HUMAN RESOURCES Working to close the gender wage gap FOOD LOGISTICS Will new regulations help or hinder efficient transport? MARCH 2013 Published Since 1898 Brazil Can Brazil rise above its creaky transportation and logistics networks to become a key figure of our international supply chains?
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HUMAN RESOURCESWorking to close the gender wage gap
FOOD LOGISTICSWill new regulations help or hinder efficient transport?
MARCH 2013
Published Since 1898Published Since 1898Published Since 1898
BrazilB O U N DCan Brazil rise above its creaky transportation and logistics networks to become a key figure of our international supply chains?
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ct&l march 2013 3
VOLUME 116 ISSUE NO. 2 MARCH 2013
Published Since 1898
Can Brazil rise above its creaky transportation and logistics networks to become a key figure of Canada’s international supply chains? � � � � � � � � � � � � � � � � � � � � � 10
COVER
Features 18. . . PROFITABLE PACTEast Coast ports see big dividends from planned Canada-EU free trade pact�
26. . . MAKING PROVISIONSNew regulations aim to ensure food safety from farm to form� Will they help or hinder the efficient transport of goods?
32. . . THE GENDER GAPThe gender wage gap is still wide in supply chain, but opportunities for change are coming�
4 THE VIEW WITH LOUWhy Mexico will increasingly figure into your international supply chain strategy.
6 IN THE NEWSIndustry experts discuss the risks, rewards and challenges of social media at a recent CITT panel discussion. Plus: can business intelligence improve your transport operations?
34 DASHBOARDTransCore’s Canadian Freight Index starts 2013 with record results; fuel, freight costs decrease for Canadian shippers; international shipments help maintain Canadian rail freight increases; and more.
36 INSIDE THE NUMBERSThe dollar divide – how much less women make and why.
38 THE BIGGER PICTUREMoving goods around the world can be a risky business. Is your risk management plan up to the task?
Departments
Thank you!Our annual Transportation Buying Trends Survey, conducted in partnership with CITT and CITA, has now been completed.
Your response has made it a success.
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BrazilzB O U N D
44 ct&l march 2013
Our cover story this month highlights Brazil as the Latin American country Canadian supply professionals can
expect to figure increasingly in their compa-nies’ sourcing and sales plans. Veteran corre-spondent Ken Mark spent a couple of weeks
in Brazil touring the logistics in-frastructure of the world’s sixth-largest economy. As he notes, the size of Brazil’s economy, population and land mass make it impossible to ignore. It is cer-tain to become an important part of our international supply chains.
Yet, I think it wise to keep an eye on the dark horse in this race of developing Latin Ameri-
can nations: Mexico. I’m just back from a few days in that coun-
try visiting with the executive team from Daimler, who see considerable growth poten-tial for Mexico. Gerhard Gross, president and CEO of Daimler Trucks Mexico, believes there is no reason the Mexican truck market can’t grow to the size of the Canadian market within a few years.
Daimler is not alone in its optimistic view of Mexico. Nissan has created a village-size factory where, starting next year, it will begin churning out thousands of taxis for New York City. The $2 billion factory, together with an existing factory, will allow Nissan to pump out a car nearly every 30 seconds. Mazda and Honda are also busy building factories and Audi is constructing a $1.3 billion plant. This year, Mexico will produce about three million vehicles, making it the world’s fourth largest auto producer. When all the factories men-tioned are on line, its capacity will rise to four million.
A few years ago, at CITT’s annual confer-ence, I hosted a panel of global supply chain experts who delivered their insights on the pros and cons of near-shoring. John O’Reilly, direc-tor of customs and traffic at Toshiba of Canada, was part of the panel and explained why after looking at a number of Key Performance Indi-cators, Toshiba decided to move production of some its products out of China and into Mexi-co. “Production in Mexico makes sense for Toshiba, logistically, economically, politically
and environmentally,” he summarized. Today, Mexico is the world’s biggest exporter of flat-screen TVs – not to mention Blackberrys and fridge-freezers.
After years of underachievement, Latin America’s second largest economy is poised for resurgence and this could have important ramifications for Canadian supply chains. In fact, this perennial underachiever grew faster than Brazil last year and is forecasted to re-peat that performance this year. By the end of the decade, Mexico will probably be among the world’s 10 biggest economies, according to a special report in a recent issue of The Economist. HSBC projects that within six years the US will become more dependent on imports from Mexico than any other country, surpassing Canada and current leader China.
What is driving the resurgence? Mexico is working hard to shed its reputation as a country of tariffs and trade controls. Joining the North American Free Trade Agreement was the start of a journey that has so far seen Mexico sign free trade deals with 44 coun-tries, more than any other nation. A bit more than a year ago, for example, Canada and Mexico reached an expanded air transport agreement to facilitate increased trade be-tween the two countries. The expanded agreement provides a completely open framework for direct flights between Canada and Mexico.
And in what will force a rethink for Cana-dian importers who embraced China as a prime source of supply in recent years, Mexico over the past few years has repeatedly been identified as the number one location for low-est landed-costs. In 2000, it cost just $0.32 an hour to employ a Chinese manufacturing worker compared to $1.51 for a Mexican one. By 2012, the Chinese worker’s wage had grown to $1.63 whereas the Mexican’s had risen to only $2.10. As The Economist noted in its report, the minimum wage in Shanghai and Qingdao is now higher than in Mexico City and Monterrey.
Mexico is also investing in its infrastruc-ture, with 1,500 km of new railroad lines added since 2006. Combined with the much lower fuel costs and shorter delivery times, it should come as no surprise if “Made in Chi-na” gives way to “Hecho en Mexico.” CT&L
Lou Smyrlis, MCILT
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‘Hecho en Mexico’Why Mexico will increasingly figure in your
international supply chain strategy
the view with Lou
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Lou Smyrlis,MCILT
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Web TV: Transportation Matters
• CN�S NEW INTERMODAL TERMINAL: CN Rail has opened a new state-of-the-art intermodal terminal for containerized goods at the Calgary Logistics Park.
• RATE REALITY: How Loblaws and HBC handle carrier rate negotiations.
• PARTNERSHIP FOR CHANGE: SCL and the non-profit Trucks For Change Network have announced a new partnership.
5ct&l march 2013
ONLINE
What’s on CTL.ca?
• NOT YOUR TYPICAL BEAN-COUNTER:
Transportation freight auditor DTA Services has launched a marketing campaign to set itself apart from your typical bean-counter, including a new logo, Web site and brochure.
Blog bits Search our blog archives at ctl.ca • Carolina Billings: What’s behind the wage gap between men and women in supply chain?
• Dan Goodwill: Does your trucking company still need an outside sales force?
• Laurie Turnbull: Why RFID costs are still problematic in supply chain. Salary calculator:
Discover your occupation’s average salary range with the PMAC/Purchasingb2b salary calculator.
News:
Mid-level city employee at centre of Montreal corruption schemes.
Report: Panel releases report on military procurement.
3PL Finder: A comprehensive directory of Canadian third-party logistics providers.
Thinking Robots: Ontario 3PL looks to automation for a competitive edge.
News:
Port Burwell welcomes HMCS Ojibwa to its final resting place.
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Blog bitsBlog bitsSearch our blog archives at ctl.caSearch our blog archives at ctl.ca
• Carolina Billings: What’s behind the wage gap Carolina Billings: What’s behind the wage gap between men and women in supply chain?
• Dan Goodwill: Does your trucking company still need an outside sales force?
• Laurie Turnbull: Why RFID costs are still problematic in supply chain.
www.ctl.ca
in thenews
6 ct&l march 2013 www.ctl.ca6
Social Media: Understanding its risks, rewards and challenges Research clearly shows that an increasing number of supply chain professionals are using social media – LinkedIn, Facebook, Twitter, YouTube, blogs, etc. – to aid them in their day-to-day job functions. Yet, for the most part, supply chain service provid-ers have been slow to respond to this new way to engage with their customers. Should supply chain service providers be jumping on the social media bandwagon?
The risks, rewards and challenges of so-cial media were the subject of an engaging panel session hosted by CITT’s Manitoba Area Council in Winnipeg. It included in-sights from Nigel Fortlage, vice-president of information technology and social business leader at GHY International; Matthew Shepherd, Internet marketing/SEO consul-tant at Dotdynamic; David Baker, CEO of Think Shift; and Lou Smyrlis, editorial di-rector of Transportation Media. The panel was moderated by CITT’s Reg Wightman.
“What is this concept of social media all about? And why is it so important for com-panies to understand what it is and the power it holds?” moderator Reg Wightman asked in kicking off the session.
Wightman pointed to the impact the In-ternet has already had on supply chain management. For example, the advent of the Internet has pushed order cycle times from weekly to daily or hourly; enabled customer service strategies to shift from rigid and reactive to responsive and flexible;
and allowed replenishment to happen in real-time rather than scheduled time.
Could the Internet’s latest offshoot, so-cial media, have a similar impact on how providers of supply chain services and the people who purchase those services inter-act with each other?
Research shows it already is. More than half of Canada’s supply chain professionals already look online for collaboration and sharing of information, according to re-search conducted in 2011 by BGR Coach-ing and Strategic Solutions (formerly Gary Breininger & Associates) in partnership with Canadian Transportation & Logistics. And nine in 10 are turning to social media site LinkedIn to not only exchange contact information with other supply chain par-ticipants, but also to look for answers to challenges they are facing. A considerable number of supply chain and transportation-related groups have sprung up on LinkedIn, providing easy forums to discuss industry issues among industry professionals. The same research indicated that reading of supply chain blogs is pervasive, with only 2% of respondents indicating they don’t follow at least one blog. More than 40% of supply chain professionals are also using Facebook for business purposes and a third are using YouTube. A small but increasing number is also turning to Twitter.
“The strategic implications for transpor-tation companies and other providers of supply chain services of this trend towards increasing use of social media is huge,” said CT&L’s Smyrlis. “How do such service pro-viders stay relevant? How do they stand out in a crowded marketplace? Certainly, hav-ing a well-functioning Web Site with lots of good information is still important, but it can’t end there anymore.”
As Think Shift’s Baker explained, busi-ness professionals turn to the Internet and social media to get answers to questions. To remain relevant, rather than simply adver-tising their services in the traditional man-ner, businesses have to ensure they can be found when clients and potential clients are asking essential questions and are capable of providing helpful information.
“It requires a shift in attitude. It’s a move away from the notion of broadcasting (your marketing message) to a notion of how do we connect with people?” Baker said, add-ing the cautious note that companies have
to be listening to “this great conversation” going on online among their customers be-cause, increasingly, “Your company brand is not what you say it is; it’s what everybody else says it is.”
In other words, the company brand is increasingly being judged not by the sleek-ness or creativity of its traditional market-ing message, but rather by the quality of its online engagement in helping its customers find solutions to problems.
Shepherd’s Dotdynamic is an Internet marketing company which helps businesses find, understand, and reach their online au-diences. That means helping companies un-derstand what those audiences – for exam-ple, purchasers of transportation services – are looking for when they are online; what information the company can provide that would be most useful; and the best way to deliver that information.
“Companies can get lost in social media because they don’t know what to say or what channel to use,” Shepherd warned.
GHY International, a Winnipeg-based customs broker and international trade so-lutions provider, jumped into social media back in 2010. For Fortlage, clarity comes from first asking why.
“In using social media, you have to go back to why does your company want to do it? If your answer is because your competi-tion is doing it, that’s the wrong answer. Look at your business plan and your strategic direc-tion. Why do you want to do this? At GHY, as the economy dropped in 2008, we didn’t like where things were going. We wanted to fill our sales channel and we looked at strate-gies of what we needed to do. We believed (the answer) was in strategies of market out-reach,” Fortlage said. “First, you have to an-ticipate the questions (clients are looking to answer in using social media) and then you have to be found. At GHY, we call this having the hunters find us.”
Of course, there is also the critical question of what to say that is both help-ful and unique.
“We found something none of our com-petitors are talking about because it creates no revenue for traditional competitors fo-cused on clearing a truck through a border. We talk about integrated trade compliance strategies. It created a new market and new customers because our customers are now the CEO and CFO since we are talking
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in thenews
about risk and compliance management not just customs brokerage,” Fortlage said.
Fortlage also cautioned against the mis-take of thinking the different social media platforms are the actual media strategy. Twitter, Facebook, LinkedIn, etc. are merely social media tools to be used to build the company’s social media strategy and they will likely change over time. He provided the example of MySpace, which was the predominant social media site before Face-book rose to its current prominence.
Shepherd also cautioned against mak-ing social media the only thing companies do online.
“Don’t put all your eggs in one basket,” he said. “Social media should be part of your overall marketing strategy. Driving people to your Web site is still the end goal.”
And finally, all the panellists warned against seeing social media as providing a quick payoff.
“Social media is about building trust and it’s a long-term game. But building that trust will mean that (customers) will recog-nize your expertise and they will come to you when they have a need,” Shepherd said.
Can business intelligence improve your transport operations?By Julia Kuzeljevich
What is true business intelligence? It’s not just dashboards. It’s a state of understand-ing, “driven by a relentless pursuit of quan-tifying what drives performance at its most fundamental level,” said Tom Peters, a part-ner with Deloitte Analytics, and Rich Tucker, senior vice-president of product management at LeanLogistics.
Peters and Tucker presented a session about the value of gleaning business intelli-gence during the recent Surface Transporta-tion Summit in Mississauga, Ont. The event, which brought together more than 200 carrier and shipper executives, was put on by Canadian Transportation & Logistics, Motortruck Fleet Executive, and Dan Good-will & Associates.
A Business Intelligence System is the act of building Key Performance Indicators (KPIs) to track performance, while also ap-plying advanced analytic methods to un-cover the innate relationships among dis-parate sources of enterprise and market data that can then be exploited to classify,
predict, forecast, and simulate new busi-ness outcomes.
Translated, “it’s the act of understanding your business’ ecosystem at its most basic, granular levels,” said Peters.
The analytics ambition roadmap starts with understanding a company’s processes.
Indexes are a standard against which performance can be measured, and they will change based on the measured activity.
For example, common transport report-ing looks at performance, delivery, tender acceptance and rates.
But is there anything different about your way of operating? Reporting is limited to what you see in your business, so you need to compare your company with in-dustry peers and change your perspective that you are unique.
When measuring a carrier to benchmark performance, first remove the ‘exceptions.’
Measure all pickup moves with the same criteria. Use an unbiased index, such as an industry benchmark index, and cal-culate a company-wide index using the same method.
Measure against the index and do a di-rect comparison of indexes, and measure a percentage of change to the index.
“We’ve also seen people take indexes from elsewhere and create a dashboard, creating a benchmark that is very transac-tional related,” said Tucker.
“When you are moving beyond tracking historical performance and looking at influ-encing future performance, you must ask ‘What are the crunchy questions, the key operational variables with the biggest im-pact on your profitability?’” said Peters.
Using predictive analytics here is better than checking each case.
The new world of big data technology and methods has offered companies the op-portunity to aggregate new forms of data at a very granular level, enabling the organiza-tion to uncover the nuts and bolts of what is driving KPIs, he said.
For example, new transport data – such as EOBRs sensors and RF tags in trailers, readers in distribution centres, and new handheld devices (smartphones and tablet PCs) – when combined with traditional data, will offer a wealth of information from which to gather predictive analysis.
Traditional data includes GPS databas-es, accounting data, government-provided
data, analyst-provided data, and industry-provided data.
How can you add this data to your tacti-cal business? You need to build an analytic database that has “one view” of a transac-tion, customer, contract, lane, SKU, etc.
Developing an analytic discipline in your organization is about considering the list of questions “that keeps you up at night,” Peters and Tucker told the shipper-carrier audience.
Then, it’s about developing a business-driven roadmap to show how you are going to address these questions. A cross-func-tional team with a budget is required, the pair added.
Next, establish foundational data man-agement capabilities, and identify data sources. Develop a strategy to aggregate it into an “analytical sandbox.” Apply these analytics to provide hindsight, insight, and foresight. Use data visualization to monitor analytic results, such as dashboarding, geo-spatial mapping, etc. Plan for quick and fre-quent deliverables, and perform pilots to learn, iterate, and above all, be nimble.
“You need to understand where you have been (hindsight), but the gold is in the insight and foresight, i.e. the ‘something about their business’ they didn’t know be-fore,” said the presenters.Join us at the next Surface Transportation Summit, scheduled for Oct. 16 at the Mississauga Convention Centre. Speaker lineup details to be announced soon at www.ctl.ca.
Canadian trucking industry could be short 33,000 drivers by 2020: reportThough tens of thousands of truck drivers are approaching retirement age, very few young people and immigrants are entering the industry, according to a new report from the Conference Board of Canada (CBC).
According to the report, funded by the Canadian Trucking Alliance and titled “Un-derstanding the Truck Driver Supply and Demand Gap and Implications for the Ca-nadian Economy,” the gap between the sup-ply of drivers and the demand for them – estimated at 25,000 by 2020 – could be costly to the Canadian economy.
“The food we eat, the goods that we en-joy and even the homes we live in are in large part delivered by trucks. The inability to meet a huge demand for drivers could
be costly for the trucking industry, con-sumer goods and the Canadian economy,” said Vijay Gill, principal research associate at the CBC.
While truck drivers make up nearly 1.5% of the Canadian labour force –approximately 300,000 truck drivers overall – participation of young people, ages 15 to 24, has dropped off significantly in the past decade. As a re-sult, the average truck driver’s average age has increased from 40 years in 1996 to 44 years in 2006, an average that surpasses that of many comparable occupations.
While the report notes that the driver “gap” could reach 25,000 by 2020, the CBC says it could exceed 33,000.
The report also notes that a change in policy to recognize the truck driving occu-pation as a skilled trade could attract more domestic and immigrant entrants into the industry.
Port Metro Vancouver to get ‘Smart’ with three-year trucking initiativePort Metro Vancouver is set to implement the Smart Fleet trucking strategy, a three-year action plan designed to improve the efficiency and reliability of the container truck sector and reinforce the Port’s ongo-ing collaboration with supply chain part-ners, Port officials announced.
“In 2012, container traffic at Port Metro Vancouver reached a new record of 2.7 mil-lion TEUs and that number will continue to grow,” said Robin Silvester, president and CEO of Port Metro Vancouver. “Given that a large proportion of container traffic moves to and from the terminals by truck, improvements to reliability and efficiency
are vital. Smart Fleet sets out our action plan to ensure we are maximizing existing capacity and improving operational effi-ciencies as the Gateway grows to service our nation’s trade requirements.”
Key initiatives from the Smart Fleet plan include:
• The expanded use of GPS commu-nications to track supply chain excel-lence in 2013;
• Jointly-funded research (from the Port, the industry and the government, via the Clean Transportation Initiative) to iden-tify technology-based solutions to improve sustainability;
• The Container Drayage Leadership Team (CDLT) providing a forum for termi-nal operators and industry leaders to work openly to solve drayage challenges;
• A Container Vessel On-time Incentive Program, introduced by Port Metro Vancou-ver, to encourage container vessel operators to arrive on schedule and thereby contrib-ute to overall supply chain consistency;
• A Truck Licensing System (TLS) review designed to enhance performance, safety and environmental standards; and• Continued container capacity improve-ment projects with the Deltaport Terminal, Road and Rail Improvement Project and the South Shore Corridor Project.
Container traffic through Canada’s Pacif-ic Gateway is expected to double over the next 10 to 15 years and nearly triple by 2030. Port officials say this projected increase in Canadian international trade necessitated planning now to meet future demand.
Transportation and Infrastructure Minis-ter Mary Polak says the government will be investing $300,000 towards installing 700 GPS units in trucks calling at the port. “Data collected from these GPS units will provide valuable information to improve truck rout-ing and improve terminal operations, help-ing our trucking sector improve its competi-tiveness while also reducing greenhouse emissions and making the port greener and more efficient,” she said.
9ct&l march 2013
GETTING ‘SMART’: Port Metro Vancouver is set to implement the Smart Fleet trucking strategy, a three-year action plan designed to improve the efficiency and reliability of the container truck sector.
1010 ct&l march 2013
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GLOBAL AMBITIONS:GLOBAL AMBITIONS:GLOBAL AMBITIONS:GLOBAL AMBITIONS:GLOBAL AMBITIONS:
BrazilzB O U N D
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B
11ct&l march 2013
The size of its economy, population and land mass make it impossible
to ignore. Increasingly, Brazil is fated to become an important part of
our international supply chains. Yet its creaky transportation and
logistics network and excessive red tape pose great challenges. Senior
contributor Ken Mark travelled extensively through Brazil last
fall to provide a first-hand account of those challenges and the
opportunities of dealing with the world’s sixth-largest economy.
B y K e n M a r k
Brazil Brazil has emerged as South America’s leading economy, accounting for almost half of the region’s total GDP. Such primacy is the result of an historic hat trick the soccer-mad country has scored over the past 20 years.
First up is political stability. Since 1995, three presidents have been popularly elected, including a smooth transition between the first two who belonged to different parties. Second is economic stability. After peaking above 1,000% in the early ’90s, Brazil solved its inflation problems. The current annual rate is 6%. Final-ly, there is social stability. In the new century, about 40 million Brazilians – more than the entire population of Canada – have es-caped poverty to join the middle class.
What does all this mean for Canadian firms? According to Jean Cardyn, EDC’s São Paulo-based regional vice-president for South America: “Brazil is now the world’s sixth-largest economy in GDP terms ahead of Canada’s. More important, its annual GDP growth rates will exceed Canada’s and those of other developed economies for the foreseeable future.”
And for Canadian supply chain managers, that can only mean that Brazil will figure increasingly into their companies’ sourcing and sales plans and thus become an important cog in their interna-tional supply chains. Yet navigating Brazil’s still-emerging trans-portation infrastructure will prove a challenge.
Flying down to RioAt present, the only direct air link to Brazil is the Air Canada To-ronto-São Paulo flight. Other airlines such as Tam Airlines, LAN Chile, and American Airlines fly from New York. Freight forward-ers such as Mellohawk Logistics in Mississauga can arrange seam-less intermodal trucking links to and from New York.
As for ocean shipping, there are irregular charter sailings that stop in Halifax. Otherwise, there are intermodal connections by rail or road to ports in New York, Mobile, Houston, Norfolk, etc.
CN Rail is actively moving goods coming up from Brazil to Mobile where they are loaded on to trains for Canadian destina-tions. Products such as lentils and soybeans move from Western Canada in the other direction.
After arriving in Brazil, goods must still wend their way through its creaky transportation and logistics network. Its ports are among the slowest and most costly in the world due to poor infrastructure, high taxes, excessive red-tape and deficient road and rail access. According to a recent report, lack of investment has resulted in inefficient ports where it costs on average US$200 to load or un-load a single container, compared to US$110 in European ports or US$75 in Asian ports.
And then there’s Brazilian Customs. Except for perishables, it can take three to 10 days for cargo to be cleared. However, Arnon Melo, president and managing director of Mellowhawk Logistics,
12 www.ctl.ca12 ct&l march 2013
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claims he has never encountered any prob-lems. (He left Brazil as a young man to come to Canada to study.) “Unlike 30 years ago, customs in Brazil is now more open and transparent,” he says. “But officials are still very bureaucratic – if forms are not filled out properly, everything stops.”
His secret is getting approval before goods arrive in Brazil and ensuring you have used the proper import permit and that the
rest of the paperwork is perfect. “Never try to fix the problem after the
cargo arrives,” he says.But things are changing. Brazil’s logistics
infrastructure is about to get a makeover. In August, President Dilma Rousseff an-nounced a US$66 billion investment pack-age to pay for laying 6,200 miles of railway tracks and building or widening 4,660 miles of federal highways. Other plans for updat-
ing airports, ports and waterway transporta-tion are emerging.
The private sector is also getting involved. The centrepiece of those plans is the pro-posed US$2.7 billion port of Açu, 400 km north of Rio de Janeiro. Its planned annual capacity is 350 million metric tonnes making it potentially the largest port in the Americas. Located inside the Açu Superport industrial complex, which spans 90-sq.-km comprising two terminals with 17 kms of piers and 40 berths, the port will be able to handle ships of up to 400,000 tonnes.
The project is separate from Brazil’s prep-arations for the 2014 soccer World Cup and the 2016 Olympic Games.
The biggest Latin American infrastructure story, of course, is the widening of the Pana-ma Canal to be completed in 2015. It will double its annual capacity to 600 million tonnes while creating a construction chain re-action that ripples through the entire region.
In response, other national leaders beyond Brazil are aggressively introducing innovative funding and construction techniques to mod-ernize their own outmoded harbours, air-ports, highways and railways. Among them is the soon-to-be opened US$700 million Qui-to Ecuador airport, a private-public partner-ship (P3) project led by a Canadian firm, Aecon Group.
Decision-makers throughout the entire region realize that modern facilities are cru-cial to their countries’ future export-led pros-perity. Canadian companies benefit, first, from helping to build such projects and, sec-ond, from the more efficient trading activi-tiessuch projects deliver.
Why it’s impossible to ignore BrazilCurrently, it is the world’s:6th largest economy with an annual GDP of US$2.1 trillion
5th largest population – 191 million people
5th largest land mass – more than two million sq. km
(The only other countries with that combination and an annual GDP of US$600 billion or more are the US, India, China and Russia.)
As well, Brazil is the world’s leading exporter of iron ore, soy beans, coffee, orange juice, beef, chicken and sugar.
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www.ctl.ca
The Canadian connection While the opportunities in selling to Brazil are huge, so are the challenges. Some Canadian firms have enjoyed notable suc-cess, starting with Brazilian Traction, Light and Power Com-pany in 1899, which later became known as Brascan. It intro-duced hydro-electric power, telephone and streetcar systems to Rio de Janeiro and Saõ Paulo. After a long and complicated history as a multi-sector conglomerate, the firm still retains a solid Brazilian foothold as Brookfield Brazil, a wholly-owned subsidiary of Brookfield Asset Management.
Other Canadian firms have not been so fortunate, espe-cially the forays by Canadian telecom giants including Bell Canada, Nortel and Celestica in 1990s. “They lost hundreds of millions of dollars by offering the wrong products, using the wrong strategies and choosing the wrong partners,” says James Mohr-Bell, Saõ Paulo-based executive director of the Brazil-Canada Chamber of Commerce.
More recently, other Canadian firms have found a more suc-cessful formula for doing business profitably in Brazil. The “key to the mint” is dealing successfully with custo Brasil. It’s the complex web of government duties, taxes, and social costs set up years ago to protect domestic producers from imports by driving up business costs for foreign competitors.
Exporters need to find a savvy advisor who knows how to apply local rules creatively. Ricardo Barro, a Toronto-based cer-tified international business developer with Atlantic Trade In-ternational, pulled off a jeitinho or “little fix” to get around pay-ing duties for a Canadian canola oil exporter. He simply pointed out to Customs officials that since Brazil did not produce any canola oil, there was no domestic industry to protect.
To overcome such barriers to imported goods, Canadian firms must develop innovative solutions. One is participating in global value chains (GBVs). That involves becoming a reliable supplier to global conglomerates. It is especially helpful for small- and medium-sized firms which often lack the resources to penetrate overseas markets on their own. If they can catch on with such firms in Canada or elsewhere, they can strengthen their case to do the same for their Brazilian operations.
It is becoming easier for Canadian firms to start right away here at home with subsidiaries of major Brazilian corporations. These include: AB InBev, which owns Labatt Breweries and Alexander Keith’s; mining giant Vale S.A., that picked up Inco; and, most recently, JBS US, a division of Brazil’s JBS S.A, which purchased embattled Alberta-based meat packer XL Foods. As well, according to EDC, 33 of the GBVs it deems important to Canada – including giants such as Siemens, Tata, and General Electric – are active in Brazil.
According to Raul Papaleo, Toronto-based president of the Brazil-Canada Chamber of Commerce, even large firms are do-ing it. He cites examples of Bombardier supplying parts to Em-braer S.A. for some of its aircraft.
Another approach is to leverage the tax advantages of duty-free zones. Brazil’s largest is in Manaus, a city on the Amazon River of almost two million people about 3,000 km northwest of Rio de Janeiro. Global manufacturers ship in so-called “com-plete-knock-down” (CKD) kits containing all the parts needed for high-end consumer electronics, motorcycles and motorized water sport vehicles for assembly and distribution.
But Manaus can only be reached by plane or ship and not by truck or rail. It is far from the major coastal cities and markets.
Panama Canal expansion will double present capacityBy Ken Mark
When it opens in early 2015, a deeper, wider Panama Canal with two new flights of triple locks, one at each ocean entrance, will double existing canal capacity
and facilitate the passage of so-called post-Panamax ships through the 80-km (51-mile) waterway. These new cargo levia-thans -- the length of an aircraft carrier and the height of a 14-storey building – are capable of carrying up to 12,000 con-tainers or about a million flat-screen TVs all with a crew of just a dozen men. The arrival of these sea-going behemoths has also unleashed a tsunami of transportation and logistics infrastructure upgrades within the New World.
PortMiami is turning up the heat with a full-court press to welcome such mega cargo ships to Southern Florida. It has budgeted US$2 billion to leverage its advantage as the clos-est major US East Coast port to the expanded canal.
Almost half of the total is dedicated to the PortMiami Tun-nel Project that will link port facilities directly to the US Inter-state highway system. Intermodal connections will also ben-efit from a freight-rail restoration initiative. The port itself will be upgraded by dredging the harbour to a depth of 50 feet, adding four new super post-Panamax cranes and a strength-ened bulkhead and wharf system. Currently, the next closest 50-ft-draft harbour is Norfolk ,Va., 1,750 km (947 nautical miles) to the north.
In addition, the US Army Corps of Engineers has called for enormous investments to modernize all supporting inland transportation infrastructure from highways, bridges, tunnels, railways and airports to inland shipping facilities.
In Canada, the Port of Halifax is already prepared. Accord-ing to Patrick Bohan, the port’s business development man-ager: “Halifax harbour features a 55-ft. draft at low water which gives us an advantage over many US Eastern seaboard ports. Currently, about 5% of our volume goes to US destinations by rail, truck or feeder ships.”
Still, the port is finishing up a C$100-million upgrade to the Halterm container port to provide more dock-side rail access and increasing the number of gantry cranes to eight. It is also modernizing the Ocean Terminal, adding 1,500 feet of gen-eral cargo dock space in Richmond and increasing terminal assets at Sheet Harbour to handle dry-bulk and project cargo.
14 www.ctl.ca14 ct&l march 2013
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In return for creating jobs in a remote region, foreign firms enjoy a wide variety of tax concessions. Brightex, a Vancouver-based maker of lightning-strike pipeline pro-tection devices, estimates that the CKD approach would reduce the cost of each unit by 60%, making them more affordable and competitive.
But according to staff at the Canadian consulate in Saõ Paulo, among the world’s emerging markets, Brazil pos-sesses a number of unique qualities. On the positive side, it has a huge and growing group of middle-class consum-ers eager to spend. Companies operating in Brazil enjoy generous margins and large profits.
But unlike the other BRIC countries (Russia, India and China), it is not a low-cost producer. So a winning strat-egy for Canadian firms is not to outsource production there to reduce production costs and boost profit margins. A more viable, medium-term solution is to manufacture goods domestically with a trusted, well-connected part-ner to compete effectively against existing players and enjoy the same profit margins – not to mention protec-tion from foreign imports. Papaleo believes this could take three to five years.
An unexpected benefit of made-in-Brazil goods is that they are more likely to stay there and not creep back to Canada and compete as bargain-priced items against the original products. Over the longer term, as the production quality of the Brazilian goods rises, foreign firms can bene-fit from so-called south-to-south trade – export sales direct to emerging markets in Latin America, Asia or even Africa.
The challenge then becomes how Canadian firms can gain a solid foothold, empowering them to do business inBrazil rather than with Brazil. Ultimately, it boils down to four Ps – products, partners, policies and patience.
The proper recipeDoing business in Brazil can become complicated very quickly. However, a more positive view emerges from comparing its pulsating market dynamics with the ingre-dients and their flavours that make up its national drink, the caipirinha.
First there’s sugar (sweet) which stands for its resource wealth – agriculture, forestry, energy and minerals. The second is cachaça – Brazil’s signature liquor made from fer-mented sugar cane juice (the kick) representing margins and profits. The third is ice or water symbolizing the spirit and energy of its almost 200 million people. Finally, there’s lime juice (sour) a proxy for custo Brasil, the costly hassles of dealing with duties, taxes, laws and regulations.
Once overseas firms find the proper recipe or business plan that includes partners, products, policies and patience, doing business in Brazil becomes a true pleasure like sip-ping a well-mixed caipirinha. CT&L
Veteran technology expert Ken Mark has covered supply chain management since it was called distribution and has documented its legitimization as a critical business function. He holds an MBA from York University.
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15ct&l march 2013www.ctl.ca
Latin America is a region of regions. It stretches from the Rio Grande which separates the US and Mexico all the way down to Cape Horn. Balancing off the economic juggernaut of Portu-
guese-speaking Brazil is the string of Pacific-Rim, Spanish-speaking countries, Mexico, the Central American republics of Guatemala, Honduras, Nicara-gua, Costa Rica and Panama, and the so-called Fab Four on South America’s west coast – Colombia, Ecua-dor, Peru and Chile.
International-trade mandarins in Ottawa have al-ready earmarked these places for special attention by negotiating free-trade agreements (FTAs) with all these Pacific-coast countries except for Guatemala and Nica-ragua. (Since 1997, there has been a Canada-Ecuador Foreign Investment Promotion and Protection Agree-ment or FIPA in place.)
Not to be outdone, the presidents of the book-end nations, Mexico and Chile, have recently set up a re-gional group called the Pacific Alliance (PA) together with Colombia and Peru. Collectively, they will advance their common trade initiatives. The PA joins other exist-ing continental trading blocs, including the Andean Community and the path-breaking Mercosur that links Argentina, Brazil, Paraguay and Uruguay.
Such communal aspirations are another sign of the region’s coming-of-age. More important, these initia-tives are forming solid platforms for future prosperity. That will spring from domestic growth resulting from a rapidly expanding middle class with money to spend and money flows from higher foreign demand for their exports of commodities, agricultural products, services and manufactured goods.
Modern transportation infrastructure and updated logistics services are key to making those dreams come true. They ensure the efficient movement of raw materi-als and other inputs as well as finished products and commodities in and out of the region. All Latin Ameri-can countries are now investing aggressively to bring their facilities and processes up to speed to meet interna-tional standards and practices.
COLOMBIA Colombia has recently made great strides to boost do-
mestic security, especially in the major cities. It has also started negotiating with weakened rebel groups to re-duce rural turmoil as well.
The US-Colombia Trade Agreement, which came into force in April, is a huge vote of confidence in the country’s future as is the continuing tourism boom.
Part of that new-found acceptance has resulted from bureaucratic reforms. The government reduced business start-up costs by eliminating upfront pay-ments and license fees, introducing an electronic filing system for corporate taxes, and simplifing processes for resolving insolvencies. As a result, Colombia has moved up five spots to 47th place in the 2012 World Bank Doing Business rankings.
In addition, its constitution provides national treat-ment to formally registered foreign firms. As a result, the government deals with them without discrimina-tion in the same way as they would any other Colom-bian company.
According to Alvaro Concha, Colombian Trade Commissioner at Toronto-based Proexport Colombia, “As a result of our free trade agreement, 98% of our ex-ports enter Canada duty-free.”
So far, most of its exports are primary products such as oil and gas, minerals and agri-food products such as sugar, coffee and cut flowers. But it is also promoting other value-added manufactured goods including phar-maceuticals, plastic packaging, and auto parts, as well as construction materials and high-end fashions including lingerie, jeans, swimsuits and other athletic wear.
Other firms are pursuing joint ventures with Cana-dian firms in digital animation and software. Under its Export Guarantee Program, EDC will work with a video game developer exporters’ guaranteed lines of credit or other facilities offered by their bank. The pro-gram is expected to encourage other financial institu-tions to work with them to expand their own lending to such firms.
“Key opportunities for Canadian exporters are in consumer goods, conventional and alternative energy, mining and infrastructure construction,” Concha says.
Avianca Taca, the national airline and South Amer-ica’s third largest, has a code-share agreement with Air Canada. Direct Toronto-Bogota flights take about five
BEYOND BRAZILMany countries in Latin America have signed free trade agreements with Canada and are poised for increased business. Modern transportation infrastructure and updated logistics services are key to making those dreams come true. Are they close to reality?
B y K e n M a r k
16 www.ctl.ca16 ct&l march 2013
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hours. Copa Airlines flights pass through its major hub in Panama City.
PERUIn terms of climate, Peru is a true marvel. Of the world’s 104 differ-ent climates, Peru has 84; of the total global 32 micro-climates, it has 28. Agriculturally speaking, then, it can be considered a “bou-tique” producer. For instance, it grows 5,000 different varieties of potatoes.
Its food processors are also highly resourceful. Peru has become a production and distribution centre for sweets, particularly cookies which it exports to its neighbours – Chile, Colombia and Venezu-ela. However, it must import almost all of its wheat from Canada and elsewhere because it cannot grow it at home.
It has centuries-old traditions in fabric, textile and apparel design production which are still alive and well today. Large-scale manu-facturers and small-scale artisans are all capable of end-to-end pro-duction, including weaving and dyeing. Peru is home to numerous exotic natural fibres including Pima and Tangüis cotton, as well as alpaca and vicuña wool.
As a result, they are not just contract manufacturers of everyday clothing. Vicuña wool is rare and the most expensive in the world. A scarf can cost as much as US$1,500. At the same time, Peru can also produce modern microfibre yarns used in exercise wear for producers such as Nike and lululemon.
Peru’s main port is Callao near the capital city, Lima. In the north, close to Ecuador, there is Paita, and in the south, there is Ilo. Air Canada flies to Lima three times a week. Tacca Peru, a division of the Colombian carrier Avianca, offers daily flights. In addition, there are code-sharing flights involving American Airlines and Lan-Peru – a division of LanChile – through New York City.
“Peru is a perfect partner for Canadians. It has about the same population and most companies are small and medium-sized who don’t rely on large-scale production,” says Jose Luis Peroni, head of the Trade Office of Peru in Toronto. He points out possible joint ventures opportunities with Canadian firms for developing business software and solar panels in Peru.
The Canada-Peru FTA, which came into force in 2009, has made a huge difference by reducing tariffs on almost all goods being traded. “It should be better known so that it becomes a wake-up call to greater export opportunities for both countries,” Peroni says.
PANAMAPanama’s enormous efforts to modernize the Canal have caught the world’s attention. But behind the scenes, the government has also been leveraging its strategic geographic location to boost Copa Air-lines as the region’s main carrier and Tocumen Airport as the gate-way to South America. More important, it is also developing its fi-nancial and business services sector to become the New World’s version of Hong Kong or Singapore.
The world is now starting to pay attention. According to the World Economic Forum’s Global Competitiveness survey, the quality of its Panama’s port system stands fourth in the world and its airport infrastructure is sixth. These key drivers will help keep the economy booming. Government forecasts for 2013 GDP growth are 8.5%, down from 11% in 2012.
Canada and Panama continue to build on their strong existing economic ties and commercial relations continue. Bilateral trade between Canada and Panama was $235.3 million in 2011, repre-
senting nearly a 62% increase over 2009. Canadian merchandise exports to Panama were $111.2 million in 2011. These included aircraft, machinery, electrical and electronic machinery. In addition, agricultural and agri-food products such as pork, peas and lentils and fats and oils are very popular.
In 2011, merchandise imports totalled $124.1 million, mainly gold, as well as bananas and pineapples, machinery and equipment, fish and seafood, and coffee.
That’s just the beginning. Our two countries signed a free trade agreement in 2010 which Panama has since ratified. Canadian rati-fication is expected later this year. That will make Canadian agri-food exports more competitive since they now face very high tariffs. As well, both countries signed an air transport agreement in 2008 that established a new, modern framework for scheduled air ser-vices between Canada and Panama.
MEXICODoing business in Mexico is an idea whose time has come – again. In 2011, total trade within NAFTA, including Canada, the US and Mexico, totalled US$1,012 trillion – an historic high – up 15% from 2010. Of that figure, Mexico’s share reached 46.6% compared with just 30.9% in 1993 when it joined NAFTA.
Bilateral trade between Mexico and Canada, grew 14.6%, re-sulting in a record-breaking total of US$34.4 billion. That repre-sents an increase of 751% or an average annual growth rate of 12.6% since 1993.
Many observers point to global trends – rising production costs in China, major natural disasters in other parts of Asia, higher fuel costs and congestion in shipping lanes for making Mexico a more reliable, cost-effective, closer-to-home production location. How-ever, often overlooked are Mexico’s massive infrastructure invest-ments and other reforms that have made it the go-to place for its NAFTA partners to set up shop.
While the basic manufacturing costs remain lower in Asia, get-ting finished goods to customers is cheaper, faster and more reliable from Mexico. According to a recent study by the Mexican Institute for Competitiveness (IMCO), transporting a 40-ft. container with cargo valued at US$100,000 takes four days and costs US$2,789 to move from a Mexico City factory to a US port. In comparison, the trip from Paris, takes longer and cost 26% more. From Saõ Paulo, shipping cost are 80% higher and from Beijing, it’s 124% more.
A major contributor to the breakthrough is the emergence of true industrial parks to replace the maquiladoras or 1960s low-cost factories set up near the US border. The modern facilities more closely resemble their full-service, more comprehensive Canadian and American counterparts. In fact, now, as a result of recent mas-sive infrastructural investments and the growing realization that the importance of logistics trumps traditional manufacturing, these fa-cilities are scattered more widely throughout the country.
From 2006 to 2012, the National Infrastructure Program pro-posed by former president Enrique Caldéron resulted in adding 1,500 km of new railroad lines that beefed up the International Railroad Corridor. As well, the program helped develop and ex-pand ports such as Lázaro Cárdenas on Mexico’s southern Pacific coast. Now, 70% of the cargo that arrives there is carried by rail to Mexican and US industrial centres. Lázaro Cárdenas enables Asian shippers to bypass higher cost, more congested US ports in Los An-geles and Long Beach.
The US-based Kansas City Southern Railroad’s (KCSR) Mexi-
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17ct&l march 2013www.ctl.ca
can subsidiary has the only direct link from the new port to the rest of Mexico’s rail network. (That is similar to CN Rail having the only rail line into Prince Rupert, B.C.) A KCSR spokesperson says that at present there is no Canadian cargo passing through Lázaro
Cárdenas to or from Asia to its home base in Kansas City, Mo.Another potential land-based link to Canada is the proposed In-
ternational Mid-Continent Trade and Transportation Corridor which would be the world’s first international, integrated and se-cure, multi-modal transportation system. It would integrate existing highways and other facilities that would improve both the trade competitiveness and quality of life in North America.
CHILEChile is the most open and free economy in Latin America. As proof, besides the 1997 Canada-Chile Free Trade Agreement (CCFTA), it has also signed a score of other similar treaties involving 59 countries which account for 86% of the world’s trade. The CCFTA was an icebreaker for both partners. It was Chile’s first with a G-8 nation and Canada’s first with a South American country.
Such global trade initiatives are motivated in large part by the government’s plans to diversify its economy. Its bedrock is the state-owned firm CODELCO, the world's largest copper-pro-ducing company with recorded copper reserves of 200 years. In April, both countries agreed to amend the CCFTA to include a
financial services chapter and update others on government pro-curement, dispute settlement and custom procedures. Discus-sions will continue to update the 1997 rules of origin and to fur-ther broaden the CCFTA.
Chile has benefitted enormously from the CCFTA because the agreement has helped boost the value of its exports to Canada by more than 450%. In the other direction, Canada has been the most active foreign investor in Chile in four out of the past five years. Canadian firms are particularly active in mining and engi-neering services.
Juan Antonio Figueroa, trade and investment commissioner for Prochile in Toronto suggests that Canadian firms look for possible trade opportunities by focusing on major infrastructure initiatives such as the huge US$740 million Chacao Channel bridge project linking the island of Chiloé with the country’s mainland. The CCFTA, among other things, ensures that firms in both countries enjoy open access to pursue public-sector con-tracts in each other’s markets.
Chile has established a “Brand Chile” strategy with the objective of becoming the service hub for South America, especially with its Pacific coast neighbours. Along with two of them – Peru and Co-lombia as well as Mexico – Chile has recently established the Pa-cific Alliance (Alianza del Pacifico) as a group that will collectively advance their common global trade expansion plans. CT&L
18 www.ctl.ca18 ct&l march 2013
tradeinternational
Protracted negotiations between Canada and the European Union for an historic free trade agreement failed to over-come certain contentious issues towards the end of 2012 and spilled over into 2013. But both sides are expected to
pull out all the stops in the first quarter of this year to hammer out an accord that has major implications for Canadian shippers and ports on the East Coast.
Among the issues remaining to be resolved, the EU is seeking concessions to extend the patent on pharmaceuticals, greater ac-cess to municipal and provincial government contracts, and the relaxation of supply management rules on milk, poultry and egg products. In the other direction, Ottawa’s negotiators are report-edly frustrated that Europe is not going far enough to eliminate barriers against Canadian exports of beef and pork.
Traditionally strong North Atlantic, general cargo trading part-ners like Montreal and Halifax are well positioned, but other ports on the Great Lakes/St. Lawrence maritime corridor could benefit from increased shipments across the Atlantic. Falling under the latter category would be such mainstream commodity ports as Quebec, Sept Iles, Port Cartier, and Hamilton.
Observers see Canada’s North Atlantic maritime trade remain-ing dominant in the years ahead, but by a lesser extent than in the past due to the ongoing expansion of trade with China-led Asia.
The free-trade strategy of the federal government is taking place in the context of greater diversification to lessen reliance on the US. Though the US will remain Canada’s largest trading partner, the percentage of Canadian trade with the US has dropped to 74% from nearly 90% in the past decade and is expected to decline an-other 10% by the end of this decade.
What has been qualified as a Comprehensive Economic and Trade Agreement (CETA) would, notably, give Canadian export-ers privileged access to a market of more than 500 million people.
According to a federal report, CETA could boost the Canadian
economy by at least $12 billion annually and increase Canada’s trade with Europe by 20% a year. The EU is Canada’s second-big-gest trading partner, with goods and services exports totalling $40 billion and imports totalling $52 billion in 2011.
Tony Boemi, vice-president of growth and development at the Montreal Port Authority, points out that more than 47% of the total number of containers handled at the Port of Montreal are coming from or going to Northern European ports located within the European Union and 18.6% from or to Mediterranean ports also within the European bloc.
“This means that 65.8% of our container traffic could benefit to some degree from a free trade agreement between the EU and Canada,” he said. In total, Montreal handled 1.35 million TEUs in 2011.
“The Port of Montreal,” Boemi added, “will not be the sole beneficiary. The expected benefits will translate into job creation, economic growth and long-term prosperity for Montreal, Quebec and Canada.”
In the first 10 months of 2012, the five leading European ports in the two-way box trade with Montreal were Antwerp (23.3%), Valencia (11.8%), Hamburg (10.7%), Bremerhaven (9%) and Liv-erpool (6.5%).
At the Port of Halifax, George Malec, vice-president of business development and operations, says he has been following the CETA negotiations very closely.
“Europe has long been an important region for trade with Hali-fax, and in 2011 represented 38% of the Port of Halifax business.” Total container throughput at Halifax amounted to 410,650 TEUs in 2011.
Malec stressed that CETA would especially benefit local ex-porters in the seafood industry.
“The removal of double-digit tariffs on seafood and better mar-ket access has the potential to increase the export of seafood to
East Coast ports see big dividends from
planned Canada-EU free trade pact
B y L e o R y a n
Located in Southern New
Brunswick, Port Saint John has
a very diverse cargo base, han-
dling over 31 million metric tonnes
annually, including dry and liquid
bulks, break bulk, containers, and
cruise; making Saint John the second
largest port in the Canadian Port Sys-
tem.
Here in Saint John, our geograph-
ic position is a real asset. We are the
closest Atlantic Canadian port to the
population centres of Central Canada,
New England, and the Midwest. We’re
the only port in Atlantic Canada that
offers choice when it comes to con-
necting by rail to key markets, with
both CN and CP rail systems or down
into the American rail system. We are
situated only 100 kilometers (62 miles)
from the United States border with
direct connections to major highway
systems in New Brunswick. It’s clear
proximity and accessibility are one of
the key factors that make Saint John
the logical choice within the supply
chain equation for businesses.
The opportunity is now apparent
for Port Saint John to play a larger
role in maintaining and enhancing ef-
ficient trade routes to all parts of the
world. Recognizing this opportunity,
our team has aggressively sought new
markets in the Caribbean and South
America, such as the Dominican Re-
public, Costa Rica, and Brazil; attract-
ed new global shippers, such as Medi-
terranean Shipping Company; and
developed trading routes for our cus-
tomers, both long-standing and new.
For our cruise sector, we are the
gateway to the Bay of Fundy and a
marquee port in the Canada New Eng-
land Cruise itinerary. Over the past 25
years, Saint John has welcomed over
2 million passengers to the beautiful
City of Saint John. Cruise guests are
always pleasantly surprised with a first
class welcome from local volunteers as
they arrive in Saint John. Port Saint
John is a full service port, with capac-
ity to dock three cruise ships simulta-
neously and two purpose-built cruise
terminals, each equipped with FMT
Gangway Systems and passenger ped-
ways directly into these facilities. In
2012, Saint John welcomed 75 calls, a
total of 187,900 passengers and nearly
72,000 crew members.
We at Port Saint John are commit-
ted to continually raising our game.
With our global connections offered
through Mediterranean Shipping
Company and our long-term estab-
lished services with Tropical Shipping
we offer a stable North/South connec-
tion. We provide global networks to
over 350 ports in the world, and are the
second largest cruise port in Eastern
Canada. Our geographical proximity
to Toronto and Montreal combined
with our multiple rail and road transit
options give us competitive costing in
relation to U.S. Ports. Our experienced
workforce and our willingness to in-
vest in infrastructure to support trade
opportunities make Saint John the
logical choice for North/South trade.
Our port is a facilitator of trade and a
part of Canada’s Atlantic Gateway with
transportation infrastructure provid-
ing a marine gateway to markets all
over the world. Furthermore, our loy-
alty, pride and strength as a Port drives
everything we do for our community,
stakeholders and customers.
www.sjport.com
PORT ST JOHN ADVERTORIAL copy.indd 22 13-02-27 10:19 AM
Located in Southern New
Brunswick, Port Saint John has
a very diverse cargo base, han-
dling over 31 million metric tonnes
annually, including dry and liquid
bulks, break bulk, containers, and
cruise; making Saint John the second
largest port in the Canadian Port Sys-
tem.
Here in Saint John, our geograph-
ic position is a real asset. We are the
closest Atlantic Canadian port to the
population centres of Central Canada,
New England, and the Midwest. We’re
the only port in Atlantic Canada that
offers choice when it comes to con-
necting by rail to key markets, with
both CN and CP rail systems or down
into the American rail system. We are
situated only 100 kilometers (62 miles)
from the United States border with
direct connections to major highway
systems in New Brunswick. It’s clear
proximity and accessibility are one of
the key factors that make Saint John
the logical choice within the supply
chain equation for businesses.
The opportunity is now apparent
for Port Saint John to play a larger
role in maintaining and enhancing ef-
ficient trade routes to all parts of the
world. Recognizing this opportunity,
our team has aggressively sought new
markets in the Caribbean and South
America, such as the Dominican Re-
public, Costa Rica, and Brazil; attract-
ed new global shippers, such as Medi-
terranean Shipping Company; and
developed trading routes for our cus-
tomers, both long-standing and new.
For our cruise sector, we are the
gateway to the Bay of Fundy and a
marquee port in the Canada New Eng-
land Cruise itinerary. Over the past 25
years, Saint John has welcomed over
2 million passengers to the beautiful
City of Saint John. Cruise guests are
always pleasantly surprised with a first
class welcome from local volunteers as
they arrive in Saint John. Port Saint
John is a full service port, with capac-
ity to dock three cruise ships simulta-
neously and two purpose-built cruise
terminals, each equipped with FMT
Gangway Systems and passenger ped-
ways directly into these facilities. In
2012, Saint John welcomed 75 calls, a
total of 187,900 passengers and nearly
72,000 crew members.
We at Port Saint John are commit-
ted to continually raising our game.
With our global connections offered
through Mediterranean Shipping
Company and our long-term estab-
lished services with Tropical Shipping
we offer a stable North/South connec-
tion. We provide global networks to
over 350 ports in the world, and are the
second largest cruise port in Eastern
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The growth experienced by the Port of Prince Rupert in recent years has been significant. In
2012 alone, total tonnage through Prince Rupert’s terminals rose to 22 million. This figure is remarkable when compared to the 12.2 million tonnes the port moved in 2008, or the 4.3 million throughput of a decade ago. In fact, in January 2013 the Port of Prince Rupert increased tonnage by 74.7% year-over-year, and it has recently become Canada’s third larg-est port.
Current expansion projects in-clude the construction of Pinnacle Renewable Energy’s wood pellet ex-port terminal, which will operational by the end of 2013 and within five years is expected to reach an annual volume of 1.5 million tonnes. Envi-ronmental assessment approval has also been given for the expansion of Prince Rupert’s Fairview Container Terminal, a project which at full build-out would create the capac-ity for as many as 2.3 million TEUs within the next decade. Ridley Ter-minals Inc. is amidst an expansion
that will see coal throughput double to 24 million tonnes by 2015.
These projects only hint at expo-nential growth on the horizon. The recent construction launch of the $90-million Road, Rail and Util-ity Corridor (RRUC) infrastructure project enables an increase in export of capacity for Canada’s resources to growing world markets through the Asia-Pacific Gateway. With a total of 405 hectares of undeveloped ocean-front property ideal for marine im-port/export terminals, the port’s Ridley Industrial Site has deepwater berths capable of safely accommo-dating the world’s largest ships, di-rect access to international shipping lanes and links to CN Rail’s north-ern mainline to major Canadian and American urban trading hubs.
The vision to fully unlock Prince Rupert’s development potential was realized in 2012, when the Prince Rupert Port Authority and CN Rail each put forward $30 million to begin the first phase of the RRUC project, which leveraged $15 million funding agreements with both the Govern-
ment of Canada and the Province of British Columbia.
“Beginning construction on the first phase of this project ensures that the Port of Prince Rupert will be ready for further terminal development to service Canada’s coal, potash, natural gas, forestry and mining industries,” said Don Krusel, President and CEO of Prince Rupert Port Authority. “This infrastructure project will liter-ally lay the groundwork necessary to link the country’s natural resources to our world-class port and provide the best solution for Canadian indus-try seeking access to Asian and other world markets.”
The RRUC project provides access to port property through common user roads, a multi-track rail system, and utilities that will connect all fu-ture developments. As a catalyst for the ongoing development of Prince Rupert’s high-performance and di-verse port complex, the RRUC will enable proposed developments lead-ing to an anticipated port-wide annu-al throughput capacity of 100 million tonnes of cargo.
Ridley Island
Road Rail Utility
Corridor
The growth experienced by the Port of Prince Rupert in recent years has been significant. In
2012 alone, total tonnage through Prince Rupert’s terminals rose to 22 million. This figure is remarkable when compared to the 12.2 million tonnes the port moved in 2008, or the 4.3 million throughput of a decade ago. In fact, in January 2013 the Port of Prince Rupert increased tonnage by 74.7% year-over-year, and it has recently become Canada’s third larg-est port.
Current expansion projects in-clude the construction of Pinnacle Renewable Energy’s wood pellet ex-port terminal, which will operational by the end of 2013 and within five years is expected to reach an annual volume of 1.5 million tonnes. Envi-ronmental assessment approval has also been given for the expansion of Prince Rupert’s Fairview Container Terminal, a project which at full build-out would create the capac-ity for as many as 2.3 million TEUs within the next decade. Ridley Ter-minals Inc. is amidst an expansion
that will see coal throughput double to 24 million tonnes by 2015.
These projects only hint at expo-nential growth on the horizon. The recent construction launch of the $90-million Road, Rail and Util-ity Corridor (RRUC) infrastructure project enables an increase in export of capacity for Canada’s resources to growing world markets through the Asia-Pacific Gateway. With a total of 405 hectares of undeveloped ocean-front property ideal for marine im-port/export terminals, the port’s Ridley Industrial Site has deepwater berths capable of safely accommo-dating the world’s largest ships, di-rect access to international shipping lanes and links to CN Rail’s north-ern mainline to major Canadian and American urban trading hubs.
The vision to fully unlock Prince Rupert’s development potential was realized in 2012, when the Prince Rupert Port Authority and CN Rail each put forward $30 million to begin the first phase of the RRUC project, which leveraged $15 million funding agreements with both the Govern-
ment of Canada and the Province of British Columbia.
“Beginning construction on the first phase of this project ensures that the Port of Prince Rupert will be ready for further terminal development to service Canada’s coal, potash, natural gas, forestry and mining industries,” said Don Krusel, President and CEO of Prince Rupert Port Authority. “This infrastructure project will liter-ally lay the groundwork necessary to link the country’s natural resources to our world-class port and provide the best solution for Canadian indus-try seeking access to Asian and other world markets.”
The RRUC project provides access to port property through common user roads, a multi-track rail system, and utilities that will connect all fu-ture developments. As a catalyst for the ongoing development of Prince Rupert’s high-performance and di-verse port complex, the RRUC will enable proposed developments lead-ing to an anticipated port-wide annu-al throughput capacity of 100 million tonnes of cargo.
Ridley Island
Road Rail Utility
Corridor
23ct&l march 2013
24 www.ctl.ca24 ct&l march 2013
Europe,” Malec said, before underlining the Port of Halifax’s stature as “one of the leading ports in North America with mul-tiple cold storage facilities and 1,000 reefer plugs. The combination of infrastructure and our natural geographic location of be-ing the closest port on the East Coast of North America to Europe will certainly help us to take full advantage of this poten-
tial agreement.”Bob Armstrong, president of the Char-
tered Institute of Logistics and Transport North America and of ATLAS Trade and Logistics Advisory Services, states “there is no doubt” in his mind that imports and ex-ports between Canada and the EU will grow, as has been experienced under the North American Free Trade Agreement
for more than two decades.“The marine industry,” he says, “should
be excited about the growth prospects of two-way trade as tariffs are reduced to zero and other barriers to trade are eliminated in the final drafting of this free trade agree-ment. Commodities from Canada such as iron ore and coal will have new markets in the EU and be a boon to marine operators.”
Armstrong agrees with Malec that CETA will offer an opportunity to increase Canadian exports of fish and seafood prod-ucts via the marine mode. “And likewise, certain imports of agrifood products from the EU should increase as tariffs are re-duced to zero.”
Other sectors identified by Armstrong for increased business with Canada (and through Canada to the US) are production machin-ery, advanced equipment, project car-goes, and the like – especially from Germany.
Armstrong also asserts: “The EU will see Canada as a key stepping stone to the US and Mexico markets to complement our own market – thereby boosting cargo movements on the St. Lawrence-Great Lakes waterway.”
For his part, Bruce Hodgson, director of market development of the St. Lawrence Seaway Management Corporation, states: “Given the marine mode’s strong competi-tive advantage in breakbulk and project cargo, we are optimistic that a free trade agreement with Europe would translate into increased utilization of the Seaway.”CT&L
For more than two decades vet-eran journalist Leo Ryan has re-ported on key transportation and trade developments in Canada. A former Montreal bureau chief for The Journal of Commerce, he spe-
cializes in port and shipping issues and was awarded the Medal of Merit in 1992 by the then Canadian Port and Harbour Association.
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logisticsfood
makingprovisions
New regulations aim
to ensure food safety
from farm to form. Will
they help or hinder
the efficient transport
of goods?
B y J u l i a K u z e l j e v i c h
27ct&l march 2013www.ctl.ca
B y J u l i a K u z e l j e v i c h
Canada’s food and beverage sector will soon be operating in a stricter regulatory climate, as the Canadian government moves for-ward on Bill S-11, the Safe Food for Cana-
dian Act, which received Royal Assent in November.The Act will see the Canadian Food Inspection
Agency (CFIA) condense eight different programs into one single approach.
In the US, where the federal government is in the midst of clearing regulations governing its Food Safety Modernization Act, the Food and Drug Administra-tion is expected to have the power to govern every-thing from the growing of food to its distribution.
A key component of the Safe Food for Canadians Act is the Imported Food Sector Regulatory Proposal, which will institute compulsory licensing and registra-tion for the importing or exporting of food products, including transportation of these between provinces. The legislation won’t be enforced until after the indus-try awareness period is over in 2015, but stakeholders are already considering the impact.
“The new policy framework is good news for con-sumers and for industry as well. The approach is much more based on accountability for industry, for consum-ers, and other stakeholders in the supply chain,” said agriculture expert Dr. Sylvain Charlebois, associate dean and professor in the College of Management and Economics at the University of Guelph.
The Act makes a compelling case for increased col-laboration, he said.
“There will be less complacency. CFIA is trying to be more consistent in its approach to implementing regulations. That wasn’t happening before. The real-ity was that a federally licensed facility in one prov-ince was regulated differently from another. It will allow stakeholders to understand what is expected from the regulator.”
But there is a fair degree of skepticism that the approach will be fair and that food recalls will not be alarmist.
“Lack of trust between government and industry will probably continue, but government will have more authority. More clarity is essential with respect to food safety. It is forcing industry to document. This has been a struggle, particularly on the processing side. The responsibility will have a life beyond the transac-tion through which one facility sells goods to another,” said Charlebois.
The legislation will have an impact on the entire supply chain, believes Paul Medeiros, director of consulting services at the Guelph Food Technology Centre (GFTC), which provides food safety, train-ing, quality and technical solutions to the food and beverage industry.
“For years, importers have flown under the radar; now they will be required to get licensed, retain re-cords at a Canadian address, and have a written recall
plan, with good traceability built in,” he said. “There will also be a requirement for a preventive
food safety control plan. CFIA hasn’t come out with the specifics for the plan to pass, but they have said that if you are following ‘good importing practices,’ you’ll be in compliance with these. When all is said and done, who will oversee the importers? CFIA doesn’t have that ironed out yet – they are currently working to determine their approach. What they have said is that the verification program will be risk based. The higher the risk nature, the more oversight, i.e. in-creased frequency or more inspections,” he added.
Why the increased drive for food safety? It stems from many factors, including an increasingly diverse supply chain and the trend toward more food imports.
Issues of viability and volatility in agriculture will also become the new normal, as food costs steadily in-crease, affecting the players in transportation and logis-tics, said Mark FeDuke, director of trade compliance for VLM Foods.
In a presentation to attendees of the Chartered In-stitute of Transport North America’s annual 2012 gen-eral meeting in Ottawa, FeDuke noted: “This doesn’t necessarily mean foods from abroad are inherently un-safe. There is a greater ability for regulators to find out where foods are coming from. There was a huge num-ber of well-publicized food recalls from 2006-2009. These things made regulators stand up and pay atten-tion to the need for reworking legislation,” he said.
The CFIA’s move towards mandatory licensing for the importing or exporting of food products “will im-pact who in the supply chain will be able to conduct business. If you can’t get a license, you will have a problem,” he added.
While the US model does not include compulsory licensing, “They will be putting a substantial bar on food imports. They will require importers to show that they are demonstrating meaningful foreign supplier verification. This is currently not being done terribly well,” said FeDuke.
Highly compliant food importers could, however, benefit from the voluntary qualified importer pro-gram that would see trusted traders and their trans-port partners subjected to fewer container inspections and lower dwell times.
“There is a shift in the US taking place toward trust-ed trader programs. The regulatory landscape in North America is such that where the food comes from will matter, but who can import that food will also matter,” FeDuke said.
Under the new US Act, some Canadian companies will have problems accessing the American market if they are not deemed the importer of record when it comes to food safety.
Canada will impose licensing that will have residen-cy requirements, so that American companies can no longer be non-resident importers in Canada. If you buy
logisticsfood
28 www.ctl.ca28 ct&l march 2013
product from an American supplier and they are a non-resident importer shipping the goods to the resident retailer, then the retailer could become responsible as importer.
“This has implications for freight buying decisions. You may find the changes taking place will impact you in terms of both the new regulatory changes you have to meet to prove your foods are safe. The people you normally deal with may not be able to make those buying decisions. Folks in logistics should understand that we are no longer in a bubble. You may have a fantastic rate, but if you can’t get product to market, it doesn’t matter,” said FeDuke.
Many suppliers and their logistics partners have been adopting new food safety technologies, proce-dures, and certification standards on a voluntary ba-sis, including Hazard Analysis Critical Control Points (HACCP), Good Agricultural Practice (GAP), Good Manufacturing Practice (GMP), GFSI (The Global Food Safety Initiative), Safe Quality Foods Institute (SQF), and British Retail Consor-tium (BRC), among others.
“On the consulting side, there is more and more interest now from food manufacturers and retailers with regard to facilities being required to pass an audit on storage and distribution. But we have to distinguish between audit options (such as good distribution prac-tices) and certifications. Getting an audit certificate is not the same as being certified,” said Medeiros.
“When it comes to certification, there are many op-tions depending on roles and activities. Everybody has to have a preventive food safety program, which would cover many of the requirements of any certification that you might seek,” he added.
“What I suspect will happen is customers will give their distributor certain options, i.e. anything bench-marked to GFSI. Hopefully the customers are not go-ing to try and get distributors to get certified to stan-dards that don’t exist. Many times they will call and say the customer wants them to get HACCP certified. Frequently, they don’t even know well enough which standard. The lack of knowledge is causing confusion. I call them and ask if they are looking for full-blown certification to a scheme or a one-day audit. I would get it in writing from the customer,” said Medeiros, who recommends trying not to squeeze in an audit when things are swamped.
“I saw it happen a lot with GFSI – companies thought they could do this in a month or two and many lost business as a result.”
DB Schenker’s Vancouver Airport facility went through the HACCP certification process in mid-2012, via HACCP Canada as its third-party auditor and certification body.
“We are not a processor, so we receive pre-packaged goods for which we verify the receipt, packaging, stor-age and integrity. From time to time, if perishable goods show up in the back of a non-refrigerated van, we take an external temperature reading and document it, and
alert the client. We keep a record. If the client signs off, we proceed. If we deem it to be a risk, they take the product back,” said Tim Whitting, operations manager.
“We already had a monitored cooler and data logs, so the process of the one-day training was tying up the loose ends. People say all the time that they’re certi-fied. But HACCP is not so much a governing body as it is a set of procedures, and about making sure prac-tices are documented and in place. A good part of it is common sense,” he added.
Don Cockburn, vice-president of contract logistics at DB Schenker, said there are increased expectations and challenges at sites with regard to safe handling of food products.
“The reality is that there is more monitoring, more visitations. This tends to add more cost which nobody likes to hear. The minimal expectations of providers have also changed,” he said.
“With more security, WMS has to become substan-tially more sophisticated. Now we’re going right down to the case level by lot code, by production date, and maintaining that information, so our databases are get-ting larger.”
In terms of managing raw material, DB Schenker has installed special coding for different types of allergens.
“Different materials can only be so close to each other. There is a higher level of pest control within our sites also required. For food safety, allergens need to be segregated. We have to ensure there has been no mix-ing or contamination,” said Cockburn.
Good temperature monitoring has also become im-perative where food or pharma are involved.
“Now you can start using Wi-Fi temp monitoring with recorders. That information is easier to get and is more user-friendly. In the past, it was always hard-wired and you had to bring the temperature gauge down a floor level in order to get a reading. We’re see-ing more and deeper monitoring as part of the packag-ing, or monitoring that sticks with the load until the last delivery is made,” said Cockburn.
He observed that companies using services coming from a company-run facility to Schenker as a 3PL are very well-versed in food safety requirements, while this varies with companies moving from one 3PL to another.
“We’ve supported that by adding a QA area in our company to support those needs,” he said.
Cockburn said that increased regulation “can’t do anything but slow down the process. The challenge is to try and figure out how to effectively streamline ei-ther through technology or through information. The key is to try and figure out what is required, have it ready and available.” CT&L
logisticsfood
Features editor Julia Kuzeljevich has been writ-ing about transportation issues for more than a decade. Her meticulously researched articles have garnered several transportation and Canadian Business Press writing awards.
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Versacold_CTL_Mar2013_Layout 1 13-02-19 11:02 AM Page 1
TERMINALS & A NATIONAL FLEET
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VANCOUVER: Derwent Facility1188 Derwent Way, Annacis Island, Delta, BCT: (604) 216-6238 F: (604) 540-9774
KAMLOOPS: Kamloops Facility#4 – 453 W. Victoria St., Kamloops, BCT: (250) 828-2808 F: (250) 828-0024
CALGARY: Great Plains Facility5600–76TH Ave. SE, Calgary, ABT: (403) 216-2653 F: (403) 216-5600
EDMONTON: Northlands Facility12536 – 62 St., Edmonton, ABT: 780-477-4000 F: 780-474-4204
REGINA: Elliot Facility1575 Elliott St., Regina, SKT: (306) 352-9531 F: (306) 569-9731
SASKATOON: Patrick Facility2020 St. Patrick Ave., Saskatoon, SKT: (306) 652-9955 F: (306) 652-0469
WINNIPEG: Dawson Facility200 Dawson Rd. N, Winnipeg, MBT: (204) 233-0237 F: (204) 237-6650
TORONTO: Steeles Facility4545 Steeles Ave. W, Toronto, ONT: (416) 747-0091 F: (416) 748-8814
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Versacold_CTL_Mar2013_Layout 1 13-02-19 11:02 AM Page 1
30 www.ctl.ca30 ct&l march 2013
As the largest component of Canada’s food processing sector, Canadian meat packing and processing companies register annual sales surpassing $24 billion, exports exceeding $4.7
billion and direct employment of close to 70,000 people. “From the perspective of meat packers and processors, it is of
critical importance that the cold chain be maintained by ensuring meat products are kept at the appropriate temperature during transport, including through expeditious loading and unloading,” asserts Ron Davidson, director government and media relations at the Canadian Meat Council.
As well, both shippers and receivers need to be informed of deviations in temperature control when they occur, for example, as the result of equipment failure. And all federally-registered meat packers and processors must create and maintain Hazard Analysis Critical Control Point (HACCP) programs.
The meat industry is currently supporting the development of a national Certified Livestock Transport (CLT) Training Program, a comprehensive training course and support service on livestock handling, loading and biosecurity for livestock truckers, shippers and receivers.
For those transporting meat products to the US, operators must travel to one of the 10 “I-Houses” (United States Depart-ment of Agriculture Food Safety Inspection Service staffed inspec-tion facilities) after crossing the border and prior to proceeding to the receiving destination.
These meat re-inspections conducted at I-Houses usually break the cold chain, thereby impacting food safety and shelf life as well as impeding timely delivery to destination, noted Davidson.
So as part of the Beyond the Border Action Plan, the Canadian Food Inspection Agency (CFIA) is cooperating with the United States Department of Agriculture Food Safety and Inspection Ser-vice (FSIS) to plan and implement a pre-clearance initiative for meat for further processing.
“This initiative consists of a pilot project that will consider, first, alternative methods for reviewing import documents prior to the arrival of Canadian shipments at the US border and, second, alterna-tive methods for the release of shipments that are destined for fur-ther processing at a FSIS inspected establishment in the United States. While the primary outcome of this initiative will be enhanced food safety, it will have ancillary benefits for transporters,” he said.
The pilot project will begin with a small number of CFIA-regis-tered establishments that export fresh meat (beef and pork) prod-ucts directly to USDA FSIS-inspected establishments for further processing. The current import re-inspection process will not change for CFIA-registered establishments not participating in the program, said Davidson.
Some shipments of product from Canadian meat establish-ments participating in the pilot project will still be directed to stop at one of the official import inspection facilities (i.e., I-Houses)
Pre-clearance pilot for fresh meat products
could streamline transport, improve food safety
where samples of the meat will be collected for laboratory testing. Conversely, other shipments of product from establishments that participate in the pilot project, but are not pre-assigned to be sam-pled at the import establishment (i.e., I-House), will be cleared to continue directly to their FSIS-inspected destination establish-ment where physical examination of the shipment may occur.
“When the pilot project begins, it will be very important that truck operators be aware of whether they must stop at an I-House for re-inspection and product sampling or whether the shipment has been pre-cleared to continue directly to a FSIS-inspected US destination. The pilot project will not have a negative impact on food safety. Quite to the contrary, by eliminating the undesirable current requirement to open sealed refrigerated and freezer trucks en route, it will contribute to enhanced food safety and product freshness,” Davidson said.
In effect, the pilot project will simply transfer the point of USDA Food Safety and Inspection Service re-inspection from one of the 10 privately-owned I-Houses to a FSIS-inspected meat processing es-tablishment located elsewhere in the US, he explained. In addition to the upgrade in food safety, the change in location of FSIS re-in-spection will have ancillary benefits to transporters, including elim-inating the waste of valuable time, reducing environmental pollu-tion from fuel consumption, decreasing local traffic congestion and lessening truck wear and tear, all of which are augmented when trucks are diverted to an I-House and all of which will be mitigated when shipments destined for further processing proceed directly from the port of entry to the FSIS-inspected processing establish-ment.
If pilot projects such as this are successful at streamlining trans-port and ensuring safety in the food chain, it will be a positive for harmonization efforts, and perhaps a move away from regulations that act to impede rather than facilitate trade.
“In the past, trade with the US was the driver to implementing food safety. Now different players within the industry are asking more questions of their suppliers. It’s easier to respond now to emerging threats when you have a sound relationship. We’ve strug-gled for years to bring some consensus around traceability, standards and functions in the supply chain. We’ve hit a lot of roadblocks and this approach will force functions to really get along and to agree on what information should be flowing,” says Dr. Sylvain Charlebois, associate dean and professor in the College of Management and Economics at the University of Guelph. CT&L
logisticsfood
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There’s a gender divide in Canada’s supply chain manage-ment field; one that sees women’s salaries tending to lag behind men’s.
That’s the bad news – and, of course, it isn’t unique to the supply chain. The good news, according to Cheryl Paradowski, president and CEO of the Purchasing Management Association of Canada, is that the supply chain management field is actually more equitable to women than some other sectors.
Speaking to the Van Horne Institute’s “Engage! Women in Sup-ply Chain” conference at the University of Calgary’s downtown campus on Jan. 31 and Feb. 1, Paradowski outlined the results of an annual survey her organization conducts in conjunction with sister publications purchasingb2b and MM&D and, as of last year, CT&L. “We have some trends from at least as far back as 2008, so we can see how (things) are progressing in the sector,” she said, noting that one of the primary areas into which they look is wages, where “cur-rently the gap stands at just over $16,000 or about 17.7%.”
That’s a pretty significant chunk of change going unpaid, and according to Paradowski, that gap hasn’t changed significantly in the past few years. “Salaries have progressed for both (sexes),” she not-ed, “but the gap in 2008 was 17.2%, so while salaries have grown, they’ve grown by 11.2% for men and only 10.6% for women.”
Not only that, but the cash chasm – which doesn’t loom large when the worker is starting out – gets wider the longer women stay in the workplace. “The split starts to come after 15 years in the in-dustry and it gets even wider after 25 years or so,” Paradowski said.
As for the aforementioned good news, “When it comes to the gender gap, supply chain management doesn’t look so bad,” Parad-owski said, citing a 2010 report from The Globe and Mail, “because the overall gap across Canada in all sectors is 29.2%.”
Reasons for the disparity between the salaries of men and women include education, or lack thereof. “The gap is generally narrower the higher the level of a woman’s education,” Parad-owski said.
Another factor is biology. “Women have children,” Paradowski said, “and it’s not just the period of time we spend out of the work-force on maternity leaves; it also affects the kinds of career decisions we make because (women) are typically the ones who make the sacrifices for the balance of family.”
In other words, a woman may decide to only seek out posi-tions that don’t require travel – or 10- or 12-hour workdays – so she can be at home to look after the family. And that can affect their earning power. “These are realities,” Paradowski said, “but I think some of that is starting to shift and there’s a recognition that men are equally capable – as long as we remind them – of picking up the kids.”
Another fly in women’s ointment could be a reluctance to toot their own horns. “Whether it’s a lack of confidence or that we want to be sure we’re (qualified) 100% before we’re ready to go,” Parad-owski said, “there’s a feeling that that factor plays into things.”
Still, Paradowski said, there are good demographic reasons that point to a turning of the tide for women’s fortunes. “We are in a
The gender wage gap is
still wide in supply chain,
but opportunities for
change are coming
B y J i m B r a y
the
resourceshuman
the the gendergenderGAP
33ct&l march 2013www.ctl.ca
period of time within supply chain management that presents a number of opportunities,” she said, “and now’s the time to be think-ing about how we capitalize on them.”
Citing figures from the Canadian Supply Chain Sector Council, Paradowski said there are approximately 767,000 positions in sup-ply chain-related fields today – everything from forklift drivers up to the chief procurement officer – 39% of which are female. And, as with other industries, there’s a crunch coming that’s going to open lots of doors in the not-too-distant future.
“The alarm was sounded on this about five years ago because we have the pending baby boomers who are going to be retiring,” Para-dowski noted. “It’s a huge demographic fact of life anywhere in the developed world.” Alas, the fiscal meltdown of 2008 delayed many of those retirements as many nest eggs turned out to not be what they were cracked up to be – meaning many of these retiree wan-nabes discovered, to their chagrin, that they would have to stay in the workforce slightly longer.
All this did was delay the problem, however. “It has not made it go away and we’re still going to have to deal with it over the next few years,” she said.
And since many of the individuals leaving the workforce are senior manag-ers, Paradowski said, “that represents a significant challenge for businesses right across the country, because there’s a sig-nificant knowledge component within that group of individuals.” Paradowski thinks that’s actually good news for women, however. “As far as I’m con-cerned, it’s a huge opportunity for wom-en to start to change that differential in terms of management positions that are available,” she said.
How many jobs are there going to be? Paradowski said the CSCSC estimates there will be 66,000 positions that will have to be filled every year for the next five years, so there should be plenty of room for new faces.
“There’s going to need to be a focus on skills development and training to move people into those roles,” Paradowski said, “because they aren’t going to be available organi-cally. And we face a significant challenge in supply chain because it’s not a very visible profession – it’s a behind-the-scenes type of occupation. But it’s an emerging and evolving field of practice, so we are very pleased to start to see its growth in the post-secondary community, and as businesses recognize its importance, it is going to become more visible.”
On the other hand, “It makes current recruitment more of a challenge because you’re trying to get people to understand what the field of practice is about,” Paradowski said. “One of the reasons we either lose people with potential or have trouble attracting them is because we don’t do a very good job at being able to define and excite people about the career opportunities they have available and I think that, particularly for women, this could be a big part of the puzzle.”
Paradowski also thinks women in the industry need to stay ahead of the curve and acquire “either the skills, the knowledge or the experience they need to aspire to those positions, and to give them that confidence, too, if that’s one of the barriers.”
Supply chain careers can also be attractive to women because the field is seen as allowing for some flexibility, some work/life bal-ance, Paradowski said. “Bigger organizations are investing heavily in it and creating opportunities where there is some job security,” she said, “and the more we become tech savvy, there’s the ability to work from home, or work remotely. The range of opportunities re-ally continues to be one of the attractions and something for us to highlight when we’re looking to recruit anybody into roles, but, in particular, for moving women forward in the field.”
As for what can be done to take the message of SCM’s potential to people who may not have considered it as a career path, Parad-
owski said “we’re going to continue to highlight those survey results because if people don’t know those numbers are out there, the actions aren’t going to happen to make them change.
“I think we need to equip the women in supply chain with the documentation that those (gender) gaps are there and to start asking why when we have equiva-lent competencies to bring to the table.”
Paradowski encourages women to pursue a professional designation, or any other professional development, as a way to enhance their career paths. “This is where women who are currently in man-agerial positions have the opportunity to provide that mentoring. We are growing in terms of the educational opportunities that are available in this profession. I think such credentials are a good way to build credibility and confidence.”
As for networking and “horn-tooting” opportunities, Paradowski said “that’s the other way for women to be able to get ahead – to move their way into the ‘old boy’ network and start to find out who the players are in the industry, what op-
portunities there are.” She suggests women go to some networking breakfast and/or dinner meetings or other professional development events as a way to make important connections.
But there’s more to it than just meeting the movers and shakers who can help women advance; it’s also about learning. “It gives you access to a network of individuals who may be dealing with the same challenges that you are,” Paradowski pointed out. “If you are able to tap them for the solutions you become the hero in your or-ganization for bringing that solution forward and that’s certainly a way to be noticed and to be promoted.”
Which, of course, is good advice for any worker, regardless of gender. CT&L
Jim Bray is a regular contributor to CT&L and western editor of sister publication Truck West.
“The split starts to come after 15 years in the industry and it gets even wider after
25 years or so.”
– Cheryl Paradowski, president and CEO,
Purchasing Management Association of Canada
resourceshumanFor more on the wage gap issue, read Carolina Billings' blog "The Dollar Divide, Indeed" at blog.ctl.ca.
34 ct&l march 2013 www.ctl.ca
dash board
TransCore’s Canadian Freight Index starts 2013 with record resultsTransCore’s Link Logistics Canadian Freight Index recorded the highest spot market load volumes for January, surpassing the record set for the month in January 2011 by 3%. January’s load volumes increased 25% from December and year-over-year vol-umes increased by 4% from January 2012.
Equipment postings increased 17% from the previous month’s levels and increased 13% from January 2012.
Intra-Canada loads represented 24% of the total load vol-umes. Top regions for loads within Canada by region of origin were Western (50%), Ontario (29%), Quebec (16%), and Atlantic (5%).
Cross-border postings represented 71% of the overall load postings. Top regions for loads into Canada by region of destina-tion were Ontario (58%), Western (20%), Quebec (20%), and Atlantic (2%).
Equipment postings also started the year with positive in-creases. January’s postings increased 17% from the previous month and 13% from January 2012.
The first six columns include monthly index values for years 2008 through 2013. The seventh column indicates the percent-age change from 2012 to 2013. The last column indicates the percentage change from the previous month to the current month. For the purpose of establishing a baseline for the index, January 2002 (index value of 100) has been used.
Fuel, freight costs decrease for Canadian shippersThe total cost of ground transportation for Canadian shippers declined by 0.86% in November when compared with October, results published by the Canadian General Freight Index (CGFI) indicate.
The Base Rate Index, which excludes the impact of accesso-rial charges assessed by carriers, decreased by 1.2% when com-pared to October. Average fuel surcharges assessed by carriers have seen a decrease from 21.27% of base rates in October to 20.4% in November. This is the first decrease in fuel since July.
“Total costs for domestic LTL and truckload continued their increase again this month, while cross border LTL and truckload costs continue to decline,” said Doug Payne, president and COO of Nulogx. “Accessorial charges rose marginally after three months of steady costs.”
The CGFI is sponsored by Nulogx, a transportation manage-ment solutions provider, and is used by shippers and carriers to benchmark performance, develop business plans, and secure competitive agreements. It was developed with the assistance of Dr. Alan Saipe. The most recent results are available at the CGFI Web site, www.cgfi.ca.
International shipments help maintainCanadian rail freight increasesCanadian railways carried 27.4 million tonnes of freight in November, a 0.8% rise from November 2011 and the third consecutive year-over-year increase for the month. The gain occurred almost entirely on the strength of international rail traffic shipments.
Within Canada, combined loadings of intermodal traffic (i.e., freight moved via containers and trailers on flat cars) and non-intermodal traffic (i.e., freight moved via box cars or loaded in bulk) decreased 0.4% to 24.2 million tonnes. The drop in domestic loadings was the result of reduced loadings of non-intermodal traffic, which offset the gains in in-termodal traffic.
Domestic intermodal freight loadings rose 4.2% to 2.5 million tonnes, solely attributed to increased loadings of freight in containers as freight moved via trailers on flat cars dropped.
Domestic non-intermodal freight loadings decreased 0.9% to 21.7 million tonnes. Loadings declined in 33 of the 64 commodity groups, led by iron ores and concentrates, potash, wheat and colza seeds (canola). The decline was partially offset by gains in a number of commodity groups, most notably, fuel oils and crude petroleum.
The western division accounted for 57.7% of the domestic freight
2008 2009 2010 2011 2012 2013 % % Change Change
Y-O-Y M-O-M
Jan 214 140 171 222 220 228 4% 25%
Feb 217 117 182 248 222
Mar 264 131 249 337 276
Apr 296 142 261 300 266
May 316 164 283 307 301
Jun 307 185 294 315 295
Jul 264 156 238 245 233
Aug 219 160 240 270 235
Sep 203 180 234 263 200
Oct 186 168 211 251 215
Nov 143 157 215 252 215
Dec 139 168 225 217 182
TransCoreCanadianSpotMarketFreightIndex2008-2013
316 164 283 307 301 316 164 283 307 301 316 164 283 307 301 316 164 283 307 301 316 164 283 307 301 316 164 283 307 301 316 164 283 307 301 316 164 283 307 301 316 164 283 307 301 316 164 283 307 301 316 164 283 307 301 316 164 283 307 301 May 316 164 283 307 301 May 316 164 283 307 301 May
307 185 294 315 295 307 185 294 315 295 307 185 294 315 295 307 185 294 315 295 307 185 294 315 295 307 185 294 315 295 307 185 294 315 295 307 185 294 315 295 307 185 294 315 295 307 185 294 315 295 307 185 294 315 295 307 185 294 315 295 Jun 307 185 294 315 295
264 156 238 245 233 264 156 238 245 233 264 156 238 245 233 264 156 238 245 233 264 156 238 245 233 264 156 238 245 233 264 156 238 245 233 264 156 238 245 233 264 156 238 245 233 264 156 238 245 233 264 156 238 245 233 264 156 238 245 233 Jul 264 156 238 245 233
219 160 240 270 235 219 160 240 270 235 219 160 240 270 235 219 160 240 270 235 219 160 240 270 235 219 160 240 270 235 219 160 240 270 235 219 160 240 270 235 219 160 240 270 235 219 160 240 270 235 219 160 240 270 235 219 160 240 270 235 Aug 219 160 240 270 235
203 180 234 263 200 203 180 234 263 200 203 180 234 263 200 203 180 234 263 200 203 180 234 263 200 203 180 234 263 200 203 180 234 263 200 203 180 234 263 200 203 180 234 263 200 203 180 234 263 200 203 180 234 263 200 203 180 234 263 200 Sep 203 180 234 263 200
186 168 211 251 215 186 168 211 251 215 186 168 211 251 215 186 168 211 251 215 186 168 211 251 215 186 168 211 251 215 186 168 211 251 215 186 168 211 251 215 186 168 211 251 215 186 168 211 251 215 186 168 211 251 215 186 168 211 251 215 Oct 186 168 211 251 215 Oct 186 168 211 251 215 Oct
143 157 215 252 215 143 157 215 252 215 143 157 215 252 215 143 157 215 252 215 143 157 215 252 215 143 157 215 252 215 143 157 215 252 215 143 157 215 252 215 143 157 215 252 215 143 157 215 252 215 143 157 215 252 215 143 157 215 252 215 Nov 143 157 215 252 215 Nov 143 157 215 252 215 Nov
139 168 225 217 182 139 168 225 217 182 139 168 225 217 182 139 168 225 217 182 139 168 225 217 182 139 168 225 217 182 139 168 225 217 182 139 168 225 217 182 139 168 225 217 182 139 168 225 217 182 139 168 225 217 182 139 168 225 217 182 Dec 139 168 225 217 182
TransCore Canadian Spot Market Freight Index 2008-2013
Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
Change Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
Change Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
Change Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
TransCore
Change Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
Change Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
Canadian
Change Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
Change Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
Canadian Spot
Change Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
Change Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
Market
Change Y-O-Y
316 164 283 307 301
307 185 294 315 295
264 156 238 245 233
219 160 240 270 235
203 180 234 263 200
186 168 211 251 215
143 157 215 252 215
139 168 225 217 182
TransCoreCanadianSpotMarketFreightIndex2008-2013
Change Y-O-Y
143 157 215 252 215
139 168 225 217 182
Freight Index
Change Y-O-Y
143 157 215 252 215
139 168 225 217 182
2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % % 2008 2009 2010 2011 2012 2013 % %
4% 25%4% 25%4% 25%Jan 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 214 140 171 222 220 228 4% 25%
Feb 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222 217 117 182 248 222
Mar 264 131 249 337 276 Mar 264 131 249 337 276 Mar 264 131 249 337 276 264 131 249 337 276 264 131 249 337 276 264 131 249 337 276 264 131 249 337 276 264 131 249 337 276 264 131 249 337 276 264 131 249 337 276 264 131 249 337 276 264 131 249 337 276 264 131 249 337 276 264 131 249 337 276
Apr 296 142 261 300 266 Apr 296 142 261 300 266 Apr 296 142 261 300 266 296 142 261 300 266 296 142 261 300 266 296 142 261 300 266 296 142 261 300 266 296 142 261 300 266 296 142 261 300 266 296 142 261 300 266 296 142 261 300 266 296 142 261 300 266 296 142 261 300 266 296 142 261 300 266
ChangeM-O-M
2008-2013
2008 2009 2010 2011 2012 2013 % %
4% 25%
2008 2009 2010 2011 2012 2013 % %
4% 25%
35ct&l march 2013www.ctl.ca
loadings, virtually unchanged from the same month in 2011. The remainder was loaded in the Eastern Division. For statistical pur-poses, cargo loadings from Thunder Bay, Ont., to the Pacific Coast are classified to the Western Division while loadings from Armstrong, Ont., to the Atlantic Coast are classified to the Eastern Division.
Freight traffic received from US connec-tions advanced 10.9% to 3.2 million tonnes, driven by increases in both non-intermodal and intermodal traffic movements.
US truck tonnage robust in January: ATAUS for-hire truck tonnage surged 2.9% in January, following up a strong 2.4% gain in December, according to the American Trucking Associations.
December’s gain was revised down from the originally report-ed 2.8%. Still, tonnage has now increased at least 2.4% every month since November, gaining a total of 9.1% over that time, the ATA reports.
The seasonally-adjusted for-hire truck tonnage index was up 6.5% year-over-year in January, marking the best y-o-y gain since December 2011. In fact, January’s index was the highest on record, the ATA reported.
“The trucking industry started 2013 with a bang, reflected in the best January tonnage report in five years,” ATA chief economist Bob Costello said. “While I believe that the overall economy will be slug-gish in the first quarter, trucking likely benefited in January from an inventory destocking that transpired late last year, thus boosting vol-umes more than normal early this year as businesses replenish those lean inventories.”
RBC PMI signals only slight growth of output, new orders in January The RBC Canadian Manufacturing Purchasing Managers’ Index pointed to only marginal increases in both output and new orders in January; however, this marks the first rise in production levels since last October. A monthly survey, conducted in association with Markit, a global financial information services company, and the Purchasing Management Association of Canada (PMAC), the RBC PMI offers a comprehensive and early indicator of trends in the Canadian manufacturing sector.
The headline RBC PMI – a composite indicator designed to pro-vide a single-figure snapshot of the health of the manufacturing sector – signalled only a marginal improvement in Canadian manu-facturing business conditions in January. At 50.5, the RBC PMI was only slightly higher than the survey-low of 50.4 recorded in both
November and December. The RBC PMI found that output increased for the first time in
three months in January, albeit only slightly, but new order growth slowed since December and was only marginal. The rate of job cre-ation also weakened, easing to a 12-month low, while the rate of input price inflation strengthened to its fastest since last September.
“The Canadian manufacturing sector experienced a relatively lacklustre start to the New Year amid ongoing global economic uncertainty,” said Craig Wright, senior vice-president and chief economist at RBC. “As some of the more extreme downside risk scenarios look less likely now, we should see confidence in the global economy improve, paving the way for a stronger recovery in Canadian manufacturing.”
In addition to the headline RBC PMI, the survey also tracks changes in output, new orders, employment, inventories, prices and supplier delivery times.
Although the volume of new orders received by Canadian manu-facturers rose further in January, with one in four panellists reporting an increase since December, the rate of growth was only marginal. Firms generally cited weak client demand. New export orders, mean-while, were broadly unchanged in the latest survey period, but this was nonetheless an improvement from the declines recorded in the previous two months.
After having fallen for two consecutive months, manufacturing production increased in January. However, output growth was only slight. Meanwhile, stocks of finished goods decreased at the sharpest rate since last July, and backlogs of work fell solidly and for the fourth month running.
Reflective of higher output requirements, the quantity of inputs bought by manufacturers increased in January. Purchasing activity rose modestly, but growth remained weaker than the series average. Input inventories, meanwhile, fell for the third consecutive month and at the strongest rate in a year.
The intellectual property rights to the RBC Canadian Manufacturing PMI provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content of information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers’ Index™ and PMI™ are trade marks of Markit Economics Limited, RBC use the above marks under licence.
50 = no change from previous monthSource: RBC, Markit
2010 2011 2012
RBC Canadian Manufacturing PMI™Canada's manufacturing sector registers marginal improvement in January
48.0
49.0
50.0
51.0
52.0
53.0
54.0
55.0
56.0
57.0
58.0
Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan
HIGH: 56.9
LOW: 50.4
2013
36 ct&l march 2013 www.ctl.ca36
inside the numbers Who are you reaching out to?
Coming to your rescue. It’s what we do best.
No other Canadian carrier has the resources we do on both sides of the border. We enlist the people, technology and processes to speed things up, not slow them down.
We take a proactive approach to enhancing the efficiency of your supply chain on both a day to day basis and when you need action now. Who are you reaching out to? Take another look at Vitran!
TF : 1.800.263.0791 E : [email protected]
INFLUENCE AT EXECUTIVE LEVEL
Male Female At C-level 6% 1% Have influence at C-level 43% 35%
Would like to have influence at C-level 26% 29%
Don’t need to have influence at C-level 21% 28%
Salary gap
TOTAL RESPONDENTS $16,148
Agriculture, forestry, other natural resources $12,149
Mining, quarrying $13,962
Oil and gas extraction $24,700
Utilities $9,611
Construction $20,210
Manufacturing $15,587
Wholesale trade $23,229
Retail trade $14,771
Transportation and warehousing $33,281
Educational services $7,845
Healthcare and social services $3,996
Public administration $11,160
SALARY GAP FOR CANADIAN FEMALE SUPPLY CHAIN PROFESSIONALS BY SECTOR
THE DOLLAR DIVIDEHowmuchlesswomenmakeandwhy
Canada’s supply chain sector encompasses more than 738,000 workers, according to research published by the Canadian Supply Chain Sector Council, and 39% of those are women. With the sector facing a shortage of skilled employees, is it doing enough to retain its female employees and entice more women into supply chain positions? Examining the gender gap in pay evident in our Survey of the Canadian Supply Chain Professional, it would seem there is considerable work to be done. Canada overall does not have a great record on the gender gap pay issue, ranking 20th in the world with a gap of 29.2%. The gender gap is not as large in the supply chain sector, our survey, sponsored by the Purchasing Management Association of Canada, shows. But, as of last year, there was still an almost 18% difference in the average salary between males and females, amounting to $16,148. Also of concern is that the gap has widened since the recession, with male supply chain professionals outpacing their female counterparts in the salary increases they’ve received since 2008 and that the gap gets wider the longer women remain in the workforce. As our statistics above show, what starts out as a mere $437 gap at the start of their careers grows into a significant $19,385 gap after 26 years on the job. There are influences, however, that need to be taken into consideration. More men tend to either be in executive roles or have influence at the C-level, which has an impact on pay. Level of education is another consideration – the gap is generally narrower the higher the level of a woman’s education. Industry sector is also a factor, with wages tending to be closer in sectors such as social sciences, education, and government services.
AVERAGE GROSS SALARY BY GENDER 2008 VS 2012
Males Females
2008 average salary $81,962 $67,814
2012 average salary $91,181 $75,033
AVERAGE GROSS SALARY BY GENDER AND YEARS OF EXPERIENCE
Males Females
Starting out $56,127 $55,690
15 years $83,614 $69,905
26+ years $107,737 $88,352
For more on the wage gap issue, read Carolina Billings’ blog “The Dollar Divide, Indeed” at blog.ctl.ca.
Who are you reaching out to?
Coming to your rescue. It’s what we do best.
No other Canadian carrier has the resources we do on both sides of the border. We enlist the people, technology and processes to speed things up, not slow them down.
We take a proactive approach to enhancing the efficiency of your supply chain on both a day to day basis and when you need action now. Who are you reaching out to? Take another look at Vitran!
TF : 1.800.263.0791 E : [email protected]
38 ct&l march 2013 www.ctl.ca
the bigger picture
One of the trends for 2013 will be the require-ment for transportation professionals to ramp up their efforts at risk management.
In recent years, we have seen a range of weather-related natural disasters. Of course, disruptions to sup-ply chains can come from other sources such as terror-ism, wars, accidents, the failure of various operating systems such as telephone and computer systems, qual-ity control problems, and export restrictions. To make matters worse, most of these disruptions are unpredict-able in timing and scope.
Supply chain risks can be categorized into five groups: operational, social, natural, economy and po-litical/legal. Each shipper has to make an assessment of the potential risks to their supply chains. Supply chain risk management can be defined as attempts to identify risks and quantify their commercial financial exposures as well as mitigate potential disruptions at each node and lane in the supply chain.
Supply chain risk models can vary from the rudi-mentary to the sophisticated. In the case of the latter, complex “what if” analyses can be performed. These allow shippers to identify potential trouble spots and map out alternative supply chain strategies. Historically, shippers have tended to focus on factors with the big-gest impact on their supply chain, such as on-time per-formance, supplier lead time variability and carriers by origin or trade lane.
Based on the escalation of various risks in recent years, there is a need to take risk management to another level. Shippers need to perform a probabil-ity analysis on the impacts of each potential disrup-tion, with a particular focus on alternative vendors, manufacturing facilities, modes, carriers, origin points, ports, border crossings, distribution facilities and destination ports.
In 2013, there will be some major (predictable) risks that could drive up supply chain and transportation costs. These include the result of the ongoing debt dis-cussions in the US, the impact on fuel costs if there is more violence in the Middle East, a driver shortage if
the economy rebounds faster than expected, the reces-sion in Europe, and other weather-related problems. In Canada, there is a risk of a housing bubble, which would have a major impact on its economy.
Each company needs to assess the potential risks for each of the five elements outlined above. As a mini-mum, shippers should be evaluating alternate modes and carriers to make sure they have a range of quality options in place. It makes good business sense to seek out alternate sources of supply, near-sourcing oppor-tunities in Mexico or Latin America, back-up com-puter systems and expanding the range of carriers in your routing guide. Motor carriers and logistics com-panies should have plans in place if a freight terminal or computer system goes down. In addition, each of these options should be tested under real-world cir-cumstances with actual freight to see if they are viable and dependable in a time of need. CT&L
To learn more about this topic, I would suggest
looking online for some good articles recently pub-
lished by Adrian Gonzalez and Tim Cummins. Go to:
http://contract-matters.com/2013/01/03/tackling-
supply-chain-risk.
Yossi Sheffi’s “The Resilient Enterprise” and
“Supply Chain Risk Management: A Compilation of
Best Practices” published by the Supply Chain Risk
Leadership Council are also worth reading.
What is your company doing in the area of Risk
Management? Please share some of your practices
and procedures with readers of my blog on www.
ctl.ca. And if you’re interested in improving the
performance of your supply chain, join the Freight
Management Best Practices Group on LinkedIn.
planning for the worstMoving goods around the world can be a risky business.
Is your risk management plan up to the task?
Dan Goodwill, president of Dan Goodwill and Associateshas more than 20 years
of experience in
the logistics and
transportation industries in
both Canada and the US.
He has held executive
level positions in the
industry, including
president of Yellow
Transportation’s Canada
division, president of
Clarke Logistics, general
manager of the Railfast
division of TNT, and
vice-president of sales
and marketing at TNT
Overland Express.
Goodwill is currently
a consultant to
manufacturers and
distributors, helping
them improve their
transportation processes
and save millions of
dollars in freight spend.
He can be reached at
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RSC-Rowing Ad CT&L_JanFeb_2013_RTR-104 Skate-Tractor Ad-DCV 1/15/13 1:52 PM Page 1
SUPPLY CHAIN • DISTRIBUTION • TRANSPORTATION • CONTROL TOWER
1-888-887-9337 www.ryderscs.com
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Empower People.
Simplify Every Process.
Reject Complacency.
Raise The Bar.
Create Consistent Flow.
Do It Again.
Set The Pace.
Prevent Errors.
RSC-Rowing Ad CT&L_JanFeb_2013_RTR-104 Skate-Tractor Ad-DCV 1/15/13 1:52 PM Page 1
R7
Ad Number: FDX_COR_P127134Publication(s): Canadian Transportation & Logistics
This ad prepared by: SGL Communications • 2 Bloor St. West, Toronto, Ontario • phone 416.413.7495 • fax 416.944.7883 File Location: SGL_A-M:Volumes:SGL_A-M:FedEx-SFX:P12713 FedEx freight ANT:FDX_COR_P127134.indd
JOB SPECIFICS
Client: FedEx FreightCreative Name: Extra Set of ArmsAgency Docket #: FDX COR P29435Main Docket #: SFX COR P29435Art Director: NoneCopy Writer: NonePrint Production: Kay IzzardRetoucher: Jano Kirijian / JeffLive: 7” x 10”Trim: 8.125” x 10.875”Bleed: 8.375” x 11.125”Artwork Scale: 1:1Print Scale: 100%
FILE SPECIFICATIONS:
File Name: FDX_COR_P127134.inddCreation Date: 12-21-2012 10:23 AMLast Modified: 1-15-2013 3:21 PMWorkstation: T11-0082InDesign Version: CS4 App. Version: 6.0.6Round #: 1 Page Count: 1GRAPHIC PRODUCTION:
Operator: Matt EvesCorrection: None
SIGNOFFS:
Creative:
Production:
Premedia:
Proofreading:
Account:
Client:
PREMEDIA OPERATOR:
Operator: SQ
INKS:
Cyan
MAGENTA
YELLOW
BLACK
FONTS & PLACED IMAGES
Family Style
Univers 67 Bold Condensed, 57 Condensed
File Name Colour Space Eff. Res (PPI)
FedEx_Freight_Preferred_Two_Color_Positive_Four_Color.epsAnt_Carton_r2.psd CMYK 340 ppi
This proof was produced by the following department:
PREPRESS
S:7”S:10”
T:8.125”T:10.875”
B:8.375”B
:11.125”
FedEx. Solutions That Matter.™
The new FedEx Freight® direct servicecentre in Vancouver is like having anextra set of arms.FedEx® is proud to announce we just opened a direct service shipping centre in Vancouver. Shipping LTL freight within Canada and to the U.S. just got easier.
Visit fedex.ca/LTL or call 1.800.GoFedEx 1.800.463.3339 today.
FED EX AD.indd 1 13-02-27 9:49 AM
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