DECEMBER 2013Published Since 1898SUMMIT SUMMARYGreat minds meet on transportation managementNEW HORIZONSAnnouncing the launch of Canadian ShipperOUTLOOK 2014:The climate ahead for transportation purchasersFXF Cross Border Speed ClaimClient: FedExJob #: 00050Notes: CT&L = 8.125" x 10.875"MM&D = 8.125" x 10.75Prod Mgr:Eileen O'MalleyProd Phone:630-562-7337Current Date:10-21-2013 1:15 PMUser Name:lventrellaPrevious User:tknightFile Name:00050_FXF_CrossBorder-AD-v4.inddTrim:8.375" x 11.125"Bleed:NoneFolded Size:NoneFold Position: None Job Colors: 4/cScale: 1" = 1"Final Output: 100%Printed on Xerox550PrintedatNonePage: 1 of 1Fonts Used: Univers (57 Condensed, 47 Light Condensed, 67 Bold Condensed)Team Approval:PR: None_______CD: Tom Knight_______AD: Lauren Castady _______CW: None _______PA: Lisa Ventrella _______AE: Laura Goodlove_______Ink Colors Used: Cyan Magenta Yellow Black.., CT&L, Slug Cubed 2013 FedExFedEx Freight Priority has the fastest published transit times of any LTL service connecting the U.S. and major Canadian markets with a single network.*Ship smart from the start. FedEx Freight delivers your cross-borderLTL freight shipments with the reliability, fast transit times andon-time performance you need to keep your business competitive. Greenlight your LTL shipment with FedEx Freight.Visit fedex.ca/ltlcrossborder or call 1.800.GoFedEx today. *Major Canadian markets: Toronto, Montreal, Vancouver, Ottawa and Calgary. FASTEST CROSS-BORDERCT&L DECEMBER 20133VOLUME116I SSUENO. 11DECEMBER2013Published Since 1898Ourannualreportfeaturesthelatestindustrytrendsand topicsaffectingyourbusiness,expertanalysisofeconomic factors shaping the year ahead, by mode, along with the most up to date research on transportation buying trends. . . . .21COVER6 CITT REPOSITION 2013 REPORTExclusive coverage from CITTs AGM features in-depth discussion of the CITT designation name change, and the debate around fuel surcharges and affected stakeholders.12 SURFACE TRANSPORTATION SUMMITTransportation Media and Dan Goodwill & Associates brought together some 300 participants in this years Surface Transportation Summit, which provided the opportunity for shippers and carriers to air their differences, in a spirit of collaboration, and sparing no sacred cows.Special Insidewww.ctl.caOutlook 22. . .MARINE CARRIERS: EXPANSION PLANSCanadian shipping firms boast fleet renewal, increased investments25. . .AIR CARRIERS: TOUGH CLIMATERate and yield pressures continue as cargo volumes show modest gains28. . .RAIL CARRIERS: HEIGHTENED SAFETYThe rail industry faces stricter climate on safety, process and service32. . .COURIER AND EXPRESS: NO SHAKE-UPSThe biggest players increase their market share, but otherwise the field is unchanged35. . . MOTOR CARRIERS: MARGIN PRESSURE Volumes are up but not rates4 THE VIEW WITH LOUInside our rebranding to44 CT&L DECEMBER 2013Since our publisher Nick Krukowski first mentioned it in this space in the August issue, youve seen our promotional ads and youve been introduced to the upcoming change in our title if you attended our most recent Surface Transportation Summit. This is the last issue we will be publishing under the title of Canadian Transportation & Logistics. Starting in 2014 we are adopting a new title: Canadian Shipper.AsmuchasIhadgrown used to the Canadian Transpor-tation&Logisticstitleandthe familiarity it enjoyed in industry circles,truthisthatitwasa mouthfultosayanditsoverly longlogodifficulttomarket. The new Canadian Shipper title ismuchshorterandeasierto promote but also better reflects exactlywhomoureditorial scope and mandate is meant to serve:provenbuyersoftrans-portation services, both inbound and outbound. Ourpublicationis115yearsoldandhas changeditstitlemanytimesoverthepast dozen decades to better reflect the changes in the industry. But one thing has remained con-stant:Ourfocushasbeenonthetransporta-tion link of the supply chain. Our editorial is geared towards providing the information you need to get your product to where it needs to be, when it needs to be there, in the most ef-ficient, secure and cost effective manner. Thefocusontransportationwillnot change under the Canadian Shipper title but it will be expanded. One of the most impor-tantchangeswevewitnessedoverthepast twodecadesisthelengtheningofCanadian supply chains as Canadian companies set their sights beyond the domestic or the US market towards global markets. Of course, longer sup-plychainsaremorecomplexsupplychains. Over the past couple of years we have tried to address the resulting need for more informa-tionaboutmanagingtransportationinsuch globalsupplychainsbysendingoureditors further afield to report directly on transporta-tion and customs challenges. Expect more of the same next year with every issue of Cana-dianShipperhavingafocusonakeyglobal market: Europe, Asia, South America and, of course, our largest export market, the US.Moreglobalsupplychainsalsomeanan expandingmixoftransportationmodes. Whilewehaveattemptedtoincludeinfor-mation about every mode in our issues, the reality is we are constrained by the amount ofspaceavailableinourprintedproduct. Anotherkeychangefor2014isasizeable increase in our frequency and an important change in our delivery method. We will pub-lish18issuesnextyearsixinthetradi-tionalfeatures-basedprintformat,and twelve digital modal updates, each of them focusing on key metrics for a specific mode, andprovidingyouwiththelatestindustry data,analysis,andinsightaffectingyour transportation purchasing decision.The move to digital editions continues our effortstoprovideinformationtoyouina varietyofplatforms.Ouraward-winning WebTV show, TMTV, is not only a favourite onourwebsitebutisapproachinghalfa million views on our YouTube channel. Our twiceweeklye-newsletterkeepsyouupto dateonthelatestnewshappenings.Itssafe to say we have conducted more research on thetransportationindustryoverthepast10 years than any other industry organization by a long stretch. Our own Surface Transporta-tionSummitisbecomingrecognizedasone ofthebesteducationalandnetworkingop-portunitiesintransportationtoday. Andour social media presence on Twitter and Linke-dIn is second to none in the industry.It all amounts to having the tools and flex-ibility necessary to tell a story in the best way for that story to be told. We are committed to engagingwithourreadersinwhicheverway they prefer to engage with us. Expect to see us reachouttoyouinevenmorenewwaysin the years to come.Asexcitedasweareaboutthenewtitle, weareworkingtoensurethereisrealsub-stance behind it. CT&LLou Smyrlis, MCILT We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian HeritageMEMBER CANADI AN BUSI NESS PRESSCANADI AN CI RCULATI ONS AUDI T BOARDVolume 116 Issue No. 11 December 2013EDITORIAL DIRECTORLou Smyrlis(416) 510-6881 Lou@TransportationMedia.caASSOCIATE EDITORJulia Kuzeljevich(416) 510-6880 Julia@TransportationMedia.caPUBLISHERNick Krukowski(416) 510-5108 nick@ctl.caART DIRECTORMary Peligra mpeligra@bizinfogroup.caCONTRIBUTING EDITORSCarroll McCormick, Leo Ryan, James Menzies,John G. Smith, Ian Putzger, Ken MarkMARKET PRODUCTION MANAGERGary White(416) 510-6760gwhite@bizinfogroup.caVIDEO PRODUCTION MANAGERBrad LingRESEARCH MANAGERLaura MoffattCIRCULATION MANAGERBarbara Adelt(416) 442-5600 Ext. 3546 badelt@bizinfogroup.caEXECUTIVE PUBLISHERTim DimopoulosVICE-PRESIDENT PUBLISHINGAlex PapanouPRESIDENTBruce Creighton HEAD OFFICE:80 Valleybrook Drive, Toronto, ON M3B 2S9

CANADIAN TRANSPORTATION & LOGISTICS iswritten for Canadian transportation and logistics professionals who manage product flow from manufacturer to point-of- sale. Edit orial is focusedon re porting, analysis and interpretation of Can adianlog istics trends and issues. It is published byBIG Magazines LP, a division of GlacierBIG Holdings Company Ltd.SUBSCRIPTIONS:Contact us at: mmarasigan@bizinfogroup.ca Tel: 416 442 5600 ext. 3548. Fax: 416 510 6875.Website: ctl.ca (click on sub scription button)SUBSCRIPTION RATES: Canada: $64.95 + applicable taxes, per year; $105.95 + applicable taxes, for two years. U.S.A.: US$105.95 per year. All other foreign: US$105.95 per year. Single copies $8 except for the annual Logistics Buyers Guide (Aug) $59.95 + applicable taxes, (not including HST) plus $2.00 for postage. USA: US$107.95, Foreign: US$107.95 ISSN 1187-4295 (print), ISSN 1923-368X (Digital), (Can adian Trans port ation & Logistics.) Indexed by Canadian Bus iness Period icals Index. Printed in Can ada. All rights re served. The contents of this publication may not be reproduced either inpart or in full without the consent of the copyright owner. POSTMASTER: Please forward forms 29B and 67B to:80 Valleybrook Drive, Toronto, Ontario, M3B 2S9Second Class Mail Registration Number 0721. PUBLICATIONS MAIL AGREEMENT 40069240whats in a name?We are changing our title to Canadian Shipper. But we are keeping,and growing, our commitment to supplying you with thecomprehensive information you need to manage transportation.the view with LouPolicies are underwritten by Northbridge Commercial Insurance Corporation. Registered trademark of Northbridge Financial Corporation (Northbridge). Used under license from Northbridge.nbins.com/truckingIm old school, says Brian Kurtz. When I started my truckingcompany over 30 years ago, you didnt worry too much about the rules. Now there are so many rules and regulations. Nobody under-stands the challenges facing transportation companies more than we do at Northbridge Insurance*. With over 60 years in the sector, we get trucking. We know how difcult itis to stay current on safety and compliance requirements in vari-ous jurisdictions. We can even benchmark your performanceversus your industry and competition. Our tools enableyou to improve your operations and lower costs, boosting your bottom line. Some insurers you only seeat renewal time, but these guys are in touch to keep us up-to-date, says Mr. Kurtz. No other insurer works as hard tomaintain relationships with customers. We provide ongoing,customized support, training and materials to assist with yourspecic needs. Ask your broker how Northbridge lets you focus on whats importantyour cus-tomers and your prots. Margins are half of what they were 10 years ago, says Mr. Kurtz. But I know Northbridge will always be there. Heck, theyve been around even longer than me. Who could possibly keep up with all the new trucking regs? Good thing Northbridgekeeps me current.Brian Kurtz, President, Kurtz Trucking, Breslau, Ontariowww.ctl.caLou Smyrlis,MCILT We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian HeritageMEMBER CANADI AN BUSI NESS PRESSCANADI AN CI RCULATI ONS AUDI T BOARDVolume 116 Issue No. 11 December 2013EDITORIAL DIRECTORLou Smyrlis(416) 510-6881 Lou@TransportationMedia.caASSOCIATE EDITORJulia Kuzeljevich(416) 510-6880 Julia@TransportationMedia.caPUBLISHERNick Krukowski(416) 510-5108 nick@ctl.caART DIRECTORMary Peligra mpeligra@bizinfogroup.caCONTRIBUTING EDITORSCarroll McCormick, Leo Ryan, James Menzies,John G. Smith, Ian Putzger, Ken MarkMARKET PRODUCTION MANAGERGary White(416) 510-6760gwhite@bizinfogroup.caVIDEO PRODUCTION MANAGERBrad LingRESEARCH MANAGERLaura MoffattCIRCULATION MANAGERBarbara Adelt(416) 442-5600 Ext. 3546 badelt@bizinfogroup.caEXECUTIVE PUBLISHERTim DimopoulosVICE-PRESIDENT PUBLISHINGAlex PapanouPRESIDENTBruce Creighton HEAD OFFICE:80 Valleybrook Drive, Toronto, ON M3B 2S9

CANADIAN TRANSPORTATION & LOGISTICS iswritten for Canadian transportation and logistics professionals who manage product flow from manufacturer to point-of- sale. Edit orial is focusedon re porting, analysis and interpretation of Can adianlog istics trends and issues. It is published byBIG Magazines LP, a division of GlacierBIG Holdings Company Ltd.SUBSCRIPTIONS:Contact us at: mmarasigan@bizinfogroup.ca Tel: 416 442 5600 ext. 3548. Fax: 416 510 6875.Website: ctl.ca (click on sub scription button)SUBSCRIPTION RATES: Canada: $64.95 + applicable taxes, per year; $105.95 + applicable taxes, for two years. U.S.A.: US$105.95 per year. All other foreign: US$105.95 per year. Single copies $8 except for the annual Logistics Buyers Guide (Aug) $59.95 + applicable taxes, (not including HST) plus $2.00 for postage. USA: US$107.95, Foreign: US$107.95 ISSN 1187-4295 (print), ISSN 1923-368X (Digital), (Can adian Trans port ation & Logistics.) Indexed by Canadian Bus iness Period icals Index. Printed in Can ada. All rights re served. The contents of this publication may not be reproduced either inpart or in full without the consent of the copyright owner. POSTMASTER: Please forward forms 29B and 67B to:80 Valleybrook Drive, Toronto, Ontario, M3B 2S9Second Class Mail Registration Number 0721. PUBLICATIONS MAIL AGREEMENT 40069240Policies are underwritten by Northbridge Commercial Insurance Corporation. Registered trademark of Northbridge Financial Corporation (Northbridge). Used under license from Northbridge.nbins.com/truckingIm old school, says Brian Kurtz. When I started my truckingcompany over 30 years ago, you didnt worry too much about the rules. Now there are so many rules and regulations. Nobody under-stands the challenges facing transportation companies more than we do at Northbridge Insurance*. With over 60 years in the sector, we get trucking. We know how difcult itis to stay current on safety and compliance requirements in vari-ous jurisdictions. We can even benchmark your performanceversus your industry and competition. Our tools enableyou to improve your operations and lower costs, boosting your bottom line. Some insurers you only seeat renewal time, but these guys are in touch to keep us up-to-date, says Mr. Kurtz. No other insurer works as hard tomaintain relationships with customers. We provide ongoing,customized support, training and materials to assist with yourspecic needs. Ask your broker how Northbridge lets you focus on whats importantyour cus-tomers and your prots. Margins are half of what they were 10 years ago, says Mr. Kurtz. But I know Northbridge will always be there. Heck, theyve been around even longer than me. Who could possibly keep up with all the new trucking regs? Good thing Northbridgekeeps me current.Brian Kurtz, President, Kurtz Trucking, Breslau, Ontario6 www.ctl.ca 6 CT&L DECEMBER 2013CTL: Is it true that CITT has decided to change its designation name after over 50 years?CITT: Absolutely, 100% true. And we think this is really fantastic news. The CITT mem-bership approved it at our AGM with over-whelmingsupport.Thisisalong-overdue, value-adding move for our designation hold-ersandthecompaniestheyrepresentand work with.CTL: Why did CITT decide to make this change?CITT: The simple answer is that CITT certi-fied members and business leaders have been askingforadisciplinespecificdescriptionof the designation holder to better communicate their area of expertise and high level of experi-ence, integrity and professionalism.CTL: What is the new designation name?CITT: CITT-Certified Logistics Professional (CCLP). CCLP was the most accurate, de-scriptiveandappropriatedesignationname we could adopt. It also is the way we infor-mally describe CITTs fully certified pros and designation holders now. Each part of it pro-videsimportantinformationaboutthecre-dential holder.CTL: What was the reaction among your mem-bers to the change?CITT: Most members are thrilled. And we had tremendous participation from a huge portion of our membership base in the decision-mak-ingprocess.Someofourmostenthusiastic CITT champions wanted to be sure that CITT wouldstillhaveaprominentprofile.And theyllbehappyandconfidentthatCITTis prominent in the new designation name.CTL: Howcancompaniesidentifypeoplewho are CITT-Certified Logistics Professionals?CITT: Companies have a wide range of prac-ticesonhowindustry,andother,credentials are shown with their staffs signatures and on theirbusinesscards.Forinstance,someonly allow job titles. So someone might have a cre-dentialbutitisntshown.Ofcourse,smart employersandcustomerswillalwaysaskif someone holds an industry credential.That said, all CITT-Certified Logistics Pro-fessionalsareentitledandencouragedto showtheinitialsCCLPaftertheirnames and/orwriteouttheirfulldesignationname. And only those pros that are fully certified by CITTandareingoodstandingasmembers willbeabletocallthemselvesCCLPs.This reallydistinguishesthemfromCITTspro-gram of study graduates and articling students as people who have met our academic require-mentsinlogisticsandbusinessANDhave loggedaminimumof8,500sector-specific professionalhours,havecommittedtocon-tinuingprofessionaldevelopmentandhave pledged themselves to ethical conduct.The other way that CCLPs can be identi-fiedisiftheyreshowingouroptional-use, Change will be discipline-specific, and aims to better communicate expertise and experienceB y L o u S m y r l i sCITT approves change to designation name at AGMreport reposition 2013In an exclusive interview with Warren Sarafinchan, CITT, and vice president of Supply Chain at Sun-Rype Products Ltd., Canadian Transportation & Logistics discusses CITTs designation name change and certification.Capacity as a competitive advantage.What do you get with North Americas most powerful truckload network? The condence that every freight shipment arrivesat its destination on time. People in every C.H. Robinson ofcehave the local market knowledge and visibility to maximize your opportunities. Now, your customers are satised and youre prepared for any situation. Say yes to coast to coast connections working for you.solutions@chrobinson.com|800.323.7587 2013 C.H. Robinson Worldwide, Inc. All Rights Reserved. www.chrobinson.comScan this code to download a FREE copy of our 10 Tips to Prepare for a Tight Capacity Market white paper.Capacity as a competitive advantage.What do you get with North Americas most powerful truckload network? The condence that every freight shipment arrivesat its destination on time. People in every C.H. Robinson ofcehave the local market knowledge and visibility to maximize your opportunities. Now, your customers are satised and youre prepared for any situation. Say yes to coast to coast connections working for you.solutions@chrobinson.com|800.323.7587 2013 C.H. Robinson Worldwide, Inc. All Rights Reserved. www.chrobinson.comScan this code to download a FREE copy of our 10 Tips to Prepare for a Tight Capacity Market white paper.8 www.ctl.ca 8 CT&L DECEMBER 2013ADDED CAPACITY TO AND FROMSOUTH AMERICAAir Canada Cargo has more capacity on its service to and from Brazil, Chile and Argentina, thanks to aircraft up gauges. Flights to Sao Paulo, Santiagoand Buenos Aires are now operated with B777 aircraft.Book now!Visit www.aircanadacargo.com for detailsor contact your local Air Canada sales representative.AC Expedair|AC Live|AC Secure|AC DGR|AC General Cargo|AC Compassion|AC Cool Chain|AC Post Air Canada Cargo|Going further.aircanadacargo.comACC_CTL_4.5x7.5-SouthAmerica.indd 1 13-10-15 3:18 PMCCLPtrust-mark.Sincenotallformsof communication will support or allow this kindofgraphic,thisisavalue-added supportformembersandisntrequired for display.CTL: Why did CITT pick logistics and not a wider description, such as supply chain?CITT: CITT-Certified Logistics Profession-als (CCLPs) play lynchpin roles in the glob-al supply chain ecosystem. Yet we felt it was really important to avoid the faulty thinking that says theres only ONE, definitive sup-plychainprofessional.Intruth,thereare severalcomplementaryskillsetsthatneed tocometogetherforsomeonetobea completelywell-roundedsupplychain professional.Ifpeoplereallywanttobe recognized as all-round supply chain pro-fessionals, they really need cross-functional certificationfrommorethanoneexpert certifying body.So CCLP is a LOGISTICS management certification,providingindustrysdeepest andmorecomprehensivecoverageofthe technicaldisciplinecombinedwithopera-tion-criticalmanagementabilities.The otherbigskill-setforsupplychainispro-curement, and well leave this with our col-leagues at SCMA since thats their focus.CTL: Who is the CCLP Designation for?CITT:Itsforanyonewhobuys,sellsor manageslogistics,orisimpactedbythe transportationofrawmaterialsorgoods. Thisisforpeoplewhoworkinbusinesses wherelogisticsorancillaryservicesisthe companys core business or for people who work in supply chain and logistics roles on the client side such as resources, manufac-turing, retailing, or import-exporting.CTL: Why is certification good for people work-ing in supply chain and logistics roles today?CITT:Whenyouknowmore,andhavea third-partyvalidationofthatfromare-spectedindustrybodyyoureworthmore professionally. And when times are tougher, oruncertainliketheyarenow,companies really lean on and value people with proven supply chain logistics expertise. In all, its a proven investment that pays off with higher earningpower,betteradvancementpros-pects and improved overall employability no matter whats happening with the cycli-cal economy or job market.CTL: Whyishavingacredentialedlogis-ticsprofessional(suchasCCLPs)good for business?CITT: There are quite a few reasons actually.Industrycertificationmakesitcompletely clearwhatsomeoneknowsbyapplyinga credible third-party standard of proficiency. For the CCLP designation, CITTs standard isobjectively-measuredbasedonthepar-ticipantsperformanceresultsinthepro-gram(notjustshowinguptoacourse). CITTsstandardisnationalanditsrecog-nized right across Canada as well as by inter-national markets.Aprofessionaldesignationreallydistin-guishes the people whove made the effort to earn one. Unlike some other professional disciplines that require certification to prac-tice, logistics credentials are entirely volun-tary although more and more people are becomingcertified.Nevertheless,employ-ersandcustomerscanusecredentialsasa measuretoidentifycredentialholdersas report reposition 2013File: PMV_169391-03_MapMag_CTL Project: Magazine AdFull Page Size: 8.125" x 10.75"Bleed: 8.375" x 11"Project Manager: Jasmine Politeski Designer:Client: Port Metro Vancouver REV: NOV. 27, 2013 8:38 AM Operator: DJungColours: 4CPublication: Canadian transport and logistics December IssueFold to Fold to VANCOUVERSHANGHAIKAOHSI UNGSHENZHENHONG KONGTOKYOYOKOHAMADALIANBUSANPort Metro Vancouver is already close to Asian markets. And with unprecedented infrastructure investment in our gateway, were getting even closer.Were building land-side projects that boost rail and road efciency. Were increasingourcontainerterminal capacity and reducing on-dock dwell through collaboration with supply chain partners. Andwereoperatingwith longshore labour certainty to 2018.As a result, weve taken up to 3 days out of your supply chain. That brings your goods closer to market and you closer to your customers.is better. CloserFile: PMV_169391-03_MapMag_CTL Project: Magazine AdFull Page Size: 8.125" x 10.75"Bleed: 8.375" x 11"Project Manager: Jasmine Politeski Designer:Client: Port Metro Vancouver REV: NOV. 27, 2013 8:38 AM Operator: DJungColours: 4CPublication: Canadian transport and logistics December IssueFold to Fold to VANCOUVERSHANGHAIKAOHSI UNGSHENZHENHONG KONGTOKYOYOKOHAMADALIANBUSANPort Metro Vancouver is already close to Asian markets. And with unprecedented infrastructure investment in our gateway, were getting even closer.Were building land-side projects that boost rail and road efciency. Were increasingourcontainerterminal capacity and reducing on-dock dwell through collaboration with supply chain partners. Andwereoperatingwith longshore labour certainty to 2018.As a result, weve taken up to 3 days out of your supply chain. That brings your goods closer to market and you closer to your customers.is better. Closer10 www.ctl.ca 10 CT&L DECEMBER 2013people who are committed to doing their jobs well and are serious about their careers and the business of logistics. And that will be more and more important with the coming wave of retirements.Lastly, most professional groups have Codes of Ethics for their credential holders. CCLPs definitely have one, as did our CITTs. While this isnt a great differentiator with other professions or other sector credentials who also have Codes of Ethics, having a code for CCLPs definitely sets them apart from those people or companies in business who are not interested in operating with integrity.CTL:Didanyoftherequirementschangeforsomeonetoearna CCLP designation (vs. a CITT Designation)?CITT: No change at all.CTL: Are there plans to change the name of the organization?CITT:Absolutelynot.CITTisCITTandwillremainCITT; although,likeIBM,wedontspelloutourfulllegalname veryoftenanymore.WellkeepCITTsinceCITThasa well-establishedandwell-respectedindustryprofileandis aniconicbrand.CITThasbeenknown,trustedandrespected for 55 years and were not going to change that.CTL:WherecansomeonelearnmoreaboutbecomingaCITT-Certified Logistic Professional?CITT:TheycancallCITTat416.363.5696orvisitCITTs website at www.citt.caCT&Lreport reposition 2013InapaneldiscussiononfuelsurchargesattheCITTsNational Conference on Supply Chain & Logistics, Lou Smyrlis, Editorial Director of the Transportation Media group, asked shippers, carri-ers,andoilindustryexpertstoweighinonthediscussionabout types of fuel surcharges and the need to re-examine the processes around them.Smyrlis also said he hoped the discussion would spark an under-standing of the different points of view and also the desire to con-tinue the conversation.CITTsNationalConference,Reposition2013,tookplacein Toronto this November.Roger McKnight, senior petroleum analyst, with En-Pro Interna-tional Inc., said there are many factors affecting the price of crude, whether its a low inventory in diesel as a factor of weather, a refin-ery or pipeline issue that immediately translates into a crude price hit, and even the perception of a political crisis that affects trading on currencies like the US dollar.Six to twelve months out, he said, its expected that US shale oil andoilsandsproductionwillsteadilyincreaseandtherewillbe some relief in terms of pipeline availability.In the meantime fuel price volatility wreaks havoc on the trans-portation industry which must try to recoup some of that instability via fuel surcharges.GinnieVenslovaitis,director,TransportationOperations,for Hudsons Bay Company, said that while she wouldnt want to take money out of the carriers pockets, fuel surcharges should be based onfuelconsumptionandnotonseconddrops,waitingtimeand other accessorials that are more driver-labour related.Panelists also discussed the merits of both percentage based and invoice based fuel surcharges.Mark Lerner, assistant vice president, Intermodal Sales, with CN Rail, said the railway uses mileage-based surcharges for carload but for intermodal, invoice based is easier for the customer to compare.Invoicing is more efficient for intermodal when the complexi-ties are built in, he said.Jeff Bryan, president and CEO, Jeff Bryan Transport Ltd., noted that carriers have to keep on top of the changes every time theres a different version out for a mileage program.Theprocessneedstostayassimpleaspossible,i.e.invoice based, said Venslovaitis, which would essentially keep the poten-tial for arguments out of the process.If someone did want to move to mileage based, theres no easy way to do it other than grabbing on to something that already exists within the data, noted Richard Patenaude, vice president, Wheels International Inc.Are shippers and carriers willing to consider a revamp and a reset of fuel surcharge rates as they stand?Many of us as a group need to come up with whats the new base rate and how much of getting from A to B is fuel these days. As long as its simple, we should raise the bar up and make fuel the right component of a freight bill, said Venslovaitis.Were open to looking at how its calculated. The issue happens when there is a wide swing in oil prices that may lead to the need for recalculation or recalibration, said Lerner.Considering the wide range of variability in fuel pricing, if carri-ers are hedging to that speculation, I would make sure I overstated my base rates to compensate, said Patenaude.Why hasnt someone come up with a new benchmark? Smyrlis asked.Because it costs money, said Bryan. The shipper has to come to us and say we want to adjust our base rates to reflect X. Everybody has their own program-it cant be whitewashed across the board. If a shipper wants to change their benchmark they could probably do that today, he said.Therealityisthatweprobablywonttaketheinitiativeto changeit.Everyoneneedstobeinalignmentontheelementsof what make up the charges. We also dont need to get government involved in the process, said Venslovaitis.AreFCAfuelsurchargetablesnon-negotiableorcantheybe considered a starting point for shipper-carrier negotiations?Its a guidepost to where the true negotiation and conversation should start. It protects your agreement with the carriers to volatil-ity-when we look at the various reasons for why fuel prices jump around-someone has to have protection, said Venslovaitis. CT&LConversation is critical for shippers and carriersB y J u l i a K u z e l j e v i c hHitting the moving target on fuel surchargesShipperCANADIANFormerly Canadian Transportation & LogisticsCanadianShipper NewsCanadianShipper.comComingin 2014!In 2014, Canadian Transportation & Logistics is adopting a new title - Canadian Shipper. The new title is more reective of our editorial scope and mandate: a business journal written for Canadian Supply Chain professionals, in the context of their transportation needs and responsibilities. The new title also lends itself more easily to the wide array of media platforms through which we are now able to serve you - not just our print magazine, but our eNewsletter - Canadian Shipper News - and online portal as well - CanadianShipper.com. Canadian Shipper will continue to publish the award-winning features and articles that youve come to expect from Canadian Transportation & Logistics - just with a fresh new look!Watch for us in 2014!news ShipperShipperCANADIANCANADIANShipperCANADIAN. comShipperCANADIANShipperCANADIANShipperCANADIANFormerly Canadian Transportation & LogisticsCanadianShipper NewsCanadianShipper.comComingin 2014!In 2014, Canadian Transportation & Logistics is adopting a new title - Canadian Shipper. The new title is more reective of our editorial scope and mandate: a business journal written for Canadian Supply Chain professionals, in the context of their transportation needs and responsibilities. The new title also lends itself more easily to the wide array of media platforms through which we are now able to serve you - not just our print magazine, but our eNewsletter - Canadian Shipper News - and online portal as well - CanadianShipper.com. Canadian Shipper will continue to publish the award-winning features and articles that youve come to expect from Canadian Transportation & Logistics - just with a fresh new look!Watch for us in 2014!news ShipperShipperCANADIANCANADIANShipperCANADIAN. comShipperCANADIANShipperCANADIAN12 www.ctl.ca 12 CT&L DECEMBER 2013Most economic indicators in positive territoryCautious optimism remains, even with US debt ceiling impasseB y J a m e s M e n z i e smanagement transportationSURFACETRANSPORTATIONSURFACEummitTRANSPORTATION2012SURFACEummitTRANSPORTATION2012SURFACETRANSPORTATIONummit 2013ummit 2012Despite all the negativity on the news, and the uncertainty in-volvingtheUSdebtceiling,mosttrendsarepointingtoa steadily growing economy that bodes well for truckings future.Thatwasthesynopsisfromleadingeconomistsandindustry analysts speaking at the 2013 Surface Transportation Summit. Car-los Gomes, senior economist with Scotiabank, has earned a reputa-tion for being more upbeat than many of his peers. I generally have been very positive over the past several years and I still remain positive with respect to the outlook, Gomes said.Globally, Gomes said the economy has been improving through-out the year, led by emerging markets in China, India and Brazil. They have moderated as well, but they continue to grow in excess of 5%, while the global economy is closer to 3%, Gomes said.Even Europe, which has been an economic anchor in recent years, returned to positive growth in the second quarter, Gomes noted.China saw some moderation in economic growth last year, but it has enjoyed double-digit growth in late 2012 and into 2013, which is telling us the slowdown in China that was expected to last several years is coming to an end.Job growth is improving in the US, by about 2% year-over-year. Thats a leading indicator Gomes watches closely.Employment growth went negative a full year before the reces-sion began, he pointed out.Here in Canada, Gomes characterized the economic picture as more mixed.Comingoutofthedownturn,wehadasignificantimprove-ment both in manufacturing shipments as well as building permits, Gomes said, noting growth has since moderated. Canada still relies heavily on the US for 70% of its exports.Gomes acknowledged Canadian household debt is a valid con-cern, but that it may not be as dire as it seems. Canadians now carry a debt-to-household income ratio of nearly 160%, which is higher than in the US today, and about equal to where US debt loads sat before the recession.However, thanks to low interest rates, debt charges account for just 7% of disposable income in Canada, a figure that was in excess of 9% in 2008 and as high as 12% in the 1990s. Interest rates would havetoclimbby100basispointstobringthedebtchargesasa percentageofdisposableincometoitsaveragerateof8.5%.So while Canadian household debt is high, Gomes said its manageable as long as interest rates remain low.CharlesClowdisJr.,managingdirector,NorthAmerican markets with IHS Global Insights, said he was embarrassed by what the impasse in Congress over the debt ceiling threatens to do to the economy. He said a quick resolution should prevent anylastingdamage,butthatitcouldinterruptsomepositive momentumwithleadingindicatorssuchashousingandcon-sumer confidence.Until two weeks ago, we were cautiously optimistic, about the economy, Clowdis said. Were still cautiously optimistic.Focusing on transportation, Clowdis said hes seeing evidence of near-shoring, with as much as 5% of manufacturing that was moved to Asia, returning to North America, usually to Mexico. This bodes well for trucking and rail providers, he noted. CT&LOURSPONSORSShippersandcarriersworkbetterwhentheyworktogether,inaspiritofcooperationand collaboration rather than confrontation. These are more than fancy words; they are the heart of what drives both Transportation Media and Dan Goodwill & Associates, two organizations which have made a concerted effort over the years to bring shippers and carriers together to discuss issues of importance, in an atmosphere that is both respectful of each others needs and yet spares no sacred cows.And its what drove us to again bring shippers and carriers together for our second annual Surface Transportation Summit this Oct. 16th. More than 300 top level transportation and logistics professionals heeded our call for a full day of education and networking at our new venue, the Mississauga Convention Centre.Ourblue-chiplineupofmorethan20speakersdugdeepintokeysubjectssuchastheeconomicoutlookfor transportation, the CEOs view of the coming year, the future of intermodalism, the growth of dedicated transportation; retailsupplychains;carrierperformancemanagement;effectivetransportationsalesstrategies;opportunitiesin mergers and acquisitions, and a frank debate on freight bids.We were rewarded with a very insightful exchange of ideas. But this conversation is too important to allow it to end there. So with this issue we are providing a comprehensive report on the major themes from the conference across all Transportation Media properties Truck News, Truck West, Fleet Executive and Canadian Shipper, reaching more than 150,000 providers and buyers of transportation services across the country. Look also for our Inside the Numbers and HookedUp e-newsletters for more information as well as future episodes of our award-winning WebTV show, TMTV. We have already provided considerable coverage of the event on www.trucknews.com, www.ctl.ca, Twitter and on our Facebook page and will continue to provide more. This dialogue between shippers and carriers must continue beyond the Summit and we will be doing our best to ensure that it does.Finally, we would like to thank our growing group of industry sponsors, whose support allowed us to bring the Surface Transportation Summit to a higher level. And dont forget to book Oct. 15, 2014 into your calendar for our next Surface Transportation Summit.Lou Smyrlis, Publisher & Editorial DirectorTrucking Group, Transportation MediaNick Krukowski, PublisherCanadian Shipper, Transportation MediaDan Goodwill, PresidentDan Goodwill & Associates13 CT&L DECEMBER 2013 www.ctl.camanagement transportationWheres the demand and areservice levels improving?B y J u l i a K u z e l j e v i c hA panelofintermodalexpertsattendingthe2013Surface Transportation Summit, held by Transportation Media with DanGoodwill&Associates,shedlightonwherethismodeof transport is headed going into 2014.The panel, moderated by Dan Goodwill, was asked to elabo-rate on some of the common perceptions about intermodal use.NeilMcKenna,vicepresident,transportation,withCana-dian Tire Corporation, indicated that intermodal is a strategic part of the Canadian Tire network, and that this mode is used to handle some 30% of the companys 4 billion pounds/year of freight, and specifically 36% of the inbound freight coming in from Vancouver.Its (for) freight that doesnt move over the road. Where the infrastructureisconducivetoitisanindicationofwhereits used, he said.I agree the driver shortage has some impact on moving con-tainers to the intermodal mode, but I dont think the shortage is asseriousasitsbeingportrayed-Ithinkitsacapacitything, added McKenna.RonTepper,executivechairmanandCEO,Consolidated Fastfrate, said the company is engaged in lots of intermodal activ-itythroughitsrecenttruckingcompanyacquisitionandalso through Canada Drayage which has offered up a lot of opportu-nities for us. We have to find ways that are competitive, or better, to move LTL shipments. Because our freight is portable we can load it as cost per cubic foot. We have a real value to the railway in terms of repositioning shipments out west again, said Tepper.Thecompanystruckingbusinessisalittlemorediversified while the intermodal business is 100% LTL, he said.BarryONeil,executivevicepresident,HubGroupCana-da, said that out of some $3.1 billion in total business, $2 bil-lion is from intermodal.Wevegrownourdrayageoperationstobecomeoneof thelargestinNorthAmerica.ThegrowthofHUBisdriven by our asset management and control. We continue to grow ourassetprogramasassetsaredepletedintheintermodal business, he said.MarkLerner,CNsAVP,domesticintermodal,saidtheCN vision for intermodal is not to change it.Wewanttobuildonitintermsofinvestinginourinfra-structureandgivingourcustomersmorevalue,andmoreop-tions. Weve invested in infrastructure, in more track, and more sidings. We have a $200 million facility in Calgary that will give usthecapacitytogrowinkeywesternmarkets,withfaster ramping and deramping of trains and co-location opportunities. Were also looking at capacity in terms of domestic and interna-tional, he said.The railway also just purchased 100 reefers that its starting to offer in the transborder market.Going intermodal:Intermsoflengthofhaul,andwhereintermodalfitsbest, Goodwill noted times have changed.Irecall1500mileswaskindofabenchmarkbackwhen. Now,weretalkingaboutlengthsofhaulasshortas600,700 miles,with80%oftruckmovementsinthe500mileorless space.Whatstheimpactoncross-border,andonCanadian freight? he asked the panel.A lot of the trucking companies we deal with are happy that wecanmoveintheshorthaulcorridors.Inorderforrailwayto compete theres a lot of fixed costs. You need a truck-like service, dependable and fast. You need a good low cost infrastructure in terms of being able to doublestack, said Lerner.TheChicago-Torontocorridorisshowingincrediblegrowth, he said, both from freight transloaded out of LA-Long Beach or originating from the Midwest interior.It is quite doable-we may even see this accelerate, he said.Shipperscontinuetohavequestionsaboutrailservicelevels and according to Lerner, a lot has changed in intermodal products over the last decade.When people experience something once its hard to shake it. I understand that if there was a bad experience there would be the fear it would happen again. But with the reservation process we putinbackin2003,2004weareabletounderstandshipper demandandsizeourcarsaccordingly.Ifwedontunderstand whats coming at us we cant plan for it, he said.CNsintermodal-focusedcustomerservicedepartmentisin charge of looking at service issues 24/7.The team sits with every new customer on delivery windows, expectations, contacts, targets. We have the KPIs against it. Now we buy ahead of the cycle-we have a little bit more than we actu-ally need, said lerner.McKenna said that reservations have improved fourfold, and 80% of time were getting what we need.Intermodal is the cheapest mode of transport next to water, andthelowestinemissionspertonne/km.Itsanobrainerasa sustainable part of your strategy, he said.WiththePanamacanalexpansionandtargetedopeningfor 2015, questions abound about whether the larger vessels will in-creasingly call on east coast ports, and how this will play out on the use of intermodal.Shippersareincreasinglyprocuringsophisticatedtechnology that is allowing them to determine where intermodal fits optimally.Were in the process of implementing a TMS-its necessary becauseofthecomplexityoftheintermodalsystemandfor keepingtrackoffreight,billsandforreconciliationpurposes, said McKenna.Rail costs are lower than trucking costs so when it can move byrail,thenitshould,andotherthanthatitshouldmoveby road, said Tepper.CT&L14 www.ctl.ca 14 CT&L DECEMBER 2013management transportationThe right fitCarrier metrics, performance, feedback keyto solid shipper relationshipB y J u l i a K u z e l j e v i c hFor shippers charged with managing the transportationequationoftheirbusi-ness,creatinganoptimizedtransportation solutionthatresultsinefficienciesisthe goal to strive for.Butwhatarethestepsittakestoget there?This years Surface Transportation Sum-mit offered a comprehensive carrier perfor-mancemanagementseminarfeaturing guestspeakersTomCoates,seniorvice president and COO, Lakeside Logistics Inc. and Anna Petrova, senior manager, custom-erservice&transportation,withFerrero Canada Ltd.LakesideLogistics,notedCoates,han-dlesawidevarietyoftransportationre-quirementsininfrastructureproducts,flo-ral distribution, food, and consumer goods.After 27 years, were more focused on thetransportationmanagementservice. Aboutfiveyearsagowedecidedtomove awayfromthetransactionalbusinessand more into strategic alignment with custom-ers,dealingattheC-level,andoffering more of a transportation management solu-tion where we would do network optimiza-tion, activity costing, business analytics and benchmarking, said Coates.Whenselectingcarriers,aspartofthe agreementwithcustomers,saidCoates, wealwaysliketolookattheincumbent carriers as part of the new stable of provid-ers that were going to use. We have a data-baseofapproximately4000carriersthat we do business with or have done business withandwewouldlookatthosecompa-niestoo,tofigureoutsomethingthatfits the needs of the customer.Petrova said that Ferreros carrier selec-tion process is very much about looking for the right fit.The right fit to me is service and capac-ity.Capacityisanimportantmatterbe-cause were a seasonal company and we still spike around Christmas time, with the sec-ond biggest spike (in volumes) around Eas-ter, said Petrova, adding that ten years ago over 60% of the companys inventory was sold during the Christmas season alone.When discussing future relations with a potential carrier, Ferrero uses a very selec-tive process, relying a great deal on carrier reputation and background.We make sure we are dealing with rep-utable service providers, said Petrova.For Lakeside Logistics, which has a full safetyandcompliancegroupinthecom-pany,whatwerelookingforwhenwe have an opportunity to look at new carriers SURFACETRANSPORTATIONSURFACEummitTRANSPORTATION2012SURFACEummitTRANSPORTATION2012SURFACETRANSPORTATIONummit 2013ummit 2012Theres always going to be risk. The issue is how to manage it.Seiter&Miller001039 Pub. CTNL Size 8.125 x 10.875Issue May 13Art Director: sd/lgCopywriter: ms Account Executive: emDate:04/30/13People who know Distribution, know BDO.The Consumer Business Practice at BDOThe logistics business has never been simple. And with recent emphasis on supply chain sustainability, higher safety standards, and an evolving regulatory climate, its getting more complex. BDOs dedicated professionals provide an exceptional array of partner-led services to help you keep up with key issues and maximize protability, even in challenging times. Assurance|Accounting|Tax|Advisorywww.bdo.ca/consumer-businessBDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member frms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.Theres always going to be risk. The issue is how to manage it.Seiter&Miller001039 Pub. CTNL Size 8.125 x 10.875Issue May 13Art Director: sd/lgCopywriter: ms Account Executive: emDate:04/30/13People who know Distribution, know BDO.The Consumer Business Practice at BDOThe logistics business has never been simple. And with recent emphasis on supply chain sustainability, higher safety standards, and an evolving regulatory climate, its getting more complex. BDOs dedicated professionals provide an exceptional array of partner-led services to help you keep up with key issues and maximize protability, even in challenging times. Assurance|Accounting|Tax|Advisorywww.bdo.ca/consumer-businessBDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member frms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.16 www.ctl.ca 16 CT&L DECEMBER 2013management transportation1.800.822.4512 Canada1.800.621.8723 USAherculesfreight.comHercules has your Customs Self Assessment solution - guaranteed!We can move CSA and non-CSA freight on the same trailer and all drivers are CSA approved.TIRED OF INTERMITTENT CSA SERVICE?Hercules Driver-CSA ad4-8.125x10.875 V7:Layout 113-11-0110:11 AMPage 1ispredominantlyCanadianbasedcarriers. They are very familiar with crossborder re-quirements,saidCoates,addingthatcar-rier safety records, CVORs, and insurance coverage are key considerations. Wehaveinsuranceminimumsthey mustobtain-$250,000worthofcargo. Were also looking for WSIB coverage, and the carriers physical location in relation to our clients. We work with companies with four or five trucks and we work with some of the biggest carriers in Canada. We focus on value added services too, and credentials likeCSAforthenorthbound,FAST,and C-TPAT.I would be a hypocrite if I said that cost was not a consideration,said Petrova of the carrier selection process at Ferrero. We do RFPs, but these are not a way for shippers to intimidate carriers, said Petrova.RFPswereahottopicofdiscussionat the summit this year. Jacquie Meyers, pres-identofMeyersTransportationSystems, issuedapleatoshippersandcarriersat-tending the Summit to re-evaulate the ten-derprocess,whichshesayshascommod-itized the trucking business.There are lot of challenges inherent to these tenders, Meyers said. Number one, itreducesthedecisionmakingdownto priceoften times when we win these ten-ders, you are not really winning. Its not a long-termwin.Itmeansyouwerethe cheapest or close to the cheapest. You have to give something up to be cheap. If youre thecheapest,whatareyouleavingout? Driver training? Safety? Security? Meyers said in a presentation during the summit.Fortheshipper,RFPsactmorealong the lines ofa quality control tool, Petrova stressed.In a lot of global organizations you have to watch for multiple audit reports, gover-nancepolicies,andriskminmization,and RFP is a tool were expected to use in a lot of cases and quite frankly they can end up costingusmoremoney.Allitdoesisit gives you a reality check. It compares your business requirements to what the market hastooffer.Sometimespricesgoupand you end up paying more, said Petrova.As a buyer, I should not be overpaying for the service, so that is sort of part of my personal exercise. Do we have to run RFP everytimewewantthatrealitycheck?I would say no, because RFP is a very high-maintenanceprocessoneverybodyspart, notjustonthetransportationcompanys part. Imagine all the data you have to gath-er-imaginealltheanalyticalsupportyou have to go through. Its the responsibility of every freight buyer to understand what the markethastooffer.Anyonewhohasthe skill of creating a simple Excel spreadsheet can and should do it, she said.Themeasurementofcarriers,andthe key variables inherent to that process, is an-otherimportantprocessinselectionand retention.Before we measure them we have to be clear about what our expectation is. People need to know when they are not perform-ing to our expectations and this will make thembetter.WithregardtospecificKPIs we have them we collect one-time deliv-ery reports from our carriers. Its a self eval-uation report-they send us the 214 EDI in-formation they put into a nice spreadsheet with the reason codes as to why they were late, said Petrova.TheotherthingIlookatarecarrier claims-howmuchNutelladidtheyfreeze SURFACETRANSPORTATIONSURFACEummitTRANSPORTATION2012SURFACEummitTRANSPORTATION2012SURFACETRANSPORTATIONummit 2013ummit 20121.800.822.4512 Canada1.800.621.8723 USAherculesfreight.comHercules has your Customs Self Assessment solution - guaranteed!We can move CSA and non-CSA freight on the same trailer and all drivers are CSA approved.TIRED OF INTERMITTENT CSA SERVICE?Hercules Driver-CSA ad4-8.125x10.875 V7:Layout 113-11-0110:11 AMPage 118 www.ctl.ca 18 CT&L DECEMBER 2013Will increase sales.WARNING:Palmer Marketing|1.800.247.5550|TryPM.com* Possible side effects include (but are not limited to): Extreme happiness, lowered blood pressure, excessive phone ringing, spontaneous cheering and may or may not result in early tropical retirement.management transportation1-866-282-4332A higher standardA professional resultA CIFFA forwarderCIFFA freight forwarders are top performers at moving freight worldwide. Theyre held to a higher standard, are more informed and are skilled in all modes of international transport. Whether you require professional guidance with a single air or ocean shipment, need to charter a vessel or an aircraft, or have project work that means moving an entire plant to the other side of the planet, use a CIFFA forwarder... theyll go farther and reach higher, to serve you better. CANADIAN INTERNATIONAL FREIGHT FORWARDERS ASSOCIATIONforme,andhowmuchRocherdidthey melt? The bottom line is its important they executetoourexpectationsandtotheir commitment.Becausethisiswhatwent into their regional agreement and we have to hold each other responsible because its a partnership, she said.Whenwestartarelationshipwitha company we need to understand what our client needs are-and we bring that back and put a plan together on how we can get that out to carriers. Sometimes we would issue an RFP, and we create a scope document so carrierscanunderstandwhatitistheyre quotingon.Weremeasuringthecarriers on compliance issues. In retail a lot of fines canhappen.Ifsomeoneleviesafineona late delivery we have to get in the middle of that and find out were the goods picked up on time, did they have enough time in tran-sit-well push back and fight off a fine based on what our records indicate, said Coates.We have been somewhat mild in man-agingourcarrierbase,butwehavetobe very transparent and very clear. If there are examples of poor service, by all means they willbebroughtupatthemomentofrate renegotiations, by all means they will be dis-cussed, and I will want to know what will be thecorrectiveandpreventiveactionsto make sure that the next year of our partner-ship we see less of those, Petrova said.Coates said Lakeside Logistics has creat-ed an operations person to work on the op-erational side and liaise with the customer. Wehavestrategicaccountmanagers whomanageourmajoraccountswhoare not salespeople but when there is an issue they would help solve it or bring it back to us, said Coates.Petrova said she aims for a short-lived relationship with salespeople.I talk to the salespeople at the point of rate discussions, and then I try to terminate thatrelationship.Insometransportation companiesthereisthatbeliefthatsales-peopleshouldbethemediatorsbetween me and the rest of their organization. Quite frankly,salespeopleshouldbeoutthere bringing the owners more sales and new ac-counts, they shouldnt be buried with op-erational issues, and I shouldnt have to go throughthesalesreptotalkaboutopera-tional issues that I have. Moving forward I would like to have a solid operations con-tact with whom I can speak the same lan-guageasopspersontoopsperson.AndI would probably not settle for less than a VP levelonthetransportationside,becauseI do want to make sure that I speak with the people who make decisions, she said.Addingthatthefishstinksfromthe head, Petrova noted that the exceptional carriers are those where the owners are in-vested in, and interested in, each aspect of the jobs their company is awarded.Intermsofacompanythatstoodout for her in this regard, Petrova said Ferrero signedacontractthreeyearsagowitha new carrier. One of the first trucks shipped out was driven by the owner-the whole atmosphere aroundthatwasveryinteresting.He showed up in his work boots and jeans with a big notepad. He wrote everything down. He asked me to take him to the warehouse. Heaskedmetotakehimonthefactory tourandlookedintoeverywastebin.He askedforacopyofthebillofladingand mentionedafewthingshewantedtosee differently.Itmadeanincredibleimpres-sionandtellsyouthevalueandthestan-dards of the organization, she said.CT&LSURFACETRANSPORTATIONSURFACEummitTRANSPORTATION2012SURFACEummitTRANSPORTATION2012SURFACETRANSPORTATIONummit 2013ummit 20121-866-282-4332A higher standardA professional resultA CIFFA forwarderCIFFA freight forwarders are top performers at moving freight worldwide. Theyre held to a higher standard, are more informed and are skilled in all modes of international transport. Whether you require professional guidance with a single air or ocean shipment, need to charter a vessel or an aircraft, or have project work that means moving an entire plant to the other side of the planet, use a CIFFA forwarder... theyll go farther and reach higher, to serve you better. CANADIAN INTERNATIONAL FREIGHT FORWARDERS ASSOCIATIONWho are you reaching out to?Comingtoyourrescue.Itswhatwedobest.NootherCanadiancarrierhastheresourceswedoon both sides of the border. We enlist the people, technology and processes to speed things up, not slow them down.We take a proactive approach to enhancing the efficiency ofyoursupplychainonbothadaytodaybasisand when you need action now. Who are you reaching out to? Take another look at Vitran!TF : 1.800.263.0791E : ltl.cda.sales@vitran.com21 OUTLOOK 2014The road ahead for transportation purchasers22 22 OUTLOOK 2014In looking at developments in 2013 and the outlook for 2014, certainly the financial results of some global carriers merit men-tion for showing improvement despite mounting capacity and still volatile ocean freight issues. However, closer to home, the lime-lightjustifiablybelongstoCanadianshippingfirmsaccelerating their biggest fleet renewal in three decades to compete not only in international trades and the domestic trades on the Great Lakes/St. Lawrencewaterwaybutalsotobolsterthecoastaltradesinthe Arctic region.As an example of a leap of faith and taking the long-term ap-proach, total investments well exceeding $1 billion are all the more striking in light of lacklustre cargo activity in recent years on the St. LawrenceSeaway.Throughputhasfallentobelow40million tonnes as opposed to 45mt in 1992, 50 million mt in 1989 and 68 mt in 1982 the main contributing factors involving a combination of increased competition from the Mississippi route, strengthened rail services to US east coast ports, and a historic shift in large vol-ume grain exports from Europe to Asia via the West Coast.Up to the end of September, total traffic on the Seaway was down over 10% at 22.8 mt. A record grain crop was expected to generate a strong surge in shipments in the closing weeks of the 2013 season.We expect to finish 2013 at or slightly below our forecast of 39mt,statesBruceHodgson,director,marketdevelopment,St. Lawrence Seaway Management Corporation.Europehasstartedtoshowsomesignsofrecovery,although this is being offset by weaker than anticipated performance within the Canadian and US economies.With a similar economic outlook foreseen in 2014, Hodgson sees B y L e o R y a nCanadian shipping lines pursue expansion amidst challenging cargo trendsmarine carriersK Line America, Inc. Customer Service (800) 609-3221 www.kline.comAll around the world, the red K Line logo is recognized as a symbol of speedy, reliable shipping and handling, over the seas and on land. It embodies the K Line ideals service, innovation, and strength. Our global network is among the most extensive in the world. And our strength the strength of people who do whatever it takes to best serve you is greater than ever.ALL-AROUNDCAPABILITIES, ALLAROUNDTHEWORLDKLA_2013_All-Around_CanadianTransport3/21/134:57 PMPage 1Seaway volume hovering between 38mt and 39mt in 2014.Iron ore cargo in 2014 is expected to remain steady, while grain cargo through the Seaway should increase somewhat.In the project cargo sector, Hodgson says wind turbine vol-umesshouldreboundfromthelowlevelsexperiencedin 2013 as a result of the US tax credit for renewable energy now being in place.In the Great Lakes region, project cargo has become a grow-ing area of business for such ports as Thunder Bay on the tip of Lake Superior, thanks in part to rapid direct CN rail service to Fort McMurray and the Alberta oil sands. In this regard, Tim Heney, president and CEO of the Thunder Bay Port Authority, forecastsaresurgencewithrecentinquiriespointingtoa pick-up in wind farms and oil sands-related activity.Amongtheshippinglines,WayneSmith,seniorvp,com-mercialforAlgomaCentralCorporation,whichoperatesthe largestCanadian-flagfleetofdry-bulkcarriersandproduct tankers, sees encouraging trends in grain, construction materials as well as steel products thanks to a more robust North Ameri-can auto industry.Greener and more capacityOtherwise, Algomas management is looking forward to reaping the benefits of its Equinox Class ships being built in China as part of a new era of shipping in Canada. The latter was kick-started for Ca-nadian-flag vessel operators in particular by the federal government removal in October 2010 of a longstanding, controversial 25% im-port duty on ships built outside Canada.A gearless bulker, the Algoma Equinox, was the first in a series of eight Equinox Class fuel-efficient green vessels to arrive in Can-ada in the late fall of this year. The other seven are slated to be de-livered in approximate three-month intervals starting in 2014. All told, the fleet expansion comprises four gearless bulk carriers and four self-unloaders.These ships have been designed to optimize fuel efficiency and operatingperformance.Theyofferadditionalcargospaceanda 45%improvementinenergyefficiencyfromthecurrentfleet. And regarded as a game-changer by industry observers is the fact they are fitted with exhaust gas scrubbers that remove 97% of all suphur oxides from shipboard emissions. They represent the first applicationofsuchscrubbersonaGreatLakesvesselapproved by the International Maritime Organization (IMO), a UN agency based in London.When CSLs Trillium Class self-unloader Baie St. Paul arrived in Montreal in December 2012, it marked the beginning of the biggest ship renewal in the history of Canada Steamship Lines. Then, over thenext11months,sixothervesselsbuiltinChinajoinedher, totaling more than 350,000 DWT.Marine continued on page 24CSLs Trillium Class self-unloader.K Line America, Inc. Customer Service (800) 609-3221 www.kline.comAll around the world, the red K Line logo is recognized as a symbol of speedy, reliable shipping and handling, over the seas and on land. It embodies the K Line ideals service, innovation, and strength. Our global network is among the most extensive in the world. And our strength the strength of people who do whatever it takes to best serve you is greater than ever.ALL-AROUNDCAPABILITIES, ALLAROUNDTHEWORLDKLA_2013_All-Around_CanadianTransport3/21/134:57 PMPage 124 24 OUTLOOK 2014Today, four Trillium Class Lakers ply the Great Lakes/St. Law-rence waterway and three Trillium Panamaxes are in operation on ocean routes for CSL Americas.Alongwithamoreefficienthullshape,propellerdesignand anti-fouling paint, the Trillium Class vessels use variable frequency drives so that fewer generators need to be on line to start machinery, thereby reducing fuel consumption. Other environmental features includeemissions-reducingtechnologyandthereplacementof stern tube oil with a water-based lubricant.For its part, Montreal-based Fednav Ltd., the largest ocean-going user of the Seaway, currently has16 vessels on order from a Japa-nese shipyard for delivery in 2015-2016 as part of a major renewal program entailing investments surpassing $500 million. Twelve of these ships will be Great Lakes-suitable Handysize bulkers that are highlyflexibleforinternationaltradesandspeciallyequippedfor navigating in ice. They are built with box holds ideally suited for breakbulk and project cargo. They will also use 28% less fuel and produce 33% fewer nitrogen oxide emissions than an earlier genera-tion of ships purchased a decade ago from the Oshima shipyard.A pioneer in Arctic shipping for more than five decades, partici-pating in every major mining project in the region, Fednav will be marking a new chapter in its Arctic operations in Q1 2014 when a new Polar Class bulk carrier, the MV Nunavik, is scheduled to make its first winter voyage transporting nickel and copper concentrates from northern Quebec to customers in Europe. The MV Nunavik will thus be joining the Umiak I and MV Arctic long in service in Fednavs Arctic operations.Last July, the MV Mitiq was added to the Arctic sealift opera-tions during the summer months of Nunavut Eastern Arctic Ship-ping. Montreals Logistec Corporation is a shareholder in the Inuit-controlled company.Meanwhile, the Oceanex Connaigra, the largest Canadian-flag container/roro ship, built in Germany at a cost of more than $100 million, began its regular service for the Oceanex group in late No-vember between Montreal and St. Johns. CT&L TRANSPORTATION BUYING TRENDS SURVEYmarine freight shippersCAPACITY CONCERN4.44excess capacity balanced capacity very tight capacity05107%% expect this mode to havehighest pricing power 2014Staythe same 50%Increase 35%Decrease 4%Changes in use of mode 2014EXPECTED RATE INCREASES 2014 Size of Increase% of Respondents Down 5%+0%Down 2-5%5%Down 0-2%0%Flat28%Up 0-2%19%Up 2-5%19%Up 5%+5%Not sure26%3%9%Inside the numbersNot sure 11%SURCHARGES%RESPONDENTS PAYINGFuelCurrencyDetentionBorder DelayBorder Security95%3%20%3%20%Marine continued from page 22CSLs Thunder Bay in Montreal.25 OUTLOOK 2014Old Dominion Freight Line, the Old Dominion logo and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identied herein are the intellectual property of their respective owners. 2013 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved.If youre in the seed and feed business, so are we. Old Dominion Freight Line, the Old Dominion logo and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identied herein are the intellectual property of their respective owners. 2013 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved.If youre in the seed and feed business, so are we. Wemaybeinshipping,butyourbusinessisourbusiness.Withover220servicecenters nationwide,premiumservicelikebest-in-classon-timedeliveryandoneofthelowest claimsratiosintheindustry,ODhandlesallyourDomesticLTLneeds.Wedeliveryour promises to help your business grow. odpromises.com/domesticODDOMESTIC ODEXPEDITED ODPEOPLE ODTECHNOLOGY ODGLOBALHELPING THE WORLD KEEP PROMISES.B y I a n P u t z g e rPressure on yields, rates, continuesair carriersParked freighter aircraft and failed all-cargo airlines were the starkest manifestations of a tough business climate for opera-torsintheaircargoindustryin2013.Aftertwoyearsof negative growth, global volumes appeared to show some modest gains, but the pressure on yield remained strong.Since 2008 we have been fumbling along as an industry, com-ments Lise-Marie Turpin, vice president of cargo at Air Canada. We have been in the doldrums for the past five years. We have had no growth, but capacity has increased.Howard Jones, president of airline general sales agent Network CargoSystems,whoseclientlistincludesEtihadCargo,United CargoandThaiCargo,likensthepastyearto2009,whenthe global crisis began to bite. 2009 was worse, as demand dropped sharply, but the rates were not too bad then. Now the rates are bad, he remarks.Airlines have been struggling with a toxic combination of slow demand,overcapacityandhighoperatingcostswithhighfuel prices,whichhascrippledyields.Freighteroperatorshavebeen Air continued on page 2626 26 OUTLOOK 2014particularlyhardhit.Unlikepassengerairlines, they had to shoulder the full brunt of this perfect storm,unabletomitigatesomeofitwithreve-nuesfrompassengeroperations.Older,fuel-thirsty freighters have been taken out of service, butthearrivaloflargenewfreighterswithsig-nificantly more capacity and the steep growth in bellyholdcapacityfrompassengercarriershave ensured that on most sectors the available lift ex-ceedsdemand.Thesituationhasbeenexacer-batedbyshipperseffortstocurblogisticscostsbyshiftingas much traffic as possible to slower, less expensive alternative modes of transportation, especially ocean cargo.Bob Imbriani, vice president of corporate development at for-warder Team Worldwide, reckons that this shift has largely run its course. Companies are still looking to shift some traffic from air to ocean, but it is not as large a shift as before. Most of this has already been done, he says.Freighters may have been hurt the most by the situation, but passengercarriersalsofeelthepain.Low-costairlineFrontier announcedearlierintheyearthatitwouldabandonthecargo business. Jones reckons that larger carriers are unlikely to follow suit, though.No mainline carrier has done that yet. Cargo is 7-15 percent of the total revenue for belly carriers. You cant throw away 15 percent of your bottom line, he comments.He adds that more airlines are interested in using sales agents likeNetworkCargoSystems.GSAsaremorecost-effectivefor airlines in a tight market. We are getting more enquiries and have meetings with airlines that are interested, he says.Likeseveralotherpassengerairlines,AirCanadahasadded capacity on the strength of its passenger business. Three Boeing 777s joined its fleet in 2013, with two more to follow in the first quarter of 2014. These can carry up to 40 tons, the equivalent of a mid-sized freighter. Halfway through the coming year Air Can-adawilltakedeliveryofitsfirstB787Dreamliner,anaircraft thatoffers15percentmorecargocapacitythantheB767-300 that it replaces.The 777s and 787s are mostly for international routes with goodcargodemand.Despitethechallengeofhavingtofind more freight, Turpin welcomes them, as they enable Air Cana-da to offer steady lift on routes where the 767s have faced pay-load restrictions.In Air Canadas case the new aircraft joining the fleet do not mean incremental capacity increases over the planes they replace, as the latter continue in service, just in different colours. They are shifted over to offshoot low-cost carrier Rouge, which took off this pastsummerwithtwoB767s.Someofthetouristdestinations servedbythenewcarrier,suchasEdinburgh,havelittlecargo demand, but others work well for freight, says Turpin. She points to the Venice route, which has allowed Air Canada Cargo to tap into traffic from northern Italy.WithRougewecantapintonewmarkets.Ithelpsusbuild ournetworkoutofCanada,sheremarks.Jonesagreesthatair-lines with larger route networks have an advantage in the existing market conditions.The market has not been entirely grim for freighter operators. Cargojet, which makes most of its money hauling traffic for the express industry overnight on trunk routes across Canada, has en-joyed 5-7 percent growth in the domestic arena in 2013, according to Jamie Porteous, executive vice president of sales and service.The freighter airline is about to boost its capacity, as manage-Air continued from page 25 TRANSPORTATION BUYING TRENDS SURVEYair freight shippersCAPACITY CONCERN3.47excess capacity balanced capacity very tight capacity05101%% expect this mode to havehighest pricing power 2014Staythe same 60%Increase 23%Changes in use of mode 2014EXPECTED RATE INCREASES 2014 Size of Increase% of Respondents Down 5%+0%Down 2-5%2%Down 0-2%7%Flat27%Up 0-2%16%Up 2-5%11%Up 5%+11%Not sure25%3%9%Inside the numbersNot sure 10%SURCHARGES%RESPONDENTS PAYINGFuelCurrencyDetentionBorder DelayBorder Security93%10%7%31%7%Decrease 8%27 OUTLOOK 2014ment has decided to start replacing its B727 fleet with larger B757 cargo planes. Such a step was on the horizon for some time but gained stronger momentum after FedEx retired the last 727 from its fleet. With the largest operator of the type out of the picture, most maintenance firms will scale down their service program for theaircraft,makingitharderandmoreexpensivetokeepthe planes in good shape.The757fitsallourroutes.Italsogivesussomeroomfor growth, says Porteous.Besides the integrator traffic, Cargojet has enjoyed growth in interline business with Asian carriers hauling in freight across the Pacific. Its departures from Vancouver are usually full, so some of this cargo is trucked to Calgary or Edmonton for lift from these points, says Porteous.Flights between Canada and China stand to increase as a result of the new bilateral aviation agreement between the two nations that was signed in July. It allows for a threefold increase in pas-senger and cargo flights. Turpin is delighted with this, even more so because westbound loads have grown well and are now almost level with eastbound traffic, she reports.Across the Atlantic airlines and forwarders look forward to the free trade agreement with the European Union to come into ef-fect. I am not sure where exactly this stands at the moment, but itshouldboostsomecommodityflows,remarksBillGottlieb, president of David Kirsch Forwarders and a director of the Cana-dian International Freight Forwarders Association (CIFFA).Whileoperatorsanticipatesomeimprovementindemandin 2014,costcontainmentwillremainamajorfocusformostof them.Theovercapacityforcesustobeverydisciplinedinour approach to the market, comments Turpin.Automation plays a key role in this space, with the data flow betweenforwardersandairlinesoneprimetar-get. The establishment of a multilateral electron-ic air waybill last summer should be a major cata-lystinpushingthiseffortforward.Finallywe start to see some traction with the e-air waybill. The absence of a multilateral agreement has been one of the roadblocks. This will allow us to move forward,saysJeffCullen,CEOoftheRodair Group and president of CIFFA.Securityrequirements,notablythepushfor transmission of manifest information ahead of departure, has been a major catalyst for the advance of e-freight. Gottlieb points out that more developments are afoot in that area but it remains un-clear when they will materialise.Weve got people in Canada who have invested in expensive equipment for scanning and find they dont use it much because the implementation keeps being pushed back, he notes.Securityisstillamovingtarget.Thishasbeenoneofthe frustrations. What is needed is clear directions and a mandate, agrees Cullen.Gottlieb adds that customs had intended to roll out the e-man-ifest in June. Are we going to see another 6-month or 12-month delay in implementation? he wonders.Thecommercialoutlookfortheyearaheadseemssimilarly hazy. I cant predict anything for 2014. I think about next week, net year I cant even take a guess at, says Jones, adding that the oil price will have a huge bearing on how the market develops.I dont think were back on terra firma. That seems to be the new normal with demand and capacity. There does not seem to be predictabilityanymore,reflectsCullen.Itsstillverymucha spot price market. Its the grand bazaar. CT&LOld Dominion Freight Line, the Old Dominion logo and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identied herein are the intellectual property of their respective owners. 2013 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved.If youre in the seed and feed business, so are we. Old Dominion Freight Line, the Old Dominion logo and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identied herein are the intellectual property of their respective owners. 2013 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved.If youre in the pizza and pasta business, so are we. We may be in shipping, but your business is our business. From Europe, Asia, Canada, Mexico, Alaska, Hawaii andbeyond,ourLCL/FCLservicesandgloballogisticsexperienceensureyourimportsandexportsget where they need to go. We deliver promises, in any language. odpromises.com/globalODDOMESTIC ODEXPEDITED ODPEOPLE ODTECHNOLOGY ODGLOBALHELPING THE WORLD KEEP PROMISES.28 28 OUTLOOK 2014 28B y C a r r o l l M c C o r m i c kRail industry faces heightened safety, regulatory activityrail carriersWithahorrificblast,thedown-towncoreofLacMgantic, Quebecwasflattenedand47 peoplediedafterarunawayMontreal Maine & Atlantic (MMA) rail car carrying crude oil crashed and burned last July. MMA declared bankruptcy and its Ca-nadian operating licence hangs by a thread even as the Canadian Transportation Agen-cy (CTA) has thrice extended the suspen-sion of its licence, most recently to Febru-ary 1, 2014. Thedowntowntrackisbeingrepaired and service to the citys industrial park may be restored by the end of 2013. When rail service will otherwise return to its pre-acci-dent levels is an open question. The city is pushing to have a track go around the city. But this is a huge project, a long-term proj-ect, says Christine Couture, supply chain manager, Tafisa. Tafisa is North Americas largest manufacturer of particleboard and a Lac Mgantic industrial park tenant. Thetragedywillhaveenduringconse-quencesforrailcompaniesandsuppliers. Forinstance,theTransportationSafety BoardofCanada(TSB)wantsTransport Canada and the United States Pipeline and HazardousMaterialsSafetyAdministra-tion (PHMSA) to review the processes for suppliersandcompaniestransportingor importingdangerousgoodstoensurethe Tel: 416.487.3311 Finance:Maintain administrative control of transportation cost allocationThe Challenge: Logistics:Keep transportation costs contained and rates competitiveThe Solution:DTA Services Ltd Audits freight bills electronicallyAllocates transactions by general ledger codesPays carriers within the negotiated termsConverts all shipment information into a simple, user-friendly, electronic formatLook TwiceWe're more than your typical bean counter.Transportation Costs: Pay what you should and only what's fair.Learn more at:www.dta.ca4 COLOURPROCESS7"w x 4.875"hBTA02 10DTA1015July 30, 2013DTA1015_HalfPageAd_FNL.pdf7"w x 4.875"hRail continued on page 30OUTLOOK2014properties of the goods are accurately determined and documented for safe transportation.The TSB discovered that crude oil in nine intact tank cars in that MMA train was inaccurately labeled as Class 3, PG III hazardous product instead of what it actually was a Class 3, PG II dangerous good. So are such tank cars adequate for transporting crude oil? In 2012 the U.S. National Transportation Safety Board put for-ward recommendations regarding the safety of DOT-111 tank cars. PHMSA is currently considering amendments to regulations to en-hance tank cars and rail safety.There are approximately 250,000 DOT-111 tank cars in North America, says Michael Bourque, president and CEO, Railway As-sociation of Canada. The United States government issued an ad-vance notice of regulation, aimed at taking legacy tank cars out of service over an accelerated period. A related issue is the supply of tank cars. I believe there is a two-year waiting list for them. This will be a big story for customers going into next year. It will have a sig-nificant impact on them. We dont want to see business curtailed in any way. There is a great deal of urgency to it. While we dont know exactly when regulations would come into effect, it is an area of fo-cus for all parties.This issue has come under the microscope as the movement of crude by rail skyrockets. Canadian railways carried less than 10,000 barrels per day (bpd) of crude oil in 2009. By October 2013 this had risen to 175,000 bpd carried by the mainlines and a dozen short line railways. This is expected to top 200,000 bpd by years end, accord-ing to the Canadian Association of Petroleum Producers.The Lac Mgantic explosion has also drawn attention to liability coverage after it became clear that MMAs insurance would barely begintocoverthecoststhatwillcomeoutofthedisaster.Inits October16speechfromthethrone,theFederal Conservative government announced, railway companies must be able to bear the cost of their actions.OurGovernmentwillrequireshippers and railways to carry additional insurance so they are held accountable.It remains to be seen how this will play out. There are significant concerns about what changes tosafetyregulationswillimpactshippers,and [the]third-partyliabilityinsurancethatwillbe borne by the shipping community, says Bob Ballantyne, chairman, Coalition of Rail Shippers.On another regulatory front, the rail and shipping communi-ties may have the opportunity next year to test the strength of Bill C-52, the Fair Rail Freight Service Act, which received Royal As-sent on June 26, 2013. This addition to the Canada Transporta-tion Act governs the commercial activities of airlines and federally regulated railways. It legally entitles shippers to a service agreement and an arbitra-tion process to obtain one, if necessary, and fines for railways that breach service agreements. CN is on record as not seeing the need for Bill C-52. Ballantyne sees it as a coup for shippers, but with ca-veats: For the first time in Canadian law, shippers have the right to some definition of the service railways will provide. But there is a gap in how precise and specific that definition will be.Going to arbitration to obtain a service agreement will be break-ing new ground. No one knows how this will turn out; for example, how expensive it will be, the outcome, how will the [CTA] moni-tor service agreements in place and when rail lines will pay fines for non-performance.29 OUTLOOK 201430 30 OUTLOOK 2014 30On the capital-spending front, CP had planned tospendsome$1.1billionin2013.However, higherthanexpectedcashflowprojectionsin-spired CP to add up to $100 million to its 2013 capital investments, advancing some projects orig-inally scheduled for 2014. Shippers will benefit from the new intermo-dalterminalCPopenedinReginathisyear. Other projects include renewing its track infra-structureonitsWinnipeg-Edmontonmainlineandotherwise spending around $865 million replacing or renewing older assets.One of CPs key investments combing through its schedules for improvements - will improve services with its suppliers in 2014. CPsays,Inwhite-boardingsessions,wefoundkeyefficiencies. For example, this summer we were able to remove 20 hours from our Toronto-Calgary intermodal schedules, giving us a 64-hour to-talruntime.Weareprovidingincreasedreliabilityandthemost efficientroutetogetfromTorontotoCalgarybyofferingfaster transits, later cut-offs and more capacity.CN budgeted $1.9 billion in spending this year. Among the proj-ectsplannedisworkonitsextendedsidingprograminnorthern Ontario,AlbertaandnorthernBritishColumbia,doubletracking some of its mainline in Saskatchewan and investments that will in-crease the efficiency of transferring freight between rail and truck. Its $200 million in planned equipment purchases include intermo-dal equipment, car refurbishments and the acquisition of 77 new and used locomotives by roughly the end of 2014.CN is also investing in its frac sand business; e.g., a US$33 mil-lion upgrade of a 74-mile rail line between Wisconsin Rapids and Blair, Wisconsin. This November it expected to begin serving a new frac sand terminal north of Grande Prairie, Alberta. The Hudson Bay Railway (HBRY), owned by OmniTRAX, ex-pectstomovesome600,000tonnesofwheattothePortof Churchillthisseasonup100,000tonnesfromlastseason.But withnomoreCanadaWheatBoardmonopolyandtheresulting implications for shipping schedules and export routes, OmniTRAX is pursuing a Port Storage Program. To maintain long-term sustainability for both the Port and the railroad we must diversify to maximize the shipping season, says Darcy Brede, president and chief operating officer, OmniTRAX.SinclairHarrison,president,HudsonBayRouteAssociation adds, There was talk of OmniTRAX setting up a grain company to collect grain, that they say that in 2014 they will put in a transload-ing facility in Le Pas. There is also a desire to extend Churchills shipping season, which currentlyendsonOctober31.WithclimatechangetheBayhas been ice-free into November. We are trying to get that season ex-tended. If we could extend it three weeks into November, we could ship another 100,000 150,000 tonnes of wheat, Harrison says.OmniTRAX also wants to moving crude through the Port and around 25 potential customers have expressed interest in the plan. OmniTRAXhadplannedatestrunofcrudeontheHBRYthis year, but delayed it to 2014. We anticipate that the test shipment would involve approxi-mately 330,000 barrels of light sweet crude shipped in unit trains of 80 railcars. It will take approximately six trains for the vessel, Brede says. Following our test shipment, we will be able to pro-videmoredefinitiveinformationonplanstorunregularship-mentsoflightsweetcrudealongtheHudsonBayRailwayand through the Port of Churchill. CT&LRail continued from page 29intermodal freight shippersrail freight shippers TRANSPORTATION BUYING TRENDS SURVEYintermodal freight shippersCAPACITY CONCERN3.71excess capacity balanced capacity very tight capacity05108%% expect this mode to havehighest pricing power 2014Staythe same 58%Increase 26%Decrease 5%Changes in use of mode 2014EXPECTED RATE INCREASES 2014 Size of Increase% of Respondents Down 5%+0%Down 2-5%0%Down 0-2%0%Flat32%Up 0-2%22%Up 2-5%12%Up 5%+6%Not sure28%3%9%Inside the numbersNot sure 11%SURCHARGES%RESPONDENTS PAYINGFuelCurrencyDetentionBorder DelayBorder Security92%5%16%5%14% TRANSPORTATION BUYING TRENDS SURVEYrail freight shippersCAPACITY CONCERN4.26excess capacity balanced capacity very tight capacity05108%% expect this mode to havehighest pricing power 2014Staythe same 69%Increase 16%Decrease 3%Changes in use of mode 2014EXPECTED RATE INCREASES 2014 Size of Increase% of Respondents Down 5%+0%Down 2-5%0%Down 0-2%2%Flat30%Up 0-2%15%Up 2-5%15%Up 5%+6%Not sure32%3%9%Inside the numbersNot sure 11%SURCHARGES%RESPONDENTS PAYINGFuelCurrencyDetentionBorder DelayBorder Security83%9%30%17%26%31 OUTLOOK 201432 32OUTLOOK 2014The big bang never hap-pened.Thepastyear wassupposedtowit-nessthemergerofglobal powerhousesUPSandTNT, butthedealgotderailedby the European Commission.TNT has never had a large footprintinCanada,sothe ruling from Brussels had scant impactonthismarket,al-thoughitwouldhavegiven theUScompanyastronger handintheCanada-Europe sector,saysMikeTierney, president of UPS Canada. He seesnosignificantchangein thecompetitivelandscapein Canadabutraisesaquestion overCanadaPostsgrowing pushintotheB2Cmarket. Withagovernment-granted monopoly, there is concern that costs and revenues are allocated appropriately, he remarks.Gary Breininger, president of BGR Coaching & Strategic Solu-tions, agrees that there has not been a major change on the pro-vider scene recently. The seven largest players together command-ed 86 percent of the market in 2012, unchanged from 2007, he notes. However, the picture does look different at the top of the field.FedEx,UPSandPurolatorhaveincreasedtheircombined market share from 55.9 percent in 2007 to 58.1 percent in 2012.The bigger are getting bigger, he remarks, a trend reinforced by several developments that characterised 2013, notably the rise ine-commerceandagrowingfocusonthehealthcaremarket amongtheleadingplayers.Theyalsostandtobenefitthemost from growth in international shipping.One big aspect this past year has been service expansion, with newserviceofferingscomingon,andthecoldchainhasbeena particular focus, observes Breininger. Last year DHL, FedEx and UPS all launched temperature-controlled products, which aim at the healthcare industry.UPS added 200,000 sq ft of healthcare space in Canada over the past year and now runs 11 dedicated facilities in this countries. Wearegoingtopositionourselvesasagloballeaderinhealth-care, says Tierney, adding that Canada is one of five key markets in this segment for UPS.Purolator also has this business in its sights, confirms compa-B y I a n P u t z g e rThe bigger get bigger, with service expansionscourier & expressny president and CEO Patrick Nangle. Healthcare as a sector for uscontinuestogrow.Weseeanevolutionattheendpoint. Thereisatrendtoadministeritathomeasopposedtoatthe clinic, he remarks.Cold chain services require adequate infrastructure. Histori-cally the integrated express carriers have steered clear of markets withsuchrequirements.Airlinesandforwardersthatwere watchinghowtheserivalswrestedthelucrativeexpressparcel business from them used to console themselves that the integra-tors systems were inflexible and could not accommodate cargo withspecialhandlingrequirements,butdevelopmentslikethe pushintothehealthcaresectorshowthatthisassumptionno longer holds true.We see companies move more and more beyond small pack-ages, notes Breininger. I dont think there are any barriers that would prevent them from going after new segments. This indus-try has a well established track record of being quite adaptable at innovation.Some of the impetus there will likely come from the e-com-merce sector, with goods like high-end food becoming available to consumers to order over the internet. Besides the focus on health-care traffic, e-commerce has been the other main driver of growth in the express sector over the past year, Breininger points out. As retailersexperimentwithon-linesalesanddeliverychannels, many new opportunities are opening up for the express industry, agrees Nangle.A growing number of retailers are trumpeting free delivery for their wares ordered on-line. The notion of free shipping for inter-net shopping is a good marketing tool. It is going to be part of our world going forward, says Tierney.This brings or reinforces particular pressures on logistics pro-viders. On the one hand, it weighs on margins, which are already stretched by the characteristics of this market - lower traffic den-sity than in the B2B segment and the need to offer multiple deliv-erychannelsaswellasreverselogisticsoptions.Ontheother hand,thedeliveryisakeyelementinthecustomerexperience, whichhaselevatedthelogisticsaspectontheradarofretailers. We become a proxy for the retailer, remarks Nangle.Thecustomerexperienceisfirstandforemostwithclients, more than cheap rates, says Tierney. The need to balance good customer experience and cost reduction is still there. You have got to be productive, not spend a penny more than needed. If you are a high cost provider in this space, you are not competitive.Mindfuloftherisingtideofe-commerceshipmentsflowing from the US into Canada, Purolator has boosted its footprint south of the border to a total of 30 stations (up from four offices in 2005) andlauncheditsPuroPostproductinthesummer.Accordingto courier freight shippersOUTLOOK2014Nangle, this has been met with much interest in the US.Beyond the increasing flows between Canada and the US, the internationalarenaoffersgoodchancesforgrowth,remarks Breininger.Theglobalmarketoffersastrongopportunity,he says. International growth is stronger than in the domestic busi-ness. It is not going to be 10 percent growth a year the rate of growth is slowing but it is faster tha