adding it up - canadian shipper...jan 01, 2017 · last year, montreal’s container cargo broke...

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Adding it Up

2017 SURVEY OF THE LOGISTICS

PROFESSIONAL

HEALTHCARE LOGISTICSSymptoms and Cures

SUPPLY CHAIN FINANCEFactoring in reverse

JANUARY/FEBRUARY 2017

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www.canadianshipper.comJanuary/February 20173

CONTENTS

JANUARY/FEBRUARY 2017

COVER STORY

10

©St

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nd/i

Stoc

kFEATURES

HEALTHCARE LOGISTICS | 21 The pain points and top priorities for the healthcare supply chain.

GROWTH ENGINES | 23Pharmaceuticals are a growing market but one full of challenges for operators.

SUPPLY CHAIN FINANCE | 29New tools for trade promise balance sheet relief.

REQUEST FOR PROPOSALS | 31The best advice to make RFPs work for you.

ANNUAL SURVEY OF THE LOGISTICS

PROFESSIONALSalaries, budgets,

positions, locations

26

DEPARTMENTS

5 | Editor’s ForwardOf New Year’s resolutions that ring true to self.

6 | In the NewsMore container capacity for Montreal.

34 | RetrospectiveApproaching transportation management in 2017.

35 | Coaching CornerThe entrepreneurial spirit- what it takes.

36 | Inside the NumbersSalient stats on Canada’s transportation industry.

37 | The Bigger Picture2017 and stepping stones to great change.

AFRICAN TRADE

As an emerging continent, Africa boasts and young

demographic and urban growth. How can exporters make

their mark? 21

Saposi

http://www.canadianshipper.comJanuary/February














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EDITORJulia Kuzeljevich (416) 510-6880

[email protected]

RESEARCH DIRECTORLou Smyrlis

[email protected]

ART DIRECTOREllie Robinson

[email protected]

CONTRIBUTING EDITORSCarroll McCormick, Leo Ryan, James Menzies, John G. Smith,

Ian Putzger, Ken Mark.

MARKET PRODUCTION MANAGERKimberly Collins (416) 510-6779

[email protected]

VIDEO PRODUCTION MANAGERBrad Ling

CIRCULATION MANAGERMary Garufi (416) 614-5831

[email protected]

PUBLISHERNick Krukowski (416) 510-5108

[email protected]

PRESIDENTJoe Glionna

CHAIRMAN & FOUNDERJim Glionna

VICE-PRESIDENT, OPERATIONSMelissa Summerfield

HEAD OFFICE: 80 Valleybrook Drive, Toronto, ON M3B 2S9

Canadian Shipper is written for Canadian transportation and logistics professionals who manage product flow from manufacturer to point-of- sale. Edit orial is focused on re porting, analysis and interpretation of Can adian log-istics trends and issues. It is published by NEWCOM BUSI-NESS MEDIA INC.

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Tel: (416) 614-5831 Fax: (416) 614-8861

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MEMBER CANADIAN BUSINESS PRESS

N ew Year’s is the time for setting resolutions. Some may scoff at this, saying they

have no need for a once-yearly soul search, but introspection has its place at least

once a year, if not more often.

And introspection can lead to new paths.

I read an interesting Schumpeter blog in The Economist recently that discussed the

topic of introversion.

Introversion is one of my favourite topics for introspection, as I consider myself intro-

verted and for much of my life it was considered a handicap.

Psychometric tests such as Myers-Brigg Type Indicator show that introverts make up be-

tween a third and a half of the population. But, the column suggests, the corporate approach to

introverts has been getting worse, favouring more open plan offices and “group work”. Where-

as extroverts “gain energy from other people, introverts need time on their own to recharge.”

Also, many companies identify leadership skills with extroversion, and projection of the “ego”,

but those who put their company’s interests before their ego may actually be better leaders.

I was amazed by the column’s revelation that Canadian National Railway’s former CEO

Claude Mongeau apparently set himself the goal of acting like an extrovert five times a day.

So introverts who make it to the top have usually learned how to behave like extroverts at

least some of the time, the column suggests.

Certainly, we live in a world where we cannot hide under rocks, and must interact with

the human race.

Good social, interpersonal skills are some of the most highly valued “soft skills” amongst

employers today. But as an introvert who has painfully honed these skills over time I can

say with some boastfulness that in learning to ask people all about themselves (so that they

do all the talking), I remember many facts about people that I can repeat back to them

later, sometimes much to their surprise.

In contrast I can’t always say that many of the extroverts I’ve spoken to have remem-

bered very much at all about the conversation.

But for many introverts who successfully develop these skills, there needs to be a “re-

charge, reset” button that allows them to retreat from too much exposure to people and

conversation.

North America is the wrong place for introverts, because Western culture tends to value

the extrovert and tends to see quiet as dumb, suspect, invisible.

And yet in certain cultures, specifically in the East, the quiet consideration of facts, the

serious demeanour, are revered and respected.

In Susan Cain’s “Quiet: The Power of Introverts in a World that Can’t Stop Talking”, she

notes that many executives are introverts who, in their roles, show strength through their

ability to take the time to consider all facets of an argument, to debate it more diplomati-

cally than those who may enrage and engage too much.

The Schumpeter blog notes that at Amazon, meetings have been overhauled to make

them more focused. Meetings begin silently, and no one may speak before reading a six-

page memo on the subject of the meeting.

Whether you are an extrovert-introvert, who is well able to be the life of the party, to

engage many people in conversation, but who needs to relax and recharge away from this,

or someone who comes alive through more exposure to people, the more aware you are of

what drains you or feeds you, the more you play to your strengths.

In terms of introspection, and resolutions for the year ahead, beyond weight loss, be-

yond 10k goals, I think that goals aligned with who we truly are, and where we are at our

best, make the most sense.

Happy 2017!CS

January/February 2017Volume 120 Issue No.1

EDITOR'S FORWARDJulia Kuzeljevich

To thine own self be true

©iStock


mailto:[email protected]







IN THE NEWS

6January/February 2017www.canadianshipper.com

continued

A new terminal in the sector of the Port of

Montreal inaugurated November 18

boosts the port’s handling capacity by

350,000 TEUs. Canada’s second largest

port after Vancouver is positioning itself

for increased global trade, with North At-

lantic shipments a prime target amidst

strong competition from the Port of New

York/New Jersey in particular.

Termont Montreal Inc., the terminal

operator, is part of Logistec Corporation’s

extensive network on the East Coast of

North America.

“The new Viau terminal will have a

considerable impact,” said Sylvie Vachon,

President and CEO of the Montreal Port

Authority. “Ultimately, it will increase the

Port of Montreal’s handling capacity to

2.1 million TEUs and generate significant

benefits for the region, province and

country as whole with annual spinoffs of

New Montreal container terminal boosts capacity By Leo Ryan

The new Viau terminal will boost port handling capacity by 350,000 TEUs.

The new terminal was inaugurated November 18.



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$340 million and the creation of 2,500 di-

rect and indirect jobs.

“The success of this project is the re-

sult of a significant collaboration between

public and private organizations, includ-

ing Termont Montreal Inc. and Mediter-

ranean Shipping Company S.A. Moreover,

the work was carried out with concern for

communities and the environment.”

Taking part in the ribbon-cutting cer-

emony were Vachon, Laurent Lessard,

Quebec Minister of Transport, Jean

D’Amour, Quebec Minister of Maritime

Affairs, Marc Garneau, federal Minister of

Transport, Madeleine Paquin, President

of Termont Montreal, and Sakat Shaikh,

President and CEO of MSC Canada.

The new terminal, together with the

work done previously and the second

phase of work to be completed in the years

to come, will bring the total handling ca-

pacity in the Viau sector to 600 000 TEUs,

IN THE NEWS


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The new Viau terminal at the Port of Montreal.



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thereby bringing Montreal’s overall han-

dling capacity to 2.1 million TEUs.

Last year, Montreal’s container cargo

broke another record, rising 4% to nearly

1.5 million TEUs.

The construction of the new terminal

is part of a broader port capacity optimi-

zation project covering three essential

areas: the terminal’s container-handling

capacity, marine access and road access.

The Port of Montreal must be active on all

three fronts to establish the right balance

between facilitating traffic and ensuring

that activities continue to run smoothly,

noted a press release.

The federal government is contribut-

ing a third of the eligible funding for all

three project components to a maximum

of $43.6 million under the National Infra-

structure Component of the New Build-

ing Canada Fund. Of this amount, up to

$27.2 million is available to fund the new

container terminal. The remainder of the

funding will be attributed to the project’s

other two components.

“The Government of Canada recog-

nizes that port infrastructure plays a key

role in supporting economic growth,” said

Transport Minister Marc Garneau. “In ad-

dition to making the Port of Montreal

considerably more competitive, produc-

tive and effective, this project will also

help to support economic growth for Ca-

nadians in the years to come.” CS

IN THE NEWS


Earning the CCLP® designation is easily the single best thing you can do to boost your career prospects. It can set you up for better pay, more advancement opportunities, and a range of management pathways and options across the sector. Plus, you’ll develop and demonstrate cross-functional capabilities that can deliver better business results—and more personal job protection. Depending on your background, your CCLP designation

www.citt.ca/cclp 416.363.5696

What’s the most rewarding career decision you’ll ever make?

Your best choice for complete career-long

in supply chain logistics

®CCLP

Leo Ryan is a veteran journalist who

has reported on key transportation and

trade developments in Canada for more

than two decades. A former Montreal

bureau chief for The Journal of

Commerce, he specializes in port and

shipping issues and was awarded the Medal of Merit in

1992 by the then Canadian Port and Harbour Association.

“The Government of Canada recognizes that port infrastructure

plays a key role in supporting economic growth. In addition to

making the Port of Montreal considerably more competitive,

productive and effective, this project will also help to support

economic growth for Canadians in the years to come.”Marc Garneau, Transport Minister

http://www.citt.ca/cclp


Results are in for our annual Survey of

the Canadian Supply Chain Profession-

al, and as usual they shed some inter-

esting light on the state of compensa-

tion and satisfaction in the industry. Of

the 701 supply chain professionals included in our

sample, 46% defined themselves as being in the

managerial ranks of their organizations and 66%

said they were in transportation. Of the respon-

dents, 59% indicated they manage at least one em-

ployee. The vast majority of respondents (56%) were

over 35 years of age with the mean age being 45.

59% of respondents hold an undergraduate degree

at either the University or college level. Respon-

dents performed a variety of functions ranging

from transportation (66%) and purchasing (51%) to

training and development (50%) and warehousing

(45%). The majority of respondents who are Cana-

SALLARYY SUURVVVEYYY


2017 SURVEY OF THE LOGISTICS

PROFESSIONAL

©iStock

ADDINGIT UP


Survey Average

2.0% or less 45%

2.1% to 4.0% 37%

4.1% to 6.0% 8%

6.1% to 10.0% 3%

10.1% or greater 5%

Size of increase


SSALLARRYY SSUURRVVEEYY

Survey Average

Increased 57%

Remained the same 42%

Base salary increases

RYY SSUURRVVEY

Approximate size of company’s annual transportation/warehousing/logistics budget

$100,000 or less

11%

Over $1 million to $5 million

17%

$100,001 to $500,000

11%


10%

$500,001 to $1 million

10%


8%

More than $20 million

27%

Reimer Associates Inc. was established in 1997 by

Ross Reimer. We concentrate exclusively on

recruitment and M&A within supply chain and

transportation. Ross built the company by carefully

selecting exceptional people with impressive careers

in transportation and supply chain companies. The

team has learned firsthand what kind of skills, experi-

ence and personality it takes to fill critical positions

and close transactions. We operate confidentially

and effectively from inside the industry.

www.reimer.ca

Brought to you by our survey partner:


http://www.reimer.ca


Survey Average

Less than $40,000 1%

$40,000 to $49,999 4%

$50,000 to $59,999 7%

$60,000 to $69,999 9%

$70,000 to $79,999 7%

$80,000 to $99,999 13%

$100,000 to $119,999 11%

$120,000 and higher 12%

Base salary ranges Mean salary by job function

Experience, Connections, Opportunities

Customer Service 88,274

Purchasing/procurement 92,793

Warehousing 94,051

Transportation 91,302

Inventory/Material Control 87,824

Information Technology 89,736

Project Management 94,687

Training and Development 91,836

Demand Planning/Forecasting 94,906

Customs 83,732

Order Fulfillment 88,630

Sales/Marketing 99,629

Other 95,447



http://www.reimer.ca


Total Respondents (Survey Average)

$90,566

25 or fewer $79,909

26 to 100 $79,386

101 to 500 $87,694

501 to 1000 $89,782

1001 to 5000 $98,138

5001 to 25,000 $97,399

More than 25,000 $101,633

Mean salary by number of people working in company

dian Shipper subscribers had transporta-

tion and supply chain responsibilities.

The survey enjoyed wide geo-

graphic reach across Canada. While

48% of respondents came from Ontar-

io, another 37% were from Western Cana-

da and 12% from Quebec and the Mari-

times. The respondents also represented a mix of

small, medium and large enterprises with 49% working

for large companies employing more than 500 while

28% worked for small organizations employing fewer

than 100. E-mail invitations were sent to supply chain

professionals across Canada from email lists provided

by Canadian Shipper and our sister publication

MM&D. The survey was handled once again by the re-

search firm of G. Bramm Research Inc. After filtering

out unqualified respondents and incomplete surveys,

data compiled represented a margin of error of plus or

minus 3.8 percentage points, 19 times out of 20.

What trends can we see emerging from the survey

this year?

More than half of our respondents currently manage

a budget, which for a quarter of respondents is between

$1 and $5 million dollars a year.

For 27% of respondents their annual transporta-

tion/warehousing and logistics budget is more than

$20 million.

Cost cutting is top of the agenda in terms of priori-

ties for our respondents in the coming year. A vast ma-

jority of respondents (83%) are seeing continued pres-

sure to cut costs in their operations.

While 47% of respondents agreed that their com-

pensation level has been keeping up with their job re-

sponsibilities over the last five years, 52% indicated that

their compensation has not, in fact, kept up.

Next year, 63% of respondents anticipate receiving a

salary increase and 43% expect an increase of 2% or less.

Salaries are expected to rise between 2.1-4% for 40%

of our respondents.

Three-quarters of our respondents are not cur-

rently seriously looking for work with another com-

pany, but a quarter indicated they were. Some 58% of

respondents are very or extremely satisfied with their

current jobs.

The top reasons that respondents are considering a

position with another company are: better money ( for

57%), a better work-life balance ( for 35%), better career

opportunities (29%) and geographic location (29%).

Other reasons that led respondents to consider leav-

Mean salary by education

Some high school $82,500

High school graduate $98,111

Some community college $81,454

Community college graduate $83,834

Some University $82,302

Undergraduate-Bachelor’s Degree $94,088

Some post graduate education $84,019

Post graduate degree $119,423

Mean salary by years of experience in supply chain

2-5 years

5-10 years

10-15 years

15-20 years

20-25 years

25-30 years

30-35 years

$60,458 $68,338 $85,840 $86,368 $100,667 $105,102 $105,661

di

4

io, a



T H E M A R K O F T R A D E E X P E R T I S E

Certified Trade Compliance SpecialistCTCS

For information about the CTCS Program, visit cscb.ca/ctcs or call 1-613-562-3543

The CTCS (Certified Trade Compliance Specialist) designation> recognizes the experience and expertise of international trade compliance professionals,> sets a standard for ongoing professional development in a field where change is constant,> supports a network for information sharing and collaboration.

The Canadian Society of Customs Brokers is proud to present the CTCS (Certified Trade Compliance Specialist) Designates of 2017

AlbertaMerima AlicajicTrevor ByeAllan CorbettMaria Eugenia D’AloiaJeffrey FraserColleen JenningsIlona Julia KingCathryn Kirby AdshadeMarcia KobeElaine LambSusan McDonaldSteve SpoljarevicSandra TeedMichael TheodoreBritish ColumbiaFahad BasarCarol BrownCindy ChristensenPaul CourtneyAllison DouglasTaryn HannahCrystal HiggsWyatt HolykWei (David) HuJolanta KrasuckaWilliam LeeChun Hui Eric MaMaria MateMarc McLeanAmanda MilesJonathann MorcoKen NordPatricia O’Malley

Calie SchumacherCherie StormsGloria TerhaarGail WrightMelissa WrightMichael Fraser WrightManitobaWade BarrBruno BiondiAlan DewarDonna FetterlyNyree MenziesValerie MichaudBarb MillerKim RossHayley Dawn ShirtliffeCorey TkachNew BrunswickShelley GaresJanice PercyAlex PiedrahitaNewfoundland & LabradorKelly BlenkinsoppRonald MaloneMichael MurphyNova ScotiaLaurie PasherJoseph VerhaegheOntarioDanielle AdairJamal AhmedMehmood AliGillian Allan

Cynthia AnnakieFahmida ArabMohammad ArifJodi ArmstrongDeborah AxfordLisa BallKathy BarzalJennifer BeamishSarah BerlatoJohn BrooksSteve BundaKim CampbellGanase CarltonMarcos Cervantes LaflammeHannah ChengJoseph CiullaAngela CollinsSue CompisanoHernan CordobaLinda CybulskiSandy DackQi DengSatnam DhamiGrace Di MarcaKathrina DibuenoTanya DietrichKaren DingleBrianne EarishMatthew EarishCharmaine EastonCynthia L. ElliottSean EverdenPeter Xi FangEmil Fiorantis

Wa (Grace) GaoPamela GarrettAdriana GeleriuNegedeyesus GesseseElena GhimbirJohn GirouxLynne GlassMartha GoncalvesLisa GouthroSherry GrahamWarren GreenAnn GruszeckiMary-Anne HardyKyle HartwickSherry HeitmeyerM Dianne HillNancy HornerVicky Nhon HuynhNicole IrwinJohn G. JakubowskiAyesha JavedBranislav KecmanMary KennetteRufat KhanaliyevChristina KinderTomoko O. KitaiLisa KnightHarmeet KohliCarol Shu-Qin KwokChristine LeavoyMegan LeemansChun Mei LiJennifer LivickIris (Wen) Long

Elizabeth LorinczJohn LoweYen Ly-YongChristine MacriRajesh MamtoraPhilip W. MasonRaad MathyosColin MaxwellLorella MazzottaVickie McInnisHeather MissouriUsha MistryJennifer L. MitchellJohn MocciaPenny MoultonKarin MullerTammy NanticokeSumaira NazirDesiree NorwoodSandra OdoricoAdefoluke OdunlamiSherry ParkerRakesh PatelAlice Peres da SilvaVirginia PetrenciuKatie PetteplaceVassili PopovAntonella ProiettoJohn QuirkeKristin RenaudJoseph RoseBrian RoweLabinot SadikuAmanda Salmond

Naeem SardarTariq ShaikhTammy ShawCandace SiderCatherine SlaterHelen SongMark SouthworthJerry C. SpoonerHarjinder SraBrian StaplesDebbie StevensDavid StockwellMichelle StokesSusan SubryanLaura SwansonSimona TalasmanMichelle TamburroRaymond TangDemi TodorovJonathan TorresKaren ValleeMargaret ValtasKimberly Van RuntTerri WalshRuth Webb-MacleodMeredyth WelsmanPing Ping WenRajeev WijesingheLynn Wilding-FullertonJeff WillsonTara WilsonDavid WinklerDian WollisonIvy Woo

Amanda YachukJune ZhengQuebecMelanie BedardKaren BlouinJean-Philippe CarfagniniCarmen DumitracheFrançois DupuisMarc FilionRobert GaboriaultNatasha HarperClaire HowarthPaul HughesPierre-Yves LafranceNadine LépineLorin LevineApril MartinezAlexandra MierlaMargaret Emma MillionKevin MooneySuzanne PerkinsRonald RacineGinette Ste-CroixSandra WalkerDavid WallaceJohn WeightA.J. (Tony) YakuboskyMonika ZanacanMichael ZobinSaskatchewanBarry FrainAustraliaPeter McRae

http://www.cscb.ca/ctcs


Mean salary By company sector

Total Respondents (Survey average) $90,566

Manufacturing $86,478

Transportation $90,827

Third-party logistics $95,943

Retail $91,271

Other $92,659

Top three reasons for considering a position

with another company

Better money 57%

Better work/life balance 35%

Geographic location 29%

Better career opportunities 29%

Better benefits 22%

Flexible hours 22%

Greater say in management decisions 15%

Reputation of firm 12%

Better rewards program 12%

More responsibility 11%

Industry of choice 7%

Smaller firm 3%

Larger firm 3%

Other 7%

readers pulling in base salaries of $80,000-$99,000 and 17%

reporting six-figure base salaries. Overall average salary for

males was $96,141 and $76,919 for females.

Company size makes a similar difference in base pay

levels. Canadian Shipper readers working for companies

with fewer than 100 people had a mean salary of $79,386,

while those working for companies with more than 25,000

employees earned a mean salary of $101,633.

The supply chain recruitment and hiring process, ac-

cording to 60% of our survey respondents this year, is ex-

pected to stay the same, meaning that it will

be somewhat problematic or take longer

( for 49% of respondents) or very problem-

atic ( for 34% of respondents) to fill vacant

positions with suitable talent.

Our respondents worked 46.1 hours

per week with 88% receiving no over-

time pay. CS

dents this year, is ex-

at it will

onger

lem-

acant

urs

er-


ing were greater say in management decisions, reputation

of firm, better rewards program, and more responsibility.

Over three quarters of respondents have completed ter-

tiary levels of education. They also indicated that profession-

al designations are highly relevant to their job performance.

CITT's CCLP designation is held by 33% of respondents, the

P.Log by 20%, and SCMP by 16% of our respondents.

Respondents boast many years of supply chain experi-

ence, with 19% indicating they've amassed between 15 and

20 years' experience, and 16% between 20 and 25. The mean

number of companies at which our respondents have been

employed during their career is four, while the mean num-

ber of positions held during their career is 6.4.

The mean gross salary reported this year was $90,566,

with 13% of readers now pulling in base salaries of $80,000-

$99,000 and 23% reporting six-figure base salaries. In our

previous year's survey we reported $91,761 as the mean

base salary for Canadian Shipper readers with 17% of our



Of the 701 supply chain professionals included in our sample,

46% defined themselves as being in the managerial ranks of

their organizations and 66% said they were in transportation.

Of the respondents, 59% indicated they manage at least one

employee. The vast majority of respondents (56%) were over 35

years of age with the mean age being 45. 59% of respondents

hold an undergraduate degree at either the University or

college level. Respondents performed a variety of func-

tions ranging from transportation (66%) and pur-

chasing (51%) to training and development (50%)

and warehousing (45%). The majority of respon-

dents who are Canadian Shipper subscribers had

transportation and supply chain responsibilities .

The survey enjoyed wide geographic reach

across Canada. While 48% of respondents came from Ontario, an-

other 37% were from Western Canada and 12% from Quebec and

the Maritimes. The respondents also represented a mix of small,

medium and large enterprises with 49% working for large compa-

nies employing more than 500 while 28% worked for small organi-

zations employing fewer than 100. E-mail invitations were sent to

supply chain professionals across Canada from email lists pro-

vided by Canadian Shipper and our sister publication

MM&D. The survey was handled once again by the re-

search firm of G. Bramm Research Inc. After filtering

out unqualified respondents and incomplete surveys,

we compiled data from 701 respondents. This repre-

sents a margin of error of plus or minus 3.8 percent-

age points, 19 times out of 20. CS

Respondent Profile & Methodology



http://www.citt.ca/talentpool


Geographic Distribution

Ontario

48%

Quebec

8%

Manitoba/Saskatchewan

10%

Yukon/Northwest Territories/

Nunavut

1%

Atlantic Canada

4%

Alberta

15%

British Columbia

12%

Highest level of education

Highschool or less

7%

College diploma/CEGEP

17%

Some university

20%

University degree

29%

Post graduate degree

11%

Size of Company

500 or more

50%

1 to 100

28%

101-500

20%




SALARY SURVEY

As a recruiter working in the supply chain vertical I’m deeply in-

volved in the hiring process with a wide variety of clients, from

small companies with just a few employees, to multinationals,

and the processes that we see range just as greatly. Interestingly

I’ve learned just as much from some of our smaller clients about a

well-tuned hiring process as I have from companies with thou-

sands of staff.

There isn’t enough room in this column to cover every aspect,

but I will highlight those that I believe

make the biggest impact.

Clear job description First and foremost, a clear and concise job

description must be in place. If the job de-

scription is missing or vague, you’re already

going down the wrong path. Because orga-

nizations are fluid, job descriptions must

be current to stay relevant. At the same

time, the job description must be realistic.

Many times I’ve encountered four pages of standards that literally no

human being can meet. This is just as futile as having no description

at all. Realistic and attainable are the words to measure by.

Sourcing decisionSecondly, a decision on how to source outstanding candidates

must be made with the understanding that sourcing is an invest-

ment decision. Whether the company chooses to advertise, use

one of the many available tools such as LinkedIn, or employ a re-

cruiter, the decision needs to be made with a long-term view in

mind. Occasionally companies who are particularly well net-

worked can find employees without stepping outside the organi-

zation. It’s great when it works but I’ve often seen a very short-

term view taken at this point, causing the candidate pool to suffer

greatly in both quality and quantity.

Unfortunately, posting a position does not prevent multitudes

of unqualified people from applying. Twenty years ago a newspa-

per advertisement would generate the same number of unquali-

fied candidates. After all, there is simply no downside for people

to not apply. Of course, the result is that someone in the organiza-

tion has to spend considerable time sorting through résumés.

It’s important to remember that a job posting does not tap

into the passive network of outstanding people. That’s because

typically the best people are already highly engaged in their ca-

reers and require a personal approach in order to be interested in

a new opportunity. In the recruiting business we think of this as

concierge-style service. For example, if you were in New York City

and wanted to take your best client to an outstanding restaurant,

years ago you could have grabbed the Yellow Pages and discov-

ered hundreds of restaurants. In today’s world, you could search

the Web. But if you truly wanted to find a memorable experience,

you would talk to the concierge at an excellent hotel. That’s the

value of a well-established network.

The right interviewWhen it comes to interviewing there are a

few key areas that will bring success to

the hiring process. First, embrace the idea

of panel interviews, because several view-

points make for better hiring decisions.

The panel style gives the interviewers a

chance to reflect, take notes and formu-

late better questions as they participate

in the interview. Secondly, a behavioural-

style interview is the best way to validate the candidate’s previous

achievements and whether or not their skill set lines up with the

position description. As we all know, résumés can make big claims

that need to be validated and clarified with open-ended ques-

tions. This is the most important part of the interview; the candi-

date’s ability to clearly back up what their résumé says is critical.

Cultural fitEnsuring cultural fit with potential new hires is a critical piece in

the process. Along with appropriate skills and experience, poten-

tial candidates must have values that align with the company’s

culture. This is where an honest assessment of company culture is

so important. If you know your culture is particularly demanding,

with high pressure, long hours, and so on, you need to own that

and be clear with potential candidates. Disaster is waiting if you

don’t reveal the truth at this point.

Art and scienceIt’s important to remember that hiring isn’t an exact science, and

there is no perfect recipe. That said, when we successfully match

the science of a well-developed process with the art of interview-

ing and carefully select the right people, we can greatly influence

the outcome in a positive way. When we do this, our actions

match our words and we place the proper importance on ensur-

ing people truly are the most important asset in the business.. CS

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PAIN POINTSHow the healthcare supply chain is evolving BY JULIA KUZELJEVICH

COSTSControlling costs is one of the top issues

for healthcare supply chains.

The market is moving from premium

to lean.

“You’ve got to cut internal costs-there

is more of that than ever before. What we

spend more time on than anything else is

transportation costs: you have to always

introduce competition,” said Paul Steiner,

VP of Strategic Analysis for SME, Spend

Management Experts, which aims to help

companies lower transportation and ship-

ping costs by identifying savings opportu-

nities and building negotiation strategies

across all modes of transportation.

Using proprietary cost modeling tech-

nology, SME conducts a deep financial

analysis of a shipper’s carrier agreements,

invoicing and transportation spend to

identify hidden costs and improve opera-

tional efficiencies. SME works with a vari-

ety of companies in the health care sector,

specifically related to medical devices

and pharmaceuticals.

Sometimes packages are heavier than

they need to be so being able to take ad-

ditional space out of the packages and

introduce more competition on the trans-

port side is important.

Canadian and U.S. customers have

similar requirements but in Europe, for

example, where there are 8 or 9 players in

each country, there are more cost pres-

sures on the carrier side, Steiner said.

REGULATORY PRESSURES With stricter temperature control re-

quirements as a result of regulatory tight-

ening of guidelines, customers have taken

a more conservative view of the regula-

tions and ensuring that end to end we’re

able to maintain the integrity of particu-

lar products, said Maria Thomas, vice-

president, Distribution Operations, UPS

Supply Chain Solutions.

The use of biologics is growing.

Typically that is packed out in non-

reusable packaging. From a custom-

er experience perspective, the onus is

on their customers to deal with that.

Stakeholders are using active tem-

perature control and leveraging spe-

cialized carriers for the transportation of

goods to maintain integrity. Sometimes

the financials are not necessarily cost sav-

ings but cost containment.

“There is heightened awareness from

a quality perspective. Customers are al-

ways interested in programs we are sup-

porting for other customers that may

benefit their supply chain. I do believe

there is an openness to review alterna-

tives when it comes to cost containment.

In our role when consulting, when

customers are looking to enter the Cana-

dian market, we do present value to them

based on our relationships with Canadi-

an officials, regarding audits, special li-

censing, etc.,” Thomas said.

MERGERS AND ACQUISITIONSOver the last 5-6 years on an ongoing ba-

sis, there’s been a lot of activity, in the

healthcare sector, from a mergers and ac-

quisitions perspective, and what that does

is it creates a certain short term IT-driven

upheaval from a customer perspective.

“As customers focus more on their port-

folios, sometimes it’s not just a full blown

acquisition but porfolios diversifying. To

drive synergies and efficiencies there can be

a mandate to move everything to the same

platform. This can cause some upheaval,

and potential disruption to the supply chain.

Sometimes there is a shut down period and

when the new system resumes, the ramp up

and learning can also affect supply chain.

For us, typically there’s often some work ef-

fort to re-integrate things. We also feel the

impact when customers combine their cus-

tomer service groups,” Thomas said.

To mitigate that there is ro-

bust project management to help

customers through the transition.

“We plan our labour and sup-

port around that, make sure we have

resources for back order and fulfil-

ment,” Thomas said.

REDUCING PRODUCT DAMAGE AND SPOILAGE

Keeping healthcare products intact

while they are being shipped means “treat-

ing a package like a patient.”

This is where tracking, tracing, and

monitoring come into place for custom-

ers, and having facilities around the

world with the ability to intervene, and

to supply cold packs when things get de-

layed, is essential.

MODAL SHIFTProbably about 60% of the market is utiliz-

ing ocean containers to move pharmaceu-

ticals. They have better lead times, plan-

ning, and WMS systems. There’s lots of

technology for tracking things in the air.

“We are beginning to see multiple fac-

ets of transportation, intervention ser-

vices, and specialized services in this

market in general,” Steiner said.

Products such as the “Med Pack” offer

reusable, sustainable containers and pro-

vide cost cutting as well as stewardship.

“We always find product damage and

spoilage a big pain point-cost is a big con-

cern for people in this market. Competi-

tion reduces prices. The other major piece

is product security: digital protection.

There are all sorts of statistics on this.

A lot of times there is poor visibility in the

supply chain-things tend to disappear,”

Steiner said.

THE GREY MARKETIn both the pharma and the grey market

world, there are folks that stockpile cer-

HEALTHCARE LOGISTICS


continued

© artefy/iStock



tain drugs, and this creates product

concern around security.

“You’re beginning to see more

collaboration between pharma

and their wholesalers, to address se-

curity: technology such as holographs,

more advanced bar coding and serializa-

tion, and cooperating with law enforce-

ment. Customers are insuring more claims

than they ever have. Certainly there is a

recognition of the pain points: cameras,

better screening of employees, better

tracking and tracing, bar coding, etc. In

this market, there are a lot of regulatory

challenges,” said Steiner.

Europe has its Good Distribution Prac-

tices, Brazil has unique item level serial-

ization under its Brazil Serialization Act.

HOME HEALTHCAREOne of the pain points is how to go more

direct to the consumer. How are we going

to see our supply chain evolve more when

it comes to pharmaceuticals?

Home healthcare services are growing

8-10% yearly, and Canada and the U.S. are

big on that side.

There’s an increase in the delivery of

healthcare items to the home, such as oxy-

gen tanks, patients getting in-care services,

or set-up services, of medical beds, etc.

Returns are a big piece of that as well.

Traceability concerns are more or less

creating standards in this market.

Worldwide standards have been ad-

opted across a number or industries, with

manufacturer and distributor using the

same barcoding.

Years ago, it used to be expensive to move

some of these items. Now, with barcodes,

temperature control, traceability, this has be-

come a little more commoditized.

“We’re seeing some reduction in cost

along the transportation side. It’s a more

efficient process today.

As customers get smarter, they are fo-

cusing on cube utilization, and wider use

of ocean freight,” said Steiner.

Inventory reduction is also a part of this.

“If you’re carrying a couple hundred

SKUs and they’re not big items, is it nec-

essary to stockpile them?” he said.

COLLABORATIONMore and more collaboration is occur-

ring amongst healthcare supply chain

stakeholders, especially around the inter-

pretation of “regulatory compliance”-how

do they interpret it, sharing ideas about

holes in security, but maybe not direct in-

formation about the product. CS



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Editor Julia Kuzeljevich

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garnered several transportation and Canadian Business Press writing awards.



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Kuehne + Nagel is beefing up its cool chain capabili-

ties. Last year the logistics provider added a new tempera-

ture-controlled room to manage pharmaceuticals that require

ambient temperatures between 15 and 25 degrees Celsius in its

bonded airfreight facility located near Toronto's Pearson airport,

and this summer will see the opening of a 203,8000 sq ft GMP fa-

cility, manned by a specialized team of pharma experts. Strategi-

cally located in "Pill Hill", Mississauga, it is designed to manage

multiple temperature ranges, and will be audited and certified by

Health Canada.

“We are excited to be launching another new, leading-edge GMP

facility to enhance the existing campus and support our growing

pharmaceutical and healthcare customers in Canada," comments Jamie

Wood, president of Kuehne + Nagel Canada. "We will continue to invest in

innovation to support our long term vision and corporate strategy, all under

one umbrella, our KN PharmaChain product portfolio, an integrated global

supply chain solution for our customers."

Carey Roach, director of strategic customer development, pharmaceutical

and healthcare, notes that the forwarder's new facility will improve its immedi-

ate capacity needs. "We continue to experience significant growth in 2016 and

expect the same in 2017," she comments.

This is echoed by Gary Vince, head of airfreight, Canada at DHL Global

Forwarding. He reports “fairly consistent growth” in the company’s existing

trade lanes and adds that Air Canada’s expansion to Latin America should

help in a promising growth market that has so far been hampered by shortage

of direct connections.

While healthcare and pharmaceuticals has been a growth engine, it also

keeps getting more challenging for operators. Tighter regulatory requirements

keep raising the bar. More than 40 jurisdictions - including the EU, US, South

Korea, China and Brazil - are moving to introduce new track and trade regula-

tions, mandating tracing by serial number in a push against counterfeit drugs.

According to industry tracking provider Tracelink, over 75 percent of prescrip-

tion medications worldwide will be covered by the new rules by the end of 2018.

“Serialization is definitely going to change the game. It requires transparen-

cy end-to-end from the time it leaves the shipper’s dock to destination,” remarks



continued

ENGINE OF GROWTH

PHARMA GROWS IN TIGHTER REGULATORY

ENVIRONMENT

BY IAN PUTZGER

© iStock



Vito Cerone, director of marketing and

sales, Americas at Air Canada Cargo. A

major objective for the airline in 2017 is to

enhance its service in this sector and ele-

vate it to the next level, he adds.

Tighter regulations are also on the ad-

vance in other segments of the healthcare

industry. The US Food and Drug Adminis-

tration is pushing ahead with its ‘unique

device identification’ regime for medical

devices and officials in the European Union

are in the process of formulating a set of

rules for these, which are expected to come

into effect about three years down the road.

A number of airlines have taken on

new containers with temperature control

features to beef up their offerings. Air

Canada is looking to add containers from

va-Q-tec, a provider of passive closed cold

chain container solutions that cover tem-

perature ranges from -70 to +25 degrees

Celsius, to its arsenal of temperature-con-

trolled devices. It is also mulling the in-

troduction of special units to carry phar-

maceuticals from warehouse to the

aircraft in some stations, Cerone says.

As his remarks on serialization indi-

cate, monitoring capabilities are another

vital element that providers have to keep

investing in to stay in this game. “Visibility

is very important in this vertical,” he says.

According to Vince, serialization

brings more opportunities than challeng-

es. “It comes down to the ability to moni-

tor and track and trace at the serial num-

ber level,” he says. DHL introduced a new

app with this capability in the past year,

which has been well received, he adds.

Air Canada is in the process of imple-

menting RFID technology in warehouses

at major gateways, which can be used to

further enhance visibility for the health-

care sector, Cerone reckons. “This would

be a huge step forward; it would be a big

differentiator,” comments Vince.

Drawn by the growth and the higher

yields compared to most other types of car-

go, a rising number of airlines have deployed

temperature-control technology and better

tracking capabilities to capture a slice of this

traffic. Roach welcomes these moves, saying

that airlines' service levels and visibility have

improved markedly in recent years, which

also supports the continued efforts to im-

prove handling compliance.

Vince stresses that visibility is just as

important as cold chain technolo-

gy. “It is not just a case of what type

of container an airline uses. It is about

their ability to offer various solutions,

and it is about the carrier’s ability to

provide us with a measure of visibility.

For example, we need time stamps when

the cargo goes out to the ramp,” he says.

This implies a smooth flow of data be-

tween the various parties. Not surpris-

ingly, Tracelink CEO Shabbir Dahod

views this as vital, arguing that “imple-

menting serialisation across global oper-

ations calls for new thinking about plat-

forms that can not only deliver massive

data and processing elasticity, but net-

work connectivity and supply chain in-

teroperability that links businesses to-

gether to advance the value of the

pharmaceutical ecosystem as a whole.”

Data flow may not be enough. In-

creasingly operators stress the need for

close cooperation within this ecosystem.

“We work with our customers on solu-

tions,” says Roach, adding that this has

been a major driver for Kuehne + Nagel’s

growth in this segment.

Alan Dorling, global head of pharma-

ceuticals and life sciences at IAG Cargo,

emphasizes the need to include ground

handlers in this as well as forwarders and

shippers. “There is an emerging trend of

preference to routing shipments over cer-

tified gateways,” he remarks. “The market

is moving to GDP corridors”.

The notion that logistics providers - be

they forwarders, handlers or airlines - need

certificates to document their capabilities

in this sector is gaining ground. “We are

looking at getting CEIV and GDP certifica-

tion at out key stations,” says Cerone “We

are going to work with both to make sure

we are aligned with the industry.”

Until recently GDP (Good Distribu-

tion Practice) has been the lone gold

standard for healthcare-related logistics

activities, but CEIV (Centre of Excellence

for Independent Validators), which has

been promoted by the International Air

Transport Association, is gaining trac-

tion as a second important badge of qual-

ity. Airline executives report that it is be-

coming a standard question in RFPs.

Among other things, CEIV marks an

effort of the air cargo industry to shore up

its credentials at a time when more and

more pharmaceuticals shippers

glance at ocean transportation as a po-

tential alternative mode of moving

their traffic. Faced with mounting cost

pressure, they are looking for more

cost-effective solutions, notes Roach.

However, while the amount of phar-

maceuticals that are shipped by ocean

vessels is on the rise, there will always be

a need for airfreight, she adds.

Dorling is unfazed by the mounting

use of ocean transportation. Speed to

market remains a potent factor in favour

of airfreight, he stresses. Moreover, glo-

balized production requires airfreight to

link pharmaceuticals manufacture with

packaging and other elements, he argues.

Air cargo stands to benefit from the

emergence of biologics, especially medica-

tions tailored to the health profiles of indi-

vidual patients, largely associated with

cell therapy or gene editing. These are ex-

pensive to manufacture, and typically

highly sensitive to ambient conditions.

According to Dorling, these substanc-

es usually have an 18-hour window.

Roach, who anticipates large growth in

this sector, expects to see more stringent

requirements on handling and packaging

of such shipments.

“It is going to be a challenge to meet

these requirements,” she reflects.

The more information clients can give

their logistics providers about the pack-

aging, the loading options they have

available and other aspects, the better

equipped the logistics firm will be to en-

sure the precious shipment reaches its

destination without any issues, she notes.

Airlines sense a similar need for more

involvement to handle this new type of

cargo properly. “That’s one reason why I

want discussions not only with forward-

ers but also with manufacturers. I’d like

to understand where they will be in three,

four years,” remarks Cerone. CS




Ian Putzger is an award-win-ning journalist with more than 20 years experience covering transportation and logistics

issues. He is a former writer and editor with the Hong Kong-based Asian Sources Media Group, and Airtrade, a British magazine covering the global air cargo industry.



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ith its young population and ris-

ing consumer demand, the Afri-

can continent stands to benefit

from growth in the years ahead.

The International Monetary Fund says Africa will be

the world’s second-fastest growing economy to 2020. Africa

will soon have the fastest urbanization rate in the world. By

2034, the region is expected to have a larger workforce than ei-

ther China or India-and, so far, job creation is outpacing growth

in the labour force.

There are key sectors where the needs of African companies

and Canadian expertise are good matches. These include the ex-

tractive sectors (mining, oil and gas, resources), infrastructure

(road and ports engineering), telecommunications, clean tech-

nology, transportation and agriculture. Light manufacturing and

healthcare/life sciences are other emerging sectors.

In 2015, Export Development Canada (EDC) formalized its

representation in Africa with the opening of its permanent office

in Johannesburg in order to help Canadian companies take ad-

vantage of the growing opportunities in the sub-Saharan region.

EDC aims to link more Canadian companies into the supply

chains of upcoming infrastructure, oil and gas, and mining proj-

ect opportunities on the continent, and has helped facilitate more

than USD 7.4 billion in business between African and Canadian

companies – many of them small- and medium-sized enterprises

(SMEs) – in the last five years and is looking to grow that number

to USD 10 billion over the next 5 years.

In conversation with Canadian Shipper, Jean-Bernard Rugg-

ieri, Chief Representative, Africa, with EDC in Johannesburg, said

that this is a very good time to talk about Africa.

“Five years ago Africa was booming because of commodities.

Now countries are trying to diversify their economies away from

strictly the oil and gas sector. How we describe Africa is that it is

the next China or India of 10-15 years ago. There is growth ahead,

in terms of population and demand. If you want some good growth

it’s time to invest. It takes time to be successful in Africa,

to find the right partners, and to be involved in the

supply chain,” he said.

Ruggieri, who covers the entire continent of Africa,

talks to the buyers, existing or future, of Canadian suppli-

ers of exports.

“We are approaching buyers to help Canadian

suppliers-we bring financing to buyers to make the

contract happen,” he said.

African markets differ in that there are many state

owned companies, and doing business with these can be slightly

more complicated than doing so with the corporate world.

In countries like Nigeria, Kenya, and South Africa, however,

more and more private companies are being launched.

In terms of impediments it’s like any emerging markets- it’s really

understanding the culture and how you can be successful in signing

the contract, Ruggieri said.

“Today what I see more and more is a reluctance to buy from

North America and Europe and they are more willing to work

with other emerging countries, like China, which is a major player

in Africa. Canadians are well positioned but maybe not aggressive

enough or present enough. You have to come and be present, and

come often to the market, because the other competitors show up

at least once a quarter or more,” he said.

EDC has been growing its presence, matching buyers and suppli-

ers. Power generation is a huge sector, oil and gas, mining are com-

ing back, and infrastructure and transportation are also key.

“If you ask a company that has already sold in Africa, 80% of

the time they will sell there again,” he said.

A September 2016 report from the McKinsey Global Institute,

Lions on the Move II: Realizing the Potential of Africa’s Econo-

mies, looked at fundamentals on the continent and opportunities

for growth in trade.

According to the report, five years ago, growth was accelerating

in almost all of the region’s diverse economies, but recently their

With growth and demand on the rise, it’s a good time to invest in

the African continent

By Julia Kuzeljevich

AFRICAN TRADE

©iStock



paths have diverged. Some countries have continued to grow fast

while others have experienced a marked slowdown as a result of

lower resource prices and higher sociopolitical instability.

While fundamentals on the continent are strong, African gov-

ernments and companies will need to work harder to make the

most of its potential. Africa’s real GDP grew at an average of

3.3 percent a year between 2010 and 2015, considerably slower

than the 5.4 percent from 2000 to 2010.

Accelerating technological change is unlocking new opportu-

nities for consumers and businesses, and Africa boasts abundant

resources.

Consumer and business spending today totals $4 trillion.

Household consumption is expected to grow at 3.8 percent a year

to 2025 to reach $2.1 trillion, while business spending is expected

to grow from $2.6 trillion in 2015 to $3.5 trillion by 2025. Compa-

nies wanting to tap into consumer markets would need to have a

detailed understanding of income, geographic, and category

trends. Africa could nearly double its manufacturing output from

$500 billion today to $930 billion in 2025, provided countries take

decisive action to create an improved environment for manufac-

turers. Three quarters of the potential could come from Africa-

based companies meeting domestic demand (today, Africa im-

ports one-third of the food, beverages, and similar processed goods

it consumes), while the other one quarter could come from more

exports. Companies looking to grow across the continent should

develop a strong position in their home market, use that as a base

for expanding into markets well beyond their immediate region,

adopt a long-term perspective and build the partnerships needed

to sustain success over decades, and be ready to integrate what

would usually be outsourced. They should look for opportunities in

six sectors that MGI finds have “white space”-wholesale and retail,

food and agri-processing, health care, financial services, light man-

ufacturing, and construction—with high growth, high profitability,

and low consolidation, and invest in building and retaining talent.

To better gauge stability at the country level, MGI developed

an African Stability Index to help businesses and investors under-

stand their portfolio risk and help policy makers understand and

address their own countries’ vulnerabilities. The index highlights

the diverging growth and stability trends that economies in the

region have been experiencing since MGI published its first report

on Africa’s economies in 2010.

Four factors could transform African economies and their

pace of growth, said MGI.

Africa is the world’s fastest urbanizing region. Over the next

decade, an additional 187 million Africans will live in cities-equiv-

alent to ten cities the size of Cairo, Africa’s largest metropolitan

area. Between 2015 and 2045, an average of 24 million additional

people are projected to live in cities each year, compared with

11 million in India and nine million in China.

Faster penetration of the internet and mobile phones offers

Africa a huge opportunity to enhance growth and productivity;

Africa’s penetration of smartphones is expected to reach 50 per-

cent by 2020, from only 18 percent in 2015. Previous MGI research

estimated that the internet could drive 10 percent of Africa’s GDP

by 2025. This trend is already transforming a number of sectors,

including banking, retail, power, health care, and education. Elec-

tronic payments are sweeping across the region and changing the

business landscape. East Africa is already a global leader in mo-

bile payments. E-commerce in Africa is growing quickly-revenue

has doubled in Nigeria each year since 2010.

Africa contains 60 percent of the world’s unutilized but poten-

Urban growth on the rise. Top-bottom: Johannesburg, South Africa, Lagos, Nigeria, Nairobi, Kenya.

AFRICAN TRADE

continued



AFRICAN TRADE


tially available cropland, as well as the world’s largest reserves of

vanadium, diamonds, manganese, phosphate, platinum-group

metals, cobalt, aluminum, chromium, and gold. It is responsible

for 10 percent of global exports of oil and gas, 9 percent of copper,

and 5 percent of iron ore. Even at recent low prices for such com-

modities, a significant share of African production continues to

be cost-competitive, putting the resources sector in a strong posi-

tion for when demand-and, eventually investment—recover.

Consumer-facing companies will need to make sure they have

a meaningful presence in

each of Africa’s emerging centers of consumption—Egypt, Ni-

geria, and East Africa—with a

primary focus on the largest cities in those and other markets.

In all consumer markets, companies need to tailor their product

and service offerings, and their pricing, to Africa’s distinct con-

sumer segments.

Informal retail channels are an important route to

market in many countries, and companies will need

to design their sales and distribution models to cater

to these.

The rapidly growing business-to-business (B2B) mar-

ket is an even larger spender. Companies in Africa spent

some $2.6 trillion in 2015, 40 percent of it in Nigeria and South

Africa.

Africa’s B2B spending is expected to increase to $3.5 trillion by

2025, with half of that total being spent on materials, 16 percent

on capital goods, and the remainder on a wide range of services

including business and financial services, transportation, and

telecommunications. Services consumption is set to grow the

quickest at 3.5 percent per year. Companies selling to other busi-

nesses—like companies serving consumers—need a detailed un-

derstanding of trends at the sector level to be successful. Today,

the largest spending B2B sector is agriculture and agri-process-

ing, and the spending largely goes toward input materials. This

sector is expected to increase spending by an additional $204 bil-

lion over the next decade, reflecting both a growing population

and rising incomes that are boosting demand for agricultural out-

put and more sophisticated food products.

The fastest-growing sectors are set to be financial services,

construction, utilities and transportation, and wholesale and re-

tail trade. B2B spending in the telecommunications, resources,

and manufacturing sectors is likely to grow more slowly than in

other sectors.

Smaller businesses predominate in Africa requiring compa-

nies to have a clear plan for how to serve them, including tailored

offerings, targeted sales forces, and distribution and supply chains

appropriate to their needs.

Four categories of products could increase manufacturing

output in the period to 2025 by $430 billion so that overall output

approaches the $1 trillion mark. The largest opportunity is in a

category of goods classified as global innovation for local mar-

kets, which includes vehicles and chemicals.

Reflecting the continent’s growing population and rising

household incomes, manufacturing of regional processing goods

such as food and beverages is a second major opportunity. There is

also an opportunity to earn up to $72 billion from resource-inten-

sive products such as cement, and up to $27 billion more from la-

bor-intensive goods such as apparel and footwear. Three-quarters

of the potential could come from meeting domestic demand, and

the rest from enhancing exports. Three-quarters of the growth in

potential output would come from meeting intra-African demand

and substituting imports of manufactured goods, which today are

at levels much higher than in peer regions. With consumer and

B2B markets growing strongly, and rising sophistication among

consumers and businesses, we can expect rising demand for a

wide range of manufactured goods, including processed food and

beverages, apparel, appliances, cars and trucks, fuel, construction

materials, and industrial inputs. The other one-quarter could

come from accelerating growth in niche manufacturing exports.

African economies need to boost competitiveness in manufac-

turing on seven dimensions: labor productivity, electric power, in-

dustrial land, movement of goods, business environment, financial

systems, and tariffs. Depending on which categories of manufac-

turing offer the best opportunities for competitive growth in their

countries, governments can prioritize specific interventions.

Infrastructure development: poor infrastructure, in-

cluding electricity provision, and poor transportation

links contribute to the lack of scale among Africa’s compa-

nies and hinder regional integration. Africa’s spending on

infrastructure has doubled from an average of $36 billion

in 2001–06 to $80 billion in 2015 in nominal terms but, as a

share of GDP, infrastructure investment has remained at

around 3.5 percent, less than the 4.5 percent that MGI research

said is necessary each and every year until 2025. In absolute

terms, this means doubling annual investment in African infra-

structure to $150 billion.

Unlike the large integrated markets of China, Brazil, and the

United States, Africa is a patchwork of more than 50 mostly small

economies with only a limited degree of economic integration

and political collaboration.

That helps explain why so many large African companies have

focused their expansion on their immediate regions. Africa’s eco-

nomic fragmentation has domino effects on companies’ ability to

source or sell inputs along supply chains in multiple sectors.

There are few manufacturing and services hubs as production is

highly dispersed across the continent, hindering the formation of

new businesses, limiting companies’ ability to specialize, and re-

ducing their international competitiveness. African governments

can act on three fronts to strengthen regional integration: (1) help

corporate Africa to build scale by reducing the time it takes for

goods to cross borders, continuing to lower tariffs between coun-

tries, and implementing double taxation agreements; (2) drive

closer integration of regional capital markets to help attract FDI;

and (3) encourage the movement of business people between Af-

rican countries through simplified visa requirements.

Integrating local industries into global supply chains: coun-

tries will also need to attract international manufacturing com-

panies and investors to help develop manufacturing clusters with

capital and skills that can then be integrated into global supply

chains. To achieve this, governments need, for instance, to active-

ly market African capabilities and products, bolster investment-

promotion agencies, streamline imports of partially manufac-

tured goods (typically components), and offer special economic

zones backed by reliable infrastructure. CS




SUPPLY CHAIN FINANCE

www.canadianshipper.comJanuary/February 201729©dashadima/iStock

When exporters hear the

word, FinTech – tech-

based financial services

-- they dismiss it as just

another digital tool that might one day

make their jobs easier.

That day has now arrived. FinTech so-

lutions have revolutionized supply chain

financing by converting long-dated invoic-

es into cash faster. The breakthrough en-

ables executives to manage their accounts

receivable more adroitly. Most firms, espe-

cially smaller ones, live or die by their cash

flows. But until recently, many finance

folks were left waiting for corporate cus-

tomers to pay their bills which were being

stretched out well beyond 60 days.

According to Priyamvada Singh, New

York-based head of product manage-

ment, GTRF HSBC Bank USA, supply

chain finance (SCF – AKA approved pay-

ables finance or reverse factoring)

emerged after the financial crisis. Lack of

credit availability created an incentive for

buyers to support suppliers by establish-

ing SCF programs.

The era of “reverse factoring” began

when financial institutions changed the

global payment system by introducing new

rules. They gave birth to buyer-led or buyer-

initiated programs, under which suppliers

can access finance and receive early pay-

ment for receivables at a discount. Early

payment is possible since it is based on the

buyer’s irrevocable commitment to pay,

since the financing cost is now based on

the buyer’s, not the seller’s, credit risk.

That occurred after invoice issuers

agreed to add a “commitment to pay” no-

tice to invoices. The greater difference be-

tween the buyer’s credit rating compared

to that of the supplier reduced the financ-

ing cost of the SCF transaction. Before,

without such an issuer’s irrevocable com-

mitment to pay, when sellers holding the

invoice approached a bank or factor, the

finance provider calculated their risk on

the seller’s creditworthiness which would

often be much lower than the buyer’s, re-

sulting in higher risk premiums.

A recent Harvard Business Review ar-

ticle explains how the process works: “Fi-

nancial technology companies … act as

intermediaries in facilitating transactions

between a company and its suppliers.

"They enable both the buyer and sup-

plier to improve their working capital by

making it possible for the former to ex-

tend its payables and at the same time ac-

celerate payment to the latter. This pro-

vides both sides with benefits, including

greater liquidity and less variability in the

timing of payments.”

Driving the new services are cloud-

based software platforms linking both

purchasing management and accounts

payable functions into tighter “procure-

to-pay” systems. Closing that loop simpli-

fies and eliminates past processes that in

turn speed up invoice payments.

Many of these new-breed financial in-

termediaries are Silicon Valley startups.

The HBR article also states, “They are in-

ternet companies that streamline finan-

cial systems and make funding the supply

chain more efficient. These include new

enterprises such as Orbian, Prime Reve-

nue, C2FO, Taulia, and Ariba. As well, tra-

ditional players such as Citi Group, HSBC,

BNP Paribas, Deutsche Bank and others

also offer similar services.

According to Tom Roberts, PrimeReve-

nue senior vice-president of Global Market-

ing, such supply-chain financing (SCF) or

BY KEN MARK

FINE TUNING FINANCE

Supply chain invoicing sees some revolutionary changes

continued



SUPPLY CHAIN FINANCE


invoice financing services opened the

door to “reverse factoring”. In essence,

it was a short-term loan from the bor-

rower who charged fees based on current

interest rates and the risk related to the

borrower’s credit rating.

PrimeRevenue’s SCF transactions are

conducted on its OpenSCi platform that

includes analytical and onboarding tools.

Serving as a hub for both invoice sellers

and buyers, it enables suppliers to trade

their receivables for advance payment

without changing their existing invoicing

processes. Suppliers can receive payment

within days in exchange for the receiv-

able and paying relevant interest charges

and fees until it is processed.

Roberts says, “The service we offer is

cheaper than traditional sources because

we can leverage the lower cost of capital

that global multinational corporations

enjoy. Such financial strength reduces the

risk of non-payment. And the faster cash

flow enables exporters to manage their

finances more effectively.”

“The system is very easy to use,” says Pi-

eter Dorsman, CFO of Atima Software Inc.

“It may take a few days to set up the neces-

sary documentation to use the system or

much faster if you use the cell phone app.

Depending on the payment period, the

cost of the service can be less than one per-

cent of the receivable’s value. The system

helps us manage our cash flow better.”

Fundthrough, a Toronto-based start-

up, has been offering such services since

2014. Says CEO and co-founder Steven

Uster “About 60 percent of our customers

offer services and 40 percent sell products.

The Fundthrough application gives

new meaning to the term, “click & col-

lect”. Users simply click on the invoice or

invoices listed on their online accounting

software system such as QuickBooks they

want to negotiate and link them into the

Fundthrough platform. After accepting

the invoice, Fundthrough typically charg-

es the seller a fee of $5 per $1,000 per

week until the invoice is paid.

Exporters can also participate since

Fundthrough accepts foreign currency

invoices covered by Export Develop-

ment Corp. (EDC) Accounts Receivable

Insurance.

In fact, EDC should be every Canadian

exporter’s first stop. It is a government

agency whose mandate is to boost the over-

seas sales of Canadian goods and services. It

offers a wide range of financial and in-

surance products and services that as-

sist Canadian firms in winning over-

seas contracts and mitigate the risks

involved in dealing with foreign customers.

These include accounts receivable insur-

ance that makes sure that exporters get

paid for the products and services they sell.

Says Shawn Cusick, Director, Financial In-

stitutions and Political Risk Insurance,EDC,

“This not just for overseas buyers in obscure

markets. The greatest number of defaults

involved U.S. buyers. That’s because of sheer

volume. Almost 75 percent of Canadian ex-

ports are sold there.”

As well, for major Canadian capital

goods producers EDC will also arrange fi-

nancing and possibly credit facilities for buy-

ers and insurance in case a foreign firm fails

to deliver or pay as a result of bankruptcy,

natural disasters or nationalization of pri-

vate-sector firms by the local government.

In addition, EDC also offers foreign

buyer financing assistance options which

may also eliminate the need for letters of

credits (LCs). Says the HSBC’s Priyam-

vada Singh, “Although volumes for docu-

mentary letters of credit (L/Cs), continue

dropping, they are still necessary, espe-

cially in emerging markets.

“Sellers, especially MSMEs (micro, small

and medium enterprises) may still rely on

letters of credit as collateral for pre-ship-

ment financing needs since SCF enables ac-

cess to finance only at the post-shipment

stage and post-acceptance of an invoice by

the buyer. Banks in such countries will not

accept electronic notices of payment as col-

lateral for pre-production loans for export-

ers to buy raw materials, etc.”

Foreign exchange (FX) hedging is an-

other tool that can make life easier for ex-

porters. Today’s political and economic

uncertainties can suddenly rattle currency

exchange rates which can reduce the num-

ber of Canadian dollars they receive when

they convert invoices denominated in a

foreign currency, i.e. U.S. dollars, pounds

sterling, euros etc. Before, in more settled

times, most of them did not consider FX

hedging overseas invoices but simply let

FX markets decide how many Canadian

dollars they would bank after converting

their foreign-currency invoices.

Says Dev Dabas, Winnipeg-based senior

vice-president, EncoreFX Inc. “Exporters

should not try to outguess FX markets.

They should simply try to lock in the value

of their contract when it is signed and elim-

inate the guesswork and other risks.”

That approach makes sense to Encore-

FX client, Peter Boda, president of Bodefide

Auto Ltd. in Headingly, Manitoba. He says,”

We sell about 100 used cars per month to

the U.S.. Our U.S. dollar-Canadian dollar

receivables take about 90 days to clear. Be-

fore, we used to hedge about 50 percent of

them. Now, it is closer to 75 percent.

“Hedging gives us more control over

our receivables by locking in our revenues,

margins, and profits. I sleep better at night

knowing how much I take home in Cana-

dian dollars is not left to chance.”

Exporters may also need to be aware of

other financial risks to their overseas re-

ceivables. Says David Butler, business de-

velopment executive at AFEX, a multi-

service cross-border payment advisory

firm, “We try to find out as much as pos-

sible about each of our customers’ needs

and objectives – they are all different and

most deals are not the same.”

Through its experience and connections,

AFEX has been able to help clients avoid di-

saster by suggesting they denominate con-

tracts in a different currency. “We told one

exporter to denominate an invoice with a

Chinese client in its local currency, renminbi

(RMB), not U.S. dollars because the firm had

a reputation for padding its U.S.-dollar in-

voices to cover potential swings in FX rates.

We saved our client between five percent to

10 percent of the contract’s value.

“For another client that was importing

sophisticated drones into Canada, we

proposed that the contract be denomi-

nated in Euros rather than U.S dollars.

That increased his margin on the basic

seven-figure deal by about four percent.

The HSBC’s Priyamvada Singh con-

cludes, “Many ‘FinTech’ platforms have

entered the market offering improved

digital tools, simple integration with buy-

ers ERP systems with easy access to mul-

tiple liquidity providers compared to the

limitations of individual banks.” CS

Ken Mark is a veteran technology expert, who has covered supply chain management since it was called distribution and has

documented its legitimization as a critical business function. He holds an MBA from York University.


At CITT’s fall Canada Logistics

Conference, Laurie Turnbull,

CCLP, Supply Chain Consultant

with Cole International Inc.,

and Larry Mitchell, director, government

services and corporate accounts with

United Van Lines, discussed the use of

RFPs as tools that can, when properly

used, enhance the shipper-carrier rela-

tionship.

The RFP is one of those great tools

that’s the first point of interface between

many shippers and carriers.

“We see a fair number of these docu-

ments. It’s often a point of contention and

it’s increasingly important that we get the

process right. I have some strong biases

when it comes to RFPs. Process is the key

word. Traditionally, RFPs have been fo-

cused as a tool to look at cost and service.

I’m not suggesting that we no longer do

that, but globalization has broadened the

spectrum for the RFP discussion, so today

we have shippers that increasingly want

carriers that are more agile. They want to

have the ability to change points of origin

around the world,” said Turnbull.

They want carriers that can provide

increased visibility, sometimes with tech-

nology tools.

“It’s all about process. Yes, cost and

service are important, but it’s becoming

much broader. That’s an important factor

for me because it speaks to the value add

in our relationship. The simple reason for

that is if you extend your supply chain

from 500 kilometres to 5000 km, you’re

going to have a hard time convincing me

that price is the most important part of

that relationship,” he said.

As he pointed out, when you are im-

porting from places where your source of

supply is 1500 km inland from a foreign

origin port, in some countries it can take

as long as three weeks to move from in-

land to the port, let alone from the port

across the Atlantic or Pacific.

“Whether you have to write one, or

you have to respond to one, there’s that

intuitive question of ‘Ugh’. I don’t think

the person who has to write one or re-

spond to one really gets excited. They are

laden with fines. You’re busy already, and

the distraction for your team to have to

pull people to deal with the RFP is real,”

said Larry Mitchell, Director, Govern-

ment Services and Corporate Accounts,

with United Van Lines Canada Ltd.

“There’s no guarantee you’re actually

going to get something from it as well. The

RFP tool is often just used as a mechanism

for a price war, so that’s why in the carrier

world we often get frustrated,” he added.

When discussing RFPs, it helps to be-

gin with a brief reference to RFQs, Turn-

bull noted.

“There are a lot of things about RFQs

that are good: large companies with so-

phisticated procurement departments do


REQUEST FOR PROPOSALS

continued

POINT OF INTERFACE

RFPs can be great tools linking shippers and carriers-here’s how to approach them.

BY JULIA KUZELJEVICH

©iStock





Replacing suppliers, in a case where

you’re shipping from Hong Kong, can be

complicated vs. if you’re shipping from

somewhere local, he said.

The value add that we bring to that re-

lationship has taken on a lot more impor-

tance as well.

Turnbull said he favours the RFP pro-

cess because it does more than talk about

price. It invites discussion of the value

add, as well as discussion of things like

ancillary charges, that no one likes to pay.

One of the challenges of RFPs is

that there is only one point of contact

this well. But small and medium sized

companies don’t do it as well-I think they

do better with the RFP process. The other

thing is that oftentimes people on the

procurement side of the industry are in-

creasingly taking responsibility for logis-

tics as part of the overseas procurement

piece. Now, more often we find those

people leading the RFP team for the ship-

per. Sometimes they can bring some new

dimension to the process but other times

they look at it from a procurement per-

spective and they don’t give it the same

weight that you and I might give it from a

logistics perspective. The key for me is

long term relationship,” he said.

But if you are tightly tied to a budget,

some of the concepts around relationship

building do not work as well.

The purpose of the process is not to

come up with the lowest price, but to

come up with the foundation for a long

lasting relationship between the shipper

and the carrier.

from the issuer.

The assumption is, that person is the de-

cision maker or controls all the information.

At the very least, that that person has

brought all of the information to the table for

the discussion. Oftentimes that is not true.

Who do you bring to the table for an

RFP discussion?

These days, operations, finance, sales,

dispatch, and even an IT team would be

logical people to include in the discussion,

maybe not all meeting at the same time.

“Shippers have done a good job in

spec’ing out their IT requirements, but in-

variably their IT requirements are much

greater than they thought was worthy of a

mention,” Turnbull said.

Distribution/warehousing is another

group you could bring in. While the teams

can get a little unwieldy, it helps to form a

pool of resources and can be a rewarding

experience.

“The overall objective is to get as much

information as possible. I might think I

The purpose of the process is not to come up with the lowest price, but to come up with the foundation for a long lasting relationship between the shipper and the carrier.


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have a lot of good questions to ask a ship-

per, but certainly the other parts of the

team will have questions I wouldn’t have

thought of, ” he said.

It’s the RFP that helps you qualify

who the carriers are that you are speak-

ing with.

But the real objective goes to your

ability to contribute to your competitive

advantage. Otherwise, why have the rela-

tionship?

Data culled from the technology being

used, once in a format that can be pre-

sented in the RFP, can be instrumental.

Always make sure you understand vol-

ume, capacity, seasonality (in shipments,

manpower and labour).

Part and parcel of that is seasonality of

receivables.

“I always say give your prospective

carrier 6-12 months’ data,” he said.

Develop specific clauses. As much as

possible, tailor these contracts to the spe-

cific process that you’re looking at, in-

stead of getting a template done, and

never updating it so that five years down

the road you’re using it and the business

needs have drastically changed.

Get as much information in there as

possible, target potential suppliers, and

check references.

“It’s still amazing to me today how

many companies do not check referenc-

es,” said Turnbull.

“I always ask for four to six weeks’

time. Prepare for questions from carriers.

How are you going to respond to them?

Are you going to share info with everyone

in the RFP process? Some companies like

to do it one way, some another. Lately, I’ve

seen the introduction of a pilot project

once the company is rewarded. Upon suc-

cessful completion, then they’ll award the

contract (after say 60 days).”

The contract should have a clear start

and end date, and demonstrate a clear op-

portunity for synergies, profitability, etc.

If you get the RFP, how does it affect

existing relationships?

Beware contract language in the RFP.

Turnbull recommends reading every sin-

gle clause, even if it’s eight pages long.

Look for KPIs. Some will be implied, some

will be stated.

There is significant ‘freedom of con-

tract’ for the parties to come up with their

own contract terms to complement – or

even substitute – those terms prescribed

by legislation. In some cases, shippers are

increasingly aggressive when drafting

contract language that shifts liability to

carriers/intermediaries.

Shipper-carrier contracts should be

clear in terms of their content and intent,

particularly with respect to the obliga-

tions and liabilities of the parties, or the

courts may interpret them to one party

(or the other’s) disadvantage if a dispute

results in litigation.

All shipper-drawn contracts should be

carefully scrutinized to ensure they do

not included “hidden” risks for carriers/

intermediaries. For example, Force Ma-

jeure clauses are typically limited to

events beyond the parties’ control:

“No party will be liable for any delay or

failure to perform its obligations under this

Agreement if that delay or failure is caused

by any event beyond its reasonable control,

provided that party promptly gives written

notice of fact and circumstances of that

event to the other parties and uses all rea-

sonable endeavours to mitigate its effects”

These now may include additional

stipulations like:

“… provided, however, that nothing in

this Section shall relieve Broker or a Se-

lected Carrier from its liability to Shipper

for the full actual loss, damage, or injury

to the freight shipped.”

“That’s my classic definition of a hidden

risk…the iceberg beneath the surface,” said

Turnbull of the additional clause.

“In my experience though the force

majeure clause is the more common expe-

rience. As bad as that is, that clause now

has an additional clause for broker or

freight forwarder….holding their carriers

liable. This is my walkaway point,” he said.

The clause: (Requiring intermediaries

to do the same with their agents:

“Broker shall require each Selected

Carrier to agree as a Carrier Requirement

that no force majeure, as described herein,

shall relieve Selected Carrier from its lia-

bility to Shipper for the full actual loss,

damage, or injury to the freight shipped.”

(K.E. Stoll, Fernandes Hearn LLP)

The big point here is ask lots of ques-

tions.

Identify why the previous service pro-

vider failed, and whether or not you can

improve the service. Were there inaccura-

cies in the RFP conditions, unidentified

customer expectations, unidentified end-

customer expectations, was there an un-

willingness to pay for ancillary services?

The RFP process can be a “land of op-

portunity”, said Mitchell.

“My firm has embraced it. We have de-

veloped a functional team internally that

respond in all of the areas. Like many of

you that do this on a daily basis, we’ve de-

veloped a library. Why it’s a real opportu-

nity for us is that the RFP gives you that

opportunity to say, you’ve asked us to re-

spond to the freight move, but we want to

talk about the entire cycle,” he added.

Sometimes, for example, you can get

RFPs structured in a way that benefits

you more, as well as the opportunity to

help to develop service level agreements.

“One of the most exciting things we’ve

done recently for our contracts is survi-

vorship based on KPI. If we meet all your

KPIs we want our extended agreement to

kick in,” Mitchell said.

But even when you don’t get the con-

tract, Mitchell said the debrief process of-

fers insight.

“It’s very valuable to go in after the fact

and find out, where did you do well,

where you didn’t and why they chose an-

other option? I have always found this

very helpful,” he said.

And when you don’t want to respond

in the first place?

“Just offer a simple ‘thanks for the op-

portunity, we don’t think we can add val-

ue to the process’,” said Turnbull.

“We do respond politely. We appreci-

ate the opportunity, we’d love to do busi-

ness. We enclose a generic pricing pro-

posal that doesn’t shut the door, but we’re

honest that ‘this is what we can provide

with this general tariff ’,” Mitchell said. CS



Develop specific clauses. As much as possible, tailor these contracts to the specific process that you’re looking at,

instead of getting a template done, and never updating it so that five years down the road you’re using it and the

business needs have drastically changed.


RETROSPECTIVE


Produce or Perish

As the old year closes and a new

one begins, we revisit, in our Ret-

rospective page, the August 1965

edition of Canadian Transportation for

Scrooge’s view on how to apprach trans-

portation management.

“Cratchit, let me put it this way…pro-

duce or perish!”

It’s once again time to shed some light on

what’s ahead for the industry mode by mode,

and for the economy in general.

Maintaining good shipper-carrier rela-

tionships goes without saying.

Carriers are having trouble increasing,

and in some cases even sustaining, rates

because there’s an abundance of capacity.

Forward-thinking shippers will want

to build partnerships with carriers to en-

sure they have capacity available in the

long term. Shippers with a longer-term

view are more likely to be serviced when

capacity tightens.

Shippers and carriers can work to-

gether by driving waste out of the system.

More shippers should be planning for

capacity to tighten in 2017 when electronic

logging devices (ELDs) are mandated in

the U.S.. At the October 2016 Surface Trans-

portation Summit, trucking economist

John Larkin, managing director and head

of research with Stifel Financial Group,

said the legislation could pull 3-5% of U.S.

trucking capacity out of the market due to

an inability or unwillingness to comply. CS


COACHING CORNER

www.canadianshipper.comJanuary/February 201735©id-work/iStock

Carolina M. Billings is CFO-CHRO of a business conglomerate and has 15+ years' experience in the fields of Business Development,

Human Resources and Finance. She champions leadership initiatives as well as empowering and coaching/mentoring others to lead. For more information please visit www.nlilabel.com or email [email protected]

Dreams can be fantasies. It is wonderful

to daydream of one day being your own

boss….or wish for the dream job of own-

ing your own business. Successful entre-

preneurs rarely dream, they envision,

they solve problems, add value, create,

most of all they believe in their product

and just do what needs to be done.

Q/ I have been an executive for most of my career and find myself disenchanted, unfulfilled and most of all tired of what feels like “the machine”. All of a sudden, my job began to taste like dust. All of the motivators that once engaged me no lon-ger seem to matter. I have been thinking of going at it alone. Starting my own con-sulting practice has always been my dream. I am hesitant to discuss it with col-leagues or friends, as they see only the perks and benefits of my role, not the ev-eryday reality of it, and will think I am crazy or having a mid-life crisis. Is there a way to ease into it or figure out the best time to try before it is too late?

A/ The best time to start your own busi-

ness is the present. There is no such

thing as the perfect time, however there

is such a thing as the least imperfect

time. But before you decide to quit your

job or make any kind of monetary in-

vestment do take the time to consider

the following:

• What is the primary reason you want to

start your own business? Is it the dream

of being an entrepreneur/consultant/sole

practitioner or is this a dream to follow

your passion?

• What is your current reality? Do you

have time commitments i.e. are you a pri-

mary caregiver? Do you have a secondary

source of income? Succeeding at getting a

business started requires a

lot of time. It is often said that “entrepre-

neurs are willing to work 80 hours a week

for themselves so they do not have to work

40 hours a week for someone else”. How

will you or your household do without

your existing income? How will you pay

the bills until your business gets rolling?

• Will your consulting practice be within

the same field you are currently working

in? Is it possible to make the transition

from employee to consultant while keep-

ing your existing employer as a client?

• About the “job tasting like dust”? Is it

that what you are doing all of a sudden

does not inspire you? To be a successful

consultant you must be a master of your

field. This means it must become your

brand, your everything. Gladwell’s 10,000

hours comes to mind. That is where pas-

sion comes into play. If you are going to be

doing consulting on something that you

are passionate about, chances are you will

succeed at it. Passion typically becomes a

bit of an obsession. To succeed as an en-

trepreneur your task will be: to be pas-

sionate and to ensure your commitment

to your brand becomes an obsession.

• If you are not staying within the same

field, is it possible to start your practice at

night or part-time? Many networking

events occur in the morning - breakfast

sessions are usually at 7:30 a.m. or alterna-

tively, evening networking events may fit

your schedule too. This is a great way to

get your name out there and to begin mak-

ing contacts. Also content marketing can

be great. Social media allows the world to

get to know the caliber of your expertise

and it gives you a chance to master your

pitch and your unique value proposition.

• Lastly, to be successful in business you

need mastery of two things: The actual

product or service you are offering AND

being good at business - which are two

different skills. There are a lot of future en-

trepreneur programs at various boards of

trade and start-up think tanks, to name a

few. An internet search of your area would

be an ideal place to start. They are great at

helping you put your business plan to-

gether as well as providing market re-

search for the viability of your offering.

Launching your own consulting

practice or business is hard work, but

the amazing thing is that it does not feel

like it. There is a freedom and commit-

ment to self that seems to take over. Per-

sonally I think it is “a must” experience

in a lifetime. Fasten your seat belt and

enjoy the ride. CS

Chasing the dreamSuccessful entrepreneurs must have the grit, vision to make the dream reality By Carolina Billings, CPCC, CHRL, MA-IS

“The best time to start your

own business is in the present.

There is no such thing as the

perfect time, however there

is such a thing as the least

imperfect time.”

http://www.nlilabel.com




IN DEMANDAlmost one million people are employed by the Canadian

transportation and warehousing industry, according to

government data gathered by Canada Cartage for an

infographic, part of which is reproduced here. Truck drivers

on their own make up 1.5% of the Canadian labour force.

INSIDE THE NUMBERSWITH LOU SMYRLIS, MCILT

OUR INDUSTRY MAKES UP 5% OFTOTAL EMPLOYMENT IN CANADA

90%

24 305Class 8 trucks were bought in Canada in 2015

of consumer and food products are transported by truck.

1.5%of the Canadian labour force are employed as truck drivers.

of total employment

1.6%from 20135%

worked in the Canadian transportation and warehousing industry in 2014.

896,000 PEOPLE

=100k

People


THE BIGGER PICTURE

www.canadianshipper.comJanuary/February 201737©iStock

Amazon and Uber Set the Pace in the Freight IndustryAmazon and Uber have identi-

fied two unique elements of

freight transportation and are

triggering a tidal wave of activ-

ity. They have created a unique

blend of predictable logistics

services, pricing options and

marketing. On demand deliv-

ery services are sprouting

in major markets throughout

North America. Whether it is

DoonDash, Sprig or Instacart

in food deliveries, Washio in

dry cleaning or Shyp, Roadie,

Cargomatic or Deliv for carrier

procurement or Transfix or

Freightera for freight broker-

age, there are a host of app-

based delivery services that are

a variation on the Uber con-

cept. This is just a sample of the

start-ups that have entered

and continue to enter the in-

dustry on an almost daily basis.

Trucking/Rail Equipment Purchases DeclineThis was a tough year for

transportation equipment

providers, a direct result of

the slow economy. Class 8

truck production was down

30% in 2016 while semi-trail-

er production outperformed.

With rail car utilization be-

low 70 percent and

significant overca-

pacity, North American

orders for rail cars were at

very low levels.

The Ongoing Driver ShortageDriver recruitment and reten-

tion remained one of the ma-

jor problems in the trucking

industry in 2016. While many

companies have been raising

driver wages the past few

years, this is still of limited

benefit in retaining qualified

drivers. The major carriers

continue to try a range of oth-

er approaches to address the

problem: driver surveys, driv-

er loyalty programs, efforts to

improve work life balance,

driver mentorship programs,

driver training programs and

a range of other measures.

The Hanjin BankruptcyThe August bankruptcy of

Hanjin shipping line, the

world’s seventh largest con-

tainer line, threw ports and

retailers around the world into

confusion, with giant contain-

er ships marooned and mer-

chants worrying whether tons

of goods would reach their

shelves. The financial strug-

gles of Hanjin Shipping were

attributable to an ongoing

downturn in the container

shipping industry that is the

result of numerous interrelat-

ed factors such as weak global

GDP, overcapacity on contain-

er vessels, “bloated” U.S. retail

inventories, changing con-

sumer spending patterns, Chi-

nese economic slowdown, and

muted demand for container

shipping. The downturn dent-

Here are the top stories in

freight transportation that

caught my attention over 2016.

Brexit and the Election of Donald Trump as President of the United StatesThese were the two biggest

political events of 2016. The

Brexit vote had an immediate

impact on the value of the

British pound. The impact of

these two stunning develop-

ments on trade, economics

and transportation will be

felt for years to come. NAFTA

and the Trans-Pacific Part-

nership will certainly come

up for review early in 2017.

The entire world will be

watching to see how these

stories play out.

In an otherwise flat year,

these two political stories

were the biggest events of the

past twelve months. The year

2017 is shaping up as step-

ping stone to great change in

North America and around

the world.

The Tepid EconomyThe North American econo-

mies underperformed the

global economy and the econ-

omies of emerging markets in

2016. Business investment, a

key driver of the economy,

was down in 2016, driven in

large part by the big drop in

fortunes of the oil and gas in-

dustry. Consumer spending

and employment levels re-

mained solid in the United

States and somewhat less so

in Canada. U.S. manufactur-

ing activity increased.

U.S. imports began an up-

tick as did U.S. imports of Ca-

nadian goods, driven in part by

the strong U.S. dollar and drop

in the value of the Canadian

dollar. The strong U.S. dollar

depressed export activity.

E-Commerce/The Last Mile Home Delivery Market Continue to GrowE-Commerce has had a com-

pound annual growth rate of

CAGR of 3% (2000-2015).

While final mile parcel

companies continue to gain

traction, UPS, FedEx and

USPS still appear to control

94% of the USA parcel market.

Omni-channel distribu-

tion has been gaining in im-

portance over the past few

years as consumers seek

more options and greater

flexibility. The bad news, as

reported at the recent Sur-

face Transportation Sum-

mit, is that nobody appears

to be making money with it.

The need for multiple in-

ventories and the challeng-

es of demand planning are

eroding the financial bene-

fits of this method of distri-

bution. To improve finan-

cial performance, companies

are linking collaborative in-

ventory planning, distrib-

uted order management,

integrated order manage-

ment with their TMS sys-

tem and RFID technology.

“To improve financial performance, companies are linking collaborative inventory planning, distributed order management, integrated order management with their TMS system and RFID technology.”

2017 “stepping stone” to great change By Dan GoodwillBy

continued



THE BIGGER PICTURE


TMS Market Continues to ExpandCertain TMS providers are

now going to market with so-

lutions that are easy to get up

and running and easy to use,

many of which are cloud

based with global capabilities.

In the past, shipper networks

tended to be application spe-

cific. Today, the leading TMS

providers are building inter-

faces into multiple networks

of transportation providers

for rail, trucking and interna-

tional shipping. CS

IoT, Big Data and AnalyticsThe Internet of Things and Big

Data are trendy labels for a

fundamental change that will

revolutionize manufacturing,

distribution, and hence trans-

portation. Applying advanced

analytics to big data can solve

supply chain problems. Three

ingredients are key to getting

an advanced analytics initia-

tive underway: having the

right people; collecting high

quality data and; obtaining the

best tools at the right price.

tion. Carriers were taking

rate decreases.

This caused many carriers

to rethink their operating

strategies. Truckload carriers

reined in capacity, parked

trucks and/or curtailed buy-

ing new ones. LTL carriers

focused on yield manage-

ment and the utilization of

dimensioning equipment to

improve pricing accuracy.

Understanding Total Cost of

Ownership (TCO) of fleet

equipment became a priority

for fleet owners.

ed profits and crippled the fi-

nancial health for most of the

top twenty ocean carriers.

Cost Management2016 was supposed to be a

year when truckload capacity

tightened and rates skyrock-

eted. It was supposed to be a

year when higher truckload

rates pushed shippers to

move freight over to intermo-

dal transportation. It was

supposed to be the year when

shippers had to face the mu-

sic of higher driver wages and

pay their carriers according-

ly. It wasn’t. For much of the

year, the economy was the

softest it had been since 2011.

The slow economy and high

inventories sent spot market

rates in a downward direc-

Dan Goodwill, president of Dan Goodwill and Associates, has more than 30 years of experience in the logistics and transportation industries in both Canada and the US. Goodwill is currently a consultant to manufacturers and distributors, helping them improve their transportation processes and save millions of dollars in freight spend. He has held several executive level positions in the industry. He can be reached at [email protected].





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adding it up - canadian shipper...jan 01, 2017 · last year, montreal’s container cargo broke...

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