SUPPLY CHAIN TO THE MAX - Inside Logistics
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NOVEMBER/DECEMBER 2017
PUBLISHED SINCE 1898 | WRITTEN
WRITT
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TEN FOR BUYER
BUYERS
RS OF
OF TRANSPORTATION
TRA
RANS
NSP
POORT
RTA
AT
TIO
ION SERVICES
SE
S ERV
RVIIC
CES
2018 OUTLOOK
Shippers and carriers
bullish on the future
TRADE
China’s new Silk Road
SUPPLY
CHAIN TO
THE MAX
Sanimax is thriving thanks
to the efforts of Executive
of the Year Martial Hamel
and his team
www.canadianshipper.com
PROUDLY CELEBRATING 80 YEARS OF EXCELLENCE A YEAR TO CELEBRATE This year marks the 150th anniversary of Canada and Air Canada’s 80th birthday. On this landmark occasion, we would like to thank you, our customers and partners, for your continued support. As we look forward to the future, we at Air Canada Cargo, continue to aim higher, striving to deliver the services you need with utmost expertise and care, with a truly Canadian spirit. We invite you to experience today’s Air Canada Cargo.
CONTENTS
NOVEMBER/DECEMBER 2017
DEPARTMENTS
5 | Editor’s Foreword
Supply chain dangers
14
6 | In the news
Kuehne + Nagel’s pharmaceutical/
healthcare logistics facility up and
running; ACPA conference focuses on
sustainability
43 | Inside the Numbers
Shippers having second thoughts
45 | Coaching Corner
Is short term the new normal?
46 | The Bigger Picture
COVER STORY
The capacity crunch
SUPPLY CHAIN
38 EXECUTIVE OF
THE YEAR
Sanimax is thriving
thanks to the efforts
of Martial Hamel
and his team
Denis Bernier
Martial Hamel, senior vice president, supply chain for Montreal-based Sanimax, is the 2017 recipient of
the Freight Management Association of Canada’s annual Supply Chain Executive of the Year.
FEATURES
2018 OUTLOOK | 18
Shippers and carriers discuss the future of the transportation supply chain
REGIONAL FOCUS | 28
32
China’s ambitious Belt and Road Initiative building momentum
CARRIER PROFILE | 32
Project Cargo Cargojet continues to soar at 15
Case Study WEST COAST GATEWAYS | 34
Museum ships a blue Prince Rupert expands its terminal and its future
whale heart to Europe— 2017 SURFACE TRANSPORTATION SUMMIT | 37
and back Shipper and carriers agree, more freight visibility needed
www.canadianshipper.comNovember/December 20173
BUILDING CONNECTIONS
WHEREVER WE GO.
CP prides itself on building partnerships. We work with
our customers, wherever they are, to identify their needs
and help meet their objectives, while providing the best
service along the way. CP is your full supply-chain solution
provider that gets your goods to where they need to be.
Learn more at cpr.ca
EDITOR'S FOREWORD
John Tenpenny
November/December 2017
Volume 120 Issue No. 6
EDITOR
John Tenpenny (416) 510-6880
Always be prepared
john@newcom.ca
RESEARCH DIRECTOR
Lou Smyrlis
lou@newcom.ca
A
ART DIRECTOR s the incidences of terrorism continue to rise worldwide, global supply
Ellie Robinson chains are not immune to this unlawful use of force intended to intimidate
ellie@newcom.ca or coerce governments or corporations in furtherance of a political goal or
CONTRIBUTORS for economic gain. Supply chain terrorism is the use of such tactics against any part of
Denis Bernier, Carolina M. Billings, the supply chain, including air, rail or sea transport and by any metric, this activity has
Dan Goodwill, Ken Mark, James Menzies,
Carroll McCormick, Ian Putzger, Leo Ryan seen a dramatic increase in recent years.
According to a report from supply chain consultancy BSI, terrorist attacks on the
PRODUCTION MANAGER
Kimberly Collins (416) 510-6779 supply chain have increased 16 per cent year on year, with a total of 346 attacks taking
kim@newcom.ca place in 2016.
VIDEO PRODUCTION MANAGER The report, entitled Terrorist Threats to International Trade and the Supply Chain,
Brad Ling noted varied attacks, including cargo theft cause considerable direct and indirect eco-
CIRCULATION MANAGER
nomic costs, disrupt the international movement of freight and creates reputational
Mary Garufi (416) 614-5831 risks to organizations.
mary@newcom.ca Terrorist attacks threaten to disrupt a significant amount of international trade.
PUBLISHER Over the past five years, the top 10 countries for supply chain terrorism incidents ac-
Nick Krukowski (416) 510-5108 counted for $776 billion worth of global exports annually, including $108 billion of
nick@newcom.ca
exports to the United States specifically.
PRESIDENT Even the increased security measures implemented in the wake of terrorist at-
Joe Glionna
tacks—intended to reduce the risk of further attacks—have the effect of disrupting
CHAIRMAN & FOUNDER the flow of cargo, especially for cross-border shipments, as was seen in France follow-
Jim Glionna
ing the November 2015 coordinated attacks in Paris. Immediately following, France
VICE-PRESIDENT, OPERATIONS imposed stricter controls along the borders with Belgium and Luxembourg, costing
Melissa Summerfield
companies an additional $59 per delayed vehicle. The total cost to shippers in Bel-
gium was estimated at $3.5 million within the first month following the attack.
HEAD OFFICE:
The report also found that in 2016 terrorists targeted a wider range of industries
80 Valleybrook Drive, Toronto, ON M3B 2S9 and modes of transport than in any other year. In particular, terrorists increasingly
Canadian Shipper is written for Canadian transportation
targeted industries generally associated with private or corporate supply chains rath-
and logistics professionals who manage product flow er than state-owned supply chain infrastructure. Over three years of data, terrorist
from manufacturer to point-of-sale. Editorial is focused
on reporting, analysis and interpretation of Canadian log- attacks against the agriculture and food and beverage sectors more than tripled, at-
istics trends and issues. It is published by NEWCOM BUSI-
NESS MEDIA INC.
tacks on the industrial and manufacturing materials and pharmaceuticals sectors
more than doubled, and attacks against the metals industry nearly doubled.
SUBSCRIPTIONS: Worryingly, despite the upward trend of attacks, BSI’s report found that there is
Contact us at: mary@newcom.ca
Tel: (416) 614-5831
still inadequate spending on supply chain security.
Fax: (416) 614-8861 “Our analysis clearly shows that commercial interests and private organizations
Website: canadianshipper.com are increasingly threatened, extorted, and directly targeted by terrorist organizations
(click on subscription button)
all over the world,” stated Jim Yarbrough, global intelligence program manager at BSI.
SUBSCRIPTION RATES: Canada: $65.95 + applicable “Corporations must take notice and prepare their organizations accordingly.”
taxes, per year; $107.95 + applicable taxes, for two years.
U.S.A.: US$107.95 per year. All other foreign: US$107.95 per Regardless of how the NAFTA renegotiations turn out, Canadian shippers and car-
year. Single copies $8 except for the annual Logistics Buyers’
Guide (Aug) $60.95 + applicable taxes, (not including HST) riers need to ensure their security measures are continuously updated and improved
plus $2.00 for postage. USA: US$68..95, Foreign: US$68.95
ISSN 2292-2490 (print), ISSN 2292-2504 (Digital), (Canadian
in order to guard against any kind of threat. Just as international trade isn’t going
Shipper.) Indexed by Canadian Business Periodicals Index. anywhere, neither is the threat of terrorism. CS
Printed in Canada. All rights reserved. The contents of this
publication may not be reproduced either in part or in full
without the consent of the copyright owner.
POSTMASTER: Please forward forms 29B and 67B to:
80 Valleybrook Drive, Toronto, Ontario, M3B 2S9
Second Class Mail Registration Number 0721.
PUBLICATIONS MAIL AGREEMENT 40063170
John Tenpenny,
MEMBER CANADIAN BUSINESS PRESS
Editor
john@newcom.ca
www.canadianshipper.comNovember/December 20175
IN THE NEWS
K+N unveils new pharma facility By John Tenpenny
The KN PharmaChain GxP distribution centre,
located in Mississauga’s Pill Hill district,
is a 208,000 square-foot, multi-client facility.
While it may have taken less than a year view and tour of the facility. “In 2012, It offers advanced warehousing, co-
to go from ground-breaking ceremony to Kuehne + Nagel Canada undertook its packing services, full end-to-end capabili-
hitting the ground running, for the full first investment in the vertical and con- ties from inbound to final mile, and cross-
story behind Kuehne + Nagel Canada’s re- verted 80,000 square feet of an existing docking for time-critical products. In
cently opened pharmaceutical/health- site, on what we call the Millcreek Cam- addition, says Gascoyne, Kuehne + Na-
care logistics facility in Mississauga’s Pill pus, into our first pharmaceutical-grade gel’s standardized warehouse and trans-
Hill, you have to go back a little further. building,” says Gascoyne. portation management system provides
As one of the world’s leading logistics After promptly outgrowing that facil- total supply chain inventory visibility.
providers, Kuehne + Nagel focuses on in- ity, “we couldn’t take on more volume According to Gary Boettger, Kuehne
dustry specific solutions. “Several years from customers,” says Gascoyne, “so we + Nagel’s manager, national procure-
ago, in close cooperation with customers, needed to leverage the next phase.” The ment, the warehouse was designed to
we developed KN PharmaChain to set newly built KN PharmaChain GxP distri- capture innovations within the industry
new standards in logistics,” says Murray bution centre is a 208,000 square-foot, while keeping an eye on environmental
Gascoyne, vice president, contract logis- multi-client facility equipped with state- impacts. The facility is temperature and
tics for Kuehne + Nagel Canada. of-the-art technology for storing temper- humidity controlled, as well as licensed
“We already had a mature and estab- ature-sensitive healthcare products. and qualified to Health Canada stan-
lished pharma/healthcare offering in air- “Our investment underlines the impor- dards, including:
freight in Canada, so it was a matter of tance of our strategy to further grow our • Ambient storage – between 15° C
expanding our contract logistics network healthcare activities in Canada and we to 25° C
up to meeting our customers’ warehous- are grateful to our loyal customers for • Less than 60 per cent relative humidity
ing and distribution needs,” he told Cana- their confidence in our services,” says • 10,000 square-foot 2° C to 8° C cooler
dian Shipper, during an exclusive inter- Gascoyne. fully racked with 30-foot clear height
6November/December 2017www.canadianshipper.com Photo:Kuehne + Nagel
IN THE NEWS
• Live temperature and humidity “Inside, from an end of next year and at that point that’s
monitoring systems when the future expansion will kick in.
• CCTV and other security features operations point of “In the 3PL industry, you’re talking
• Motion sensor LED lighting view, flow was a key about a 12 to 18-month lead time, so
• Digitally controlled HVAC system the reality is we’re opening up conversa-
• Grey-water landscaping consideration. What tions with customers to pre-build the
irrigation system extension.”
“One of our goals with this building is
is good about this Foresight was also taken in regards to
to raise the bar when it comes to GMP- facility is you have being able to add features to the facility as
compliant facilities,” says Boettger. “So, needed. “In the future, we will add a nar-
that when customers come in and see natural pressure and cotics vault and an Order-to-Cash, sys-
our facility and compare it to other facili- choke points within tem feature for automated sales order
ties, it stands out in the market.” creation,” says Gascoyne. Being in the
Nothing was too small to escape de- an operation that if centre of Canada’s second-largest life sci-
sign scrutiny in setting up the warehouse ences cluster, with nearly 400 companies
to store goods securely and in optimum
you haven’t designed employing 25,000 people, is key to ensur-
condition. “It’s not your typical ware- enough space flow ing the company’s long term future.
house design,” says Boettger. “We worked “The area is a logistics hub,” adds Matt
with the engineers to eliminate as many around it, become an Harris, director of operations, contract
horizontal and cross beams to avoid plac- artificial bottleneck.” logistics for Kuehne + Nagel Canada.
es where dust could collect.” The sur- “From a logistics standpoint we’re
rounding fields even include bio-swales Jason Farrell, within thirty minutes of two intermodal
for water retention, rather than rainwater distribution manager, hubs and within twenty minutes of Pear-
going directly into the sewer system. Kuehne + Nagel Canada son airport and most truckyards are with-
Inside, from an operations point of in that same radius.”
view, flow was a key consideration, says In a market filled with complexity due
distribution manager Jason Farrell. efficiently in that area.” to strict regulations and compliances to
“What is good about this facility is you “The new facility allows Kuehne + Na- meet, Kuehne + Nagel’s pharma/health-
have natural pressure and choke points gel to meet two important strategic care logistics facility puts the company
within an operation that if you haven’t de- goals—good design to make us more effi- right where it wants to be.
signed enough space flow around it, be- cient and effective—and set the stage for “We like complexity,” says Gascoyne.
come an artificial bottleneck. continued growth,” says Gascoyne. “We’ve “With our proven KN PharmaChain solu-
“When you design you have to look at been managing the process pretty tightly tions and our team of local experts, we
areas such as packing, shipping, receiv- and have some target customers lined up manage our customers’ logistics chal-
ing, and picking and identify how goods and we believe that optimistically the op- lenges and offer a wealth of value to their
and people are going to move safely and portunities will come towards the back businesses.” CS
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www.canadianshipper.comNovember/December 20177
IN THE NEWS continued from page 7
Canadian port officials focus
on sustainability and infrastructure
Annual ACPA conference also highlighted Canadian ports’
position on the front lines of trading opportunities By Leo Ryan
The 59th annual Association of Canadian portunities and we must seize the mo- said before underlining the constant need
Port Authorities (ACPA) conference, ment to be part of the future,” declared for risk mitigation efforts such as the re-
staged in Vancouver, focused on sustain- Robin Silvester, president and CEO of the cent initiatives on Canada’s east and west
ability issues, infrastructure demands and Vancouver Fraser Port Authority. coasts to slow vessel speeds to protect
the key role of maritime transport in world Peter Ellis, executive director of the threatened right whales and orcas.
trade. The central theme of the September Vancouver-based Centre for Responsible
event, “Navigating a Sustainable Future,” Marine Shipping in Canada, referred to Emergence of ‘new oceanic age’
dominated panel discussions against a an analysis forecasting that Canada’s A highlight of the event was the opening
backdrop of the recently enacted free trade maritime trade could double by 2045. keynote address with a broad geopolitical
agreement with the European Union A persistent challenge, he said, is “to content by a high-ranking commander of
(CETA) and the ongoing renegotiations of strike a balance between the advantages the Canadian Navy. Rear Admiral Art Mc-
the North American Free Trade Agree- of maritime transport and protecting the Donald, commander of Maritime Forces
ment (NAFTA). environment. Pacific, proclaimed the arrival of “a new
“As a trading nation, Canadian ports “By virtue of its nature, shipping affects oceanic age”—characterized by surging
are on the front lines of all our trading op- people and wildlife in many ways,” Ellis maritime commerce, global power poli-
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IN THE NEWS
being played out at sea, and oceans are
central to the health of the planet in an
age of profound climate change.”
McDonald stressed that the oceans
have become a global highway, account-
ing for 90 per cent of world trade, with
“the meteoric growth of the Chinese
economy” constituting “a driving factor
this expansion.
“As evidenced by China’s economic
rise, Beijing has come to fully appreciate
the flexibility, mobility and authority of
seapower…manifested in the appearance
of a powerful new Blue Water navy.”
Among other things, McDonald said
this “has meant that the existing hege-
mony, the United States, and the aspiring
hegemony, China, find themselves com-
peting for power and influence in the
tics, the impact of climate change in the in the 16th century have oceans played as same oceanic realm—creating a context
Arctic region, and the challenges for the important a role in global affairs as they in great power geopolitics that has not
United States especially with China’s ex- do today,” said McDonald. “Unprecedent- previously coexisted with globalization.”
panding involvement. ed levels of commerce move across the What is more, he continued, “we will
“Not since the great era of exploration world’s oceans, great power politics are increasingly be called on to operate in
continued
For transborder • A single point of contact with a local OD shipping expert
shipments, OD offers: • In-house customs clearance and brokerage services available 24/7
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IN THE NEWS continued from page.9
new maritime environments that will “Supply chains are only as strong as their weakest
challenge our assumptions, test our re-
solve and require our collective commit- links. Among other initiatives, keeping the gates
ment to governance.”
open at night are part of the solution for increasing
Changing Arctic horizons
He singled out the Arctic as presenting efficiency without expanding infrastructure.”
such a case, adding: “Indeed, for the first Marko Dekovic, VP public affairs, Global Container Terminals
time in human history, we are on the cusp
of acquiring a new ocean.”
The steady recent diminution of polar
sea ice, McDonald said, promises to Can- In that context, he alluded to this past Collaborating with
ada and the whole world “a new and navi- summer’s circumnavigation of the Arctic local communities
gable ocean. The vast and remote nature via Canada’s North West Passage by a Chi- Speaking on a panel looking at solutions
of the North represents a unique chal- nese research vessel. to ease port impacts on local communi-
lenge and the opening of this marine pas- But then came a word of caution: “And ties, Peter Xotta, vice president, planning
sage will have a large impact on marine yet, despite historic pretension and mod- and operations, Vancouver Fraser Port
transit. Already, there is notable interna- ern curiosity and opportunism, one needs Authority said issues like truck conges-
tional interest and activity from those ask if marine trade exploitation (across tion on city streets and maintaining a
wishing to exploit the commercial and the entire Canadian Arctic) will ever be healthy environment could be managed
economic potential of the region.” viable and desirable.” through greater supply chain visibility
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10November/December 2017 www.canadianshipper.comIN THE NEWS
and collaboration amongst port stake- ture requires more people with expertise. “Supply chains are only as strong as
holders “by leveraging data.” “Canada needs a different way to be their weakest links,” Dekovic said. Among
He said the Port of Vancouver had a successful in the next thirty to forty other initiatives, he said that “keeping the
unique opportunity to lead by driving years,” added Bruce McCuaig, executive gates open at night are part of the solu-
that collaboration to focus on the envi- advisor to the newly-created Canada In- tion for increasing efficiency without ex-
ronment and the community. “The key frastructure Bank. panding infrastructure.”
idea is that data capability is as much Mark Hodgson, partner at Deloitte As ports forge ahead with expansion
new infrastructure for ports as a new LLP Vancouver, said that the three-berth plans in order to remain competitive,
quay crane or a rail siding or a berth—it is Roberts Bank Terminal 2 project at Delta- however, delegates were reminded that
critical to driving success.” port to boost combined container capac- building community trust represents a vi-
Christian Dea, director general, Trans- ity to 3.7 million TEUs was still bogged tal factor in the process. CS
port Canada, said the Government of Can- down in the environmental approval pro-
ada is preparing to deal with “fragmenta- cess. He recalled an estimate that to meet Leo Ryan is a veteran journalist who
tion and the lack of governance” in the Asian trade demands, total capacity at
has reported on key transportation and
country’s supply chains with the creation the Port of Vancouver would have to
trade developments in Canada for more
of the Canadian Centre for Transportation reach 6.2 million TEUs by 2030.
Data, to be launched this fiscal year. Commenting on efforts to reduce truck than two decades. A former Montreal
In a panel devoted to options for financ- congestion and pollution problems at Del- bureau chief for The Journal of
ing port infrastructure, moderator Carlo taport was Marko Dekovic, VP public af- Commerce, he specializes in port and
Dade from the Canada West Foundation, fairs of Global Container Terminals, which shipping issues and was awarded the Medal of Merit in
suggested that building trade infrastruc- operates Canada’s largest box facility. 1992 by the then Canadian Port and Harbour Association.
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%DMONTON)NTERNATIONAL!IRPORT4HE!EROTROPOLIS%XPERIENCE
scheduled to open in September a falcon. The technology from
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is becoming a true business and PROVINGTOBEMOREEFÚCIENT
Since 2013, Edmonton International entertainment community. WHENCOMPAREDTOOTHERHEATERS
Airport (EIA) has gone through INITSCLASS4HISRE PURPOSINGOF
AMAJORGROWTHPERIOD$ESPITE Cargo has also seen major technology from the Oil and Gas
ASERIOUSECONOMICSLOW DOWN developments at EIA. In September sector to address aviation needs is
OVERTHEPASTTWOYEARS OVERALL 2OSENAU4RANSPORT,TDTOOK credited to the creation of AATC.
development has continued at a POSSESSIONOFITSNEW 7HATSMORE TWOOFOURFOUNDING
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SUPPLY CHAIN AWARD
Supply Chain Executive of the Year
Martial Hamel leads a team at the forefront
of Sanimax’s environmental mission
BY JOHN TENPENNY
t some companies supply chain is new and return. Each day the company’s fleet
an afterthought, left off the agenda of trucks and equipment travels more than
at executive meetings and shuffled 40,000 kilometres collecting materials such as
off to side, left to flounder under the meat byproducts, used cooking oil and grease,
direction of someone who doesn’t have the fog- hides and organic material from supermar-
giest idea of its importance to company’s bot- kets—two billion kilograms of byproducts
tom line. that would otherwise be sent to landfills. At
Nothing could be further from the truth at some of its 17 operating sites in Canada, the
Montreal-based Sanimax, home to Martial U.S. and Brazil, Sanimax renews these mate-
Hamel, senior vice president, supply chain and rials into high quality products, which are
the 2017 recipient of the Freight Management returned to the market to its customers who
Association of Canada’s Supply Chain Execu- use them to manufacture numerous house-
tive of the Year award. Hamel was hand-picked hold products, including animal feed, pet
for his role several years ago as a result of a shift food, soaps, leather, esters, lubricants, cut-
in management’s thinking around the role the ting oils, paint, rubber, tires, shampoos, cos-
supply chain played at the company. metics, perfumes, cleansing creams, medi-
What triggered the move in 2014, accord- cines, inks, adhesives, solvents, antifreeze,
ing to Hamel, was a reset of the vision of the fertilizers, and more
company initiated by CEO Martin Couture. Sanimax was founded in 1939 by brothers
“At the heart of the vision was the customer,” Alex and Déziel Couture. Alex learned the ba-
recalls Hamel, “And in order to do that we sics of rendering, where fat and bones are pro-
needed to realign the supply chain.” cessed into useful goods, working at slaughter-
The fourth-largest rendering company in houses in the St Malo neighbourhood of
North America, Sanimax serves the agri-food Quebec City. Following the untimely death of
industry and its role revolves around what the his brother, Alex carried on and began a verti-
company refer to as the three R’s—reclaim, re- cal integration of the business by establishing a
continued
14November/December 2017www.canadianshipper.com Photo: Denis BernierSUPPLY CHAIN AWARD
Martial Hamel , Sanimax's
senior vice president, supply
chain, is lauded by colleagues
for his forward-thinking and
his habit of challenging those
who work for him to do better.
continued
www.canadianshipper.comNovember/December 201715continued from page 15 SUPPLY CHAIN AWARD
feed mill and an experimental farm that, at
its height, would include some 30,000 poul-
try and a pig house.
“Our business is reclaiming, renewing
and returning organic byproducts that
society has chosen not to use for food
consumption,” says Hamel. “And our vi-
sion of Sanimax is to be recognized by its
customers as the very best environmental
solution provider to the agri-food service
industry and a key part of that is making
sure our supply chain works.”
According to Hamel, Sanimax’s supply
chain is everything that comes into the
company in the form of a byproduct as
well as everything that goes out as a fin-
ished good. “What’s unique to our com-
pany is that what we transport is organic,
which deteriorates very quickly with time
Hamel, pictured with members of his team at Sanimax's Montreal head office, is quick to credit those he works
and temperature, so the quality of our fin- with for any success achieved in improving the supply chain at North America's fourth-largest rendering
ished products are very dependent on company. "When I look at what we've achieved...I truly believe it has been a team effort," he says.
how effective our supply chain is.”
Hamel joined Sanimax, a third-gener-
ation, family-owned company, in 2010 as “It’s also about making sure they have there was also a bringing together of what,
vice president of sales and marketing, af- the right tools and processes to do their says Strickler, had historically been separate
ter nine years at chemical distributor jobs,” Hamel continues. “Once you shape departments—transportation and logistics.
Univar Canada, where he was involved in their expectations and share the vision, “Transportation used to equal raw
sales and logistics functions. sometimes they deliver results that you materials and logistics used to equal fin-
In addition to working for a family didn’t expect. When people are listened ished goods,” he says. “And Martial has
company, Hamel was drawn to Sanimax’s to and given the tools to do their job, been very instrumental in bridging that
environmental values. “Everything the guess what, they do great things and they gap and bringing the two teams closer to-
company does is part of its green mission deliver great results.” gether so that now transportation is do-
and that, along with the fact that it was a As an example of putting his beliefs ing more finished goods on our own fleet
family business, was what appealed to me into action, Hamel points to a recent and logistics is reaching out and assisting
when I joined,” Hamel says. project Sanimax is undertaking over the transportation in outsourcing to third-
Hamel’s recognition came about as the next 18 months to develop new routing party carriers to move our materials
result of the determination of his colleague, systems with the installation of telemat- when we can’t do it ourselves.
Todd Strickler, manager of logistics for San- ics systems in its trucks and the elimina- “Martial really recognizes the impor-
imax, based in Guelph, Ont., who nominat- tion of handheld devices, where the input tance of the supply chain, not just the raw
ed his boss two years ago and despite not of drivers, gathered through engagement material collection, which is one piece of
having his efforts rewarded, didn’t hesitate surveys and interviews, was invaluable. it, but we work very closely together on
to re-nominate Hamel again this year. “When it comes to my philosophy of the return piece as well,” continues Strick-
“In the five years I’ve worked with working with people it’s about listening ler. “We have a full logistics team that I
Martial I’ve found that he’s one of the to employees and that starts with our lead, with team members in Guelph and
more forward-thinking bosses that I’ve drivers, because they’re the ones servic- Green Bay, Wisc., and Martial is always
had in my 20-plus years of working in the ing our clients day in and day out.” helping to drive that part of the supply
supply chain,” enthuses Strickler. The goal, says Hamel, is to bring chain forward and making sure we’re us-
“Sanimax values are doing what’s best Sanimax’s supply chain together as a ing the right solutions.”
and finding better ways and Martial is al- driver of profitability for the company Despite the recognition that comes
ways looking for those better ways.” by making smarter decisions and opti- with being named Supply Chain Execu-
Strickler adds that another reason for his mizing the network. tive of Year, Hamel is very forceful in de-
nomination of Hamel is his boss’ habit of “We’re investing massively in technolo- flecting any accolades directed his way.
challenging those who work for him. gy and training and we’ve found that there “When I look at what we’ve accom-
From his perspective, Hamel sees his job is quite a bit of efficiency and customer plished at Sanimax over the past few
as one of leadership, not micro-managing. service gains that we will see as a result of years, I truly believe it has been a team ef-
“I’m a true believer in empowering our investments,” he says. “It’s really about fort with no one person single-handily be-
people,” he says. “There is so much talent leading ourselves into the next generation ing responsible for the performance im-
around us and sometimes as leaders we’re of tools.” provements or the customer experience
not giving it a chance to grow and shine. With Hamel’s appointment in 2014, improvements we’ve achieved.” CS
Photo: Denis Bernier www.canadianshipper.comNovember/December 201717OUTLOOK 2018
NAFTA existed and we will continue to
have trade, regardless of what happens.
But there could be disruptions and that
would be bad.”
But Laskowski said the ongoing NAF-
TA talks at least provide an opportunity
to get trucking issues back on the table
with government. He noted the CTA
made submissions to government on
more than 13 areas that could be im-
Adapt proved with regards to border operations.
“Getting the attention of government
to survive on some of our micro issues in transpor-
tation is difficult,” he said. “Here is an op-
portunity…we have a wonderful opportu-
nity to modernize NAFTA. There are a
Canadian carriers are faced number of issues we’d like to work on as
with unique challenges, such the trucking industry, and hopefully we’ll
get an opportunity to discuss them.”
as ELDs, pot and NAFTA The latest technology is also pushing
the industry towards an uncertain future.
BY JAMES MENZIES
First and foremost, Paul Kudla, region-
al VP of Volvo Trucks North America ad-
dressed the reason why technology was
so important to trucking. In his opinion,
he believes technology gives value to the
T
he legalization of marijuana, the service rules, but it’s going to change how industry, as it makes drivers safer and at-
electronic logging device (ELD) it’s reported, and that’s a big change,” he tracts the younger generations into the
mandate, and the possible rework- explained. He said shippers will need to driving profession.
ing of NAFTA are three of the biggest is- work with carriers to better manage the “I believe we’ve made it easier for driv-
sues facing the Canadian transport in- supply chain. ers to drive safely…we’re trying to put ev-
dustry, according to panelists at the Bob Ballantyne, president of the ery technology into the trucks now that
recent Surface Transportation Summit. Freight Management Association of Can- helps the driver do a better job and stay
Stephen Laskowski, president of the ada, said his members are eager to do so. safe on the road,” he said. “Because with-
Canadian Trucking Alliance (CTA) and “There’s going to have to be a lot of co- out an automated transmission, by the
Ontario Trucking Association (OTA), said operation,” he acknowledged. end of the day (driving with a clutch)
Canada has dropped the ball when it Laskowski said it’s estimated only 30-40 you’re worn out…. Plus, young folks love
comes to protecting employers when per cent of carriers are currently using technology, so the more we can add in to
marijuana becomes legalized next July. ELDs. Implementing them, he said, can re- the trucks…it’ll make it more attractive
“The decision was made to legalize quire a 12- to 18-month transition period. for them to drive.”
marijuana. That’s fine, we’re moving on. Asked if drivers and owner-operators According to Justin Bailie, president
But the issue here is, the government will exit the business rather than adopt and co-founder of Rose Rocket, if you
must have the fortitude to stand up beside ELDs, Laskowski said most fleets report think of your trucking company as just a
employers and say that in safety-sensitive drivers come to embrace them. trucking company, you’re not only wrong,
positions we’re going to allow drug and al- “Time is money,” he said. “Drivers no but you’re doing a disservice to your cus-
cohol testing,” contended Laskowski. longer have to fill out paperwork. It’s tomers and your business.
Employers will have difficulty deter- easier to audit. There are a lot of other “Every company is a tech company,” he
mining whether or not their employees are time savings that equal money at the said. “Because you can’t sell, you can’t
high on the job, as there is currently no test end of the day.” market, you can’t transport products or
available that determines impairment. The renegotiation of NAFTA was an- services without technology. We all use
“This was rushed from the beginning,” other concern listed by the panel. Ballan- technology as consumers and suppliers,
Laskowski said. “It’s a complicated issue.” tyne said three quarters of Canadian ex- so the risk of not thinking that way and
The Canadian version of the U.S. ELD ports go to the U.S., and half our imports not embracing that, is being irrelevant to
mandate should soon be posted in the originate from there. your customers.”
government publication Canada Gazette, “So, in terms of trade, it’s the most im- Marco Beghetto, VP of communica-
according to Laskowski. portant relationship we have,” he said. tions and new media for the OTA and the
“It’s not going to change the hours-of- “We had big trade with the U.S. before CTA, said though all this new technology
18November/December 2017www.canadianshipper.com ©Artem_Egorov/iStockOUTLOOK 2018
in trucking has people excited, the indus-
try is generally slower at adopting tech-
nology than others.
“For example, ELDs, which have been
around forever…we’re three months from
compliance in the U.S. And if you believe
certain polls 50 to 60 per cent are not
compliant yet, despite four years of warn-
ing. A lot of this automation is slow to
come by.”
For Rick Geller of Marsh Risk Consult-
ing, however, timing is everything when
you talk about adopting new technology.
“Timing is critical and it’s important
Trust
to understand how to leverage technolo-
gy so it compliments your business mod-
el,” he said. “Act too soon, you end up ex-
hausting resources…wait too long and
you miss the revolution. There’s a number
of video rental companies that missed
Issues
streaming. So it really is about timing.”
By far, the most exciting and “sexy” The fate of proposed amendments
technology topic in the world of trucking to the CTA will define the next
today is self-driving vehicles. Though just
because the industry has proven it’s pos- eight years for rail shippers
sible for a truck to roll down the highway
without human intervention, doesn’t BY CARROLL MCCORMICK
mean it’s going to happen in the near fu-
ture, panelists agreed.
“The technology is there today to run
autonomous vehicles,” Kudla said liken-
T
ing the technology to modern-day air- his September the Freight Man- Transport, Infrastructure and Communi-
lines. “I’ve used this analogy before…but agement Association (FMA) pro- ties reviewed Bill C-49. The following is a
99 per cent of an airplane flight is done by posed 10 changes to the Bill C-49 summary of the FMA’s proposed changes:
a computer. But the day the pilot isn’' amendments to the rail-shipper sections 1. Bill C-49 introduced nine specific con-
there, I’m not getting on that plane. Every of the Canada Transportation Act (CTA). siderations the Canadian Transportation
one of the major OEMs has trucks run- Continuing a struggle that has existed in Agency (the Agency) must consider when
ning autonomously, but to have trucks on the Canadian rail mode for over a centu- evaluating companies’ service obligations;
the road without drivers in them con- ry, the FMA says its proposed changes that is, “the company’s and the shipper’s
cerns me. And I don’t know if our govern- will provide some surrogates for real operational requirements and restric-
ments or infrastructure will ever let that competition in a mode frequently de- tions.” The FMA argued that including
happen.” scribed as a duopoly. mandatory considerations sets the stage
Geller said that in the midst of all this Word is that the Commons Transport for protracted legal disputes, and that
technology talk, it’s easy to get carried Committee, which reviewed the Bill in shippers would find themselves having to
away, but that many things need to be put early October, did not accept all the provide certain information they have no
in place before this advanced technology changes the FMA proposed. After more access to. The FMA wants these nine con-
can truly take over. travel through the House of Commons siderations removed, allowing the Agency
“It’s hard not to get excited,” he said. and the Senate which may open it up for to use its own judgement, based on exist-
“You think about in 100 years, we’ve gone comment, and more amendments, Bill ing jurisprudence developed by the courts
from horse and carriage to driverless C-49 will become law in late 2017 or early and the Agency over time.
trucks…however having said that, there’s 2018, and the CTA will be thus revised. 2. The FMA wants the proposal to reduce
a whole host of things that have to be put Canada is nearing the end of another the time limit for dealing with level of ser-
into place first. The least of which would statutory review of the CTA, mandated ev- vice complaints from the current 120
be improved communication. When that ery eight years. Bill C-49 was introduced days—which is already too little time, the
autonomous truck has to make a deci- May 16, 2017, following recommended FMA notes—to 90 days. But if the time
sion, I don’t want to see that hourglass changes made public in January 2016. This limit is reduced from 120 to 90 days, the
spinning.” CS September a Standing Committee on Agency should be compensated with ad-
continued
©yoh4nn/iStock
www.canadianshipper.comNovember/December 201719continued from page 19 OUTLOOK
IN THE NEWS
2018
ditional funds and resources to help it
cope with such a shortended time limit.
3. Interswitching is when a shipper can
use one railway for a portion of a freight
movement, then switch to another rail-
way. To encourage competition, the
Agency has, since 1988, applied regulated
rates for the first 30 kilometres so ship-
pers can get their cargo to a competing
railway at a competitive rate. This was
later temporarily extended to 160 kilome-
tres for the three Prairie provinces, which
expired on August 1, 2017. Bill C-49 pro-
posed replacing this with something
called Long-Haul Interswitching (LHI).
Two flaws, the FMA argued, are that Bill
C-49 says the Agency cannot set a rate
lower than “what are essentially status list of all interchanges on their websites. But by railways to which a shipper “may be un-
quo captive rates,” effectively invalidating Bill C-49 also allows a railway to remove an able to respond.” The FMA wants the lan-
the remedy; and that LHI does not define interchange from their list, with 60 days’ no- guage left as is.
whether a rate is between origin and des- tice “Regarding the List of Interchanges by 9. “The “short” or summary process for
tination or between origin and the inter- each of CN and CP, there will be a clarifica- rate disputes settled by Final Offer Arbi-
switching point (the rate for short hauls tion to confirm the policy that protects in- tration is proposed to be available for dis-
are usually higher). The FMA wants “not terchanges in line with level of service obli- putes up to $2 million in value, an increase
… less” changed to “not … more.” And if gations that railways may have (I assume from the current maximum of $750,000.
the intention of C-49 is “… for comparable either by contract or by Agency decision),” Under the summary process, there is no
distances to be measured against the dis- stated Ballantyne. “Railways will be re- provision to cross-examine the other par-
tance of the long haul …” it should say so. quired to give 120 days’ advance notice (up ty’s information put before the arbitrator.
4. Bill C-49 has exclusions to LHI; e.g., it is from 60) before removing any interchange The FMA legal advisor recommended that
not available to shippers if the origin or from its list of authorized interchanges.” “the parties should have the right to cross-
destination of the interchange is within 7. The FMA points out that rail custom- examine under the summary process.”
the Quebec-Windsor corridor or Vancou- ers lack information, such as operational 10. Currently, the Agency can only re-
ver-Kamloops corridor. As well, certain and service data, that they should have spond to complaints. It does not have
products; e.g., motor vehicles and con- when negotiating with railways, such as “own-motion authority;” i.e., it cannot act
tainers or trailers on flatcars, are excluded the volume and revenue by commodity, proactively, despite, noted the FMA, con-
According to Bob Ballantyne, president of and annual random samples of freight stantly bringing this up in its annual re-
FMA, the Long Haul Interchange (LHI) ex- bills, data, that the U.S. Surface Transpor- ports. And this most recent CTA Review
clusions have been modified so that Kam- tation Board makes available. In this rec- recommends, “…that the Agency be pro-
loops will be an available point of inter- ommendation, the FMA wrote, “…Bill vided the authority to act on its own mo-
change, with the objective of “opening this C-49 be amended to permit railway-pro- tion and on an ex parte basis, and to ad-
provision to shippers in parts of B.C. and vided costs and rate information to be dress systemic issues and issue general
Alberta that would have otherwise been shared with shippers in a form deemed to orders.” Ballantyne recently attended a
excluded as Kamloops was listed as part be fair and reasonable by the Agency.” meeting of the Edmonton Chamber of
of the Kamloops-Vancouver exclusion 8. Bill C-49 makes a change to subsection Commerce that included the Minister of
zone. A similar amendment will be made 169.37(d) that, in the existing CTA, allows a Transportation. “I asked him specifically
to give shippers in parts of Quebec outside Service Level Agreement Arbitration arbi- about this,” reports Ballantyne. “He said
the Quebec-Windsor Corridor access to trator access to the following: “… the railway the government should be able to act on
LHI (apparently at Montreal).” company’s service obligations under section its own motion.
5. The FMA recommended that “ … Bill 113 to other shippers and the railway com- “This is something that we would really
C-49 be amended to retain the Agency’s pany’s obligations to persons and other like to see,” added Ballantyne. “The other
authority to set regulated interswitching companies under section 114.” thing that is really interesting is that most
rates for interswitching beyond 30 kilo- In Bill C-49, the arbitrator will have access to shipper witnesses appearing before the
metres from an interchange.” In addition, “…the railway company’s obligations under Commons Standing Committee made the
the 160 kilometres distance should be re- this Act in respect of the operation of the same recommendation. So far, the gov-
viewed to see if it has had a positive effect railway.” The FMA’s legal counsel advised ernment is not budging on this. The FMA
on competitive access. that this change renders 169.37(d) vague recommends that the Agency have own-
6. Bill C-49 requires that railways publish a and overly broad, and will lead to arguments motion authority,” he says. CS
continued
©olaser/iStock www.canadianshipper.comNovember/December 201721Whether it’s across town or halfway around the world, with every shipment and every project, our customers
place their trust in our hands. My hands. Because at some point, every piece of business I touch becomes
a personal responsibility. It’s up to me to keep costs down, performance on schedule, and quality at a
premium. Someone’s business is riding on it. And I won’t let them down. I am
pilotdelivers.com / 1-800-HI-PILOT
©2017continued from page 21 OUTLOOK
IN THE NEWS
2018
Christoph Atz, president of UPS Canada.
“We don’t expect to be running a cold
chain,” agrees Ferguson.
Manner-Romberg points to a large
German retailer’s comment—“we don’t
know where this is going, but we have to
e-static be in there.” At this point there is no clear
winning formula, but retailers feel they
have to offer this service.
The financials can be sobering, he
Parcel shipments are expected to notes. British online food delivery compa-
grow over the next three years, ny Deliveroo, which operates across 84 cit-
driven by international e-commerce ies in 12 countries in Europe and Asia, had
costs of GBP127.47 million ($211.47 mil-
lion) on revenues of GBP128.56 million in
BY IAN PUTZGER
2016, resulting in a loss of GBP129 million.
According to Pitney Bowes, overall par-
cel volume growth has outstripped reve-
F
or Purolator Courier, the 2017 peak such as car makers and their vendors, nues, forcing logistics providers to focus on
season started in April, when the notes Horst Manner-Romberg, principal yield improvement. The pressure is particu-
firm began its preparations for the of mail and parcel logistics research and larly intense on the last mile, which has been
spike in traffic, sitting down with clients consulting firm M-R-U. As a rule of thumb, costly because of the need to offer multiple
for forecast planning and putting training the sector’s development is roughly in line options to meet consumer requirements.
schedules in place. Management was with domestic GDP levels, he says. “We continue to grow the UPS Access
bracing itself for an increase over the tor- Ferguson notes a convergence be- Point Network in Canada to provide a con-
rent of parcels that strained the system in tween the segments, as more companies venient delivery option for today’s busy
2016, mindful of projections for growth in are shifting to online platforms and omni- consumers,” remarks Atz. “This network
e-commerce, says Purolator president channel logistics. This is changing the provides customers with an alternate ad-
and CEO John Ferguson. landscape from a B2B and B2C distinction dress to pick up and drop off packages at
B2C parcel traffic is going through the to an ‘X2X’ scenario, he says. “Our goal in their convenience. For businesses, the UPS
roof. The latest update of a parcel ship- these verticals is to add value,” he adds. Access Point Network also provides an op-
ping index published annually by Pitney At the same time the scope of mer- tion for their customers to return goods.”
Bowes, a provider of e-commerce solu- chandise moved in courier networks is ex- Locker boxes for consumers to pick up
tions, shipping and mailing products, panding, primarily with the rise of the on- their parcels are one strategy that has gained
shows that global parcel volume surged line grocery segment. The takeover of traction, Manner-Romberg observes. In ad-
48 per cent from 2014 to 2016 to reach 65 Whole Foods by Amazon south of the bor- dition to saving cost and effort on re-sched-
billion parcels. The index, which was pub- der and the e-tailer’s aggressive pricing uling deliveries, these can become consoli-
lished in September, predicts that growth move as soon as the acquisition was com- dation points for returns, he adds.
will continue to rise at a rate of 17 to 28 pleted highlighted the importance of this The second major strand in the last-
per cent a year between 2017 and 2021. sector in the fight for B2C online business. mile arena is technology to give consum-
According to Ferguson, domestic mo- Express parcel carriers welcome this ers better tools to schedule deliveries and
mentum has remained strong, but inter- development. “Food and groceries is an keep track of shipments. “We pride our-
national flows are rising even faster, as area that we’ve gotten in pretty heavily,” re- selves on hitting delivery on the first at-
consumers increasingly make purchases marks Ferguson. For Purolator meals that tempt,” says Ferguson. Automation and
outside national borders. This tallies with are assembled at home are a major area, as improved visibility for the consumer are
a study released by UPS in the summer this business requires fast transit from dis- key elements in this, and Purolator will
that found a greater willingness among tribution centres for next day delivery. continue to invest in technology, automa-
U.S. consumers to order goods from inter- “That market is definitely growing,” he says. tion and data, he stresses.
national vendors. Market research firm The question for logistics providers is There has been talk of drones coming
eMarketer projects 22 per cent average where to draw the line. into play for delivery of parcels. Purolator has
annual growth for global cross-border e- “Food and perishables is attractive an in-house R&D group that has this theme
commerce between 2015 and 2020. where it makes sense. For example, same- on its radar, but Ferguson does not expect an
While the B2C sector has drawn much day food delivery is not in our scope at this early breakthrough, citing regulatory issues.
attention, the B2B segment has been sol- time. However, we do work with custom- “It’s still early days,” he says, adding
id, although valid numbers are scarce, ers in the food and perishable segments that this technology is moving ahead
given that much of this traffic is managed that include items like meal kits, baked within walls for now. “Drones are more
within networks of large manufacturers, goods and frozen food items,” comments used within warehouses,” he says. CS
continued
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