www.canadianshipper.com
Adding it Up
2017 SURVEY OF THE LOGISTICS
PROFESSIONAL
HEALTHCARE LOGISTICSSymptoms and Cures
SUPPLY CHAIN FINANCEFactoring in reverse
JANUARY/FEBRUARY 2017
PUPUPUPUPUPUPUPUBLBLBLBLBLBLBLBLISISISISISISISSISHEHEHEHEHHEHEHEHEDDDDDDD SSSSSSSINININNNININNCECECECECECECECE 1111111189898989898989898 888888 88 8 888 |||||| WRWRWRWRWRWWRWRWWWWW ITITITTITTTTTI TETETETEEETEETEN N NNN NNNN FOFOFOFOOFOFOOOFOOFORRRRRRRRRRRR BBBBBBBBBBBUYUYUYUYUYUYUYUYUYUU ERERERERERERERERSSSSSSSS OFOFOFOFOFOFOFOF TTTTTTTTRARARARARARARARANNNSNSNSNSNSN PPPPPPPPORORORORORORORORRTATATATATATATAATATITITITITITITITIONONONONONONONONON SSSSSSSSERERERERERERERERVIVIVIVIVIVIVIVICECECECECECECECESSSSSSSS
When your sensitive cargo needs help to keep its cool.AC Absolute˚ and AC Pharmacair, two distinct AC Cool Chain solutions, are tailor-made for the air transportation of healthcare and pharmaceutical products in temperature-controlled containers or passive packaging. With a global network of certified stations and expertly trained staff, your shipments travel quickly and safely around the world.
aircanadacargo.com
www.canadianshipper.comJanuary/February 20173
CONTENTS
JANUARY/FEBRUARY 2017
COVER STORY
10
©St
ockF
inla
nd/i
Stoc
kFEATURES
HEALTHCARE LOGISTICS | 21 The pain points and top priorities for the healthcare supply chain.
GROWTH ENGINES | 23Pharmaceuticals are a growing market but one full of challenges for operators.
SUPPLY CHAIN FINANCE | 29New tools for trade promise balance sheet relief.
REQUEST FOR PROPOSALS | 31The best advice to make RFPs work for you.
ANNUAL SURVEY OF THE LOGISTICS
PROFESSIONALSalaries, budgets,
positions, locations
26
DEPARTMENTS
5 | Editor’s ForwardOf New Year’s resolutions that ring true to self.
6 | In the NewsMore container capacity for Montreal.
34 | RetrospectiveApproaching transportation management in 2017.
35 | Coaching CornerThe entrepreneurial spirit- what it takes.
36 | Inside the NumbersSalient stats on Canada’s transportation industry.
37 | The Bigger Picture2017 and stepping stones to great change.
AFRICAN TRADE
As an emerging continent, Africa boasts and young
demographic and urban growth. How can exporters make
their mark? 21
Saposi
What’s behind a number?People. People like Jaime Lobo. Professionals committed to the highestlevel of service. Whether it’s vessel planning, operations, stowage orensuring vessels remain on schedule, a top-notch team is in place todeliver what you need when you need it.
Review all of our fresh KPI results at CountOnMOL.com.
TARGET: 100%
Jaime LoboDirector, Panama Operation CenterMOL (Panama) Inc.
ASIA - U.S. WEST COAST • JULY - SEPTEMBER 2016
PERFORMANCEVESSEL ON-TIME
www.canadianshipper.comJanuary/February 20175
EDITORJulia Kuzeljevich (416) 510-6880
RESEARCH DIRECTORLou Smyrlis
ART DIRECTOREllie Robinson
CONTRIBUTING EDITORSCarroll McCormick, Leo Ryan, James Menzies, John G. Smith,
Ian Putzger, Ken Mark.
MARKET PRODUCTION MANAGERKimberly Collins (416) 510-6779
VIDEO PRODUCTION MANAGERBrad Ling
CIRCULATION MANAGERMary Garufi (416) 614-5831
PUBLISHERNick Krukowski (416) 510-5108
PRESIDENTJoe Glionna
CHAIRMAN & FOUNDERJim Glionna
VICE-PRESIDENT, OPERATIONSMelissa Summerfield
HEAD OFFICE: 80 Valleybrook Drive, Toronto, ON M3B 2S9
Canadian Shipper is written for Canadian transportation and logistics professionals who manage product flow from manufacturer to point-of- sale. Edit orial is focused on re porting, analysis and interpretation of Can adian log-istics trends and issues. It is published by NEWCOM BUSI-NESS MEDIA INC.
SUBSCRIPTIONS: Contact us at: [email protected]
Tel: (416) 614-5831 Fax: (416) 614-8861
Website: canadianshipper.com (click on sub scription button)
SUBSCRIPTION RATES: Canada: $65.95 + applicable taxes, per year; $107.95 + applicable taxes, for two years. U.S.A.: US$107.95 per year. All other foreign: US$107.95 per year. Single copies $8 except for the annual Logistics Buyers’ Guide (Aug) $60.95 + applicable taxes, (not including HST) plus $2.00 for postage. USA: US$68..95, Foreign: US$68.95 ISSN 2292-2490 (print), ISSN 2292-2504 (Digital), (Can adian Shipper.) Indexed by Canadian Bus iness Period icals Index. Printed in Can ada. All rights re served. 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
We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage
MEMBER CANADIAN BUSINESS PRESS
N ew Year’s is the time for setting resolutions. Some may scoff at this, saying they
have no need for a once-yearly soul search, but introspection has its place at least
once a year, if not more often.
And introspection can lead to new paths.
I read an interesting Schumpeter blog in The Economist recently that discussed the
topic of introversion.
Introversion is one of my favourite topics for introspection, as I consider myself intro-
verted and for much of my life it was considered a handicap.
Psychometric tests such as Myers-Brigg Type Indicator show that introverts make up be-
tween a third and a half of the population. But, the column suggests, the corporate approach to
introverts has been getting worse, favouring more open plan offices and “group work”. Where-
as extroverts “gain energy from other people, introverts need time on their own to recharge.”
Also, many companies identify leadership skills with extroversion, and projection of the “ego”,
but those who put their company’s interests before their ego may actually be better leaders.
I was amazed by the column’s revelation that Canadian National Railway’s former CEO
Claude Mongeau apparently set himself the goal of acting like an extrovert five times a day.
So introverts who make it to the top have usually learned how to behave like extroverts at
least some of the time, the column suggests.
Certainly, we live in a world where we cannot hide under rocks, and must interact with
the human race.
Good social, interpersonal skills are some of the most highly valued “soft skills” amongst
employers today. But as an introvert who has painfully honed these skills over time I can
say with some boastfulness that in learning to ask people all about themselves (so that they
do all the talking), I remember many facts about people that I can repeat back to them
later, sometimes much to their surprise.
In contrast I can’t always say that many of the extroverts I’ve spoken to have remem-
bered very much at all about the conversation.
But for many introverts who successfully develop these skills, there needs to be a “re-
charge, reset” button that allows them to retreat from too much exposure to people and
conversation.
North America is the wrong place for introverts, because Western culture tends to value
the extrovert and tends to see quiet as dumb, suspect, invisible.
And yet in certain cultures, specifically in the East, the quiet consideration of facts, the
serious demeanour, are revered and respected.
In Susan Cain’s “Quiet: The Power of Introverts in a World that Can’t Stop Talking”, she
notes that many executives are introverts who, in their roles, show strength through their
ability to take the time to consider all facets of an argument, to debate it more diplomati-
cally than those who may enrage and engage too much.
The Schumpeter blog notes that at Amazon, meetings have been overhauled to make
them more focused. Meetings begin silently, and no one may speak before reading a six-
page memo on the subject of the meeting.
Whether you are an extrovert-introvert, who is well able to be the life of the party, to
engage many people in conversation, but who needs to relax and recharge away from this,
or someone who comes alive through more exposure to people, the more aware you are of
what drains you or feeds you, the more you play to your strengths.
In terms of introspection, and resolutions for the year ahead, beyond weight loss, be-
yond 10k goals, I think that goals aligned with who we truly are, and where we are at our
best, make the most sense.
Happy 2017!CS
January/February 2017Volume 120 Issue No.1
EDITOR'S FORWARDJulia Kuzeljevich
To thine own self be true
©iStock
IN THE NEWS
6January/February 2017www.canadianshipper.com
continued
A new terminal in the sector of the Port of
Montreal inaugurated November 18
boosts the port’s handling capacity by
350,000 TEUs. Canada’s second largest
port after Vancouver is positioning itself
for increased global trade, with North At-
lantic shipments a prime target amidst
strong competition from the Port of New
York/New Jersey in particular.
Termont Montreal Inc., the terminal
operator, is part of Logistec Corporation’s
extensive network on the East Coast of
North America.
“The new Viau terminal will have a
considerable impact,” said Sylvie Vachon,
President and CEO of the Montreal Port
Authority. “Ultimately, it will increase the
Port of Montreal’s handling capacity to
2.1 million TEUs and generate significant
benefits for the region, province and
country as whole with annual spinoffs of
New Montreal container terminal boosts capacity By Leo Ryan
The new Viau terminal will boost port handling capacity by 350,000 TEUs.
The new terminal was inaugurated November 18.
1.800.822.4512 Canada
1.800.621.8723 USA
Direct “no break-bulk” serviceto-and-from Texas.
herculesfreight.com/texas
We’ve GROWN in Texas!
EXISTING TERMINALS
NEWLY ADDED TERMINALS
SAN ANTONIOHOUSTON
DALLAS
AUSTIN
LAREDO
HARLINGEN
$340 million and the creation of 2,500 di-
rect and indirect jobs.
“The success of this project is the re-
sult of a significant collaboration between
public and private organizations, includ-
ing Termont Montreal Inc. and Mediter-
ranean Shipping Company S.A. Moreover,
the work was carried out with concern for
communities and the environment.”
Taking part in the ribbon-cutting cer-
emony were Vachon, Laurent Lessard,
Quebec Minister of Transport, Jean
D’Amour, Quebec Minister of Maritime
Affairs, Marc Garneau, federal Minister of
Transport, Madeleine Paquin, President
of Termont Montreal, and Sakat Shaikh,
President and CEO of MSC Canada.
The new terminal, together with the
work done previously and the second
phase of work to be completed in the years
to come, will bring the total handling ca-
pacity in the Viau sector to 600 000 TEUs,
IN THE NEWS
8January/February 2017www.canadianshipper.com
Air Dangerous Goods Ocean Dangerous Goods Road Dangerous Goods
Shipping Lithium Batteries By Air WHMIS 2015 For Managers WHMIS 2015 For Workers
Get Certified From The Experts WWW.CIFFA.COM
continued from p.6
The new Viau terminal at the Port of Montreal.
thereby bringing Montreal’s overall han-
dling capacity to 2.1 million TEUs.
Last year, Montreal’s container cargo
broke another record, rising 4% to nearly
1.5 million TEUs.
The construction of the new terminal
is part of a broader port capacity optimi-
zation project covering three essential
areas: the terminal’s container-handling
capacity, marine access and road access.
The Port of Montreal must be active on all
three fronts to establish the right balance
between facilitating traffic and ensuring
that activities continue to run smoothly,
noted a press release.
The federal government is contribut-
ing a third of the eligible funding for all
three project components to a maximum
of $43.6 million under the National Infra-
structure Component of the New Build-
ing Canada Fund. Of this amount, up to
$27.2 million is available to fund the new
container terminal. The remainder of the
funding will be attributed to the project’s
other two components.
“The Government of Canada recog-
nizes that port infrastructure plays a key
role in supporting economic growth,” said
Transport Minister Marc Garneau. “In ad-
dition to making the Port of Montreal
considerably more competitive, produc-
tive and effective, this project will also
help to support economic growth for Ca-
nadians in the years to come.” CS
IN THE NEWS
www.canadianshipper.comJanuary/February 20179
Earning the CCLP® designation is easily the single best thing you can do to boost your career prospects. It can set you up for better pay, more advancement opportunities, and a range of management pathways and options across the sector. Plus, you’ll develop and demonstrate cross-functional capabilities that can deliver better business results—and more personal job protection. Depending on your background, your CCLP designation
www.citt.ca/cclp 416.363.5696
What’s the most rewarding career decision you’ll ever make?
Your best choice for complete career-long
in supply chain logistics
®CCLP
Leo Ryan is a veteran journalist who
has reported on key transportation and
trade developments in Canada for more
than two decades. A former Montreal
bureau chief for The Journal of
Commerce, he specializes in port and
shipping issues and was awarded the Medal of Merit in
1992 by the then Canadian Port and Harbour Association.
“The Government of Canada recognizes that port infrastructure
plays a key role in supporting economic growth. In addition to
making the Port of Montreal considerably more competitive,
productive and effective, this project will also help to support
economic growth for Canadians in the years to come.”Marc Garneau, Transport Minister
Results are in for our annual Survey of
the Canadian Supply Chain Profession-
al, and as usual they shed some inter-
esting light on the state of compensa-
tion and satisfaction in the industry. Of
the 701 supply chain professionals included in our
sample, 46% defined themselves as being in the
managerial ranks of their organizations and 66%
said they were in transportation. Of the respon-
dents, 59% indicated they manage at least one em-
ployee. The vast majority of respondents (56%) were
over 35 years of age with the mean age being 45.
59% of respondents hold an undergraduate degree
at either the University or college level. Respon-
dents performed a variety of functions ranging
from transportation (66%) and purchasing (51%) to
training and development (50%) and warehousing
(45%). The majority of respondents who are Cana-
SALLARYY SUURVVVEYYY
10January/February 2017www.canadianshipper.com
2017 SURVEY OF THE LOGISTICS
PROFESSIONAL
©iStock
ADDINGIT UP
Survey Average
2.0% or less 45%
2.1% to 4.0% 37%
4.1% to 6.0% 8%
6.1% to 10.0% 3%
10.1% or greater 5%
Size of increase
www.canadianshipper.comJanuary/February 201711
SSALLARRYY SSUURRVVEEYY
Survey Average
Increased 57%
Remained the same 42%
Base salary increases
RYY SSUURRVVEY
Approximate size of company’s annual transportation/warehousing/logistics budget
$100,000 or less
11%
Over $1 million to $5 million
17%
$100,001 to $500,000
11%
Over $5 million to $10 million
10%
$500,001 to $1 million
10%
Over $10 million to $20 million
8%
More than $20 million
27%
Reimer Associates Inc. was established in 1997 by
Ross Reimer. We concentrate exclusively on
recruitment and M&A within supply chain and
transportation. Ross built the company by carefully
selecting exceptional people with impressive careers
in transportation and supply chain companies. The
team has learned firsthand what kind of skills, experi-
ence and personality it takes to fill critical positions
and close transactions. We operate confidentially
and effectively from inside the industry.
www.reimer.ca
Brought to you by our survey partner:
12January/February 2017www.canadianshipper.com
Survey Average
Less than $40,000 1%
$40,000 to $49,999 4%
$50,000 to $59,999 7%
$60,000 to $69,999 9%
$70,000 to $79,999 7%
$80,000 to $99,999 13%
$100,000 to $119,999 11%
$120,000 and higher 12%
Base salary ranges Mean salary by job function
Experience, Connections, Opportunities
Customer Service 88,274
Purchasing/procurement 92,793
Warehousing 94,051
Transportation 91,302
Inventory/Material Control 87,824
Information Technology 89,736
Project Management 94,687
Training and Development 91,836
Demand Planning/Forecasting 94,906
Customs 83,732
Order Fulfillment 88,630
Sales/Marketing 99,629
Other 95,447
SALLARYY SUURVVVEYYY
www.canadianshipper.comJanuary/February 201713
Total Respondents (Survey Average)
$90,566
25 or fewer $79,909
26 to 100 $79,386
101 to 500 $87,694
501 to 1000 $89,782
1001 to 5000 $98,138
5001 to 25,000 $97,399
More than 25,000 $101,633
Mean salary by number of people working in company
dian Shipper subscribers had transporta-
tion and supply chain responsibilities.
The survey enjoyed wide geo-
graphic reach across Canada. While
48% of respondents came from Ontar-
io, another 37% were from Western Cana-
da and 12% from Quebec and the Mari-
times. The respondents also represented a mix of
small, medium and large enterprises with 49% working
for large companies employing more than 500 while
28% worked for small organizations employing fewer
than 100. E-mail invitations were sent to supply chain
professionals across Canada from email lists provided
by Canadian Shipper and our sister publication
MM&D. The survey was handled once again by the re-
search firm of G. Bramm Research Inc. After filtering
out unqualified respondents and incomplete surveys,
data compiled represented a margin of error of plus or
minus 3.8 percentage points, 19 times out of 20.
What trends can we see emerging from the survey
this year?
More than half of our respondents currently manage
a budget, which for a quarter of respondents is between
$1 and $5 million dollars a year.
For 27% of respondents their annual transporta-
tion/warehousing and logistics budget is more than
$20 million.
Cost cutting is top of the agenda in terms of priori-
ties for our respondents in the coming year. A vast ma-
jority of respondents (83%) are seeing continued pres-
sure to cut costs in their operations.
While 47% of respondents agreed that their com-
pensation level has been keeping up with their job re-
sponsibilities over the last five years, 52% indicated that
their compensation has not, in fact, kept up.
Next year, 63% of respondents anticipate receiving a
salary increase and 43% expect an increase of 2% or less.
Salaries are expected to rise between 2.1-4% for 40%
of our respondents.
Three-quarters of our respondents are not cur-
rently seriously looking for work with another com-
pany, but a quarter indicated they were. Some 58% of
respondents are very or extremely satisfied with their
current jobs.
The top reasons that respondents are considering a
position with another company are: better money ( for
57%), a better work-life balance ( for 35%), better career
opportunities (29%) and geographic location (29%).
Other reasons that led respondents to consider leav-
Mean salary by education
Some high school $82,500
High school graduate $98,111
Some community college $81,454
Community college graduate $83,834
Some University $82,302
Undergraduate-Bachelor’s Degree $94,088
Some post graduate education $84,019
Post graduate degree $119,423
Mean salary by years of experience in supply chain
2-5 years
5-10 years
10-15 years
15-20 years
20-25 years
25-30 years
30-35 years
$60,458 $68,338 $85,840 $86,368 $100,667 $105,102 $105,661
di
4
io, a
SSALLARRYY SSUURRVVEEYY
T H E M A R K O F T R A D E E X P E R T I S E
Certified Trade Compliance SpecialistCTCS
For information about the CTCS Program, visit cscb.ca/ctcs or call 1-613-562-3543
The CTCS (Certified Trade Compliance Specialist) designation> recognizes the experience and expertise of international trade compliance professionals,> sets a standard for ongoing professional development in a field where change is constant,> supports a network for information sharing and collaboration.
The Canadian Society of Customs Brokers is proud to present the CTCS (Certified Trade Compliance Specialist) Designates of 2017
AlbertaMerima AlicajicTrevor ByeAllan CorbettMaria Eugenia D’AloiaJeffrey FraserColleen JenningsIlona Julia KingCathryn Kirby AdshadeMarcia KobeElaine LambSusan McDonaldSteve SpoljarevicSandra TeedMichael TheodoreBritish ColumbiaFahad BasarCarol BrownCindy ChristensenPaul CourtneyAllison DouglasTaryn HannahCrystal HiggsWyatt HolykWei (David) HuJolanta KrasuckaWilliam LeeChun Hui Eric MaMaria MateMarc McLeanAmanda MilesJonathann MorcoKen NordPatricia O’Malley
Calie SchumacherCherie StormsGloria TerhaarGail WrightMelissa WrightMichael Fraser WrightManitobaWade BarrBruno BiondiAlan DewarDonna FetterlyNyree MenziesValerie MichaudBarb MillerKim RossHayley Dawn ShirtliffeCorey TkachNew BrunswickShelley GaresJanice PercyAlex PiedrahitaNewfoundland & LabradorKelly BlenkinsoppRonald MaloneMichael MurphyNova ScotiaLaurie PasherJoseph VerhaegheOntarioDanielle AdairJamal AhmedMehmood AliGillian Allan
Cynthia AnnakieFahmida ArabMohammad ArifJodi ArmstrongDeborah AxfordLisa BallKathy BarzalJennifer BeamishSarah BerlatoJohn BrooksSteve BundaKim CampbellGanase CarltonMarcos Cervantes LaflammeHannah ChengJoseph CiullaAngela CollinsSue CompisanoHernan CordobaLinda CybulskiSandy DackQi DengSatnam DhamiGrace Di MarcaKathrina DibuenoTanya DietrichKaren DingleBrianne EarishMatthew EarishCharmaine EastonCynthia L. ElliottSean EverdenPeter Xi FangEmil Fiorantis
Wa (Grace) GaoPamela GarrettAdriana GeleriuNegedeyesus GesseseElena GhimbirJohn GirouxLynne GlassMartha GoncalvesLisa GouthroSherry GrahamWarren GreenAnn GruszeckiMary-Anne HardyKyle HartwickSherry HeitmeyerM Dianne HillNancy HornerVicky Nhon HuynhNicole IrwinJohn G. JakubowskiAyesha JavedBranislav KecmanMary KennetteRufat KhanaliyevChristina KinderTomoko O. KitaiLisa KnightHarmeet KohliCarol Shu-Qin KwokChristine LeavoyMegan LeemansChun Mei LiJennifer LivickIris (Wen) Long
Elizabeth LorinczJohn LoweYen Ly-YongChristine MacriRajesh MamtoraPhilip W. MasonRaad MathyosColin MaxwellLorella MazzottaVickie McInnisHeather MissouriUsha MistryJennifer L. MitchellJohn MocciaPenny MoultonKarin MullerTammy NanticokeSumaira NazirDesiree NorwoodSandra OdoricoAdefoluke OdunlamiSherry ParkerRakesh PatelAlice Peres da SilvaVirginia PetrenciuKatie PetteplaceVassili PopovAntonella ProiettoJohn QuirkeKristin RenaudJoseph RoseBrian RoweLabinot SadikuAmanda Salmond
Naeem SardarTariq ShaikhTammy ShawCandace SiderCatherine SlaterHelen SongMark SouthworthJerry C. SpoonerHarjinder SraBrian StaplesDebbie StevensDavid StockwellMichelle StokesSusan SubryanLaura SwansonSimona TalasmanMichelle TamburroRaymond TangDemi TodorovJonathan TorresKaren ValleeMargaret ValtasKimberly Van RuntTerri WalshRuth Webb-MacleodMeredyth WelsmanPing Ping WenRajeev WijesingheLynn Wilding-FullertonJeff WillsonTara WilsonDavid WinklerDian WollisonIvy Woo
Amanda YachukJune ZhengQuebecMelanie BedardKaren BlouinJean-Philippe CarfagniniCarmen DumitracheFrançois DupuisMarc FilionRobert GaboriaultNatasha HarperClaire HowarthPaul HughesPierre-Yves LafranceNadine LépineLorin LevineApril MartinezAlexandra MierlaMargaret Emma MillionKevin MooneySuzanne PerkinsRonald RacineGinette Ste-CroixSandra WalkerDavid WallaceJohn WeightA.J. (Tony) YakuboskyMonika ZanacanMichael ZobinSaskatchewanBarry FrainAustraliaPeter McRae
www.canadianshipper.comJanuary/February 201715
Mean salary By company sector
Total Respondents (Survey average) $90,566
Manufacturing $86,478
Transportation $90,827
Third-party logistics $95,943
Retail $91,271
Other $92,659
Top three reasons for considering a position
with another company
Better money 57%
Better work/life balance 35%
Geographic location 29%
Better career opportunities 29%
Better benefits 22%
Flexible hours 22%
Greater say in management decisions 15%
Reputation of firm 12%
Better rewards program 12%
More responsibility 11%
Industry of choice 7%
Smaller firm 3%
Larger firm 3%
Other 7%
readers pulling in base salaries of $80,000-$99,000 and 17%
reporting six-figure base salaries. Overall average salary for
males was $96,141 and $76,919 for females.
Company size makes a similar difference in base pay
levels. Canadian Shipper readers working for companies
with fewer than 100 people had a mean salary of $79,386,
while those working for companies with more than 25,000
employees earned a mean salary of $101,633.
The supply chain recruitment and hiring process, ac-
cording to 60% of our survey respondents this year, is ex-
pected to stay the same, meaning that it will
be somewhat problematic or take longer
( for 49% of respondents) or very problem-
atic ( for 34% of respondents) to fill vacant
positions with suitable talent.
Our respondents worked 46.1 hours
per week with 88% receiving no over-
time pay. CS
dents this year, is ex-
at it will
onger
lem-
acant
urs
er-
SSALLARRYY SSUURRVVEEYY
ing were greater say in management decisions, reputation
of firm, better rewards program, and more responsibility.
Over three quarters of respondents have completed ter-
tiary levels of education. They also indicated that profession-
al designations are highly relevant to their job performance.
CITT's CCLP designation is held by 33% of respondents, the
P.Log by 20%, and SCMP by 16% of our respondents.
Respondents boast many years of supply chain experi-
ence, with 19% indicating they've amassed between 15 and
20 years' experience, and 16% between 20 and 25. The mean
number of companies at which our respondents have been
employed during their career is four, while the mean num-
ber of positions held during their career is 6.4.
The mean gross salary reported this year was $90,566,
with 13% of readers now pulling in base salaries of $80,000-
$99,000 and 23% reporting six-figure base salaries. In our
previous year's survey we reported $91,761 as the mean
base salary for Canadian Shipper readers with 17% of our
16January/February 2017www.canadianshipper.com
Of the 701 supply chain professionals included in our sample,
46% defined themselves as being in the managerial ranks of
their organizations and 66% said they were in transportation.
Of the respondents, 59% indicated they manage at least one
employee. The vast majority of respondents (56%) were over 35
years of age with the mean age being 45. 59% of respondents
hold an undergraduate degree at either the University or
college level. Respondents performed a variety of func-
tions ranging from transportation (66%) and pur-
chasing (51%) to training and development (50%)
and warehousing (45%). The majority of respon-
dents who are Canadian Shipper subscribers had
transportation and supply chain responsibilities .
The survey enjoyed wide geographic reach
across Canada. While 48% of respondents came from Ontario, an-
other 37% were from Western Canada and 12% from Quebec and
the Maritimes. The respondents also represented a mix of small,
medium and large enterprises with 49% working for large compa-
nies employing more than 500 while 28% worked for small organi-
zations employing fewer than 100. E-mail invitations were sent to
supply chain professionals across Canada from email lists pro-
vided by Canadian Shipper and our sister publication
MM&D. The survey was handled once again by the re-
search firm of G. Bramm Research Inc. After filtering
out unqualified respondents and incomplete surveys,
we compiled data from 701 respondents. This repre-
sents a margin of error of plus or minus 3.8 percent-
age points, 19 times out of 20. CS
Respondent Profile & Methodology
SALLARYY SUURVVVEYYY
www.canadianshipper.comJanuary/February 201717
Geographic Distribution
Ontario
48%
Quebec
8%
Manitoba/Saskatchewan
10%
Yukon/Northwest Territories/
Nunavut
1%
Atlantic Canada
4%
Alberta
15%
British Columbia
12%
Highest level of education
Highschool or less
7%
College diploma/CEGEP
17%
Some university
20%
University degree
29%
Post graduate degree
11%
Size of Company
500 or more
50%
1 to 100
28%
101-500
20%
SSALLARRYY SSUURRVVEEYY
www.canadianshipper.comJanuary/February 201719
SALARY SURVEY
As a recruiter working in the supply chain vertical I’m deeply in-
volved in the hiring process with a wide variety of clients, from
small companies with just a few employees, to multinationals,
and the processes that we see range just as greatly. Interestingly
I’ve learned just as much from some of our smaller clients about a
well-tuned hiring process as I have from companies with thou-
sands of staff.
There isn’t enough room in this column to cover every aspect,
but I will highlight those that I believe
make the biggest impact.
Clear job description First and foremost, a clear and concise job
description must be in place. If the job de-
scription is missing or vague, you’re already
going down the wrong path. Because orga-
nizations are fluid, job descriptions must
be current to stay relevant. At the same
time, the job description must be realistic.
Many times I’ve encountered four pages of standards that literally no
human being can meet. This is just as futile as having no description
at all. Realistic and attainable are the words to measure by.
Sourcing decisionSecondly, a decision on how to source outstanding candidates
must be made with the understanding that sourcing is an invest-
ment decision. Whether the company chooses to advertise, use
one of the many available tools such as LinkedIn, or employ a re-
cruiter, the decision needs to be made with a long-term view in
mind. Occasionally companies who are particularly well net-
worked can find employees without stepping outside the organi-
zation. It’s great when it works but I’ve often seen a very short-
term view taken at this point, causing the candidate pool to suffer
greatly in both quality and quantity.
Unfortunately, posting a position does not prevent multitudes
of unqualified people from applying. Twenty years ago a newspa-
per advertisement would generate the same number of unquali-
fied candidates. After all, there is simply no downside for people
to not apply. Of course, the result is that someone in the organiza-
tion has to spend considerable time sorting through résumés.
It’s important to remember that a job posting does not tap
into the passive network of outstanding people. That’s because
typically the best people are already highly engaged in their ca-
reers and require a personal approach in order to be interested in
a new opportunity. In the recruiting business we think of this as
concierge-style service. For example, if you were in New York City
and wanted to take your best client to an outstanding restaurant,
years ago you could have grabbed the Yellow Pages and discov-
ered hundreds of restaurants. In today’s world, you could search
the Web. But if you truly wanted to find a memorable experience,
you would talk to the concierge at an excellent hotel. That’s the
value of a well-established network.
The right interviewWhen it comes to interviewing there are a
few key areas that will bring success to
the hiring process. First, embrace the idea
of panel interviews, because several view-
points make for better hiring decisions.
The panel style gives the interviewers a
chance to reflect, take notes and formu-
late better questions as they participate
in the interview. Secondly, a behavioural-
style interview is the best way to validate the candidate’s previous
achievements and whether or not their skill set lines up with the
position description. As we all know, résumés can make big claims
that need to be validated and clarified with open-ended ques-
tions. This is the most important part of the interview; the candi-
date’s ability to clearly back up what their résumé says is critical.
Cultural fitEnsuring cultural fit with potential new hires is a critical piece in
the process. Along with appropriate skills and experience, poten-
tial candidates must have values that align with the company’s
culture. This is where an honest assessment of company culture is
so important. If you know your culture is particularly demanding,
with high pressure, long hours, and so on, you need to own that
and be clear with potential candidates. Disaster is waiting if you
don’t reveal the truth at this point.
Art and scienceIt’s important to remember that hiring isn’t an exact science, and
there is no perfect recipe. That said, when we successfully match
the science of a well-developed process with the art of interview-
ing and carefully select the right people, we can greatly influence
the outcome in a positive way. When we do this, our actions
match our words and we place the proper importance on ensur-
ing people truly are the most important asset in the business.. CS
The pathway to successful hiring
Proudly serving the healthcare industry
Thanks to our extensive territory, our advanced expertise in transportation and logistics, and our supply management, more than 1,500,000 patients
especially adapted to the healthcare industry, an industry 10500 Ryan avenue, Dorval (Quebec) H9P 2T7
dicom.com
Rick Safarz Healthcare Logistics603-913-5971 [email protected]
Healthcare Industry
PAIN POINTSHow the healthcare supply chain is evolving BY JULIA KUZELJEVICH
COSTSControlling costs is one of the top issues
for healthcare supply chains.
The market is moving from premium
to lean.
“You’ve got to cut internal costs-there
is more of that than ever before. What we
spend more time on than anything else is
transportation costs: you have to always
introduce competition,” said Paul Steiner,
VP of Strategic Analysis for SME, Spend
Management Experts, which aims to help
companies lower transportation and ship-
ping costs by identifying savings opportu-
nities and building negotiation strategies
across all modes of transportation.
Using proprietary cost modeling tech-
nology, SME conducts a deep financial
analysis of a shipper’s carrier agreements,
invoicing and transportation spend to
identify hidden costs and improve opera-
tional efficiencies. SME works with a vari-
ety of companies in the health care sector,
specifically related to medical devices
and pharmaceuticals.
Sometimes packages are heavier than
they need to be so being able to take ad-
ditional space out of the packages and
introduce more competition on the trans-
port side is important.
Canadian and U.S. customers have
similar requirements but in Europe, for
example, where there are 8 or 9 players in
each country, there are more cost pres-
sures on the carrier side, Steiner said.
REGULATORY PRESSURES With stricter temperature control re-
quirements as a result of regulatory tight-
ening of guidelines, customers have taken
a more conservative view of the regula-
tions and ensuring that end to end we’re
able to maintain the integrity of particu-
lar products, said Maria Thomas, vice-
president, Distribution Operations, UPS
Supply Chain Solutions.
The use of biologics is growing.
Typically that is packed out in non-
reusable packaging. From a custom-
er experience perspective, the onus is
on their customers to deal with that.
Stakeholders are using active tem-
perature control and leveraging spe-
cialized carriers for the transportation of
goods to maintain integrity. Sometimes
the financials are not necessarily cost sav-
ings but cost containment.
“There is heightened awareness from
a quality perspective. Customers are al-
ways interested in programs we are sup-
porting for other customers that may
benefit their supply chain. I do believe
there is an openness to review alterna-
tives when it comes to cost containment.
In our role when consulting, when
customers are looking to enter the Cana-
dian market, we do present value to them
based on our relationships with Canadi-
an officials, regarding audits, special li-
censing, etc.,” Thomas said.
MERGERS AND ACQUISITIONSOver the last 5-6 years on an ongoing ba-
sis, there’s been a lot of activity, in the
healthcare sector, from a mergers and ac-
quisitions perspective, and what that does
is it creates a certain short term IT-driven
upheaval from a customer perspective.
“As customers focus more on their port-
folios, sometimes it’s not just a full blown
acquisition but porfolios diversifying. To
drive synergies and efficiencies there can be
a mandate to move everything to the same
platform. This can cause some upheaval,
and potential disruption to the supply chain.
Sometimes there is a shut down period and
when the new system resumes, the ramp up
and learning can also affect supply chain.
For us, typically there’s often some work ef-
fort to re-integrate things. We also feel the
impact when customers combine their cus-
tomer service groups,” Thomas said.
To mitigate that there is ro-
bust project management to help
customers through the transition.
“We plan our labour and sup-
port around that, make sure we have
resources for back order and fulfil-
ment,” Thomas said.
REDUCING PRODUCT DAMAGE AND SPOILAGE
Keeping healthcare products intact
while they are being shipped means “treat-
ing a package like a patient.”
This is where tracking, tracing, and
monitoring come into place for custom-
ers, and having facilities around the
world with the ability to intervene, and
to supply cold packs when things get de-
layed, is essential.
MODAL SHIFTProbably about 60% of the market is utiliz-
ing ocean containers to move pharmaceu-
ticals. They have better lead times, plan-
ning, and WMS systems. There’s lots of
technology for tracking things in the air.
“We are beginning to see multiple fac-
ets of transportation, intervention ser-
vices, and specialized services in this
market in general,” Steiner said.
Products such as the “Med Pack” offer
reusable, sustainable containers and pro-
vide cost cutting as well as stewardship.
“We always find product damage and
spoilage a big pain point-cost is a big con-
cern for people in this market. Competi-
tion reduces prices. The other major piece
is product security: digital protection.
There are all sorts of statistics on this.
A lot of times there is poor visibility in the
supply chain-things tend to disappear,”
Steiner said.
THE GREY MARKETIn both the pharma and the grey market
world, there are folks that stockpile cer-
HEALTHCARE LOGISTICS
www.canadianshipper.comJanuary/February 201721
continued
© artefy/iStock
tain drugs, and this creates product
concern around security.
“You’re beginning to see more
collaboration between pharma
and their wholesalers, to address se-
curity: technology such as holographs,
more advanced bar coding and serializa-
tion, and cooperating with law enforce-
ment. Customers are insuring more claims
than they ever have. Certainly there is a
recognition of the pain points: cameras,
better screening of employees, better
tracking and tracing, bar coding, etc. In
this market, there are a lot of regulatory
challenges,” said Steiner.
Europe has its Good Distribution Prac-
tices, Brazil has unique item level serial-
ization under its Brazil Serialization Act.
HOME HEALTHCAREOne of the pain points is how to go more
direct to the consumer. How are we going
to see our supply chain evolve more when
it comes to pharmaceuticals?
Home healthcare services are growing
8-10% yearly, and Canada and the U.S. are
big on that side.
There’s an increase in the delivery of
healthcare items to the home, such as oxy-
gen tanks, patients getting in-care services,
or set-up services, of medical beds, etc.
Returns are a big piece of that as well.
Traceability concerns are more or less
creating standards in this market.
Worldwide standards have been ad-
opted across a number or industries, with
manufacturer and distributor using the
same barcoding.
Years ago, it used to be expensive to move
some of these items. Now, with barcodes,
temperature control, traceability, this has be-
come a little more commoditized.
“We’re seeing some reduction in cost
along the transportation side. It’s a more
efficient process today.
As customers get smarter, they are fo-
cusing on cube utilization, and wider use
of ocean freight,” said Steiner.
Inventory reduction is also a part of this.
“If you’re carrying a couple hundred
SKUs and they’re not big items, is it nec-
essary to stockpile them?” he said.
COLLABORATIONMore and more collaboration is occur-
ring amongst healthcare supply chain
stakeholders, especially around the inter-
pretation of “regulatory compliance”-how
do they interpret it, sharing ideas about
holes in security, but maybe not direct in-
formation about the product. CS
HEALTHCARE LOGISTICS
22January/February 2017www.canadianshipper.com
YHMORD
YWG
YHZ
YYT
AMSTERDAM (AMS)LONDON (LGW)
REYKJAVIK (KEF)YZF
EDMONTON (YEG)
SEAYVR
TIANJIN (BEIJING)
SHANGHAI (PVG) CVGMEM
IAH
EDMONTON INTERNATIONAL AIRPORT CARGO
Use our expanding network to ship anything, anywhere in the world
• Seven consecutive years of cargo volume growth
• Worldwide air cargo service via 10 nonstop freighter routes and connections
•
• Road connections within 24 hours to and from anywhere in Western Canada
cargo
continued from page 21
Editor Julia Kuzeljevich
has been writing about transportation issues for 15 years. Her articles have
garnered several transportation and Canadian Business Press writing awards.
Kuehne + Nagel is beefing up its cool chain capabili-
ties. Last year the logistics provider added a new tempera-
ture-controlled room to manage pharmaceuticals that require
ambient temperatures between 15 and 25 degrees Celsius in its
bonded airfreight facility located near Toronto's Pearson airport,
and this summer will see the opening of a 203,8000 sq ft GMP fa-
cility, manned by a specialized team of pharma experts. Strategi-
cally located in "Pill Hill", Mississauga, it is designed to manage
multiple temperature ranges, and will be audited and certified by
Health Canada.
“We are excited to be launching another new, leading-edge GMP
facility to enhance the existing campus and support our growing
pharmaceutical and healthcare customers in Canada," comments Jamie
Wood, president of Kuehne + Nagel Canada. "We will continue to invest in
innovation to support our long term vision and corporate strategy, all under
one umbrella, our KN PharmaChain product portfolio, an integrated global
supply chain solution for our customers."
Carey Roach, director of strategic customer development, pharmaceutical
and healthcare, notes that the forwarder's new facility will improve its immedi-
ate capacity needs. "We continue to experience significant growth in 2016 and
expect the same in 2017," she comments.
This is echoed by Gary Vince, head of airfreight, Canada at DHL Global
Forwarding. He reports “fairly consistent growth” in the company’s existing
trade lanes and adds that Air Canada’s expansion to Latin America should
help in a promising growth market that has so far been hampered by shortage
of direct connections.
While healthcare and pharmaceuticals has been a growth engine, it also
keeps getting more challenging for operators. Tighter regulatory requirements
keep raising the bar. More than 40 jurisdictions - including the EU, US, South
Korea, China and Brazil - are moving to introduce new track and trade regula-
tions, mandating tracing by serial number in a push against counterfeit drugs.
According to industry tracking provider Tracelink, over 75 percent of prescrip-
tion medications worldwide will be covered by the new rules by the end of 2018.
“Serialization is definitely going to change the game. It requires transparen-
cy end-to-end from the time it leaves the shipper’s dock to destination,” remarks
HEALTHCARE LOGISTICS
www.canadianshipper.comJanuary/February 201723
continued
ENGINE OF GROWTH
PHARMA GROWS IN TIGHTER REGULATORY
ENVIRONMENT
BY IAN PUTZGER
© iStock
Vito Cerone, director of marketing and
sales, Americas at Air Canada Cargo. A
major objective for the airline in 2017 is to
enhance its service in this sector and ele-
vate it to the next level, he adds.
Tighter regulations are also on the ad-
vance in other segments of the healthcare
industry. The US Food and Drug Adminis-
tration is pushing ahead with its ‘unique
device identification’ regime for medical
devices and officials in the European Union
are in the process of formulating a set of
rules for these, which are expected to come
into effect about three years down the road.
A number of airlines have taken on
new containers with temperature control
features to beef up their offerings. Air
Canada is looking to add containers from
va-Q-tec, a provider of passive closed cold
chain container solutions that cover tem-
perature ranges from -70 to +25 degrees
Celsius, to its arsenal of temperature-con-
trolled devices. It is also mulling the in-
troduction of special units to carry phar-
maceuticals from warehouse to the
aircraft in some stations, Cerone says.
As his remarks on serialization indi-
cate, monitoring capabilities are another
vital element that providers have to keep
investing in to stay in this game. “Visibility
is very important in this vertical,” he says.
According to Vince, serialization
brings more opportunities than challeng-
es. “It comes down to the ability to moni-
tor and track and trace at the serial num-
ber level,” he says. DHL introduced a new
app with this capability in the past year,
which has been well received, he adds.
Air Canada is in the process of imple-
menting RFID technology in warehouses
at major gateways, which can be used to
further enhance visibility for the health-
care sector, Cerone reckons. “This would
be a huge step forward; it would be a big
differentiator,” comments Vince.
Drawn by the growth and the higher
yields compared to most other types of car-
go, a rising number of airlines have deployed
temperature-control technology and better
tracking capabilities to capture a slice of this
traffic. Roach welcomes these moves, saying
that airlines' service levels and visibility have
improved markedly in recent years, which
also supports the continued efforts to im-
prove handling compliance.
Vince stresses that visibility is just as
important as cold chain technolo-
gy. “It is not just a case of what type
of container an airline uses. It is about
their ability to offer various solutions,
and it is about the carrier’s ability to
provide us with a measure of visibility.
For example, we need time stamps when
the cargo goes out to the ramp,” he says.
This implies a smooth flow of data be-
tween the various parties. Not surpris-
ingly, Tracelink CEO Shabbir Dahod
views this as vital, arguing that “imple-
menting serialisation across global oper-
ations calls for new thinking about plat-
forms that can not only deliver massive
data and processing elasticity, but net-
work connectivity and supply chain in-
teroperability that links businesses to-
gether to advance the value of the
pharmaceutical ecosystem as a whole.”
Data flow may not be enough. In-
creasingly operators stress the need for
close cooperation within this ecosystem.
“We work with our customers on solu-
tions,” says Roach, adding that this has
been a major driver for Kuehne + Nagel’s
growth in this segment.
Alan Dorling, global head of pharma-
ceuticals and life sciences at IAG Cargo,
emphasizes the need to include ground
handlers in this as well as forwarders and
shippers. “There is an emerging trend of
preference to routing shipments over cer-
tified gateways,” he remarks. “The market
is moving to GDP corridors”.
The notion that logistics providers - be
they forwarders, handlers or airlines - need
certificates to document their capabilities
in this sector is gaining ground. “We are
looking at getting CEIV and GDP certifica-
tion at out key stations,” says Cerone “We
are going to work with both to make sure
we are aligned with the industry.”
Until recently GDP (Good Distribu-
tion Practice) has been the lone gold
standard for healthcare-related logistics
activities, but CEIV (Centre of Excellence
for Independent Validators), which has
been promoted by the International Air
Transport Association, is gaining trac-
tion as a second important badge of qual-
ity. Airline executives report that it is be-
coming a standard question in RFPs.
Among other things, CEIV marks an
effort of the air cargo industry to shore up
its credentials at a time when more and
more pharmaceuticals shippers
glance at ocean transportation as a po-
tential alternative mode of moving
their traffic. Faced with mounting cost
pressure, they are looking for more
cost-effective solutions, notes Roach.
However, while the amount of phar-
maceuticals that are shipped by ocean
vessels is on the rise, there will always be
a need for airfreight, she adds.
Dorling is unfazed by the mounting
use of ocean transportation. Speed to
market remains a potent factor in favour
of airfreight, he stresses. Moreover, glo-
balized production requires airfreight to
link pharmaceuticals manufacture with
packaging and other elements, he argues.
Air cargo stands to benefit from the
emergence of biologics, especially medica-
tions tailored to the health profiles of indi-
vidual patients, largely associated with
cell therapy or gene editing. These are ex-
pensive to manufacture, and typically
highly sensitive to ambient conditions.
According to Dorling, these substanc-
es usually have an 18-hour window.
Roach, who anticipates large growth in
this sector, expects to see more stringent
requirements on handling and packaging
of such shipments.
“It is going to be a challenge to meet
these requirements,” she reflects.
The more information clients can give
their logistics providers about the pack-
aging, the loading options they have
available and other aspects, the better
equipped the logistics firm will be to en-
sure the precious shipment reaches its
destination without any issues, she notes.
Airlines sense a similar need for more
involvement to handle this new type of
cargo properly. “That’s one reason why I
want discussions not only with forward-
ers but also with manufacturers. I’d like
to understand where they will be in three,
four years,” remarks Cerone. CS
HEALTHCARE LOGISTICS
24January/February 2017www.canadianshipper.com
continued from page 23
Ian Putzger is an award-win-ning journalist with more than 20 years experience covering transportation and logistics
issues. He is a former writer and editor with the Hong Kong-based Asian Sources Media Group, and Airtrade, a British magazine covering the global air cargo industry.
You’ll hear “yes” a lot in this industry. Too bad just saying yes doesn't move product. Hub Group Canada knows that years
of stability, a robust container fleet and tight control over operations does. At
Hub Group Canada when we say “yes” to the customers we work with, we truly
mean it. And that means your shelves will be full of more than just empty promises.
LEARN WHY HUB GROUP CANADA’S “YES” MEANS MOREby contacting us at [email protected]
EMPTYPROMISESARE JUSTTHAT.
HUBGROUP.COM
26January/February 2017www.canadianshipper.com
ith its young population and ris-
ing consumer demand, the Afri-
can continent stands to benefit
from growth in the years ahead.
The International Monetary Fund says Africa will be
the world’s second-fastest growing economy to 2020. Africa
will soon have the fastest urbanization rate in the world. By
2034, the region is expected to have a larger workforce than ei-
ther China or India-and, so far, job creation is outpacing growth
in the labour force.
There are key sectors where the needs of African companies
and Canadian expertise are good matches. These include the ex-
tractive sectors (mining, oil and gas, resources), infrastructure
(road and ports engineering), telecommunications, clean tech-
nology, transportation and agriculture. Light manufacturing and
healthcare/life sciences are other emerging sectors.
In 2015, Export Development Canada (EDC) formalized its
representation in Africa with the opening of its permanent office
in Johannesburg in order to help Canadian companies take ad-
vantage of the growing opportunities in the sub-Saharan region.
EDC aims to link more Canadian companies into the supply
chains of upcoming infrastructure, oil and gas, and mining proj-
ect opportunities on the continent, and has helped facilitate more
than USD 7.4 billion in business between African and Canadian
companies – many of them small- and medium-sized enterprises
(SMEs) – in the last five years and is looking to grow that number
to USD 10 billion over the next 5 years.
In conversation with Canadian Shipper, Jean-Bernard Rugg-
ieri, Chief Representative, Africa, with EDC in Johannesburg, said
that this is a very good time to talk about Africa.
“Five years ago Africa was booming because of commodities.
Now countries are trying to diversify their economies away from
strictly the oil and gas sector. How we describe Africa is that it is
the next China or India of 10-15 years ago. There is growth ahead,
in terms of population and demand. If you want some good growth
it’s time to invest. It takes time to be successful in Africa,
to find the right partners, and to be involved in the
supply chain,” he said.
Ruggieri, who covers the entire continent of Africa,
talks to the buyers, existing or future, of Canadian suppli-
ers of exports.
“We are approaching buyers to help Canadian
suppliers-we bring financing to buyers to make the
contract happen,” he said.
African markets differ in that there are many state
owned companies, and doing business with these can be slightly
more complicated than doing so with the corporate world.
In countries like Nigeria, Kenya, and South Africa, however,
more and more private companies are being launched.
In terms of impediments it’s like any emerging markets- it’s really
understanding the culture and how you can be successful in signing
the contract, Ruggieri said.
“Today what I see more and more is a reluctance to buy from
North America and Europe and they are more willing to work
with other emerging countries, like China, which is a major player
in Africa. Canadians are well positioned but maybe not aggressive
enough or present enough. You have to come and be present, and
come often to the market, because the other competitors show up
at least once a quarter or more,” he said.
EDC has been growing its presence, matching buyers and suppli-
ers. Power generation is a huge sector, oil and gas, mining are com-
ing back, and infrastructure and transportation are also key.
“If you ask a company that has already sold in Africa, 80% of
the time they will sell there again,” he said.
A September 2016 report from the McKinsey Global Institute,
Lions on the Move II: Realizing the Potential of Africa’s Econo-
mies, looked at fundamentals on the continent and opportunities
for growth in trade.
According to the report, five years ago, growth was accelerating
in almost all of the region’s diverse economies, but recently their
With growth and demand on the rise, it’s a good time to invest in
the African continent
By Julia Kuzeljevich
AFRICAN TRADE
©iStock
www.canadianshipper.comJanuary/February 201727
paths have diverged. Some countries have continued to grow fast
while others have experienced a marked slowdown as a result of
lower resource prices and higher sociopolitical instability.
While fundamentals on the continent are strong, African gov-
ernments and companies will need to work harder to make the
most of its potential. Africa’s real GDP grew at an average of
3.3 percent a year between 2010 and 2015, considerably slower
than the 5.4 percent from 2000 to 2010.
Accelerating technological change is unlocking new opportu-
nities for consumers and businesses, and Africa boasts abundant
resources.
Consumer and business spending today totals $4 trillion.
Household consumption is expected to grow at 3.8 percent a year
to 2025 to reach $2.1 trillion, while business spending is expected
to grow from $2.6 trillion in 2015 to $3.5 trillion by 2025. Compa-
nies wanting to tap into consumer markets would need to have a
detailed understanding of income, geographic, and category
trends. Africa could nearly double its manufacturing output from
$500 billion today to $930 billion in 2025, provided countries take
decisive action to create an improved environment for manufac-
turers. Three quarters of the potential could come from Africa-
based companies meeting domestic demand (today, Africa im-
ports one-third of the food, beverages, and similar processed goods
it consumes), while the other one quarter could come from more
exports. Companies looking to grow across the continent should
develop a strong position in their home market, use that as a base
for expanding into markets well beyond their immediate region,
adopt a long-term perspective and build the partnerships needed
to sustain success over decades, and be ready to integrate what
would usually be outsourced. They should look for opportunities in
six sectors that MGI finds have “white space”-wholesale and retail,
food and agri-processing, health care, financial services, light man-
ufacturing, and construction—with high growth, high profitability,
and low consolidation, and invest in building and retaining talent.
To better gauge stability at the country level, MGI developed
an African Stability Index to help businesses and investors under-
stand their portfolio risk and help policy makers understand and
address their own countries’ vulnerabilities. The index highlights
the diverging growth and stability trends that economies in the
region have been experiencing since MGI published its first report
on Africa’s economies in 2010.
Four factors could transform African economies and their
pace of growth, said MGI.
Africa is the world’s fastest urbanizing region. Over the next
decade, an additional 187 million Africans will live in cities-equiv-
alent to ten cities the size of Cairo, Africa’s largest metropolitan
area. Between 2015 and 2045, an average of 24 million additional
people are projected to live in cities each year, compared with
11 million in India and nine million in China.
Faster penetration of the internet and mobile phones offers
Africa a huge opportunity to enhance growth and productivity;
Africa’s penetration of smartphones is expected to reach 50 per-
cent by 2020, from only 18 percent in 2015. Previous MGI research
estimated that the internet could drive 10 percent of Africa’s GDP
by 2025. This trend is already transforming a number of sectors,
including banking, retail, power, health care, and education. Elec-
tronic payments are sweeping across the region and changing the
business landscape. East Africa is already a global leader in mo-
bile payments. E-commerce in Africa is growing quickly-revenue
has doubled in Nigeria each year since 2010.
Africa contains 60 percent of the world’s unutilized but poten-
Urban growth on the rise. Top-bottom: Johannesburg, South Africa, Lagos, Nigeria, Nairobi, Kenya.
AFRICAN TRADE
continued
AFRICAN TRADE
28January/February 2017www.canadianshipper.com
tially available cropland, as well as the world’s largest reserves of
vanadium, diamonds, manganese, phosphate, platinum-group
metals, cobalt, aluminum, chromium, and gold. It is responsible
for 10 percent of global exports of oil and gas, 9 percent of copper,
and 5 percent of iron ore. Even at recent low prices for such com-
modities, a significant share of African production continues to
be cost-competitive, putting the resources sector in a strong posi-
tion for when demand-and, eventually investment—recover.
Consumer-facing companies will need to make sure they have
a meaningful presence in
each of Africa’s emerging centers of consumption—Egypt, Ni-
geria, and East Africa—with a
primary focus on the largest cities in those and other markets.
In all consumer markets, companies need to tailor their product
and service offerings, and their pricing, to Africa’s distinct con-
sumer segments.
Informal retail channels are an important route to
market in many countries, and companies will need
to design their sales and distribution models to cater
to these.
The rapidly growing business-to-business (B2B) mar-
ket is an even larger spender. Companies in Africa spent
some $2.6 trillion in 2015, 40 percent of it in Nigeria and South
Africa.
Africa’s B2B spending is expected to increase to $3.5 trillion by
2025, with half of that total being spent on materials, 16 percent
on capital goods, and the remainder on a wide range of services
including business and financial services, transportation, and
telecommunications. Services consumption is set to grow the
quickest at 3.5 percent per year. Companies selling to other busi-
nesses—like companies serving consumers—need a detailed un-
derstanding of trends at the sector level to be successful. Today,
the largest spending B2B sector is agriculture and agri-process-
ing, and the spending largely goes toward input materials. This
sector is expected to increase spending by an additional $204 bil-
lion over the next decade, reflecting both a growing population
and rising incomes that are boosting demand for agricultural out-
put and more sophisticated food products.
The fastest-growing sectors are set to be financial services,
construction, utilities and transportation, and wholesale and re-
tail trade. B2B spending in the telecommunications, resources,
and manufacturing sectors is likely to grow more slowly than in
other sectors.
Smaller businesses predominate in Africa requiring compa-
nies to have a clear plan for how to serve them, including tailored
offerings, targeted sales forces, and distribution and supply chains
appropriate to their needs.
Four categories of products could increase manufacturing
output in the period to 2025 by $430 billion so that overall output
approaches the $1 trillion mark. The largest opportunity is in a
category of goods classified as global innovation for local mar-
kets, which includes vehicles and chemicals.
Reflecting the continent’s growing population and rising
household incomes, manufacturing of regional processing goods
such as food and beverages is a second major opportunity. There is
also an opportunity to earn up to $72 billion from resource-inten-
sive products such as cement, and up to $27 billion more from la-
bor-intensive goods such as apparel and footwear. Three-quarters
of the potential could come from meeting domestic demand, and
the rest from enhancing exports. Three-quarters of the growth in
potential output would come from meeting intra-African demand
and substituting imports of manufactured goods, which today are
at levels much higher than in peer regions. With consumer and
B2B markets growing strongly, and rising sophistication among
consumers and businesses, we can expect rising demand for a
wide range of manufactured goods, including processed food and
beverages, apparel, appliances, cars and trucks, fuel, construction
materials, and industrial inputs. The other one-quarter could
come from accelerating growth in niche manufacturing exports.
African economies need to boost competitiveness in manufac-
turing on seven dimensions: labor productivity, electric power, in-
dustrial land, movement of goods, business environment, financial
systems, and tariffs. Depending on which categories of manufac-
turing offer the best opportunities for competitive growth in their
countries, governments can prioritize specific interventions.
Infrastructure development: poor infrastructure, in-
cluding electricity provision, and poor transportation
links contribute to the lack of scale among Africa’s compa-
nies and hinder regional integration. Africa’s spending on
infrastructure has doubled from an average of $36 billion
in 2001–06 to $80 billion in 2015 in nominal terms but, as a
share of GDP, infrastructure investment has remained at
around 3.5 percent, less than the 4.5 percent that MGI research
said is necessary each and every year until 2025. In absolute
terms, this means doubling annual investment in African infra-
structure to $150 billion.
Unlike the large integrated markets of China, Brazil, and the
United States, Africa is a patchwork of more than 50 mostly small
economies with only a limited degree of economic integration
and political collaboration.
That helps explain why so many large African companies have
focused their expansion on their immediate regions. Africa’s eco-
nomic fragmentation has domino effects on companies’ ability to
source or sell inputs along supply chains in multiple sectors.
There are few manufacturing and services hubs as production is
highly dispersed across the continent, hindering the formation of
new businesses, limiting companies’ ability to specialize, and re-
ducing their international competitiveness. African governments
can act on three fronts to strengthen regional integration: (1) help
corporate Africa to build scale by reducing the time it takes for
goods to cross borders, continuing to lower tariffs between coun-
tries, and implementing double taxation agreements; (2) drive
closer integration of regional capital markets to help attract FDI;
and (3) encourage the movement of business people between Af-
rican countries through simplified visa requirements.
Integrating local industries into global supply chains: coun-
tries will also need to attract international manufacturing com-
panies and investors to help develop manufacturing clusters with
capital and skills that can then be integrated into global supply
chains. To achieve this, governments need, for instance, to active-
ly market African capabilities and products, bolster investment-
promotion agencies, streamline imports of partially manufac-
tured goods (typically components), and offer special economic
zones backed by reliable infrastructure. CS
continued from page 27
SUPPLY CHAIN FINANCE
www.canadianshipper.comJanuary/February 201729©dashadima/iStock
When exporters hear the
word, FinTech – tech-
based financial services
-- they dismiss it as just
another digital tool that might one day
make their jobs easier.
That day has now arrived. FinTech so-
lutions have revolutionized supply chain
financing by converting long-dated invoic-
es into cash faster. The breakthrough en-
ables executives to manage their accounts
receivable more adroitly. Most firms, espe-
cially smaller ones, live or die by their cash
flows. But until recently, many finance
folks were left waiting for corporate cus-
tomers to pay their bills which were being
stretched out well beyond 60 days.
According to Priyamvada Singh, New
York-based head of product manage-
ment, GTRF HSBC Bank USA, supply
chain finance (SCF – AKA approved pay-
ables finance or reverse factoring)
emerged after the financial crisis. Lack of
credit availability created an incentive for
buyers to support suppliers by establish-
ing SCF programs.
The era of “reverse factoring” began
when financial institutions changed the
global payment system by introducing new
rules. They gave birth to buyer-led or buyer-
initiated programs, under which suppliers
can access finance and receive early pay-
ment for receivables at a discount. Early
payment is possible since it is based on the
buyer’s irrevocable commitment to pay,
since the financing cost is now based on
the buyer’s, not the seller’s, credit risk.
That occurred after invoice issuers
agreed to add a “commitment to pay” no-
tice to invoices. The greater difference be-
tween the buyer’s credit rating compared
to that of the supplier reduced the financ-
ing cost of the SCF transaction. Before,
without such an issuer’s irrevocable com-
mitment to pay, when sellers holding the
invoice approached a bank or factor, the
finance provider calculated their risk on
the seller’s creditworthiness which would
often be much lower than the buyer’s, re-
sulting in higher risk premiums.
A recent Harvard Business Review ar-
ticle explains how the process works: “Fi-
nancial technology companies … act as
intermediaries in facilitating transactions
between a company and its suppliers.
"They enable both the buyer and sup-
plier to improve their working capital by
making it possible for the former to ex-
tend its payables and at the same time ac-
celerate payment to the latter. This pro-
vides both sides with benefits, including
greater liquidity and less variability in the
timing of payments.”
Driving the new services are cloud-
based software platforms linking both
purchasing management and accounts
payable functions into tighter “procure-
to-pay” systems. Closing that loop simpli-
fies and eliminates past processes that in
turn speed up invoice payments.
Many of these new-breed financial in-
termediaries are Silicon Valley startups.
The HBR article also states, “They are in-
ternet companies that streamline finan-
cial systems and make funding the supply
chain more efficient. These include new
enterprises such as Orbian, Prime Reve-
nue, C2FO, Taulia, and Ariba. As well, tra-
ditional players such as Citi Group, HSBC,
BNP Paribas, Deutsche Bank and others
also offer similar services.
According to Tom Roberts, PrimeReve-
nue senior vice-president of Global Market-
ing, such supply-chain financing (SCF) or
BY KEN MARK
FINE TUNING FINANCE
Supply chain invoicing sees some revolutionary changes
continued
SUPPLY CHAIN FINANCE
30January/February 2017www.canadianshipper.com
invoice financing services opened the
door to “reverse factoring”. In essence,
it was a short-term loan from the bor-
rower who charged fees based on current
interest rates and the risk related to the
borrower’s credit rating.
PrimeRevenue’s SCF transactions are
conducted on its OpenSCi platform that
includes analytical and onboarding tools.
Serving as a hub for both invoice sellers
and buyers, it enables suppliers to trade
their receivables for advance payment
without changing their existing invoicing
processes. Suppliers can receive payment
within days in exchange for the receiv-
able and paying relevant interest charges
and fees until it is processed.
Roberts says, “The service we offer is
cheaper than traditional sources because
we can leverage the lower cost of capital
that global multinational corporations
enjoy. Such financial strength reduces the
risk of non-payment. And the faster cash
flow enables exporters to manage their
finances more effectively.”
“The system is very easy to use,” says Pi-
eter Dorsman, CFO of Atima Software Inc.
“It may take a few days to set up the neces-
sary documentation to use the system or
much faster if you use the cell phone app.
Depending on the payment period, the
cost of the service can be less than one per-
cent of the receivable’s value. The system
helps us manage our cash flow better.”
Fundthrough, a Toronto-based start-
up, has been offering such services since
2014. Says CEO and co-founder Steven
Uster “About 60 percent of our customers
offer services and 40 percent sell products.
The Fundthrough application gives
new meaning to the term, “click & col-
lect”. Users simply click on the invoice or
invoices listed on their online accounting
software system such as QuickBooks they
want to negotiate and link them into the
Fundthrough platform. After accepting
the invoice, Fundthrough typically charg-
es the seller a fee of $5 per $1,000 per
week until the invoice is paid.
Exporters can also participate since
Fundthrough accepts foreign currency
invoices covered by Export Develop-
ment Corp. (EDC) Accounts Receivable
Insurance.
In fact, EDC should be every Canadian
exporter’s first stop. It is a government
agency whose mandate is to boost the over-
seas sales of Canadian goods and services. It
offers a wide range of financial and in-
surance products and services that as-
sist Canadian firms in winning over-
seas contracts and mitigate the risks
involved in dealing with foreign customers.
These include accounts receivable insur-
ance that makes sure that exporters get
paid for the products and services they sell.
Says Shawn Cusick, Director, Financial In-
stitutions and Political Risk Insurance,EDC,
“This not just for overseas buyers in obscure
markets. The greatest number of defaults
involved U.S. buyers. That’s because of sheer
volume. Almost 75 percent of Canadian ex-
ports are sold there.”
As well, for major Canadian capital
goods producers EDC will also arrange fi-
nancing and possibly credit facilities for buy-
ers and insurance in case a foreign firm fails
to deliver or pay as a result of bankruptcy,
natural disasters or nationalization of pri-
vate-sector firms by the local government.
In addition, EDC also offers foreign
buyer financing assistance options which
may also eliminate the need for letters of
credits (LCs). Says the HSBC’s Priyam-
vada Singh, “Although volumes for docu-
mentary letters of credit (L/Cs), continue
dropping, they are still necessary, espe-
cially in emerging markets.
“Sellers, especially MSMEs (micro, small
and medium enterprises) may still rely on
letters of credit as collateral for pre-ship-
ment financing needs since SCF enables ac-
cess to finance only at the post-shipment
stage and post-acceptance of an invoice by
the buyer. Banks in such countries will not
accept electronic notices of payment as col-
lateral for pre-production loans for export-
ers to buy raw materials, etc.”
Foreign exchange (FX) hedging is an-
other tool that can make life easier for ex-
porters. Today’s political and economic
uncertainties can suddenly rattle currency
exchange rates which can reduce the num-
ber of Canadian dollars they receive when
they convert invoices denominated in a
foreign currency, i.e. U.S. dollars, pounds
sterling, euros etc. Before, in more settled
times, most of them did not consider FX
hedging overseas invoices but simply let
FX markets decide how many Canadian
dollars they would bank after converting
their foreign-currency invoices.
Says Dev Dabas, Winnipeg-based senior
vice-president, EncoreFX Inc. “Exporters
should not try to outguess FX markets.
They should simply try to lock in the value
of their contract when it is signed and elim-
inate the guesswork and other risks.”
That approach makes sense to Encore-
FX client, Peter Boda, president of Bodefide
Auto Ltd. in Headingly, Manitoba. He says,”
We sell about 100 used cars per month to
the U.S.. Our U.S. dollar-Canadian dollar
receivables take about 90 days to clear. Be-
fore, we used to hedge about 50 percent of
them. Now, it is closer to 75 percent.
“Hedging gives us more control over
our receivables by locking in our revenues,
margins, and profits. I sleep better at night
knowing how much I take home in Cana-
dian dollars is not left to chance.”
Exporters may also need to be aware of
other financial risks to their overseas re-
ceivables. Says David Butler, business de-
velopment executive at AFEX, a multi-
service cross-border payment advisory
firm, “We try to find out as much as pos-
sible about each of our customers’ needs
and objectives – they are all different and
most deals are not the same.”
Through its experience and connections,
AFEX has been able to help clients avoid di-
saster by suggesting they denominate con-
tracts in a different currency. “We told one
exporter to denominate an invoice with a
Chinese client in its local currency, renminbi
(RMB), not U.S. dollars because the firm had
a reputation for padding its U.S.-dollar in-
voices to cover potential swings in FX rates.
We saved our client between five percent to
10 percent of the contract’s value.
“For another client that was importing
sophisticated drones into Canada, we
proposed that the contract be denomi-
nated in Euros rather than U.S dollars.
That increased his margin on the basic
seven-figure deal by about four percent.
The HSBC’s Priyamvada Singh con-
cludes, “Many ‘FinTech’ platforms have
entered the market offering improved
digital tools, simple integration with buy-
ers ERP systems with easy access to mul-
tiple liquidity providers compared to the
limitations of individual banks.” CS
Ken Mark is a veteran technology expert, who has covered supply chain management since it was called distribution and has
documented its legitimization as a critical business function. He holds an MBA from York University.
At CITT’s fall Canada Logistics
Conference, Laurie Turnbull,
CCLP, Supply Chain Consultant
with Cole International Inc.,
and Larry Mitchell, director, government
services and corporate accounts with
United Van Lines, discussed the use of
RFPs as tools that can, when properly
used, enhance the shipper-carrier rela-
tionship.
The RFP is one of those great tools
that’s the first point of interface between
many shippers and carriers.
“We see a fair number of these docu-
ments. It’s often a point of contention and
it’s increasingly important that we get the
process right. I have some strong biases
when it comes to RFPs. Process is the key
word. Traditionally, RFPs have been fo-
cused as a tool to look at cost and service.
I’m not suggesting that we no longer do
that, but globalization has broadened the
spectrum for the RFP discussion, so today
we have shippers that increasingly want
carriers that are more agile. They want to
have the ability to change points of origin
around the world,” said Turnbull.
They want carriers that can provide
increased visibility, sometimes with tech-
nology tools.
“It’s all about process. Yes, cost and
service are important, but it’s becoming
much broader. That’s an important factor
for me because it speaks to the value add
in our relationship. The simple reason for
that is if you extend your supply chain
from 500 kilometres to 5000 km, you’re
going to have a hard time convincing me
that price is the most important part of
that relationship,” he said.
As he pointed out, when you are im-
porting from places where your source of
supply is 1500 km inland from a foreign
origin port, in some countries it can take
as long as three weeks to move from in-
land to the port, let alone from the port
across the Atlantic or Pacific.
“Whether you have to write one, or
you have to respond to one, there’s that
intuitive question of ‘Ugh’. I don’t think
the person who has to write one or re-
spond to one really gets excited. They are
laden with fines. You’re busy already, and
the distraction for your team to have to
pull people to deal with the RFP is real,”
said Larry Mitchell, Director, Govern-
ment Services and Corporate Accounts,
with United Van Lines Canada Ltd.
“There’s no guarantee you’re actually
going to get something from it as well. The
RFP tool is often just used as a mechanism
for a price war, so that’s why in the carrier
world we often get frustrated,” he added.
When discussing RFPs, it helps to be-
gin with a brief reference to RFQs, Turn-
bull noted.
“There are a lot of things about RFQs
that are good: large companies with so-
phisticated procurement departments do
www.canadianshipper.comJanuary/February 201731
REQUEST FOR PROPOSALS
continued
POINT OF INTERFACE
RFPs can be great tools linking shippers and carriers-here’s how to approach them.
BY JULIA KUZELJEVICH
©iStock
32January/February 2017www.canadianshipper.com
REQUEST FOR PROPOSALS
Replacing suppliers, in a case where
you’re shipping from Hong Kong, can be
complicated vs. if you’re shipping from
somewhere local, he said.
The value add that we bring to that re-
lationship has taken on a lot more impor-
tance as well.
Turnbull said he favours the RFP pro-
cess because it does more than talk about
price. It invites discussion of the value
add, as well as discussion of things like
ancillary charges, that no one likes to pay.
One of the challenges of RFPs is
that there is only one point of contact
this well. But small and medium sized
companies don’t do it as well-I think they
do better with the RFP process. The other
thing is that oftentimes people on the
procurement side of the industry are in-
creasingly taking responsibility for logis-
tics as part of the overseas procurement
piece. Now, more often we find those
people leading the RFP team for the ship-
per. Sometimes they can bring some new
dimension to the process but other times
they look at it from a procurement per-
spective and they don’t give it the same
weight that you and I might give it from a
logistics perspective. The key for me is
long term relationship,” he said.
But if you are tightly tied to a budget,
some of the concepts around relationship
building do not work as well.
The purpose of the process is not to
come up with the lowest price, but to
come up with the foundation for a long
lasting relationship between the shipper
and the carrier.
from the issuer.
The assumption is, that person is the de-
cision maker or controls all the information.
At the very least, that that person has
brought all of the information to the table for
the discussion. Oftentimes that is not true.
Who do you bring to the table for an
RFP discussion?
These days, operations, finance, sales,
dispatch, and even an IT team would be
logical people to include in the discussion,
maybe not all meeting at the same time.
“Shippers have done a good job in
spec’ing out their IT requirements, but in-
variably their IT requirements are much
greater than they thought was worthy of a
mention,” Turnbull said.
Distribution/warehousing is another
group you could bring in. While the teams
can get a little unwieldy, it helps to form a
pool of resources and can be a rewarding
experience.
“The overall objective is to get as much
information as possible. I might think I
The purpose of the process is not to come up with the lowest price, but to come up with the foundation for a long lasting relationship between the shipper and the carrier.
continued from page 31
©2014 Uline
WAREHOUSE
ESSENTIALS
11504 – 186 Street NWEdmonton, Alberta T5S 0J1
EDMONTON60 Hereford StreetBrampton, Ontario L6Y 0N3
TORONTO
πSHIPPING SUPPLY SPECIALISTS
ORDER BY 6 PM FOR
SAME DAY SHIPPING
COMPLETE CATALOG
1-800-295-5510uline.ca
have a lot of good questions to ask a ship-
per, but certainly the other parts of the
team will have questions I wouldn’t have
thought of, ” he said.
It’s the RFP that helps you qualify
who the carriers are that you are speak-
ing with.
But the real objective goes to your
ability to contribute to your competitive
advantage. Otherwise, why have the rela-
tionship?
Data culled from the technology being
used, once in a format that can be pre-
sented in the RFP, can be instrumental.
Always make sure you understand vol-
ume, capacity, seasonality (in shipments,
manpower and labour).
Part and parcel of that is seasonality of
receivables.
“I always say give your prospective
carrier 6-12 months’ data,” he said.
Develop specific clauses. As much as
possible, tailor these contracts to the spe-
cific process that you’re looking at, in-
stead of getting a template done, and
never updating it so that five years down
the road you’re using it and the business
needs have drastically changed.
Get as much information in there as
possible, target potential suppliers, and
check references.
“It’s still amazing to me today how
many companies do not check referenc-
es,” said Turnbull.
“I always ask for four to six weeks’
time. Prepare for questions from carriers.
How are you going to respond to them?
Are you going to share info with everyone
in the RFP process? Some companies like
to do it one way, some another. Lately, I’ve
seen the introduction of a pilot project
once the company is rewarded. Upon suc-
cessful completion, then they’ll award the
contract (after say 60 days).”
The contract should have a clear start
and end date, and demonstrate a clear op-
portunity for synergies, profitability, etc.
If you get the RFP, how does it affect
existing relationships?
Beware contract language in the RFP.
Turnbull recommends reading every sin-
gle clause, even if it’s eight pages long.
Look for KPIs. Some will be implied, some
will be stated.
There is significant ‘freedom of con-
tract’ for the parties to come up with their
own contract terms to complement – or
even substitute – those terms prescribed
by legislation. In some cases, shippers are
increasingly aggressive when drafting
contract language that shifts liability to
carriers/intermediaries.
Shipper-carrier contracts should be
clear in terms of their content and intent,
particularly with respect to the obliga-
tions and liabilities of the parties, or the
courts may interpret them to one party
(or the other’s) disadvantage if a dispute
results in litigation.
All shipper-drawn contracts should be
carefully scrutinized to ensure they do
not included “hidden” risks for carriers/
intermediaries. For example, Force Ma-
jeure clauses are typically limited to
events beyond the parties’ control:
“No party will be liable for any delay or
failure to perform its obligations under this
Agreement if that delay or failure is caused
by any event beyond its reasonable control,
provided that party promptly gives written
notice of fact and circumstances of that
event to the other parties and uses all rea-
sonable endeavours to mitigate its effects”
These now may include additional
stipulations like:
“… provided, however, that nothing in
this Section shall relieve Broker or a Se-
lected Carrier from its liability to Shipper
for the full actual loss, damage, or injury
to the freight shipped.”
“That’s my classic definition of a hidden
risk…the iceberg beneath the surface,” said
Turnbull of the additional clause.
“In my experience though the force
majeure clause is the more common expe-
rience. As bad as that is, that clause now
has an additional clause for broker or
freight forwarder….holding their carriers
liable. This is my walkaway point,” he said.
The clause: (Requiring intermediaries
to do the same with their agents:
“Broker shall require each Selected
Carrier to agree as a Carrier Requirement
that no force majeure, as described herein,
shall relieve Selected Carrier from its lia-
bility to Shipper for the full actual loss,
damage, or injury to the freight shipped.”
(K.E. Stoll, Fernandes Hearn LLP)
The big point here is ask lots of ques-
tions.
Identify why the previous service pro-
vider failed, and whether or not you can
improve the service. Were there inaccura-
cies in the RFP conditions, unidentified
customer expectations, unidentified end-
customer expectations, was there an un-
willingness to pay for ancillary services?
The RFP process can be a “land of op-
portunity”, said Mitchell.
“My firm has embraced it. We have de-
veloped a functional team internally that
respond in all of the areas. Like many of
you that do this on a daily basis, we’ve de-
veloped a library. Why it’s a real opportu-
nity for us is that the RFP gives you that
opportunity to say, you’ve asked us to re-
spond to the freight move, but we want to
talk about the entire cycle,” he added.
Sometimes, for example, you can get
RFPs structured in a way that benefits
you more, as well as the opportunity to
help to develop service level agreements.
“One of the most exciting things we’ve
done recently for our contracts is survi-
vorship based on KPI. If we meet all your
KPIs we want our extended agreement to
kick in,” Mitchell said.
But even when you don’t get the con-
tract, Mitchell said the debrief process of-
fers insight.
“It’s very valuable to go in after the fact
and find out, where did you do well,
where you didn’t and why they chose an-
other option? I have always found this
very helpful,” he said.
And when you don’t want to respond
in the first place?
“Just offer a simple ‘thanks for the op-
portunity, we don’t think we can add val-
ue to the process’,” said Turnbull.
“We do respond politely. We appreci-
ate the opportunity, we’d love to do busi-
ness. We enclose a generic pricing pro-
posal that doesn’t shut the door, but we’re
honest that ‘this is what we can provide
with this general tariff ’,” Mitchell said. CS
www.canadianshipper.comJanuary/February 201733
REQUEST FOR PROPOSALS
Develop specific clauses. As much as possible, tailor these contracts to the specific process that you’re looking at,
instead of getting a template done, and never updating it so that five years down the road you’re using it and the
business needs have drastically changed.
RETROSPECTIVE
34January/February 2017www.canadianshipper.com
Produce or Perish
As the old year closes and a new
one begins, we revisit, in our Ret-
rospective page, the August 1965
edition of Canadian Transportation for
Scrooge’s view on how to apprach trans-
portation management.
“Cratchit, let me put it this way…pro-
duce or perish!”
It’s once again time to shed some light on
what’s ahead for the industry mode by mode,
and for the economy in general.
Maintaining good shipper-carrier rela-
tionships goes without saying.
Carriers are having trouble increasing,
and in some cases even sustaining, rates
because there’s an abundance of capacity.
Forward-thinking shippers will want
to build partnerships with carriers to en-
sure they have capacity available in the
long term. Shippers with a longer-term
view are more likely to be serviced when
capacity tightens.
Shippers and carriers can work to-
gether by driving waste out of the system.
More shippers should be planning for
capacity to tighten in 2017 when electronic
logging devices (ELDs) are mandated in
the U.S.. At the October 2016 Surface Trans-
portation Summit, trucking economist
John Larkin, managing director and head
of research with Stifel Financial Group,
said the legislation could pull 3-5% of U.S.
trucking capacity out of the market due to
an inability or unwillingness to comply. CS
COACHING CORNER
www.canadianshipper.comJanuary/February 201735©id-work/iStock
Carolina M. Billings is CFO-CHRO of a business conglomerate and has 15+ years' experience in the fields of Business Development,
Human Resources and Finance. She champions leadership initiatives as well as empowering and coaching/mentoring others to lead. For more information please visit www.nlilabel.com or email [email protected]
Dreams can be fantasies. It is wonderful
to daydream of one day being your own
boss….or wish for the dream job of own-
ing your own business. Successful entre-
preneurs rarely dream, they envision,
they solve problems, add value, create,
most of all they believe in their product
and just do what needs to be done.
Q/ I have been an executive for most of my career and find myself disenchanted, unfulfilled and most of all tired of what feels like “the machine”. All of a sudden, my job began to taste like dust. All of the motivators that once engaged me no lon-ger seem to matter. I have been thinking of going at it alone. Starting my own con-sulting practice has always been my dream. I am hesitant to discuss it with col-leagues or friends, as they see only the perks and benefits of my role, not the ev-eryday reality of it, and will think I am crazy or having a mid-life crisis. Is there a way to ease into it or figure out the best time to try before it is too late?
A/ The best time to start your own busi-
ness is the present. There is no such
thing as the perfect time, however there
is such a thing as the least imperfect
time. But before you decide to quit your
job or make any kind of monetary in-
vestment do take the time to consider
the following:
• What is the primary reason you want to
start your own business? Is it the dream
of being an entrepreneur/consultant/sole
practitioner or is this a dream to follow
your passion?
• What is your current reality? Do you
have time commitments i.e. are you a pri-
mary caregiver? Do you have a secondary
source of income? Succeeding at getting a
business started requires a
lot of time. It is often said that “entrepre-
neurs are willing to work 80 hours a week
for themselves so they do not have to work
40 hours a week for someone else”. How
will you or your household do without
your existing income? How will you pay
the bills until your business gets rolling?
• Will your consulting practice be within
the same field you are currently working
in? Is it possible to make the transition
from employee to consultant while keep-
ing your existing employer as a client?
• About the “job tasting like dust”? Is it
that what you are doing all of a sudden
does not inspire you? To be a successful
consultant you must be a master of your
field. This means it must become your
brand, your everything. Gladwell’s 10,000
hours comes to mind. That is where pas-
sion comes into play. If you are going to be
doing consulting on something that you
are passionate about, chances are you will
succeed at it. Passion typically becomes a
bit of an obsession. To succeed as an en-
trepreneur your task will be: to be pas-
sionate and to ensure your commitment
to your brand becomes an obsession.
• If you are not staying within the same
field, is it possible to start your practice at
night or part-time? Many networking
events occur in the morning - breakfast
sessions are usually at 7:30 a.m. or alterna-
tively, evening networking events may fit
your schedule too. This is a great way to
get your name out there and to begin mak-
ing contacts. Also content marketing can
be great. Social media allows the world to
get to know the caliber of your expertise
and it gives you a chance to master your
pitch and your unique value proposition.
• Lastly, to be successful in business you
need mastery of two things: The actual
product or service you are offering AND
being good at business - which are two
different skills. There are a lot of future en-
trepreneur programs at various boards of
trade and start-up think tanks, to name a
few. An internet search of your area would
be an ideal place to start. They are great at
helping you put your business plan to-
gether as well as providing market re-
search for the viability of your offering.
Launching your own consulting
practice or business is hard work, but
the amazing thing is that it does not feel
like it. There is a freedom and commit-
ment to self that seems to take over. Per-
sonally I think it is “a must” experience
in a lifetime. Fasten your seat belt and
enjoy the ride. CS
Chasing the dreamSuccessful entrepreneurs must have the grit, vision to make the dream reality By Carolina Billings, CPCC, CHRL, MA-IS
“The best time to start your
own business is in the present.
There is no such thing as the
perfect time, however there
is such a thing as the least
imperfect time.”
36January/February 2017www.canadianshipper.com
IN DEMANDAlmost one million people are employed by the Canadian
transportation and warehousing industry, according to
government data gathered by Canada Cartage for an
infographic, part of which is reproduced here. Truck drivers
on their own make up 1.5% of the Canadian labour force.
INSIDE THE NUMBERSWITH LOU SMYRLIS, MCILT
OUR INDUSTRY MAKES UP 5% OFTOTAL EMPLOYMENT IN CANADA
90%
24 305Class 8 trucks were bought in Canada in 2015
of consumer and food products are transported by truck.
1.5%of the Canadian labour force are employed as truck drivers.
of total employment
1.6%from 20135%
worked in the Canadian transportation and warehousing industry in 2014.
896,000 PEOPLE
=100k
People
THE BIGGER PICTURE
www.canadianshipper.comJanuary/February 201737©iStock
Amazon and Uber Set the Pace in the Freight IndustryAmazon and Uber have identi-
fied two unique elements of
freight transportation and are
triggering a tidal wave of activ-
ity. They have created a unique
blend of predictable logistics
services, pricing options and
marketing. On demand deliv-
ery services are sprouting
in major markets throughout
North America. Whether it is
DoonDash, Sprig or Instacart
in food deliveries, Washio in
dry cleaning or Shyp, Roadie,
Cargomatic or Deliv for carrier
procurement or Transfix or
Freightera for freight broker-
age, there are a host of app-
based delivery services that are
a variation on the Uber con-
cept. This is just a sample of the
start-ups that have entered
and continue to enter the in-
dustry on an almost daily basis.
Trucking/Rail Equipment Purchases DeclineThis was a tough year for
transportation equipment
providers, a direct result of
the slow economy. Class 8
truck production was down
30% in 2016 while semi-trail-
er production outperformed.
With rail car utilization be-
low 70 percent and
significant overca-
pacity, North American
orders for rail cars were at
very low levels.
The Ongoing Driver ShortageDriver recruitment and reten-
tion remained one of the ma-
jor problems in the trucking
industry in 2016. While many
companies have been raising
driver wages the past few
years, this is still of limited
benefit in retaining qualified
drivers. The major carriers
continue to try a range of oth-
er approaches to address the
problem: driver surveys, driv-
er loyalty programs, efforts to
improve work life balance,
driver mentorship programs,
driver training programs and
a range of other measures.
The Hanjin BankruptcyThe August bankruptcy of
Hanjin shipping line, the
world’s seventh largest con-
tainer line, threw ports and
retailers around the world into
confusion, with giant contain-
er ships marooned and mer-
chants worrying whether tons
of goods would reach their
shelves. The financial strug-
gles of Hanjin Shipping were
attributable to an ongoing
downturn in the container
shipping industry that is the
result of numerous interrelat-
ed factors such as weak global
GDP, overcapacity on contain-
er vessels, “bloated” U.S. retail
inventories, changing con-
sumer spending patterns, Chi-
nese economic slowdown, and
muted demand for container
shipping. The downturn dent-
Here are the top stories in
freight transportation that
caught my attention over 2016.
Brexit and the Election of Donald Trump as President of the United StatesThese were the two biggest
political events of 2016. The
Brexit vote had an immediate
impact on the value of the
British pound. The impact of
these two stunning develop-
ments on trade, economics
and transportation will be
felt for years to come. NAFTA
and the Trans-Pacific Part-
nership will certainly come
up for review early in 2017.
The entire world will be
watching to see how these
stories play out.
In an otherwise flat year,
these two political stories
were the biggest events of the
past twelve months. The year
2017 is shaping up as step-
ping stone to great change in
North America and around
the world.
The Tepid EconomyThe North American econo-
mies underperformed the
global economy and the econ-
omies of emerging markets in
2016. Business investment, a
key driver of the economy,
was down in 2016, driven in
large part by the big drop in
fortunes of the oil and gas in-
dustry. Consumer spending
and employment levels re-
mained solid in the United
States and somewhat less so
in Canada. U.S. manufactur-
ing activity increased.
U.S. imports began an up-
tick as did U.S. imports of Ca-
nadian goods, driven in part by
the strong U.S. dollar and drop
in the value of the Canadian
dollar. The strong U.S. dollar
depressed export activity.
E-Commerce/The Last Mile Home Delivery Market Continue to GrowE-Commerce has had a com-
pound annual growth rate of
CAGR of 3% (2000-2015).
While final mile parcel
companies continue to gain
traction, UPS, FedEx and
USPS still appear to control
94% of the USA parcel market.
Omni-channel distribu-
tion has been gaining in im-
portance over the past few
years as consumers seek
more options and greater
flexibility. The bad news, as
reported at the recent Sur-
face Transportation Sum-
mit, is that nobody appears
to be making money with it.
The need for multiple in-
ventories and the challeng-
es of demand planning are
eroding the financial bene-
fits of this method of distri-
bution. To improve finan-
cial performance, companies
are linking collaborative in-
ventory planning, distrib-
uted order management,
integrated order manage-
ment with their TMS sys-
tem and RFID technology.
“To improve financial performance, companies are linking collaborative inventory planning, distributed order management, integrated order management with their TMS system and RFID technology.”
2017 “stepping stone” to great change By Dan GoodwillBy
continued
THE BIGGER PICTURE
38January/February 2017www.canadianshipper.com
TMS Market Continues to ExpandCertain TMS providers are
now going to market with so-
lutions that are easy to get up
and running and easy to use,
many of which are cloud
based with global capabilities.
In the past, shipper networks
tended to be application spe-
cific. Today, the leading TMS
providers are building inter-
faces into multiple networks
of transportation providers
for rail, trucking and interna-
tional shipping. CS
IoT, Big Data and AnalyticsThe Internet of Things and Big
Data are trendy labels for a
fundamental change that will
revolutionize manufacturing,
distribution, and hence trans-
portation. Applying advanced
analytics to big data can solve
supply chain problems. Three
ingredients are key to getting
an advanced analytics initia-
tive underway: having the
right people; collecting high
quality data and; obtaining the
best tools at the right price.
tion. Carriers were taking
rate decreases.
This caused many carriers
to rethink their operating
strategies. Truckload carriers
reined in capacity, parked
trucks and/or curtailed buy-
ing new ones. LTL carriers
focused on yield manage-
ment and the utilization of
dimensioning equipment to
improve pricing accuracy.
Understanding Total Cost of
Ownership (TCO) of fleet
equipment became a priority
for fleet owners.
ed profits and crippled the fi-
nancial health for most of the
top twenty ocean carriers.
Cost Management2016 was supposed to be a
year when truckload capacity
tightened and rates skyrock-
eted. It was supposed to be a
year when higher truckload
rates pushed shippers to
move freight over to intermo-
dal transportation. It was
supposed to be the year when
shippers had to face the mu-
sic of higher driver wages and
pay their carriers according-
ly. It wasn’t. For much of the
year, the economy was the
softest it had been since 2011.
The slow economy and high
inventories sent spot market
rates in a downward direc-
Dan Goodwill, president of Dan Goodwill and Associates, has more than 30 years of experience in the logistics and transportation industries in both Canada and the US. Goodwill is currently a consultant to manufacturers and distributors, helping them improve their transportation processes and save millions of dollars in freight spend. He has held several executive level positions in the industry. He can be reached at [email protected].
continued from page 37
It feels good knowing more.The Port of Vancouver checks all the boxes. With real-time monitoring tools, innovative supply chain strategies and collaborative infrastructure improvements, Vancouver is the right choice now and the right choice for the future.
Go to portvancouver.com to check all the details.
Ensuring the safe transportation of temperature sensitive products across Canada and to and from the USA –
over 450,000 shipments and 1.1 billion pounds of product per year, to be exact – VersaCold is more than
Canada’s largest temperature sensitive supply chain solutions company, we are your trusted transportation partner.
Whether you’re looking to go 3 blocks or 3,000 kilometres, standard or expedited, LTL or TL, domestic or cross border,
we have you covered. Our exceptional food safety and cold-chain assurance ensures the integrity, quality and freshness
of your product, and our transportation management system gives you total visibility every step of the way.
Performance Driven
Bigger Fleet. Wider Reach. Broader Possibilities.Across town or across the continent, we have the fleet, range and technology
to meet your transportation needs.
WAREHOUSING LTL & TL TRANSPORTATION
TRANSPORTATION MANAGEMENT & 4PL
DISTRIBUTOR SERVICES
NORTH AMERICA TRANSPORTATION
3RD-PARTY LOGISTICS (3PL)
Call today for a free consultation. 1-800-563-COLD / versacold.com