutinizing 77.4 percent versus the industry average of 51 percent.

Automation One of the trends the study noted was the move toward improving efficiencies through automation. Fortyeight percent of respondents said they’re working to “optimize or automate their ability to source and negotiate freight rates and award contracts to the optimal carrier”. Forty-five percent said they’re trying to “automate data collection and analysis on freight spend and/or updates to rate tables”. Other efforts are underway to “collaborate and synchronize data with carriers, suppliers, and trading partners” (40 percent), “tie transportation, carrier selection, audit and payment together in a single process” (34 percent) and improve the “internal ability to mange contract compliance after the bid process” (26 percent).

Automation Three-quarters of the survey’s respondents told Aberdeen collaboration with internal and external partners was “integral to optimizing their supply MM&D | September 2013

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SUPPLY CHAIN SCAN chain strategy”. Through collaboration, especially when paired with near realtime monitoring, they say it is easier to obtain and track true costs of all items, including variances in fuel surcharges. Top supply chain leaders also said they engage in collaborative multi-round bidding, which leads to securing best overall rates and bundling low volume lanes, which can result in additional cost savings. These types of companies are also more likely to use electronic bid assistance.

Additional approaches Aberdeen found having a centralized spend platform to collect and share data

across the entire enterprise was one of the most important things a business can to do save money. According to the study, “some companies uncovered as much as 36 percent in cost savings directly applicable to cross-region optimization initiatives.” Other efficiencies and performance gains came from improving processes such as automating pooling and hub-based routing, planning of backhauls for delivery, and utilizing multi-origin to multi-destination routing and consolidation.

BENCHMARKS The Lawrence Kinlin School of Business at Fanshawe College in London, Ontario, has received accreditation from the Canadian Supply Chain Sector Council (CSCSC) for its business purchasing program.

weight of the lifted vehicle to help recharge the batteries. The lift can support vehicles weighing between 21,772kg (48,000llbs) to 65,317kg (144,000 pounds).

The inaugural emerging leader award from the Council of Supply Chain Management Professionals (CSCMP) will be presented in October to three recipients: Keiko Arai, leadership development program participant at Textron, Florian Schick, consultant at McKinsey & Company, and Amanda Tolhurst, senior manager, internal materials operations at Whirlpool Corp. Tolhurst is also a member of MM&D’s editorial advistory board. The award was created to recognize outstanding supply chain management and logistics professionals, age 30 and under.

Menlo Worldwide Logistics was commended by the city of New York’s office of emergency management (OEM) for its performance planning and distributing health care and comfort supplies during Hurricane Irene and Superstorm Sandy. San Francisco, Californiabased Menlo warehouses and manages a large stockpile of relief supplies for the OEM’s Emergency Supply Stockpile (ESS) program and executes rapid-deployment logistics and transportation management operations to stock citywide emergency shelters with relief supplies under the logistics shelter support program (LSSP).

Ryder System Inc has announced the winners of its 2013 top technician recognition program. The Miami, Florida-based transportation company gives written and hands-on tests to eligible competitors (who were chosen based on technical training qualifications, outstanding customer service performance, and quality workmanship), narrowing the field of candidates to seven, including one Canadian. Jonathan Timmons of Sumter, South Carolina won the competition. Kenneth Bilyea of London, Ontario was the first Canadian to make the finals.

GET IT RIGHT THE FIRST TIME

Reading, Pennsylvania-based EnerSys, which was founded in 1888, is celebrating its 125th anniversary in business this year. Today, the company’s industrial batteries are sold to customers in over 100 countries.

Canada’s foremost experts for warehouse and distribution buildings

Southeastern Freight Lines of Lexington, South Carolina, is marking its 60th year in business. The company began operations in 1953 in Florence, South Carolina in a facility consisting of 16,000sqf of dock space and 43 dock doors. Ten of Southeastern’s employees are also celebrating anniversaries of 30 years or more with the company, including one who has been with the LTL provider for 45 years. ARI-HETRA, a Manassas, Virginia-based heavy-duty lift equipment manufacturer has been awarded a US patent for a mobile, heavy-lift hoist employing hybrid battery technology and a regenerative electrical charging system which uses the

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514 737-6255 WWW.GKC.CA

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SUPPLY CHAIN SCAN

Conveyor and forklift orders in flux Sales figures show mixed results By MM&D staff

wo organizations are reporting mixed sets of materials handling equipment sales figures. Numbers from the Conveyor Equipment Manufacturers Association (CEMA) in Naples Florida demonstrate monthly gains, but still show weakness when compared with last year. According to CEMA, there was a total of 7.2 percent more booked orders in June 2013 than there were in May. Bulk handling equipment orders increased 9.2 percent between May and June while unit handling equipment orders were up 5.5 percent in the same period. June’s billed sales were 1.3 percent higher than May’s figures. When comparing June 2013 to June 2012, however, the picture looks less rosy, as booked orders were 14 percent lower this year versus last year. Shipments were also lower. June 2013 was 10.8 percent behind June 2012 in billed sales. The German Engineering Federation which produces the World Industrial Truck Statistics announced numbers that indicated both strengths and weaknesses in the global fork truck market. The organization recently released its year-end figures for 2012 fork truck orders and shipments, and according to its figures, total global orders were down 3.1 percent last year (944,405 units in 2012 compared with 974,582 in 2011) but the total number of shipped units showed a fractional increase of 0.2 percent from 941,808 in 2011 to 943,724 in 2012. In comparison to 2011, orders for Class 1 counterbalanced electric rider trucks CIFFA president Donna Letterio died on August 28. A well-known member of the supply chain industry, Letterio was CEO, Canada of DHL Global Forwarding (Canada) Inc, and since May 2012 she served as president of the board of directors of CIFFA. In a letter to members announcing Letterio’s death, CIFFA executive director Ruth Snowden described her in the following manner: Donna Letterio “As an industry veteran Donna brought a wealth of knowledge and experience to the presidency. She had a quick wit and generous sense of humor, was a consummate professional and a fine representative of our industry.” Jock Menzies, the president and founder of the American Logistics Aid Network (ALAN), has died. He started the humanitarian aid organization after witnessing the breakdown of relief efforts in the wake of Hurricane Katrina. He also served as the chair of Terminal Corp. Kathy Fulton, ALAN’s current director of operations, has been Jock Menzies appointed interim president.

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fell 1.3 percent in 2012 (156,766 in 2012 to 154,657 in 2013) while shipments increased 1.1 percent (152,271 orders shipped in 2011 and 153,892 shipped in 2012). Both orders and shipments for Class 2 electric warehouse rider trucks were up in last year compared with the previous year. Orders increased 3.3 percent from 95,747 to 98,941 and shipments rose 9.7 percent from 91,424 to 100,252. There was a 3.7 percent decline in orders for Class 3 electric warehouse pedestrian trucks in 2012 (267,545 in 2011 and 257,659 in 2012) but a slightly higher percentages—0.7 percent—of shipments (259,986 versus 261,792). The organization combines figures for Class 4 and Class 5 internal combustion engine (ICE) trucks, and both shipments and orders were down for these vehicles. Orders dropped 4.7 percent (from 454,524 units in 2011 to 433,148 in 2012). Shipments fell 2.4 percent from 438,127 to 427,788 worldwide. Looking at the world by region, Europe, for the most part saw lower sales and shipments in 2012 whereas America (North, South and Central) saw increases in every category but one: Class 4/5 orders dropped from 102,039 units in 2011 to 98,419 units in 2012.

Association merger completed SCL and PMAC are now SCMA By Carolyn Gruske

fter months of planning, meetings and outreach, the merger between the Purchasing Management Association of Canada (PMAC) and the Supply Chain & Logistics Association of Canada (SCL) has become official. Plans to join the two organizations were first announced in April. At the time, PMAC board chair Mike Whelan described the move, saying, “As organizations, our strengths complement each other; by combining them we can offer supply chain professionals in all disciplines the very best opportunities for professional development, networking, and employment.” The Supply Chain Management Association (SCMA)—the name chosen for the blended organization—officially launched on September 3. It will work on behalf of its nearly 8,000 members and provide education, training, professional development courses and networking opportunities. SCMA retains PMAC’s operational infrastructure, with a national office and 10 institutes across Canada. It will also continue to develop and support the Supply Chain Management Professional (SCMP) designation. “SCMA is truly a national organization for supply chain professionals in all disciplines and at all career stages,” said Whelan, now SCMA national board chair. “We are stronger through the sum of our parts and ready to deliver better value and more opportunities for our members and their employers.”

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SUPPLY CHAIN SCAN GLOBAL FOCUS Metro expands to UK Toronto, Ontario-based Metro Supply Chain Group, has opened its first facility in the United Kingdom. The company has opened a warehouse in Daventry in support of Wormser Corp, a contract manufacturer of cosmetics and perfumes. Metro is providing complete warehousing and distribution services including managing all of the inbound and outbound inventory and running e-fulfillment operations. Metro will also supply inventory to Wormser’s channel partners. Toys for the King King Abdullah Economic City, Saudi Arabia, has announced that Toys R Us has signed a development lease contract for a 35,017sqm plot of land in the Industrial Valley, where the retailer intends to build a distribution centre. The DC will act as a hub for the company’s expansion across the country. Jamaica mulls port Jamaica’s environment minister Robert Pickersgill, said the country is considering building a trans-shipment port in the Goat Islands, located in Jamaica’s southern protected zone of Portland Bight. According to Pickersgill, Chinese state-owned China Harbor Engineering Co wants to build there.

Indian acquisition Transportation software company Kewill, which is headquarted in Guildford, UK, has purchased a software company based in Hyderabad, India. Four Soft develops logistics software used by transportation companies, manufacturers and retailers in 120 countries. Dubai gets new cargo terminal Emirates SkyCargo has created a new cargo terminal at the Dubai World Central Al Maktoum International Airport. Measuring 68,000sqm, the terminal has 5,000 storage locations for pallets and containers. The terminal is being opened in two stages. After stage one is completed, the terminal will handle a throughput of 700,000 tonnes of freight annually. After opening phase two, which is scheduled for 2015, throughput will increase by an extra 300,000 tonnes. Siemens Logistics and Airport Solutions was chosen to provide the materials handling systems for the terminal. Caterpillar opens in Brazil Mitsubishi Caterpillar Forklift America (MCFA) Inc plans to open its first distribution centre in South America later this year. The DC will house parts inventories for Caterpillar and Mitsubishi forklifts. The warehouse, which is located in Sao Paulo, Brazil, is expected to begin distribution operations in November 2013.

Myanmar approves 3PL operations The government of Myanmar has granted Damco, a 3PL based in The Hague, the Netherlands, a permanent licence to operate in the country as its own legal entity. Damco is setting up an office and has already established a container freight station operation in Yangon. US company takes over Swedish transport firm BDP International, a Philadelphia, Pennsylvania-based logistics services provider, has made Polar Logistics AB, a Swedish transportation company, part of its global network by taking a major equity position in the company. A name change accompanies the investment, and Polar will now be known as BDP International Sweden.

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UPS grows Chinese operations Atlanta, Georgia-based UPS has added two new non-bonded contract logistics distribution facilities in China. One is in Chengdu and the other is in Shanghai. Chengdu has 47,000sqf of warehouse space and Shanghai has 70,000sqf. New UK facility UTi Worldwide Inc, a non-asset based freight forwarding and distribution services company based in Long Beach, California, has opened a new 33,000sqf operations facility in Heathrow, UK. Services available at the site include X-ray screening and bonded storage. Refrigerated storage is also available. The facility is equipped to handle dangerous goods and firearms and ammunition shipments.

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AUTOMATION A SSOCIATES INC. | MISSISSAUGA, ONTARIO

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SUPPLY CHAIN SCAN DONE DEALS Brampton, Ontario-based materials handling equipment manufacturer Blue Giant Equipment Corp will now be offering high-volume low-speed (HVLS) fans manufactured by MacroAir Technologies Inc of San Bernardino, California. The fans will be sold under the brand “MacroAir by Blue Giant”. Dorval, Quebec-based freight forwarder AGO Transportation Inc has adopted Chicago, Illinois-based CargoWise’s cloud-based logistics software ediEnterprise. Penfold Capital Acquisition IV Corp, a Toronto, Ontario-based holding company, has acquired RL Marketplace (through its wholly owned subsidiary SLM Logistics Corp) for $100,000. RL Marketplace is an American company that offers returns brokerage services including purchase contracts, shipping, warehousing, and delivery.

A free tool to assess, calculate and track your fuel savings and GHG reduction.

Montreal, Quebec-based supply chain software company TECSYS Inc is working with the Oak Brook, Illinois-based Warehousing Education and Research Council (WERC) and incorporating metrics and data sets identified in WERC’s benchmark DC Measure study into its business intelligence and analytics tools. Tree of Life Canada (TOLC), which distributes specialty and natural foods, has purchased Northbud Distributors, headquartered in Mississauga, Ontario. According to TOL, Northbud Distributors will be merged into the TOLC business over the next 12 months. Northbud’s primary business is distribution of refrigerated and frozen value-added meat, poultry, deli items and other grocery products. Tree of Life is a subsidiary of Romeoville, Illinois-based KeHE Distributors. Daifuku Webb Holding Co, based in Farmington Hills, Michigan, has announced the purchase of Wynright Corp, which is headquartered in Elk Grove, Illinois. Wynright designs and builds intelligent materials handling systems. Daifuku manufactures automated guided vehicles (AGVs), automated storage and retrieval systems (AS/RS) and other materials handling equipment. The deal is expected to be finalized in Q4 2013. Savi Technology was awarded a US$7 million contract by the US Department of Defense to provide RFID-III tags to the US Marine Corps.

Logistics and Truck Carrier versions now available in Canada.

Mercedes-Benz US International Inc ordered 123 hydrogen-based GenDrive fuel cells from Latham, New York-based Plug Power Inc for the forklifts in its vehicle assembly plant in Tuscaloosa, Alabama. The plant is a 90,000sqf US$70 million warehouse designed to streamline the auto manufacturer’s logistics operations. Greenwich, Connecticut-based transportation services provider XPO Logistics Inc has completed its acquisition of 3PD Holding Inc, an Atlanta, Georgia-based last-mile, heavy goods logistics provider. The deal was worth US$365 million.

FOR MORE INFORMATION AND TO REGISTER, VISIT

Madison, New Jersey-based Maersk Inc is selling the assets of its drayage services provider subsidiary Bridge Terminal Transport Inc to Platinum Equity, a Los Angelesbased private equity firm.

www.sclcanada.org

Penske Logistics has taken over the operation of a 600,000sqf refrigerated food distribution facility in West Shelbyville, Indiana for Cincinnati, Ohio-based grocery store chain Kroger. Reading, Pennsylvania-based Penske has retained all of Kroger’s 816 existing employees including those represented by Teamsters Local 135.

PRESENTED BY

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SUPPLY CHAIN SCAN

Global readiness in question

LogiMat® Vertical Lift Module

CEOs split on supply chain’s ability to take on emerging markets By MM&D staff

ven though CEOs understand the growth potential represented by emerging markets around the world, a large percentage of business leaders are worried about how their supply chains can cope with the challenges of doing business in new countries. According to a survey conducted by Gartner Group, a Stamford, Connecticut-based research company, “51 percent of [CEOs] see globalized supply chain as more complex and brittle, with the balance feeling that they are more resilient than at any time in history”. The company’s research found businesses with some of the most highly regarded global supply chains cited changing rules, including government regulations and tax laws, as the biggest challenge faced by supply chains as they reach into emerging markets. Finding local talent and adapting the supply chain to meet the needs and demands of the local markets were also mentioned as significant obstacles to business expansion. The 35 companies Gartner surveyed listed other notable challenges to establishing smoothly functioning supply chains in emerging markets, including unreliable infrastructure hindering the flow of both goods and information, limited availability of communications equipment, and political instability. In a separate Gartner survey of chief supply chain officers, another key risk concern identified by respondents is the scarcity of material and non-material resources (such human capital). “The ability to understand and manage local culture is a major challenge for most companies, with talent shortages and retention being significant concerns in the emerging markets.” MM&D | September 2013

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SUPPLY CHAIN SCAN WHAT’S ON MMDONLINE.COM Maple Leaf closes DC Begins to wind down Kitchener, Ontario operations http://tinyurl.com/MapleLeafDC Air Canada opens new operations centre Brampton facility now in testing stage http://tinyurl.com/ACOpCentre Congébec drops the temperature in Winnipeg Adds cold storage capacity to warehouse http://tinyurl.com/CongebecWestco AIT Worldwide comes to Canada Opens office in Ontario http://tinyurl.com/AITWorldwide

New container inspection facilities for BC $106 million investment in Deltaport and Burrard Inlet http://tinyurl.com/PortVanContainer Gates arrive at Panama [Video] Delivery marks important step in canal construction http://tinyurl.com/PanamaGates Russia outpacing Canada in Arctic shipping Canada lacks ports, charts and icebreakers http://tinyurl.com/RussiaShipping SKU proliferation and delivery charges Lift-pallet systems and new retail models http://tinyurl.com/liftpallet

MOVERS + SHAKERS Pedro Patrao has joined Montreal, Quebec-based TECSYS Inc as senior vice-president of global services. He will be responsible for consulting, software implementation, and customer care services.

been hired as its bilingual inside sales representative. Rishi Dewan is the new bilingual support specialist and David Parker is the new application implementation specialist.

Shaw Tracking has made a number of new hires. Ken Kozicki has joined the Mississauga, Ontario-based fleet management software company as its new sales account executive. Rachel Arcuri has

Simcoe, Ontario-based trucking company Bruce R Smith has a new president and COO. Sandro Caccaro, who was senior vicepresident at Canada Cartage System, has taken over the role.

Want some insight? Learn from the pros what the numbers mean Join us for the free Annual Survey of the Canadian Supply Chain Professional webinar on November 21st and find out why salaries are going up and what you need to do to see yours climb too. This one-hour live webinar will include presentations of the results by Michael Power, editor, PurchasingB2B; Carolyn Gruske, editor, MM&D; Lou Smrylis, editor, CT&L; and SCMA president and CEO, Cheryl Paradowski, along with commentary from HR professionals and recruiters.

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

Addressing issues affecting Canada’s public procurement professionals

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PROFESSIONAL DEVELOPMENT DIRECTORY

supply chain & logistics

sustainability

Professional Development for Supply Chain Professionals Register today - www.scmao.ca Better Ways to Better Deals, October 2-3, Mississauga

This seminar will add to your existing negotiation skills by providing a tool kit of effective options for handling negotiations. Using these tools will help you be better prepared, identify options, overcome barriers and measure outcomes.

Maximizing your Impact and Influence, October 16-17, Toronto

Communicate in a way that generates results. Based on methodology that assesses personal drivers, this workshop will help you learn how your motivations influence others and how to maximize your impact on them.

Strategic Supplier Performance, October 30-31, Hamilton

This seminar will assist participants in the development of a supplier management strategy. You will develop a framework that can be applied to improve supplier performance towards achieving organizational objectives.

January/February 2013 $8.00

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Frontier mentality Emerging markets roundtable examines benefits and pitfalls of extending supply chains into new regions and countries

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Inside 3 5 15 16 23 24 27 28 29 30

Taking Stock Supply Chain Scan 3PL Relationships 3PL Capability Guide Equipment Focus: Dock Products Retail Datacapture Racking Safety Materials Handling Crunching the Numbers

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It’s FAST, It’s EASY, It’s CONVENIENT

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Trusting

flexibility

Planning and building a new distribution centre

Left to Right: Gabe Mazzetti, Stephan Lauzon, Ross Halket, Gord Smith, Jeff Lem and Richard Kaplin (seated).

MM&D would like to thank the following panellists and their companies for their support in preparing this editorial roundtable report. 12

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Richard Kaplin, architect and partner, Gross Kaplin Coviensky (GKC) Architects Stephan Lauzon, partner, advisory services, KPMG Canada

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Designing and building a new distribution centre is something very few people get to do. Some spend their entire careers in supply chain without the opportunity to start a new facility from scratch. To provide some guidance for those who find themselves lucky enough to be on the ground floor of a new project, MM&D brought together a panel of experts who discussed the entire process from first concept to getting the new DC up and running.

By Carolyn Gruske

efore any company starts construction on a new distribution centre, a very basic question must be asked and answered: Is a new DC necessary? And while it may seem a simple question with an obvious answer, it’s not. Instead it’s merely a starting point that leads into a complex set of evaluations taking into consideration a variety of factors, including, first and foremost, the business need. Stephan Lauzon, partner, advisory services, KPMG Canada in Montreal, Quebec, said that when a client first expresses the need for a new DC, it’s usually because of a change in the “business model, the business product line, the client base or the geography. But it’s a business need. I like to say first that a DC is a tool because I’m dealing with big retailers and their business is retailing. Distribution centres are tools for them to be able to get their product to the stores. The store operation is their business.” Just because a business model or a product line has changed, it doesn’t automatically mean a new DC is called for. Sometimes the best approach is reworking an existing facility and making it operate better, says Gabe Mazzetti, president of Oakville, Ontario-based Redirack/Konstant. “We’ve been involved in some apparent moves that never did happen. They brought us in and said, ‘this is what we need. This is our order profile. This is how we’re doing things.’ And then we stumbled across inefficiencies. And we found ways for them to be more efficient. And the next thing you know, we were out of that job, and into another: improving the four walls they had.” Charlotte, North Carolina-based Ross Halket, executive director, automated systems division for SSI Schaefer, provides an example to illustrate that just

because a business expands its product line, it doesn’t automatically require it to move to a bigger DC. “There’s a proliferation of SKUs these days, so what used to be 2,000 SKUs is now 6,000 SKUs. And if you have 2,000 pick faces and that’s all you have space for, then you may look for another building. But we can also compress that footprint and put 6,000 SKUs into a smaller footprint inside the existing building. So a lot of things need to be taken into consideration.”

Processes and technology Planning a new DC shouldn’t just involve thinking about a new physical structure. It should also take into account new processes and procedures, along with the equipment and technology to support the new ways of doing business.

“Distribution centres are tools for them to be able to get their product to the stores. The store operation is their business.” Markham, Ontario-based Jeff Lem, vice-president of viascan and president of its qdata subsidiary, says that when he’s speaking to clients about moving to a new DC, “the first thing I ask is, are you adding anything new that you’re not doing now in the current DC? If you’re going to shorter picks, smaller picks, or your unit of measurement is going from cases to eaches, that implies a whole new technology on top of that. What we try to do is look at the entity—what kind of technology platform can we put there?—and then build off that.” Although it’s fine to start with your current requirements as the basis for a new DC—what you need to change now in order to make your operations run

Gabe Mazzetti, president, Redirack/Konstant

Gord Smith, vice-president and general manager, Automation Associates

Jeff Lem, vice-president, viascan and president, qdata

Ross Halket, executive director, automated systems division for SSI Schaefer

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Stephan Lauzon (left) and Gord Smith.

more smoothly—it’s imperative to think about the long term. Richard Kaplin, architect and partner at Gross Kaplin Coviensky (GKC) Architects in Montreal, Quebec, says, “in terms of planning a building, we’re usually trying to foresee at least five years’ progress. Of course that’s not easy, but it’s what we try to get our clients to analyze.” Expanding on that idea, Gord Smith, vice-president and general manager of Mississauga, Ontario-based Automation Associates, points out that the ability to

“If you have flexibility in all the components then you’ll have a state-of-the-art DC.” expand and adapt to changes in business requires flexibility to be built into every aspect of the new DC. “We talked about being about to expand from 2,000 SKUs to 6,000 SKUs. A lot of that can be softwaredriven, but it can also be the physical layout of the building, with the locations and the makeup of the bins. And then you have the information that the software systems bring into play, so you understand 14

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better what your facility is dealing with on a daily, monthly and yearly basis. So if you know what your growth plan is, and you expect your business to grow, you need to manage the ups and downs of your business. If you have flexibility in all the components then you’ll have a state-of-the-art DC. You’ll be able to deal with things as they occur.” That includes being able to make your new DC work with business models that may not even exist today, or that are rapidly evolving. E-commerce and the demands it puts on a DC are prime examples of why a facility needs to be flexible, according to Lem. He says a traditional retailer could be used to packing totes with dozens of items to send to individual stores. If that retailer decides to add an e-commerce component to its business and handle the processing from the same DC, then it’s probably expecting to alter its process to allow for orders of ones or twos. But that may not be the way e-commerce is done in the (very near) future. Free shipping and loyalty programs are altering the way customers shop online and that means the way their orders must be handled is also changing. MM&D | September 2013

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People In order for a new DC project to ultimately be successful, it needs the right person driving it. Smith calls that individual the champion, the person who will take the time to learn and understand what the primary needs are and go to bat within the organization to ensure those needs are met.

“…in terms of planning a building, we’re usually trying to foresee at least five years’ progress.” There are no rules about who this person should be. It can be an internal executive, or somebody brought in from the outside, but the consensus of the panel is the champion should be somebody who knows and understand the needs of the DC, but also has experience in other areas of the business, so he or she can see how the warehousing operations fit in with the bigger picture. The champion also needs to be open-minded and able to listen to new ideas and approaches. Diplomacy and communication skills are also vital, as it will be up to this person to moderate disagreements between internal groups who want to prioritize the needs of their own business areas, and those who hold the purse strings and want to exercise control over the project. The champion also needs to be somebody who can work with outside vendors and who has the ability to trust the hired professionals to provide advice and do their jobs. “I find that mistakes are made when vendors aren’t put close enough to figure things out for the company,” says Mazzetti. “They’re trying to figure things out for themselves but things get complicated and suddenly there’s a stairway in the wrong place or a beam is too low to get a truck through. I think once you’ve got to the point where you’ve picked your vendors and your experts, you really need to depend on them to talk to each other.” Halket says that because of the sheer numbers of projects vendors and consultants are involved in, they have a level of experience that is hard to match. At SSI Schaefer, he says “we’ve been building a project responsibility matrix. It probably started off with 200 lines about 10 years ago. It’s now about 2,000 lines of the things you need to pay attention to, and it’s growing with every project.”

Knowing your business One of the major impediments to any DC build is not having accurate data or measurements of what exactly is done in existing facilities. While the perception is they have all of the information they need to MM&D | September 2013

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What’s new in DC design While some best practices and design techniques are almost timeless, there are new approaches to building warehousing facilities. The panelists noted several changes to the way things are being done. Building information modeling Rather than being presented with two-dimensional architectural plans, architects are creating 3D models of buildings known as interference drawings. This allows everybody involved in the project to be able to easily visualize not just where the physical equipment (such as the racking) goes and what it will look like once it’s installed, it also permits visualization of more nebulous things like the movement of inventory through the building. The bidding process Instead of dictating to suppliers what exactly is needed in terms of equipment, the trend today is to let vendors make suggestions about what they feel would work best, based on the business needs of the company, and the way it wants to organize processes in the DC. To that end, when a project is getting started, the project manager (or consultant or architect) is less likely to send out requests for quotations (RFQs) and instead put out an open call for performance specs from the equipment vendors. Tailoring the products Since the trend is toward customization and creating solutions to meet a business’ specific needs, there are fewer cookie-cutter and out-of-the box offerings being put into new DCs. Equipment manufacturers have more engineers on hand to tailor custom solutions for clients. But that also means the clients need to be more involved in the process. They must be willing to talk in depth about how their business operates and back up what they say with hard data and statistics reflecting product inventory, throughput and other critical metrics. IT systems Compared with DCs that are hitting the end of their lifecycles, new facilities are exponentially dependent on computer systems, information technology, and automated systems, which means IT must be accounted for early in the planning stages. Wiring, network cabling and charging stations are all easier to install if their inclusion is planned. Additionally, it’s important to take into account the idea of mobile device management during the planning stages, especially as more and more facilities are permitting employees to bring and use their own consumer devices on the job. Human comfort It’s common for design trends to pop up, become popular, and, over time, fall out of favour, only to become adopted again years later. In the case of DC design, windows are back in fashion after having vanished for many years. In the recent past, it was thought they presented a security risk, but now the feeling is that security concerns can be mitigated. As to why they’re back, experts now say workers function better when exposed to natural light. Also, increasing the amount of sunlight that comes into a building can mean cutting back on artificial lighting, which means lower electricity bills. Businesses are also starting to think about adding air conditioning to their warehouses to better improve working conditions.

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understand and run their businesses, Lauzon says it’s often difficult for clients to put their fingers directly on the numbers, which makes it difficult for any partner in the construction project. “We’re still struggling with getting the proper information. Companies handle tons of information, but they just don’t know how to pull it out of their systems. It’s not accurate, and that’s a very, very important part, especially since the base of any project is the data,” he says.

“I think once you’ve got to the point where you’ve picked your vendors and your experts, you really need to depend on them to talk to each other.” “It always stuns me. We’re in 2013, but when you ask for product information, they won’t even know if they have the dimensions for each case or skid. And

if they do, they don’t know where it is. And if it’s there, they’re not sure it’s accurate.

Location After deciding a new DC is necessary and exactly what its capabilities need to be, the next step is picking the right location. Undertaking a network analysis should result in a rough location or geographic region in which to begin a hunt for property, but that’s only the first step. The trick becomes narrowing the location down to the right municipality, as “each one has regulations that are going to affect things like the height of the building, the cladding materials, trucking access, and outside storage,” says Kaplin. Picking the right lot is as important as selecting the correct municipality, and Kaplin says one of the most important features of land is often overlooked: the soil. “The most important part of the warehouse is the floor, and the floor is only as good as the soil underneath it. We’ve seen lots of cases where people thought they were buying a piece of land and we found out it was soup underneath that couldn’t support the loads on the floors, so they’ve had to give up and find a different location.” Other important things to keep in mind are access to skilled employees (and how easy it is for those employees to get to the location using public transit or their own vehicles), seismic stability, distance to borders, and access to Internet and communications networks, not to mention municipal services such as water and electricity.

Building design

Ross Halket 16

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Along with a floor strong enough to support both the inventory and whatever racking and automated systems are in the new DC, it’s important to get the rest of the physical structure of the building right. The roof and ceiling, in particular, can cause grief, says Halket. “It used to be about 120 percent of the wind load/snow load was available, because that’s just the way they built them. Now it’s so tight that I can’t hang anything from the ceiling. So if I want to hang something, I have to go into a big structure.” Getting the equipment in the right place in the building is absolutely critical to having a properly functioning DC. That’s why Lauzon says the way a DC should be built is to start with the job that needs to be done in the facility. “We usually start with the materials handling equipment or the distribution centre—not the building but the actual operation centre’s design. The processes, the equipment, whether it’s automated or not, that’s where we start and then we put the building on top of that. While it’s important to have a building that is able to support the basic warehousing and logistics functions, that’s not enough says Kaplin. A well-designed MM&D | September 2013

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DC should take into account how the people working in it will want to use it. “You have to deal with employee culture. You have to deal with the corporate culture. Is it a must-have to have a certain type of cafeteria, fitness room or daycare? Is that that a want-to-have? Is it a must-have to be LEED certified, or is it a nice thing?” Kaplin says these decisions typically come from top company executives who have heard the feelings and input of staff members at all levels and have made decisions about what is really necessary in the new facility. It also needs to comply with municipal codes and regulations. According to Kaplin, sometimes code requirements for things like emergency exits and fire ratings conflict with how warehouses need to be designed to function efficiently, so architects in charge of DC projects often need to produce timemovement or smoke studies to prove the building will meet the spirit of the code, if not the letter of the law. There are also often practical details that are easy to overlook, such as accommodating IT equipment, says Lem. “Whenever we go in to do an installation we ask if there is a proper server room, a wiring closet to put routers and switches. Because I’m always shocked it’s an afterthought. You go into the IT manager’s office at the DC and all that stuff is right next to his desk. And it’s hot in that room. It’s noisy and it’s not very secure to say the least. So I always plan for a room that can be locked down, cooled, and certainly big enough to hold some racking.” Although the design and construction phase may not seem like the time to think about software systems and network infrastructure, Smith says it makes a lot of sense to do so. “When you’re setting up your racking , we’d like to be in there setting up your network infrastructure, putting in your access points and planning your coverage.” Smith says factors like building layout, the use of microwaves in or near the building, the DC’s power plan, and even the type of inventory being stored (and how it’s being stored) can affect network coverage.

Trends and innovative concepts Staying on the cutting edge when it comes to DC design is fairly difficult, because of the quick spread of technology and concepts. Rain water and grey water collection systems are starting to become common. So are landscaped green roofs or roofs with solar panels and photovoltaic cells or wind turbines. Energy efficient HVAC, lighting and refrigeration systems have essentially become standard, and sophisticated management systems are being relied upon more and more to manage those components. FastMM&D | September 2013

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Jeff Lem

charging stations are found everywhere. LEED certification has become a familiar process.

“The most important part of the warehouse is the floor, and the floor is only as good as the soil underneath it.” One relatively new trend starting to take hold is the building of taller facilities. Putting up a structure that’s 70- or 100-ft high often means rethinking the basics such as lighting or racking, but taller buildings tend to be more efficient and require less real estate.

The construction phase In addition to understanding municipal regulations, it’s also import to fully comprehend provincial rules and restrictions involved in any construction project as they can limit what can be done and can also force additional, unwanted responsibilities on parties during construction. This is happening in Ontario, says Mazzetti, where the province’s Ministry of Labour 17

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is compelling some businesses to take on the role of constructor. “The general contractor might leave at one point and ask us, the trade, to become the constructor. It opens up a whole new can of worms and adds some more liabilities. And most vendors aren’t willing to take that on. And the client’s not crazy about it because there are all kinds of tradespeople there he doesn’t want to be responsible for. It’s something

“The processes, the equipment, whether it’s automated or not, that’s where we start and then we put the building on top of that.”

Richard Kaplin

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that can happen on a project that people need to be aware of. It has only come up in the last year or two, but it’s been a headache for us.” Rules about unionized workers and skilled tradespeople also vary from province to province. Mazzetti says anybody involved in a construction project needs to keep a checklist detailing who is allowed to do what, just to ensure the project is in compliance. One thing that’s important to remember during the construction phase is that projects don’t have to be completed all at once. They can be put together in stages, even if they are envisioned as a unified whole, says Halket.

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“We design for the end state. So right now we’re designing buildings for 2020 and even 2025. But the important thing is not to build it all up front, because, inevitably, the business will change, as it has done with almost every client I’ve ever had. We have an end goal in sight, but we phase it in so the cap-ex is not huge up front and you grow into it and move dynamically into where the business grows.”

The big move Planning doesn’t stop when the blueprints have been finalized. The act of moving into a new DC is no longer simple. Instead it’s an orchestrated process that needs to planned down to the last detail says Lauzon. “The smooth move doesn’t exist” he says, noting that he is currently working with a client to plan a move that is scheduled for 10 months in the future. He says the client is implementing new software and that requires training for the staff and testing for the systems. “In the manual world, you could do these big bang moves over a weekend. Hire one hundred temps and let’s go. Now, with technology, if you hire one hundred temps, what kind of handhelds are you going to give them? Because they can’t work manually, unless you have people key-punching everything they’re doing on paper. So temps aren’t an option any more. They are, but they need training and equipment.”

technology and equipment. It’s a chance to revise a company’s operations and improve its efficiency. But that can’t be done if people are locked into rigid ideas about what a facility should look like or how it should be built.

“Be honest about your budgets and expectations.” Working with experts—with vendors and consultants, architects and engineers—means their experience and knowledge is available for the benefit of the client. The challenge for the project leader or DC champion is to learn how to ask for an opinions, listen to the response and then consider the response in light of the business needs, and the budget. Taking that approach means the odds are much better the DC will meet the immediate and future needs of the company and be considered a success. MM&D

Budgets and money While nobody wants to spend more money than they have to, Kaplin suggests being totally transparent about how much budget is truly available for a new construction project is the best approach. “Be honest about your budgets and expectations. I’ve found, too many times, often clients think that they have to minimize the budget that they’re allowing their consultants to work with to keep them under control. And what happens is they will often make compromises because they can only afford so much on that budget. And, really, they can afford more and they’ve got budget that they’re sort of keeping in their back pocket. “During the construction or during the installation they say, ‘Well, I really would like to have that.’ Then they end up paying a lot more for it. So if they can be honest about their budgets and expectations up front, they have to trust that the consultants they hired know how to work with a budget and will give them the most value they can. Because it’s always going to be more economical to do something when it’s planned, not when it’s a retrofit.”

Conclusion Above all, the common theme all panellists kept returning to was flexibility. Building a new DC is a chance to learn about new techniques, procedures, MM&D | September 2013

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Gabe Mazzetti

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DATA CAPTURE

Scanner market evolving By MM&D staff

amera-based 2D imaging systems are supplanting laser-based products as scanners of choice across all areas of industry, including in warehousing and distribution centre operations. That is one of the conclusions of Richa Gupta, who holds the title of senior analyst, autoID and datacapture, at Natick, Massachusetts-based VDC Research. “We anticipated the eventual move from laser scanners to imaging scanners, but the pace is much faster than expected,” says Gupta. Forecasted Global Shipments of Handheld Barcode Scanners Segmented by Product Type (Revenues in Millions of Dollars) Laser Scanner Linear Imager 2D Imager (Camera-based) Total

2012 - Base Year 337.3 183.3 424.3 944.9

2017 - Forecast 269.4 175.6 774.5 1219.4

Data courtesy of VDC Research

The study, The Global Market for Handheld Barcode Scanners (which Gupta authored along with VDC vicepresident Michael Liard), says “the barcode scanner market seems to be reinventing itself,” and points out that one of the key reasons why this is happening is price.

“Market leaders are facing stiff price competition from some of the new entrants in this heavily commoditized marketplace.” Local allegiances and familiarity are important market drivers, especially in Asia and other emerging markets where many of the new device manufacturers “take advantage of their regional position”—not to mention lower costs—to capture market share. But even beyond price, there are other reasons why companies are adopting camera-based technology. Laser scanners are more susceptible to breaking when used in demanding environments like warehouses. Even when ruggedized, they have internal moving parts, whereas the 2D scanners are designed to have no (or very few) moving components. Gupta also says businesses are thinking about the future when they’re buying scanners. The thought is the scanners are being sold on the promise they’ll be integrated with programs and applications, but at this point, Gupta says despite a lot of ongoing work between scanner manufacturers and their partners, it’s an unrealized promise. “Application development is still catching up. There’s a lot of opportunity that’s not tapped yet.” The study also found a growing number of businesses are considering, if not undertaking, integration of consumer devices into their enterprise operations. MM&D

New image capture products Illuminated scanner The Matrix 300 from Datalogic has a pre-cali pre-calibrated liquid lens-focusing system and an embedded, encased light source which uses both bright fields and dark fields to illuminate normal, etched, highly reflective or textured surfaces and capture 1D or 2D barcodes at low angles. The Matrix 300’s image capture rate is 1.3 megapixels at 60 frames per second. It has an aluminum case and a plastic protective window cover. A powerover-Ethernet (POE) configuration is optional.

Lighting options Cognex Corp’s DataMan 300 industrial barcode reader is designed with modular lighting options that can be replaced or configured in the field. The swappable lighting components include systems for IR, polarized red (for reflective parts or parts under plastic), blue (for metal parts or coloured barcodes), high-intensity red (general purpose), HPIA (high-powered illu-

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mination accessory for long-range barcode scanning) and external ring lights, backback lights, spotlights and low-angled lights. Variable-focus lenses are available in S-Mount (10mm, 16mm and 25mm) and C-Mount (in standard industry sizes).

Integrated voice and scanning The Talkman A700 system from Vocollect is a hands-free system that permits both voice operations and scanning. The A700 blends a wireless SRX2 headset, the company’s VoiceCatalyst software, and the Talkman A730, an integrated short-range barcode scanner, which accepts voice commands and uses the 2D Intermec EA30 imager. The A730 measures 151mm by 64mm by 42mm. With the standard battery it weighs 269g, and weighs 320g with the high-capacity battery.

MM&D | September 2013

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Greening the transportation business Eco-friendly changes are good for the bottom line By Carolyn Gruske

S To read about what the shipping industry is doing to make itself greener— including giving its vessels nose jobs—see http://tinyurl.com/ greenMaersk

ustainable initiatives are often seen in one of two ways: as green-washing lip service or as demands that add red to the bottom line. But when the transportation industry makes changes that are good for the environment—especially ones that improve fuel efficiencies—cost-savings are usually the end result.

Air Nils Haupt, director corporate communications for the Americas, with Lufthansa German Airlines, in East Meadow, New Jersey, finds it very easy to explain why the company and the industry in general take the idea of reducing the company’s environmental footprint very seriously. “At an airline it all starts with fuel. At an airline you have lots of fuel consumption. Lufthansa is spending seven billion Euros a year in fuel, in dollars that’s $9 billion. Saving fuel is not only saving costs, because fuel makes up approximately 25 percent of your costs, it is also a burden for the environment. So bringing down fuel consumption is a key issue for airlines.” Haupt says the easiest way to save on fuel costs is to purchase new aircraft designed with more energyefficient engines and constructed with new lightweight materials. But buying new planes takes time and money. Lufthansa currently has 168 new planes on order, with a purchase price of 22 billion Euros, and the company expects to place a large order with either Boeing or Airbus for long-haul aircraft. Beyond simply buying new aircraft, Haupt says Lufthansa is working on projects to develop and implement new procedures and technologies. The

airline recently put a bio-fuel project into operation with two regularly scheduled flights—one in Germany and one between Germany and the US. It also worked with scientists and researchers to develop and test a new type of surface coating designed for application to the fuselage and wings. Known as sharkskin, the textured coating mimics the “riblets that cover the entire skin of fast-swimming sharks to reduce turbulent vortices and the drag they cause. This diminishes surface resistance when moving at speed.” Two Lufthansa Airbus A340-300s were outfitted with patches of the sharkskin for initial test flights this summer. Now, the results of the tests are being analyzed. Early expectations are a one percent reduction in fuel consumption and lower operating costs. Another scientific experiment the company is involved in is the flying of an environmental recording and research device in its aircraft. The 1.5 tonne CARIBIC container (Civil Aircraft for the Regular Investigation of the Atmosphere Based on an Instrument Container) is flown on Lufthansa’s A340s and collects air samples and “data on aerosols and trace gases at cruising speed in the atmosphere through a sophisticated air and particle inlet system on the fuselage with the help of 20 different scientific instruments integrated inside the container.” Haupt says Lufthansa is also working with suppliers to develop, test and install electro-taxiing (or e-taxiing) equipment on its planes. E-taxiing involves using quiet electric motors (thereby reducing noise pollution) to move the planes across runway tarmac, eliminating the need to run the main engines. The thought is this will save fuel and reduce air pollution. On a more practical level, Lufthansa and its subsidiary Jettainer GmbH have developed a new, hard plastic, lightweight cargo container and the airline is replacing all of its aluminum cargo containers with the plastic models. Haupt says Lufthansa also insists that any cargo that gets moved by truck to its European hub be transported in vehicles equipped with Euro 5-compliant engines—a standard created to reduce air pollution. While Haupt admits reducing costs and lowering fuel consumption is the driving force for many of these changes, he says the company is obligated to act for the greater good.

Sensors relay data about air quality and atmospheric conditions to the CARIBIC container in the cargo hold.

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“We have a responsibility because we are acting not only in an economic environment but we act in a social environment as well. We are part of society and as part of society, we have a responsibility and this is where we see an issue that we need to pursue more,” he says.

Road The trucking industry has undergone a number of changes over the past few years in order to make it greener, and not all of them have been voluntary. “We’re the only sector from an air quality emission standpoint and a greenhouse gas standpoint that’s regulated. So in our industry, it’s not a choice of whether companies care about being environmentally friendly. They are regulated to be air-quality-sensitive and greenhouse-gas-sensitive,” says Stephen Laskowski, senior vice-president of the Toronto, Ontario-based Canadian Trucking Alliance. Even with the government regulations, Laskowski says the trucking industry has the impetus to work toward sustainability. “The trucking industry is always going to be a green sector because if you burn less fuel, you create fewer emissions. If you burn less fuel, you’ll be more profitable. So there’s a compelling business interest to be green in the trucking industry.” He says that at the moment, the industry is relatively stable, at least when it comes to governments attempting to regulate engines and engine technology. “From 2000 to 2010 we went through three phases of a regulation that dealt with our engines and fuels. Those regulations, the last phase, was finalized in 2010. I don’t expect any more changes in that area with regard to NOx and particulate matter and sulphur and fuel. We’ve reached what the EPA and Environment Canada call a near zero emission engine. In terms of major tweaks to those regulations, I don’t see them coming because we’ve reached the peak of the mountain with regards to air quality emissions, and particulates and nitrogen oxides.” But that doesn’t mean the industry is done dealing with governments. Laskowski says another round of regulatory changes is set to begin next year, but he’s hoping this time the process will be easier. “As it relates to greenhouse gas emissions, the first phase of the regulatory process begins in 2014 and proceeds over a four year period to 2018. In 2018, the US plans to introduce a second phase of greenhouse gas regulations for heavy trucks. One would expect Canada will go through that same process. What we expect in 2018 is a more rigorous standard for 2018 tractors and then in 2018 dealing with trailer design issues.” According to Laskowski, during the engine regulation phase, the industry was forced to turn to new and unproven technologies in order to meet governMM&D | September 2013

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ment-imposed targets. And that’s the last thing he wants to happen next time around. So he hopes the industry will be presented with workable solutions that come with a track record. “We know the liquefied natural gas trucks work. We know it’s about a 20 to 30 percent GHG reduction compared to a similar, equivalent diesel engine. If we see more of these types of trucks penetrate the market through reduced costs and capital costs, and obviously some infrastructure improvements across North America, perhaps that means in 2018 our targets might be much more aggressive, but also much more attainable in the sense that we can use technology.” He points out that while there may be a number of solutions available to help the industry meet whatever new targets governments set, it’s unlikely there will be a solution that will work in every circumstance. He said that boat-tail technology, aerodynamic devices that get mounted on the rear of a trailer and that typically cause a four- to 10-percent fuel savings, don’t work with flat deck or tank truck operations. Similarly with tires, he cautions that some of the more fuel efficient tires with less grip (and therefore less traction) that work in hot, dry southern states may not be suitable for use in Canada, where we have far more varied driving conditions, especially in the winter. Safety, he says, still needs to be a top priority when it comes to implementing new regulations. One area where he says trucking companies are able to effect positive green changes is in the area of driver training and operations management. Teaching new drivers how to drive efficiently (such as making proper gear changes) or even moving to trucks with automatic transmissions, are options each firm needs to consider. Additionally, he says “there is a huge bunch of operational things that can be looked at, and we are looking at them. At the end of the day, our industry is hypercompetitive and competes on the management of cost structures.” MM&D

An example of a boat-tail on the back of a trailer.

13-09-12 12:56 PM

EQUIPMENT FOCUS: PALLETS, CASES AND ACCESSORIES

Hold me: New containers to love 2 3

1. Corner protection

The QuikCorner PalletTop from Laminations, a division of Great Northern Corp, is a foldable corner-stiffener and protector. It is made from VBoard PalletTop (the company’s moistureresistant laminated paperboard) and its weatherproof PVC-based Extruded VBoard. The QuickCorner has two rivet-hinged legs that swing out to protect side corners. When used in pairs—with one on the top and one on the bottom of the palletable products— the QuickCorners form a cage that requires no taping or holding while stretch wrap is applied.

2. Simplified labeling

Orbis Corp’s latest model in its StakPaks tote lineup is the NXO. The totes feature a textured surface, which permits labels to be removed more easily. The redesigned StakPaks have continuous corner ribbing and don’t require the use of cardholder pins. They can be used in conjunction with other StakPaks models such as the SO, the NSO and the SON. NXO models come in a range of sizes including 24- by 15- by 7-in, 24- by 22by 14in, and 24- by 15- by 14-in. The last size can be ordered with optional hand holes.

3. One-piece pallet

The KIGAvivo is a plastic pallet from KIGA that can be equipped with an integrated RFID transponder. Produced in an injection moulding process, the pallet is constructed in one piece and has no screws or seams. The closed-deck pallet can handle a racking load up to 1,500kg and has a 14kg tare weight. KIGAvivos are designed with inside and outside beveled skids. Special food handling and electrostatic discharge-safe versions are available. Black and grey pallets are made from recycled plastic. Virgin plastic is used to produce other colours. An anti-slip rim is optional. 6

4 5

4. Built-to-order pallet

Jifram Extrusions Inc’s custom built plastic pallets can be ordered in any size needed, including non-standard sizes. They are constructed with deck boards fastened to stringers with self-tapping screws. Jifram also offers a few regularly stocked pallets including a 96- by 48-in four-way-entry heavy duty pallet and a 48- by 40-in two-way-entry pallet with casters.

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5. Five-year life cycle

The GMA-228 Rackable Plastic Pallet from Rehrig Pacific is built to meet US Food Safety Modernization Act (FSMA) and ePedigree traceability standards. It is made from 100 percent recyclable high-density injection-moulded polyethylene resin. According to Rehrig, the pallet has a minimum five-year life cycle. It has a two-piece snap lock design with metal reinforcements, a welded deck and base, and a non-cruciform bottom structure to reduce pallet jack damage. Rehrig offers a monitoring system for its pallets that can track temperature conditions, shock and vibration.

6. Medical device transportation

Flexcon’s latest plastic cases are designed to transport and store medical devices. They are created from high-density polyethylene and come in over 200 standard sizes. Customized sizes are also available. The plastic cases can be ordered with a number of options including custom foam dunnage, carrying handles, Velcro closures, dividers, straps, buckles, locking hatches and custom printing. Electrostatic discharge safe materials are also available.

MM&D | September 2013

13-09-12 12:57 PM

EQUIPMENT FOCUS: PALLETS, CASES AND ACCESSORIES 7. Drop door box

The BN3230 from Buckhorn Inc is a new 32- by 30-in plastic bulk box made from fully recyclable high-density polyethylene (HDPE). It can be ordered with or without drop-doors in 25- and 34-in heights. The BN3230 has a nonsequential fold, and a replaceable runner that snaps into place, reducing collapsed height. The container’s surface can be customized and branded directly, eliminating the need for label fasteners.

8. Forklift protection The pointGUARD from United Pallet Services Inc is one-piece plastic shield made from 100 percent recycled material that fits on the end of a standard wooden pallet. It is designed to limit the damage caused by a lift truck’s forks and increase the pallet’s lifecycle. According to the company, pointGUARD is best used in closed loop or captive pallet environments.

9. FDA-approved

Anova Inc has two new plastic pallets on the market: an economy model and an FDA version. The pallets hold up to 1,600lbs in transit and have a floor weight capacity of 2,000lbs. They weigh 11.65lbs and measure 48- by 40- by 4.75-in. A stack of 70 nested pallets measures 105in high. Both versions are ISPM-15 exempt.

YOU PERFECT IT. WE’LL PROTECT IT. Buckhorn offers an unmatched selection of reusable packaging solutions designed to protect your products and increase your profitability. Buckhorn’s Maximizer™ Collapsible Container is a revolutionary alternative to corrugate. Its innovative design features easy one-person assembly. Reuse it hundreds of times for shipping and storing light-duty dry goods and then collapse it flat in seconds. Visit buckhorncanada.com for more information, and request a quote today!

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BULK BOXES | HAND-HELD CONTAINERS | IBCs | PALLETS | SPECIALTY BOXES

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LEGAL LINK

Robust distribution agreements Practical strategies for negotiating and drafting key contracts

or many businesses in the supply chain, success depends on the efficient distribution of the products/goods or services, and on a clear, well-drafted, and enforceable distribution agreement. Negotiating and drafting an enforceable agreement relating to the distribution of products/goods or services from a supplier to market can be complicated. Each clause in the agreement must contribute to a clear, fair and comprehensive contract. Mistakes can be costly, wasting valuable time, financial resources, and requiring the involvement of lawyers, mediators, arbitrators, and courts. Every effort must therefore be made to strengthen business relationships and to avoid disputes and potential litigation. This necessarily involves creating a robust distribution agreement.

The distribution agreement A distribution or distributor agreement is a contract usually between a manufacturer or vendor and a distributor, such as a retailer, a value-added reseller, or a system integrator in the distribution channel or supply chain. The distribution agreement is critically important to the establishment and maintenance of the relationship between a distributor and a supplier. The words and phrases used in the distribution agreement should be so clear and unambiguous that its plain meaning and effect can be discovered within “the four corners” of the document. A distribution agreement commonly contains terms and conditions pertaining to: the appointment of the distributor, the territory and markets, the term of the agreement (including pricing, payment, condition of sale, shipping and delivery terms), obligations of the distributor and the supplier, intellectual property (trademark, copyright and confidential information) rights, obligations and remedies, procedures to terminate the agreement, non-competition and nonsolicitation agreements, risk allocation, limitations of liability, indemnification, choice of legal jurisdictions, dispute resolution options, and general/standard contractual provisions. When relationships breakdown and disputes arise, they often involve complex issues such as whether: • There was a breach of the distribution agreement, and if so, was it a technical breach only, which was waived or cured in good faith by the defaulting party on the demand of the other party to the agreement. • There was a breach of the express or implied contractual terms of the distribution agreement. • There was a breach of the duty of good faith and MM&D | September 2013

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fair dealing at common law or under the Ontario Arthur Wishart (Franchise Disclosure), 2000, Act or the Canadian Competition Act. • The manufacturer wrongfully terminated the exclusive distribution agreement without reasonable notice and was therefore liable to pay the distributor damages, including lost profits, for breach of the agreement. • The damages claimed are subject to common law or equitable set-off or are precluded by the exculpatory clauses in the distribution agreement • The lawsuit should be stayed by the court based on a forum selection provision in the distribution agreement that stipulates an alternative forum that should be preferred and considered to be a more appropriate jurisdiction for the litigation. The court action should be stayed on the grounds that the claim is subject to a binding arbitration clause in the distribution agreement.

Marvin Huberman

Recommended strategies Do not sign a distribution agreement until you have: • Carefully read and understood all of its terms and conditions; • Compared the terms and conditions of the negotiated distribution agreement with proven industry model agreements, including from your industry’s distribution association • Assessed and understood the risks; • Received professional legal and other appropriate advice on the meaning and effect of the distribution agreement, and are comfortable with all of its provisions, including any additional terms of service attached to the distribution agreement or implied in it as a matter of law or industry custom; • Consulted a competent lawyer and other appropriate professional advisors, so that a distribution agreement may be custom-tailored to fit the specific circumstances of your situation. In this way, a robust distribution agreement can be created which will help you strengthen your business relationship with the other contracting party to that agreement and will assist in avoiding costly mistakes that may result in harmful disputes and potential litigation. For a comprehensive checklist of items that should included in a distribution agreement, see http://tinyurl.com/DistributionChecklist. MM&D Marvin J. Huberman, LLM, is a Toronto trial and appellate lawyer, mediator and arbitrator. www.marvinhuberman.com 27

13-09-12 12:56 PM

MATERIALS HANDLING

Effective disaster recovery Plan now to prepare for the worst later

Dave Luton

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ven though it happened over 30 years ago, the situation is still fresh in my memory: It was the end of a nice, long, summer weekend at the cottage. After unpacking the car I turned on the TV to watch the last part of early edition of the evening news. I caught the tail end of a news report from a small Canadian province. The coverage showed the aftermath of a very, very bad warehouse fire. Everything was destroyed and the entire building structure had collapsed because the steel beams supporting the roof had melted. I think only the floor and the loading docks were saved. At the time, it was the worst commercial fire in that province’s history. Apparently, it was caused by a natural gas leak. And the results were not only damage to the building and the goods it stored, but also a number of major lawsuits. The company—a smaller, capable regional 3PL that is still in business today—had three warehouses. And one of those warehouses was storing my goods. Believe me, I spent an anxious two hours waiting for a later newscast hoping to hear more about which warehouse was destroyed. Fortunately, the warehouse with my inventory escaped the blaze. For anybody facing a disaster—be it a fire, a flood or something else—the first and most important objective is to survive. Almost as pressing is the need to return to regular operations as soon as possible. But as much you want to return to normal, normal operations may be suspended or superseded during the expected duration of the interruption. Think about an organization that, due to a disaster, can’t meet market demand. Decisions must be made about allocating the remaining, limited supply, and this needs to be done quickly. Operations in an unaffected part of the country may have to be altered in order to support the region hurt by the disaster. In these types of circumstances, it’s important that decisions about allotments be made at the senior management level, even if that’s not the normal procedure. There are a number of events that can interrupt the supply chain: some predictable and some completely unexpected. The date of a business interruption, like a labour strike, can be known in advance and therefore can be planned for. Disasters like the fires, cannot be forecast, so other than general disaster planning, the amount of preparation is limited. When creating your disaster plan, some of the elements that must be considered are: • scope and objectives of the plan • overall description of the disaster type and available

pre-warning (ie hurricane versus earthquake) • vulnerability and impact on your business from the interruption (from very limited to catastrophic) • likely length of the disaster • timing required to mobilize emergency support and return to regular supply • overall organizational control and responsibility • resources required including staffing and costs • when is the plan to be initiated and by whom • plan approval, updates and maintenance. For predictable disasters (or ones that come with early warnings) the key planning steps are first to ensure you have a working alert system and second to stay on top of the situation. For example, it’s well worth setting up a notification system to warn of expiring labour agreements and to send updates on the progress of negotiations. A backup plan should identify what action is recommended, such as turning to alternate supply points in the case of a warehouse strike. The next element is to identify what actions are viable and which ones are not and what alternate action(s) should be taken in advance. For example, some companies pre-build inventory at the alternate supply locations when they are facing potential strikes. It’s critical to take into account the likely duration of the problem during the planning phase. Think about how a logistician must deal with a rail strike. There is only so much truck capacity and it is not sufficient to offset the loss of rail capacity. However the duration of a rail strike is usually limited, because of back-to-work legislation. Still, it takes a few days to resume operations, even after a back-to-work order, and that time must be taken into consideration. Another type of foreseeable disturbance would be something like a warehouse strike by your customer’s employees. Planning for direct-to-store delivery scenarios is not a bad idea. But keep in mind just because a date is set, it doesn’t mean disruptions won’t happen before that date. It’s also worth deciding what actions to take if the customer insists on operating from the warehouse while the workers are on strike. Remember, many carriers refuse to cross picket lines. Of course even in the worst situations having a sense of humour helps. For the businesses that lost inventory in the fire I mentioned at the beginning, that is one time they were truly able to say to the taxman, “Gee, my records went up in smoke.” MM&D Dave Luton is a consultant in the greater Toronto area. dluton@cogeco.ca MM&D | September 2013

13-09-12 12:56 PM

LEARNING CURVE

Thinking about nothing Using mindful meditation as a way to cope with workplace stresses

or most of us, when summer vacation ends, we return, recharged and ready, to the jobs and work that sustain us—financially anyway! Typically, we find our sense of calm quickly evaporating when we tackle the work that piled up in our absence, not to mention new tasks and responsibilities. As we manage the harried daily pace, we begin to believe our tranquil yet energized selves were left behind forever on that beach, campsite or golf course. Is it possible to find a way to, if not prolong the restful feeling, at least gain a better attitude and settle into a less stressful, more manageable work pace? “I doubt it,” is likely your answer. But even if that’s so, it can’t hurt to take a look at some unconventional approaches that might result in you rethinking your response.

The usual approaches to stress relief Traditionally, people have been told to have a release outside of work. Exercise, hobbies, socializing and spending time outdoors help some people handle work stress. But these are difficult to fit into the framework of an eight- or 10-hour shift. Some people distract themselves for a few minutes each day by tackling small errands. They check personal e-mail or voicemail, make appointments or speak to friends and family. Ultimately though, dealing with some of these responsibilities can be stressful too. If that’s the case, the feeling of calm these employees are craving is likely to remain elusive.

Mental time-outs Another less common approach to staying more energetic and sharp is to relieve stress by taking short meditation time-outs at your desk. For management, mental time-outs might appear to represent nothing but productivity losses, but there is substantial research indicating these types of activities hold value. Proponents argue these periods allow us to filter out distractions, shift our thoughts elsewhere and find mental calm. It’s important to note that meditation is not the absence of doing something. Rather, it is an active attempt to quiet the mind, re-evaluate events and learn about how we experience the demands of life. Jon Kabat-Zinn founder of the Stress Reduction Clinic and professor emeritus of the Massachusetts Medical School, has written about ‘mindful meditation. Mindful meditation, as outlined in Kabat-Zinn’s literature, is the practice of “bringing awareness to your existence internally, understanding the interplay between mind and body and learning how to better MM&D | September 2013

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take care of oneself to reduce stress and promote healing.” This may sound like a medical approach to wellness, but the preventative benefits of self-care extend to all aspects of our lives, he says. How does the corporate world benefit by encouraging the practice of mindful meditation? Through reduced employee stress, improved interpersonal skills and by a more respectful work culture. Employees who try it tend to learn about themselves and gain insights into how their experiences shape their decisions and actions. They will work better with others and become more adept at understanding what others require of them. In learning how to clear your mind and tuning into your thoughts, there is an opportunity to improve your communication style and become aware of the thoughts that trigger unnecessary pressures at work. One cannot find well-being from the outside or by using a pill, Kabat-Zinn says, and most illnesses, stresses and addictions come as a result of not recognizing where you are and who you are. Kabat-Zinn argues that mindfulness brings each of us closer to our own reality. This happens because when we let our thoughts drift from place to place and learn to detect changes in physical experiences as basic as, for example, our own breathing, we become better able to process our thoughts and feelings.

Tracy Clayson

Workplace benefits Leadership success requires a high level of self-awareness, and meditation gives us time to be conscious of our deepest thoughts and emotions. It’s a good match. The act of meditation is the ultimate practice of taking time to be kind to ourselves, to tune into our experiences and to treat life like a journey of self-discovery. Business leaders who practice mindful meditation often have a higher level of awareness of stressful conditions in their workplace, says Kabat-Zinn. They are able to create more positive work environments for themselves and a healthier workforce for all. So, if we can’t take the time to connect to our breathing, there will be little chance to enjoy the parts of life that should take our breath away! Being more tuned in to our own experiences, emotions and thoughts could lead to a more fulfilling work experience—and ultimately a more fulfilling life. Isn’t it worth a try? MM&D Tracy Clayson is managing partner, business development, of Mississauga, Ontario-based In Transit Personnel. tracy@in-transit.com 29

13-09-12 12:56 PM

Crunching the Numbers

Global

Occupancy

Actual and Forecast total occupancy costs per m2 per annum and change in costs rank (USD) Country/ Territory Market

Change in logistics occupancy costs by region, 2012 (USD)

United States

1.5%

Europe

2.9%

Global Average

Asia Pacific

Brisbane Melbourne Perth Sydney Antwerp Brussels Shanghai Prague Copenhagen Tallinn Helsinki Lyon Greater Paris Marseille Berlin Frankfurt Hamburg Hong Kong Budapest Dublin Milan Rome Riga Vilnius Amsterdam Rotterdam Oslo Warsaw Bucharest Singapore Barcelona Madrid Gothenburg Taipei Birmingham Glasgow Leeds London (Heathrow) Manchester South East England Atlanta Boston Chicago Dallas Denver Houston Los Angeles Miami Minneapolis Philadelphia Phoenix San Diego San Francisco Seattle

2012 Occupancy Costs 139 101 151 152 67 68 73 81 118 102 158 70 87 66 87 110 100 271 72 101 84 87 106 93 95 91 211 103 76 215 80 78 124 164 135 149 131 313 139 180 59 92 74 67 71 69 86 102 94 75 78 99 105 98

Costs Rank 2012

2017 Occupancy Costs

44 155 31 119 46 159 47 168 4 68 5 73 10 84 17 86 39 129 33 114 48 168 7 72 20 92 2 68 22 93 38 115 30 106 53 242 9 75 32 131 18 83 21 88 37 123 25 108 27 97 23 94 51 235 35 108 13 77 52 248 16 85 14 79 40 135 49 183 42 152 45 162 41 147 54 337 43 160 50 193 1 66 24 99 11 83 3 73 8 78 6 77 19 95 34 114 26 103 12 81 15 86 29 208 36 115 28 108

Costs Rank Change 2017 in rank

Average annual growth est. 2012-17

43  2.1% 36  3.4% 44  1.1% 47 - 2.1% 2  0.1% 6  1.4% 15  3.0% 17 - 1.1% 38  1.9% 32  2.3% 48 - 1.3% 4  0.5% 20 - 1.2% 3  0.6% 21  1.3% 35  0.9% 27  1.2% 52  -2.2% 7  0.9% 39  5.4% 13  -0.5% 19  0.1% 37 - 3.1% 29  3.1% 24  0.4% 22  0.7% 51 - 2.2% 30  0.8% 8  0.3% 53  3.0% 16 - 1.3% 11  0.5% 40 - 1.8% 49 - 2.2% 42 - 2.4% 46  1.8% 41 - 2.4% 54 - 1.5% 45  2.8% 50 1.3% - 1 - 2.1% 25  1.6% 14  2.2% 5  1.8% 10  1.9% 9  2.2% 23  1.9% 33  2.2% 26 - 1.9% 12 - 1.6% 18  2.1% 28  1.6% 34  1.8% 31  1.9%

Crunching the numbers is an editorial feature sponsored by YOUR COMPANY NAME and LOGO here. Contact Emily Atkins at 416-510-5130 or eatkins@bizinfogroup.ca for more information. 30

MM&D | September 2013

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