Spring 2016 The Shipper ADVOCATE - fma-agf.ca and Publications/Publications-Shipp… · Spring 2016 ADVOCATE The Shipper Official Publication of the Freight Management Association

Spring 2016

ADVOCATEThe Shipper

Official Publication of the Freight Management Association of Canada

www.fma-agf.ca

FMA celebrates 100 years of service to Canadian

shippers

A HUGE BOOST IN CARGO TRAFFIC WITH THE STROKE OF A PEN

The implementation of the new Canada-EU free-trade agreement is set to create new opportunities and generate growth on both sides of the Atlantic. As a major gateway for trade between Europe and North America, we’re perfectly positioned for a huge boost in cargo traffi c – and to help you profi t from the good things headed this way.

Find out what we can do for you atport-montreal.com/why-montreal

A HUGE BOOST IN CARGO TRAFFIC WITH THE STROKE OF A PEN

The implementation of the new Canada-EU free-trade agreement is set to create new opportunities and generate growth on both sides of the Atlantic. As a major gateway for trade between Europe and North America, we’re perfectly positioned for a huge boost in cargo traffi c – and to help you profi t from the good things headed this way.

Find out what we can do for you atport-montreal.com/why-montreal

DOCKET PROJECT VERSIONAPPROBATIONS9771 FREE TRADE AD SHIPPER ADVOCATE E

CLIENT PORT DE MONTRÉALDIRECTEUR DE CRÉATION SERVICE À LA CLIENTÈLE

FORMATS 8.375’’ X 10.875’’DIRECTEUR ARTISTIQUE CLIENT

CRÉÉ PAR MélanieRÉDACTEUR STUDIO

C M Y K

Spring 2016

4 President’s Message

5 The Goalkeeper: Meeting the Goals of Safety, Sustainability and Transparency at Teck Coal Limited

6 Future Issues

8 Freight Management Association of Canada Celebrating 100 Years of Serving Canada

10 Combining Environmental Sustainability and Profitability

11 Weighing In

16 Online Training for Canada’s Air Cargo Community Reflects Transport Canada’s Changing Regulatory Framework

18 Global Anti-Corruption Considerations for Shippers

20 Shippers, Beware! Protect Your Company from Fraud

22 Index to Advertisers

COVER: MV Dundee, sunk by U 55 off Cornwall in 1917, courtesy of CSL Group (Canada Steamship Lines); North Star courtesy of Air Canada; Labatt’s Streamliner; CN locomotive, iStockphoto.com

Chair: Neil McKenna

President: Robert H. Ballantyne

Vice President: Cindy Hick

Special Advisor: Forrest Hume, LLB

Published for The Freight Management Association of Canada 580 Terry Fox Drive, Suite 405 Ottawa, ON K2L 4C2 Phone: 613.599.3283 Fax: 613.599.1295 Email: [email protected] www.fma-agf.ca

The Shipper ADVOCATE is published semi-annually by J.M. Levi & Associates Ltd. PO Box 30039 RPO New Westminster Thornhill, ON L4J 0C6 Phone: 877.305.6587 [email protected]

Publisher: John Levi

Editor: Kim Biggar

Marketing Associate: Cheryl Ezinicki

Layout & Design: Tony Koch Pagecraft Computer Services Liz Mackin LIZART Communications

© 2016 J.M. Levi & Associates Ltd. All rights reserved. The contents of this magazine may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.

Return undeliverable Canadian addresses to: J.M. Levi & Associates Ltd. PO Box 30039 RPO New Westminster Thornhill, ON L4J 0C6

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contents

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4 | The Shipper ADVOCATE

ON JUNE 25, 2014, the Minister of Transport commissioned a formal review of the Canada Transportation Act (CTA) and mandated a broader look at

Canadian transportation and the transportation needs of Canadian society and the economy over the next two to three decades.

It is written into the Act that these periodic reviews must be undertaken, and this one was commissioned a year before the law required because of the grain-transportation crisis in the 2013-2014 crop year.

The Canada Transportation Act enunciates federal transport policy, provides the legislative framework for the federal transport regulator, the Canadian Transportation Agency, and provides the legal framework for the commercial activities of airlines and federally regulated railways. It also addresses some aspects of marine transportation.

The Hon. David Emerson, the Review chairman, submitted the final report, entitled Pathways: Connecting Canada’s Transportation System to the World, to the Minister of Transport, the Hon. Marc Garneau, on December 21, 2015, and the Minister made it public on February 25, 2016 by formally tabling it in the House of Commons. Volume 1 of the report is 283 pages and Volume 2, Appendices, is a further 228 pages.

The report is broad in scope and, in addition to making specific recommendations to the air, marine and rail transportation modes, it addresses trade, climate change, transportation in the north, innovation, infrastructure needs and the role of the Canadian Transportation Agency.

From a shipper perspective, there are some positive recommendations and some that will disappoint; there are also some longer-term issues that were not addressed at all.

The report states a preference for a system “disciplined by competition and market forces” [page 254], but also acknowledges that “Shippers and consumers should be able to expect predictable treatment from operators, according to clear rights and a transparent means of resolving complaints when a party does not meet its obligations” [page 255].

PRESIDENT’S MESSAGE

The report makes a total of 60 recommendations covering all commercial modes of freight transportation. It should be noted that there is only one recommendation explicitly directed at trucking (Recommendation 5 in Chapter 3: “Linking Trade with Transportation”). This recommendation exhorts the government to continue to work with the provinces to “harmonize regulatory standards” in support of interprovincial and international trade.

FMA continues to stress that there is effective competition in all modes of transportation except rail freight, and the report acknowledges that: “Finding a way to reconcile competing pressures between railways and shippers has been difficult” [page 117].

The difference between rail and the other modes is emphasized by the number of pages in the report given over to the three federally regulated modes as noted below.• Air transport: 27 pages• Marine transport: 27 pages• Rail transport: 75 pages

Similarly, the report makes 17 rail recommendations, 10 for air transport and six for marine transport. Note that the recommendations related to transportation governance and on the Canadian Transportation Agency will have an impact on all three modes.

FMA has commenced its analysis of the Review final report and will be obtaining input from member companies as part of that analysis. We will provide input to the Minister of Transport in due course. We are not commenting on the specifics of the report at this time. FMA and its members will comment once we have had the opportunity to thoroughly analyze the recommendations.

Recent news reports quote Transport Canada officials saying that the department will not be making public statements on the report until at least the fall of 2016 and that they will be seeking stakeholder input.

If the government follows its practice from previous reviews, after obtaining stakeholder input, it will likely convene officials from Transport Canada and other government

Bob Ballantyne President, FMA

Continued on page 14

CTA Review Final Report — Some Preliminary Observations

The final report, Pathways:

Connecting Canada’s

Transportation System to

the World, addresses trade, climate change,

transportation in the north,

innovation, infrastructure

needs and the role of

the Canadian Transportation

Agency.

SPRING 2016 | 5

THE WINNER of this year’s Freight Management Association of Canada’s Supply Chain Executive of the Year award is Craig Olley, Director of Logistics for Teck Coal Limited.

Teck is the world’s second-largest producer of seaborne steelmaking coal and Canada’s largest freight shipper.

As Director of Logistics for the last two and a half years, Olley’s primary responsibility is for the operations functions for the group, touching mine production, rail, ports and freight. Canadian Shipper is pleased to feature this exclusive interview with Olley, and with Steve Di Piano, Manager of Logistics at Teck Coal Limited; Di Piano nominated Olley for the award.

Canadian Shipper: Could you describe the current state of the coal industry in Canada?

Craig Olley: The coal industry is a major eco-nomic driver, particularly in Western Canada. Teck’s operations alone directly employ over 4,000 people and contribute over $4.5 billion to GDP annually. Seventy percent of our business is sold FOB loading port basis and for the balance, terms of sale are CFR where Teck arranges ocean-going vessel freight. Our 2015 shipments were approxi-mately 26 million to 28 million metric tonnes. There’s no question that the Canadian steelmaking coal industry and the industry globally have been impacted by oversupply in the market. That’s why Teck has taken steps to continue strengthening our competitiveness in the face of these challenging market conditions, including reducing costs across our operations and improving efficiency.

Canadian Shipper: How did you become involved in the industry? Tell us a bit about your background, and education, leading to your current role?

Craig Olley: I have a GDBA [Graduate Diploma in Business Administration] from Simon Fraser University through the Beedie School of Business,

The Goalkeeper: Meeting the Goals of Safety, Sustainability and Transparency at Teck Coal Limited

SUPPLY CHAIN EXECUTIVE OF THE YEAR

BY JULIA KUZELJEVICH

and plan to complete my MBA in the coming years.In my previous life, I marketed and serviced

tax-sensitive pension plans, group benefits and life insurance. Approximately 20 years ago, I had an opportunity to make a change and find a new passion to focus my energy towards. An opportunity was presented to me by a friend who owned a logistics company representing Fording Coal, which at the time consisted of three of Teck’s current six steelmaking coal mines. Total Marine Logistics, Nicholas Sears, was looking for a mouldable, green, hard worker who would apply logic to the day-to-day quality control at the ports. The time I spent working with Fording mine engineers, geologists and technical marketing personnel was invaluable, consuming almost seven years of my career. After a nine-month leave, testing my marketing skills as U.S. Sales Manager for Futura Forest Products supplying pressure-treated lumber into the Pacific Northwest, I returned to the coal industry. Fording had amalgamated with other coal assets to thwart a take-over bid from Sherritt Coal and the Ontario Teachers’ Pension Fund, and formed EVCC (Elk Valley Coal Corp.), now consisting of the Line Creek, Cardinal River and Elkview mines. Elkview mine was a 100-percent owned Teck mine, and my initial introduction to Teck Cominco was in 2004. In 2008, Teck acquired all interests in the partnership and operates today as Teck Coal Limited, a 100-percent-owned subsidiary of Teck. My new role was as Senior Operations Supervisor responsible for the day-to-day coordination between our rail and port requirements.

Canadian Shipper: Can you provide some of the particular details/requirements unique to the industry that transportation partners must be prepared to respond to?

Craig Olley: We are very mindful of the fact that we must be respectful in the communities where we mine, rail and ship our steelmaking coal.

The key to leading a team that touches so

many aspects of the supply

chain that are all integrally

intertwined in your success is to support

and encourage your people

and to lead by example each

and every time.


As such, we are very focused on monitor-ing and executing controls to ensure the safe and responsible transportation of our product. We expect all of our suppliers to act in a similar fashion.

The Teck steelmaking coal export supply chain travels over mountainous terrain from mine to rail to port, and can be subject to challenges related to inclement weather, winds and natural incidents. The majority of our shipments originate from our Elk Valley mine sites and travel to our west coast ports, travelling approximately 1,150 km and back. We also ship product east to Thunder Bay for customers on the Great Lakes and directly to steelmaking customers in the Chicago/Indiana area, as well as to various industrial customers located in B.C., Alberta and Saskatchewan. At any given point, we could have upwards of 20 to 24 active train sets in operation. As a result, Teck depends on reliable and consistent rail service. Without our rail suppliers, we simply could not execute our function.

In 2011, Transport Canada accepted changes to regulatory requirements concerning ship loading, aligning itself to MARPOL Annex V, which stipulates that all shipments shall be subject to Transportable Moisture Limits and suppliers shall conform in declaration and procedure requirements. This came into effect on January 1, 2015. As a result, Teck has implemented controls to ensure we are in compliance with the new regulations. This can at times be challenging because our steelmaking coals can absorb moisture while in transit and while at port prior to loading, specifically at our west coast ports where there can be significant rainfall depending on the time of year.

Canadian Shipper: The shipper-carrier relationship, and how to strengthen it, is something we frequently discuss in the publication. Can you discuss some of the strategies/partnerships you are involved in to maintain or further develop productive relationships with marine ports, rail, terminal operators, etc.?

Craig Olley: I have spent 20 years at the ports, where today I have an office onsite at both Westshore and Neptune Terminals. The key to leading a team that touches so many aspects of the supply

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www.portofbelledune.ca

The Shipper ADVOCATE — Future Issues

The Shipper ADVOCATE provides Canadian and international news and information for Canadian shippers and other industry stakeholders. Many articles that go into the magazine are related to regulations, issues and conditions that are current at the time of publication. We set our lead stories for upcoming issues well in advance of publication and we welcome articles on all transportation-related topics for each issue.

The lead stories (and editorial deadlines) for upcoming issues are:

• Fall 2016 – Renewing Canada’s Transportation Infrastructure (November 1, 2016)

• Spring 2017 – Canada’s Transportation Policy (April 14, 2017)

Proposals for articles can be submitted to Bob Ballantyne at [email protected].

Fall 2014

ADVOCATEThe Shipper


www.fma-agf.ca

Asia-Pacific Gateway and Corridor Initiative

Supply Chain in China

Right-Sizing the Grain-Handling System

Spring 2014

ADVOCATEThe Shipper


www.fma-agf.ca

Canada’s Ports

Logistics Performance Index

Spring 2015

ADVOCATEThe Shipper


www.fma-agf.ca

• Canadian Transportation Infrastructure

• 2014 Supply Chain Executive of the Year

Fall 2015

ADVOCATEThe Shipper


www.fma-agf.ca

• Canada–EU Trade Agreement

• Canada’s Ports: Improving Logistical Efficiency

SPRING 2016 | 7

chain that are all integrally intertwined in your success is to support and encourage your people and to lead by example each and every time. Hard work has always been a trait that I’ve never backed down from, instilled by my father. Applying what we’ve learned and experienced makes us successful.

Steve Di Piano: We believe that our role in logistics is ultimately to deliver a supply chain at the best economic bargain to enable our steelmaking coals to compete with our global competitors; offer adequate access to supply chain capacity to execute our function; and execute in a consistent and reliable fashion to meet our customer expectations. We spend quite a bit of time reflecting on supplier performance, KPIs and, of course, sound cost management. We are fortunate to work with large and sophisticated suppliers and have several long-term agreements with all the west coast ports and the two Class I railways in Canada, as well as BNSF. We approach suppliers using verifiable data, which we believe creates a singular and factual baseline for discussions and continuous improvement. The relationship between shipper and carrier needs to be balanced, with all parties trying to understand what each other’s priorities are. At times, the priorities can be conflicting, however, there needs to be a mutual acknowledgement and respect for them. We have a significant role in how the railroads plan based on our volume forecasts. We may not be able to structure our volumes in a manner which is ideal for them, but the sooner we can share our plans with them the better they will be positioned for their resourcing.

Canadian Shipper: Could you discuss some aspects of the new value stream model/lean program you were involved in developing with rail?

Craig Olley: The value stream program, which uses lean principles as its foundation, was developed in early 2012, in partnership with several supply chain partners, including Canadian Pacific, BC Railway and Westshore Terminals. We worked together to develop a complete, factual supply chain perspective, build a common body of knowledge on challenges and performance needs, identify constraints, counter-measures

and priorities for resolution, and outline actions needed to deliver the highest value to all. Currently, the supply chain partners do not formally utilize the lean/value stream program; however, many aspects developed back in 2012 continue to be maintained as a focus within Teck’s Logistics Group.

Canadian Shipper: Looking at environmental initiatives, can you discuss the coal dust mitigation initiative you were involved in both at the mines and en route to ports?

Craig Olley: Safety and sustainability are absolutely critical to what we do at Teck. Teck has been named to the Dow Jones Sustainability World Index (DJSI) for six consecutive years. We work closely with all of our supply chain partners to implement extensive measures to mini-mize any chance of dust during trans-portation and handling of our product. When steelmaking coal is loaded at our mine sites, each train car load is flattened and sprayed with a special topping agent. The topping agent is reapplied halfway to the port at a special respray station con-structed in partnership by Teck and CP at Tappen, B.C. The coal-handling terminals we work with in the Lower Mainland use advanced, automated dust-suppression systems to ensure coal stays on the ter-minal site. We coordinate with our rail and terminal partners to monitor the coal during transportation and shipping. At the same time, we continually assess the effectiveness of those safeguards and look at opportunities to improve.

Canadian Shipper: What are some of

Craig Olley

the hobbies/activities/community interests you like to pursue in your spare time, that keep you engaged in your work?

Craig Olley: I enjoy activities includ-ing golf, snowboarding, time at the gym. I played competitive soccer most of my life, representing British Columbia at various age groups, and spent my youth playing with the Vancouver Whitecaps Youth team until I was 19, when I realized pro soccer wasn’t in the cards for me with three knee operations before I was 18 years of age. I have two daughters (Alisha and Taylor), and two step-children (Lauren and Ryan) from my second marriage, along with a new grandson Kian in August of this year. Time up in Osoyoos at the lake with fam-ily and friends is where I enjoy spending my free time when not travelling to parts of the world we haven’t seen yet.

Another area where Teck and our employees continue to do outstanding work is in leading Mining for Miracles, supporting BC Children’s Hospital. In 2014, representing Coal/Energy, we collectively raised $209,630, versus our Copper/Zinc group, which raised $205,743, for a total of $415,373. I had never thought that, by asking friends, col-leagues, business partners and family, I could raise almost $110,000, and have the satisfaction of knowing you and your support group could make such a differ-ence. It was a remarkable experience.

Julia Kuzeljevich is Associate Editor of Canadian Shipper magazine, in which this article was originally published. It is republished with permission.


Freight ManagementAssociation of Canada celebrating 100 years of serving Canada

The FreightManagement

Association ofCanada’s history is

the history of transportation in

Canada for the past100 years. FMAhas represented

Canadian shippers’interests both

domestically andinternationally

before governmentsin areas of rail,

road, sea and air. It has been known

by many names and, over the

years, has promoted

improvement in all forms of

transportation intimes of both

peace and war.

A CENTURY OF FMA

1916The Canadian Traffic League

(CTL) is founded by the CanadianManufacturers Association and

17 industrial companies

1919 to 1940Now the Canadian Industrial

Traffic League (CITL), the organization works with

government and shipper members to implement improvements to legislation and relations with

carrier partners:Railway Act – 1919

Freight rate reductions – 1927Railway Act amendments – 1927

Transportation Act updates – 1938Canada-US Trade Agreement – 1939

Motor Carrier Act – 1940

1939Three days after Canada

declares war, CITL offers its “complete cooperation in any manner that might be of value

to the National interest”

1942CITL’s Ontario Division

welcomes the first female member of the League

from Borden Co. 2011CITA joins the

Global Shippers Forum and is elected chair

2012CITA participates

successfully in lobbying for the new

Windsor-Detroit Bridge

2014CITA becomes the FreightManagement Association

of Canada (FMA)

2014• FMA represents shippers at the Supreme Court of Canada

in their complaints about incidental and supplemental

railway charges

• FMA assists the MaritimeSafety Committee and the

International MaritimeOrganization in amending

the Safety of Life at SeaRegulations (SOLAS)

2009CITA provides advocacy crucial to the Ontario

government’s authorization of long combination vehicles

(LCVs)

1950 to 2010CITL evolves

• CITL creates the CanadianInstitute of Traffic and

Transportation (CITT) – 1958• CITL becomes the Canadian

Industrial TransportationAssociation (CITA) – 1998

• CITA moves from Toronto to Ottawa – 1999

• CITA develops a new bill of lading – 2009

1916 to 1918CTL assists the Canadian

war effort through its members’ expertise in

transportation operations and efficiency

2016 FMA celebrates its 100th anniversary

2056.FMACtimelineSprd 5/12/16 9:55 AM Page 2

SPRING 2016 | 9

Freight ManagementAssociation of Canada celebrating 100 years of serving Canada

The FreightManagement

Association ofCanada’s history is

the history of transportation in

Canada for the past100 years. FMAhas represented

Canadian shippers’interests both

domestically andinternationally

before governmentsin areas of rail,

road, sea and air. It has been known

by many names and, over the

years, has promoted

improvement in all forms of

transportation intimes of both

peace and war.

A CENTURY OF FMA

1916The Canadian Traffic League

(CTL) is founded by the CanadianManufacturers Association and

17 industrial companies

1919 to 1940Now the Canadian Industrial

Traffic League (CITL), the organization works with

government and shipper members to implement improvements to legislation and relations with

carrier partners:Railway Act – 1919

Freight rate reductions – 1927Railway Act amendments – 1927

Transportation Act updates – 1938Canada-US Trade Agreement – 1939

Motor Carrier Act – 1940

1939Three days after Canada

declares war, CITL offers its “complete cooperation in any manner that might be of value

to the National interest”

1942CITL’s Ontario Division

welcomes the first female member of the League

from Borden Co. 2011CITA joins the

Global Shippers Forum and is elected chair

2012CITA participates

successfully in lobbying for the new

Windsor-Detroit Bridge

2014CITA becomes the FreightManagement Association

of Canada (FMA)

2014• FMA represents shippers at the Supreme Court of Canada

in their complaints about incidental and supplemental

railway charges

• FMA assists the MaritimeSafety Committee and the

International MaritimeOrganization in amending

the Safety of Life at SeaRegulations (SOLAS)

2009CITA provides advocacy crucial to the Ontario

government’s authorization of long combination vehicles

(LCVs)

1950 to 2010CITL evolves

• CITL creates the CanadianInstitute of Traffic and

Transportation (CITT) – 1958• CITL becomes the Canadian

Industrial TransportationAssociation (CITA) – 1998

• CITA moves from Toronto to Ottawa – 1999

• CITA develops a new bill of lading – 2009

1916 to 1918CTL assists the Canadian

war effort through its members’ expertise in

transportation operations and efficiency

2016 FMA celebrates its 100th anniversary

2056.FMACtimelineSprd 5/12/16 9:55 AM Page 2


“T HE PRIME, and in many cases sole, objective has been to organize logistics in a way that maximizes

profitability. The calculation of profitability, however, has included only the economic costs that companies directly incur. The wider environmental and social costs, traditionally excluded from the balance sheet, have been largely ignored – until recently.” – Green Logistics: Improving the Environmental Sustainability of Logistics

Environmentally friendly initiatives are essential in today’s world and it is important for companies to keep up with sustainability developments in order to garner customer trust and satisfaction. Since commercial organizations have such an immense impact on society, it is important for these organizations to act on the issues influencing their customers. This is why sustainability has become so prominent in the management of supply chains. Organizations are now factoring in environmental management in addition to the other important cost-effective factors of their supply chain and profitability.

Since freight transportation is a heavy emitter of carbon dioxide, many of these sustainability initiatives are coming from supply chains. Sustainability has become so prominent in the management of supply chains that the Canada Transportation Act (CTA) review panel made recommendations to the Government of Canada indicating that it must set objectives and report results on initiatives. The CTA review panel also indicated that the Government of Canada should develop performance-based emission regulations to mitigate the large impact that transportation has on the environment. As we start to understand these impacts, companies are beginning to develop strategies to reduce the environmental impact of their supply chains. It is important to note that such changes may not lead to higher costs. All modes of freight transport in Canada are currently implementing strategies to reduce their greenhouse gas-emission impact on the environment.

Combining Environmental Sustainability and Profitability

CORPORATE ENVIRONMENTAL POLICY

BY KELSEY LEMIEUX

Carbon dioxide is not the only negative environmental effect of supply chains; each mode of transportation has other environmental influences. Truck transportation contributes to traffic congestion, which increases fuel consumption; air transportation contributes to poor local air quality at airports, which increases health problems; rail can contribute to the fragmentation of ecosystems and wildlife habitats; and marine transportation, even though it is the most environmentally friendly mode of freight transportation (per tonne/km of CO2), can contribute to underwater noise that can disrupt marine mammals. Carriers in all modes will need to develop strategies to mitigate these negative impacts in order to produce long-term environmental and economic sustainability. The environment is becoming a consideration in consumer choice, and large retailers are responding in all areas of their operations, including their supply chains.

As younger generations begin to change organizations’ supply chains, sustainability performance will assume greater importance and will need to be reported alongside financial performance in annual reports. One of the most pressing issues that younger generations are focused on is reducing the effects of global warming and increasing environmental sustainability. These generations are so sensitive to sustainability issues that being environmentally friendly is second nature to them. In the U.S., a group of 21 young people have, for example, filed a constitutional climate-change lawsuit against the federal government in the U.S. District Court for the District of Oregon. According to Our Children’s Trust, the claim asserts that, “in causing climate change, the federal government has violated the youngest generation’s constitutional rights to life, liberty, property, as well as failed to protect essential public trust resources.” Research conducted by Nielsen also determined that, “The rise in the percentage of respondents

The environment

is becoming a consideration

in consumer choice, and

large retailers are responding

in all areas of their

operations, including their supply chains.


SPRING 2016 | 11

BOB BALLANTYNE, President of the Freight Management Association of Canada, led a panel discussion at this year’s Cargo Logistics Canada conference in Montreal on

February 18, to discuss the International Maritime Organization’s (IMO) amendment to the Safety of Life at Sea Convention (SOLAS).

The amendment will require, as a condition for loading a packed container onto a ship for export, that the container has a verified weight. The shipper is responsible for the verification of the packed container’s weight. This requirement will become legally effective on July 1, 2016. After that date, it would be a violation of SOLAS to load a packed container onto a vessel if the vessel operator and marine terminal operator do not have a verified container weight.

Canada is a signatory to SOLAS and is obliged to follow the SOLAS regulations as amended.

The SOLAS amendments provide that there are two methods shippers may use to determine the container weight once the container packing process has taken place. This requirement will apply globally. Shippers, freight forwarders, vessel operators, and terminal operators will all need to establish policies and procedures to ensure the implementation of this regulatory change.

Also participating in the panel were Karl-Heinz Legler, General Manager at Rutherford Global Logistics, and Karen Kancens, the Shipping Federation of Canada’s Director of Marine Administration.

The FMA has been working with its members, the government and other stakeholders since mid-2015 and said it continues to be available to assist the shipper community meet the revised SOLAS verified gross mass (VGM) requirements.

The misdeclaration of container weights has led to marine accidents and significant losses to shipping lines and carriers. The sinking of the MSC Napoli between England and France in January 2007 was a prominent example of this.

Regarding the MSC Napoli, the UK’s Marine Accident Investigation Branch (MAIB) stated at the time that “the problem of misdeclared weights was

Weighing In

SOLAS UPDATE

BY JULIA KUZELJEVICH

After July 1, 2016, it

would be a violation of

SOLAS to load a packed

container onto a vessel if the

vessel operator and marine

terminal operator do

not have a verified container

weight.

prevalent in the industry due to a lack of weighing facilities, and shippers knowingly declaring lower weights to avoid import duties, maximize container use, and to get around road and rail weight rules.”

The Main Provisions• The shipper is responsible for obtaining and

documenting the VGM of a packed container.• The VGM must be communicated to the

ship’s master or the shipping line’s terminal representative prior to loading on the ship.

• The communication should be signed by a duly authorized representative of the shipper (may be an electronic signature).

• Packed containers will not be loaded on ships unless the verified mass is provided to the master.

• There are two authorized methods for obtaining the VGM:– Method 1: Weighing the packed container.– Method 2: weighing the cargo, e.g. pallets,

cartons, etc., dunnage, packing and bracing material, and adding those weights to the tare weight of the container.

• Method 2 is not to be used for bulk cargo, e.g., bulk grain, scrap metal, etc.

• Estimating weight is not permitted.• Weighing equipment for either method 1 or 2

must be certified by the appropriate national government agency (Measurements Canada).

Who is the Shipper?According to an IMO circular, a “shipper” is

a legal entity or person named on a bill of lading, sea waybill or equivalent transport document (e.g., through bill of lading) as shipper and in whose name or on whose behalf a contract has been concluded with a shipping company. The shipper can be the beneficial cargo owner, the freight forwarder or a 3PL, i.e. the party named as shipper on the ocean bill of lading.

Documentation and TransmissionThe IMO has issued no regulations on the form

of document; this will be left to the commercial Continued on page 14

2016_068_ad_shipper_advocate_03_28.indd All Pages 3/29/16 2:27 PM

2016_068_ad_shipper_advocate_03_28.indd All Pages 3/29/16 2:27 PM


partners. It is not proposed that specific requirements be introduced in relation to the format or location of the verified weight, except that it must be provided on the shipping documents, clearly state that it is the verified weight, and be signed by the person authorized to do so by the shipper. The signature may be an electronic signature or may be replaced by the name in capitals of the person authorized to sign it.

It’s recommended that shippers negotiate the communication details directly with their marine carrier as soon as possible, the FMA noted.

Regulations in CanadaTransport Canada is developing a

procedures guidance document, in accordance with the Canada Shipping Act. The Act has provisions for administrative monetary penalties (AMPs) that would apply to contraventions of the VGM requirements and that would range from $600 to $12,000.• Transport Canada Marine Safety and

Security (TCMSS) is responsible for enforcement of the provisions of Chapter VI to the SOLAS Convention. TCMSS will conduct oversight activities with a risk-based approach and on receipt of breach notification. It will do spot checks of paperwork to verify

transmission of VGM to the carrier. Transport Canada will not weigh containers.

• If a container is found not to have a VGM, or if Transport Canada receives notification of a problem with a VGM, TC will prevent the container from being loaded. Reweighing will be left to the commercial parties.

• While the shipper is obliged to provide an accurate weight, a five-percent variation will be the threshold applied by TC for enforcement purposes. (Some cargo products can incur minor changes in mass from time of packing until delivery due to environmental factors [e.g., evaporation or humidity].)

A Few FAQs• Transport Canada will not consider a

3-to-6-month soft implementation of warnings without penalties.

• Transport Canada will not enforce the transfer of VGM information to others in the supply chain having custody of a loaded container. It will only

departments, e.g., Agriculture, Industry and Environment, to review and make recommendations to the Minister and the Cabinet on legislative changes following from the recommendations of the Review. We would not expect the government to introduce legislation following from the Review until 2017 or 2018.

FMA will continue to be engaged and looks forward to working with government officials on this important work. As the report notes: “The quality of transportation and logistics systems may be the single greatest contributor to a country’s economic performance.”

An effective and efficient transportation system is vital to support the economy, international trade and the mobility of Canadians, and the Review is an important step in planning for future needs. The government and all stakeholders need to make sure that we get this right.

Robert H. Ballantyne, P.Eng.

PRESIDENT continued from page 4

WHERE IN THE WORLDCAN YOU FIND THE ANSWER?

How do you join? Visit our website at www.ciltna.com and sign up today!

As a member of The Chartered Institute of Logistics & Transport you have direct access to:

Now Canadian logistics and transportation professionals can tap into an unbeatable source for industry knowledge.• Our extensive online library:

Online access to over 45,000 sources of reference - specific to the logistics industry.

• Business intelligence service:A full text, business journal database. Over 10,000 detailed company profiles across all business sectors. The institutes own membership journal…and so much more!

• World newspapers today:Easy access to over 2,200 newspapers and magazines from around the world…97 countries and 54 languages. Plus archived articles that go back for a 3 month period.

Elias DemangosPresident & CEO

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It’s a fabulous tool for anyone in

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“

”

WEIGHING IN continued from page 11

SPRING 2016 | 15

aged 15–20, also known as Generation Z, who are willing to pay more for products and services that come from companies who are committed to positive social and environmental impact was also strong — up from 55% in 2014 to 72% in 2015.”

Commercial organizations will need to give greater emphasis to sustainability programs to remain relevant to a generation that is considering sustainability as well as cost when deciding on purchases. In order to continue to foster change, companies should establish metrics to define and track sustainability, assess other opportunities to identify green freight projects, choose and implement strategies to help them achieve their goals and report the results to the public. This will help customers understand how the company is implementing change and why they have decided to do so. Market competition will encourage other companies to follow suit. If these organizations can be profitable while implementing sustainable practices and strategies, they will continue to be successful in serving customers who place a high value on environmental performance as well as price.

Kelsey Lemieux is Marketing Manager of the Freight Management Association of Canada.

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consider that VGM is supplied to the shipping line.• The VGM must be received by the carrier in time for

preparation of the stowage plan, to be determined by the shipping line.

Issues to Consider• The way that containers deliver to ports is not the same

worldwide, and nuances have to be dealt with in each country (162 signatory countries!).

• The SOLAS convention does add additional layers of reporting and is expected to have commercial consequences, i.e. ultimately, who pays for the scaling, the potential deviations?

• Terminal operators have brought up questions about scale variations – something that will have to be examined.

• The Shipping Federation of Canada is trying to come up with a viable industry procedure to meet the SOLAS regulations. According to Karen Kancens: “Shipping lines need to standardize on a global basis, then according to each country they are dealing with. There is room to play in terms of carrier response in verifying and reverifying weight – a concern for everyone. What happens if the container arrives at the terminal without a VGM? We don’t have answers to those questions.”

• A VGM “certificate” as such does not exist. It can be reported on the waybill as the signature of the person reporting.

• Some terminals have announced non-acceptance of containers without an electronic VGM. Some say they could offer the weighing as a service.

• The original IMO concept was that all containers would be weighed at ports – which could be a huge productivity issue. “IMO has said it’s a commercial issue and stakeholders must work it out. Eventually it will put more pressure on shipping lines to improve the accuracy of container weights,” said Ballantyne.

What’s Happening in the U.S.?The Ocean Carrier Equipment Management Association in

the U.S. is mapping out a path for shippers, determining how commercial partners could best handle the information flow, while the U.S. Coast Guard handles the regulations. As Canadian Shipper was going to press, Adm. Paul Thomas, who oversees inspections and compliance for the U.S. Coast Guard, said that U.S. shippers that fail to properly weigh containers won’t face fines or other penalties under SOLAS.

At a meeting hosted by the Federal Maritime Commission, the Coast Guard said it was up to shipping lines to enforce the new requirement. Carriers could then call on the Coast Guard to block or remove containers from ships if they aren’t certified, but the shippers wouldn’t be penalized by law enforcement. Thomas added that the Coast Guard does not see a need to publish any guidelines or clarifications.

Several shipper groups representing farmers, manufacturers and retailers have said they are not equipped with the industrial scales needed to weigh entire containers, and that it is unreasonable to make them bear all of the costs to comply.

Thomas stressed that shippers and carriers must negotiate to meet the July 1 deadline.

Julia Kuzeljevich is Associate Editor of Canadian Shipper magazine, in which this article was originally published. It is republished with permission.

COMBINING continued from page 10


AS THE SUMMER OF 2016 fast approaches, it is clear that there will be significant changes in the way that Canada’s air cargo community will be able to

conduct its business operations, specifically in relation to recent amendments to Transport Canada regulations — the Regulations Amending the Canadian Aviation Security Regulations, 2012 and the Designated Provisions Regulations (Air Cargo). The amended regulations will come into force on October 17, 2016.

In a continued effort to enhance its voluntary Air Cargo Security (ACS) Program and air cargo security overall, Transport Canada has begun to invite companies to join the Program under five new participant categories. The department also wants Approved Participants and Registered Shippers currently in the ACS Program to update their applications under one of these new categories. As part of the amendments to the ACS Program, Transport Canada states on its website, at www.tc.gc.ca/eng/aviationsecurity/asc-41.htm, that participants will now be able to screen cargo – make it secure at a variety of different points in the secure supply chain – “as early as the time it is packed, and up until the time it is tendered to an air carrier.” Further, it says, “A secure supply chain is seen as a very practical approach for moving air cargo. It keeps air cargo secure and free from tampering while being handled at different stages of its journey.” It may also reduce costs and time delays (bottlenecks) due to the requirement for extra screening and verification prior to moving cargo onto air carriers.

The regulations, which were passed in late 2015, stipulate that companies (particularly shippers, freight forwarders, including third-party service providers such as truckers and warehouse operators, and logistics-only companies) that

Online Training for Canada’s Air Cargo Community Reflects Transport Canada’s Changing Regulatory Framework

AIR CARGO SECURITY

BY PETER AVIS AND C. ISABELLA MARCINEK

want to become participants in the ACS Program must comply with the requirements set out in the regulations, including ensuring that their employees – Authorized Cargo Representatives (ACRs), Cargo Screeners (CS) and/or Cargo Security Coordinators (CSCs) – who handle secure cargo or screen cargo “are trained in relation to their duties.”

In other words, in order to participate in the air cargo secure supply chain in Canada, a company must register in the ACS Program and meet its requirements in relation to key compliance pillars, including facility security and access control, cargo screening, personnel security, chain of custody, and oversight and compliance. To fulfill these requirements and subsequently be accepted as a participant in the ACS Program, Transport Canada requires an applicant to successfully write and implement a Cargo Security Plan (CSP), train its employees “in relation to their duties” and pass onsite inspections.

As Transport Canada provides only general guidance in its training guidelines and best practices, companies in the air cargo community will need to be trained by Canada’s private sector. One company among very few air cargo security training providers in Canada is Lansdowne Technologies Incorporated. In association with Battelle Memorial Institute, the world’s largest independent, non-profit R&D organization, Lansdowne has developed an advanced, web-based, interactive, online training system, accessible at www.aircargotraining.com, for Canada’s air cargo employees, screeners and managers. By working with recently retired Transport Canada security inspectors, Lansdowne has been able to create and document a relevant and comprehensive training offering that covers all requirements set forward in the new regulatory framework.

In order to participate in the air cargo

secure supply chain in Canada, a company must

register in the ACS Program and meet its

requirements in relation to

key compliance pillars, including

facility security and access

control, cargo screening, personnel

security, chain of custody, and

oversight and compliance.

SPRING 2016 | 17

Overall, Lansdowne and Battelle’s air cargo training is designed to assist air cargo managers and other personnel in complying with Transport Canada’s new regulatory requirements and its voluntary ACS Program requirements, specifically those related to the development of strong CSPs, including its key compliance pillars, and preparation for onsite inspections and ongoing oversight activities.

Training options consist of six interac-tive online theoretical and administra-tive courses that provide comprehensive awareness of the ongoing security situa-tion within the air cargo industry, and the potential threats and hazards that may be encountered. For example, key elements of facility security are examined, as are physical mechanisms and procedural pro-tocols to ensure effective access control of secure-cargo areas across facilities/warehouses, front offices, and in vehicles transporting cargo. These interactive courses also focus on developing and maintaining mandatory chain-of-custody record-keeping procedures, as well as

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ENTITIES AND INDIVIDUALS engaged in international commerce are subject to strict anti-corruption prohibitions. Violation of these restrictions can occur in both usual and unexpected

ways and can result in financial penalties, criminal prosecution or other extreme sanctions. Law enforcement and internal company investigations indicate that almost all bribery schemes, including in particular those that are connected to international supply chains, involve intermediaries such as shippers and third-party-logistics providers (3PLs). Virtually all transportation intermediaries and 3PLs that are involved with the international supply chain, regardless of size, will at some point encounter possible corruption, directly or indirectly. Without an accurate understanding of the applicable laws and strong compliance programs, those entities face a serious risk of violating anti-corruption laws, incurring substantial penalties and other expenses and, with increasing frequency, criminal prosecution.

U.S. FOREIGN CORRUPT PRACTICES ACT. The United States Foreign Corrupt Practices Act (FCPA) has been in existence since 1977. The law’s accounting provisions apply to companies publicly listed in the U.S. Its bribery provisions, which are considered in this article, apply to all U.S. persons and companies, as well as to foreign companies that use U.S. instrumentalities to carry out prohibited activities. FCPA enforcement efforts by the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) have increased dramatically during the past decade. It has been widely reported that, in 2014, 10 companies paid $1.56 billion to resolve FCPA investigations, six individuals pled guilty to criminal charges related to FCPA violations and several other individuals were indicted or arrested and charged with alleged FCPA violations. While fines and convictions were lower in 2015, there is no indication that enforcement efforts have lessened. Historically, most, but not all, FCPA enforcement actions have involved large corporations and large bribery amounts. Some

Global Anti-Corruption Considerations for Shippers

INTERNATIONAL LAW

BY JOHN HOVE AND JAKE FISHER

small companies and individuals have assumed to their peril that they were below government radar screens. It’s worth noting that there are no de minimis exceptions to the FCPA rules or those of most other anti-corruption laws. Equally important, the DOJ has specifically stated that it will actively investigate and prosecute culpable senior executives for violations by their companies.

While the law is complex, simply put, the FCPA’s bribery provisions prohibit corrupt payments to foreign government officials in order to obtain or retain business or to secure an improper advantage. 3PLs must note that bribes paid by agents or subcontractors can create liability for U.S. companies if the U.S. entity has actual knowledge of the activity or even of circumstances that signal improper payments. In other words, a U.S. person cannot consciously disregard or ignore warning signs that bribes are being paid in connection with a transaction it is handling. Enforcement authorities sometimes pursue indirect liability theories as well, such as aiding and abetting and conspiracy, in order to prosecute complicit participants in bribery cases.

OTHER ANTI-CORRUPTION LAWS. In addition to the FCPA, there are a growing number of other anti-corruption laws that can apply to transactions handled by 3PLs. The U.K., Canada, Brazil, China, Mexico and more than 40 other countries have anti-corruption laws that contain prohibitions simi-lar to those in the FCPA but, in many cases, cast a broader net by including sanctions for private and commercial bribery. Enforcement efforts vary widely but some countries (including the U.K., in particular) are enforcing their laws aggressively. In many countries, the laws are stricter than the FCPA, including, for example, the absence of any “facilitating payment” exception in many instances and draconian remedies such as, under Mexico’s anti-bribery law, possible dissolution of the pros-ecuted company and forfeiture of its assets. In certain circumstances, U.S. 3PLs or their affiliates operating in multiple jurisdictions may be subject to a variety of these foreign anti-corruption laws, in addition to the FCPA.

John Hove

Jake Fisher

Without an accurate

understanding of the applicable

laws and strong compliance

programs, supply chain companies

face a serious risk of violating anti-corruption laws.

SPRING 2016 | 19

POTENTIAL OPERATIONAL AREAS OF EXPOSURE FOR 3PLS. FCPA chal-lenges can arise anywhere in the supply chain. Interactions with foreign govern-ment officials are a necessary link in the successful delivery of goods being imported or exported. Amounts demanded for expediting processes or reducing the cost of a transaction are often small com-pared with the value of the goods or the importance of more-rapid processing. It is frequently assumed that payments of this type are covered by an exception to the FCPA because they may be so-called “facilitating payments.” However, cur-rent enforcement guidance indicates that the DOJ and/or the SEC are increasingly asserting that such exception does not apply. In addition, and perhaps more importantly, most non-U.S. anti-corrup-tion laws do not contain any exception for “facilitating payments” – even if such practices are widespread and accepted as a local “cost of doing business.”

FCPA exposure (and, for that matter, exposure to other anti-corruption laws) can also arise for 3PLs in many much smaller, “everyday” operational business activities. Successfully standing up and operating a distribution center requires a multitude of operating permits and licenses. These transactions, which likely are necessary to a 3PL’s very existence in a particular market, require the exercise of extreme caution. 3PLs that have operations in foreign markets (particularly those that own, in part or in full, facilities in those markets) may be targeted for bribes in many instances, such as in connection with:• Issuance of construction permits from

local authorities;• Periodic building-code or safety

inspections;• Obtaining facility-based operating

permits, such as for racking, storage of hazardous materials or fire-suppression systems;

• Securing local business-use or operational licenses, including with respect to local area trucking or drayage services;

• Enforcement of local motor carrier safety rules and regulations, perhaps for something as minor as speeding violations;

• Employment-related licenses or permissions; or

• Facility security considerations, including local police or private security guard needs.3PLs have the additional risk that their

activities may be scrutinized as part of industry-wide or geographic enforcement efforts. Government investigations have sometimes focused on specific industries, such as the oil and gas and pharmaceutical industries. Thus, 3PL operations in particular countries may also be the subject of specific scrutiny based on the type of products being stored, processed or shipped. Sensitive products, such as pharmaceuticals or other regulated and high-value commodities, may garner particular attention.

COMPLIANCE PROGRAMS. The most practical protection against possible liability for violation of anti-corruption laws is a strong compliance program. Even small companies can benefit significantly from a well designed and carefully administered compliance program. Under the FCPA, maintaining such a program will not constitute a complete defense if a violation occurs,

but such efforts often serve to mitigate penalties that would otherwise apply. More importantly, an effective compliance program will not only identify suspicious situations, but also feasibly prevent the occurrence of a violation. Failure to take the necessary steps to prevent violations will certainly be an aggravating factor in an enforcement action and, in the case of one of the more controversial aspects of the U.K. Bribery Act, may constitute an actionable corporate offense in itself.

The first steps in a compliance program are education and communication. Employees, agents, consultants and subcontractors must be made aware of applicable prohibitions, senior management’s strong directive that violations will not be permitted and the consequences of failure to follow management’s compliance directive. Employees, wherever located, should be trained and coached early and often that no sale, or the obtaining of a local permit, is worth making if it violates law and the company’s compliance program. Similarly, management of facilities in foreign countries must have effective escalation protocols and the support of the headquarters in rejecting requests for bribes by local authorities. Of equal importance is the inclusion of practical and effective procedures to anticipate problems, monitor adherence and spotlight potential violations on a continuous basis. Each company’s compliance program should fit its specific operations and particularly unique exposures in the various countries in which it operates. The cost of a good compliance program pales in comparison with the cost of responding to an FCPA or



ALARMING STORIES of fraud abound in the supply chain. The daily eBulletins of the Canadian International Freight Forwarders Association (CIFFA) often include

warnings about fraudulent practices perpetrated against freight forwarding companies. The good news is that most attempts to cheat your company can be circumvented by your employees.

In recent notable cases, forwarders’ email communications with their international partners were hacked. Right about when payment by wire transfer was due from the forwarder, the hacker, posing as the other party to the exchange, suddenly informed the forwarder that payment should be made to a new bank account.

Believing the change was legitimate, the forwarder sent payment, after which the hacker withdrew the funds and closed the account. Only when the receiving agent asked for payment was it discovered that the money – in each case, many thousands of dollars – had been stolen, and payment was still due.

FIATA has warned of another scheme in which criminals are cloning bills of lading and presenting them to the consignees’ banks for payment. Because the fakes contain correct information and appear to be issued by reputable carriers, banks are settling the payments.

Another scam brought to CIFFA’s attention by a member is being carried out by people using gmail accounts to request shipment rates. The messages contain very little information. They may well be attempts to obtain banking details from unsuspecting forwarders.

New frauds are being tried in the industry all the time. You might think you’re prepared because your accounts people are in the know about the change-of-bank-account ruse.

But devious minds continue to come up with creative ploys, some quite high-tech, to steal money and cargo. How can you equip your company to stymie them?

TECHNOLOGY SOLUTIONS TO HELP PREVENT FRAUD. Installing or enhancing

Shippers, Beware! Protect Your Company from Fraud

ADMINISTRATIVE PRACTICES

BY KIM BIGGAR

technology is perhaps the easiest way to increase security; it is certainly necessary. Among the controls that should be considered are:• An intrusion-detection system to identify

possible breaches of security on computers, networks and email;

• Data and file encryption software;• Up-to-date antivirus software and firewalls

(see the sidebar for more information in this area);

• Secure disposal of electronic data;• Multi-factor authentication for financial

transactions; and• Restricted access for payments to only company

computers.Making electronic payments through the

Automated Clearing House (ACH) Network is a relatively simple and inexpensive measure to protect your company from fraud. Most likely, the bank you deal with can handle ACH payments; if not, check with the company that processes your credit card payments.

Through the electronic transfer of funds between banks, payments are quickly received, there’s no bouncing of cheques and record-keeping is simplified.

Montreal-based Gillespie-Munro Inc. now encourages its clients to pay money owing to the company through ACH, and its CIFFA co-load colleagues in Canada to accept its payments to them the same way. (Unfortunately, says Chris Gillespie, President and CEO of the company, the process is not effective for transactions with U.S. companies). “Cheques are easy to fraudulently issue or delay dispatch of when cargo is released against a fax copy,” says Gillespie, “and payments can be stopped.” He continues: “With ACH, payments cannot be stopped and, provided you are working with a trusted partner, a copy of the bank-generated confirmation is all the proof you need and is generated immediately once the process is put into action. Because ACH payments are so quickly processed and effectively guaranteed, shipments need not be held waiting for receipt of funds.”

New frauds are being tried in

the industry all the time.

Devious minds continue to

come up with creative ploys

to steal money and cargo.

SPRING 2016 | 21

Atlas International Freight Forwarding Inc. (trade name Atlas Cargo Inc.), in Mississauga, Ont., instituted electronic payments after becoming the victim of a complex fraud involving a fictitious shipment of fuel cells from a company in Dubai to Canada, a nonexistent bank in the U.S., a U.S.-based freight forwarder, and an agent in the U.K. Atlas was engaged to provide freight forwarding services in Canada, and received payment in an incorrect amount. Atlas was asked to send a cheque to refund the overpayment. Meanwhile, the company was told there was a production setback with the goods that was delaying shipment. Fortunately, the company learned that the cheque it had deposited was forged before it sent the requested refund cheque. The people Atlas had been dealing with vanished.

Atlas President Ken Singh says his company will never again issue a refund to a company claiming to have overpaid

or transferred money into the wrong account. Banks on either end of the transaction should deal with any issues of this kind, he says, to avoid losses like that his company might have incurred. And now, because Atlas makes payments by cheque infrequently and only for very small amounts, its bank knows that a cheque on its account in a large amount is almost certainly forged. The bank is thus now able to provide another layer of security to protect Atlas from fraud.

PROCEDURES TO ENHANCE SECURITY. Security is absolutely not just a technology issue; it is equally a people issue. Well-thought-out procedures always followed by employees are a major key to eluding fraud.

Although due diligence costs time and money, says Gillespie, it’s essential that it be performed whenever your company is looking at working with new business partners. “It takes two people to create

a victim of fraud,” he points out. “You must make every effort to avoid becoming a victim.”

For Singh, that now means that his company won’t provide quotations on jobs involving international forwarding that are requested by unknown companies. “This is the price you pay to avoid loss,” he says. “We believe that we save more by avoiding loss than we’d make in profit from new business.” Even for shipments from Canada, Singh says, employees now qualify the shipper or other party requesting rate information, although he believes that the scrutiny may annoy some potential customers enough to send them elsewhere for service.

Gillespie agrees on the need to know your clients and suppliers, and to deny business where warning bells are ringing.

COMPUTER SECURITY PRECAUTIONS EVERYONE SHOULD KNOWALTHOUGH mos t o f the fo l lowing recommendations have been shared time and time again, you’ll still hear of people who don’t follow them and fall prey to cyber attacks, some with devastating impacts.

Guard against hackers with these precautions:• Make sure you’re protected with the most

up-to-date versions of all software on your computer. Best practice is to have software update automatically.

• Install good antivirus software that keeps up with threats as they emerge.

• Mix up your usernames and passwords; make them impossible to guess and vary them for all of your many online accounts.

• If you don’t know someone who wants to “friend” you, be sure connecting makes sense. Do a little research. Does the person work in your field in a known company?

• Don’t share information online with someone you don’t know that you wouldn’t consider sharing in person. Likewise, don’t click on links from people you don’t really know; doing so could infect your computer, opening it to attack.

• When using public wi-fi, know that hackers can set up networks that appear to be legitimate, then access personal information of users. Use with caution, and note that mobile phones may be particularly vulnerable to security breaches.

• Don’t fall for the message that appears to come from a friend stuck in a foreign land and needing money!

fundamental and mandatory elements of personnel security within the ACS Program. Auditable and reliable chain-of-custody procedures and processes for each item of air cargo are critical to the security and safety of personnel and pas-sengers, as air cargo is moved through the supply chain from its original source to a warehouse, then via ground transport to uplift onto an aircraft – or via a myriad of other supply chain scenarios.

Not only are the four methods of air cargo screening – X-ray, physical search, canine, and explosive trace detection (ETD) – explored theoretically, in terms of functional requirements and benefits; in addition, through practical online courses, X-ray screening and ETD screening are explored interactively, enabling transferability to practical applications. Both practical screening courses were created by Battelle and are offered through its ProDetect™ Security Screener Training program.

Lastly, two in-class courses – Facility and Vehicle Search, and Telephone Threat and Managing a Bomb Threat – are also available. The courses review the experiences, lessons learned, and recommendations of select authorities from around the world. Both courses provide an in-depth examination of

procedures needed to most effectively address adverse security activities.

Ultimately, the fact that passenger flights move 80 percent of all air cargo departing from Canadian airports necessitates the effective and efficient handling of air cargo, including its acceptance and tendering, through the secure supply chain. This painstaking effort is essential to providing a safe and secure environment for all personnel within the air cargo industry and the travelling public. The safe, reliable and timely movement of air cargo – part of the rationale behind Transport Canada’s Air Cargo Security Program – is also crucial to the economic well-being of Canadian society, industry and government. Furthermore, the securing of air cargo is fundamental to the Government of Canada’s and industry’s relationships and partnerships with the United States and others in the international community, especially as we all continue to do business in a global environment, which although uncertain, is a powerful and prosperous network.

Peter Avis is Director of Security, Emergency Management and Exercises Lead, Lansdowne Technologies Inc. C. Isabella Marcinek is an Associate of Lansdowne Technologies Inc.

TRAINING continued from page 17


“Check with references and banks to verify credibility,” he says, even in the face of competitive pressure.

With existing partners, if someone communicates a change, for example to bank account information, take time to confirm the change with your primary contact at the company, recommends Gillespie. Make sure employees are educated on current fraudulent practices, and alert to things that should make them question requests.

Procedures that can help reduce risk include:• Never clicking on links in unsolicited

emails; doing so can download malware that enables criminals to access information they can use to carry out frauds;

• Confirming that email requests for funds transfers are legitimate, by scan-ning for unusual wording or spelling, slightly changed email addresses and out-of-the-ordinary requests;

• Verifying changes with key contacts, using contact information on file;

• Ensuring that bills of lading are

other government enforcement action.FOREIGN COUNSEL. Understanding

the detailed requirements of foreign anti-corruption laws and the specific rules and procedures applicable to foreign govern-ment officials with whom a 3PL or its rep-resentatives may interact is a key part of compliance with the FCPA and other anti-corruption laws. Competent local counsel in the applicable jurisdiction can prove invaluable for both purposes.

It’s essential that local counsel be familiar not only with local logistics procedures and rules but also with the essential elements of the FCPA and other applicable anti-corruption laws. However, finding the right local counsel for assignments of this type can be challenging. Either outside or in-house U.S. compliance counsel should be able to identify local firms with such competencies from referrals provided by colleagues or from website or legal directory information. Alternatively, other U.S. companies operating in the region can be asked for referrals or a request can be made to the commercial section of the U.S. Embassy in the applicable country. In some countries, even the selection of local counsel can entail FCPA risks and should be carefully evaluated.

CONCLUSION. It is estimated that more than $1 trillion is paid in bribes every year. While that global statistic is staggering in itself, the impact of bribery on companies and individuals

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FREIGHT SERVICESCN ......................................... 12–13

LOGISTICS CONFERENCECargo Logistics Canada ............... IBC

PORTS AND TERMINALSPort of Belledune ........................... 6Port of Montreal .......................... IFCPort of Thunder Bay .......................17Squamish Terminals .......................19

TANK CAR LEASINGProcor ..........................................17

who become the subject of an anti-corruption investigation is certainly felt much more directly. Any benefit conferred by the alleged bribery is soon outstripped by the cost of coping with a resulting investigation and sanctions that may be imposed. It is common for large companies to spend millions responding to corruption charges and for smaller companies and individuals to face investigation and defense costs that exceed their available resources. Monetary penalties are generally not insurable, and most D&O policies cover only a small fraction of FCPA investigation costs, if any, and may not have global coverage. There are specialized insurance products that may cover a larger part of FCPA investigation costs but they are in many cases prohibitively expensive and may not respond to alleged violations of non-U.S. laws or provide local legal defense in overseas jurisdictions. Investing in effective anti-corruption training and compliance programs is a far more efficient method for handling corruption risk in the international logistics marketplace.

John Hove and Jake Fisher are partners at law firm Scopelitis, Garvin, Light, Hanson & Feary, P.C.

This article was originally published in 3PL Americas magazine, a publication of the International Warehouse Logistics Association. It is republished with permission.

original, accurate and endorsed (do not send colour copies or scans of original bills of lading; they could be copied and changed for illegal use);

• Maintaining inventories and tracking the use of original, blank FIATA transport documents to prevent their fraudulent use; and,

• Having all payments approved by senior management. The person should watch for changes to the vendor’s name and address. (This can help to prevent internal fraud, as well as external.)INSURING AGAINST FRAUD. After

its near loss to fraud this year, Atlas investigated options for insurance to protect against potential future repeats. It has signed on to add an endorsement for social engineering fraud to its crime

insurance policy. Through this addition, the company will be covered for computer fraud by a third party and funds transfer fraud.

Fraud could cost your company hun-dreds of thousands of dollars. Protecting against it in as many ways as possible is increasingly important. Through a combi-nation of educating employees, conduct-ing thorough background checks, utilizing relevant technologies and having fitting insurance coverage, you’ll be doing all that you can to safeguard your company from its impacts.

This article was originally published in The Forwarder, a publication of the Canadian International Freight Forwarders Associa-tion. It is republished with permission.

CORRUPTION continued from page 19

• • •

CLC 2017 - FMA - Full Page Ad (8.375 x10.875) - 201604.indd 1 2016-04-14 11:56 AM

• What’s keeping you up at night?• Fuel surcharges? • Transportation strikes? • New laws and regulations?

GOVERNMENT HAS A BIG IMPACT ON FREIGHT TRANSPORTATION FMA maintains a relationship with government, carriers and other stakeholders and facilitates communication and information exchange with members across Canada.

FMA HAS 3 MAIN ELEMENTS TO ITS MANDATE:1. Government Relations – advocacy on policy, legislation and regulation2. Providing networking opportunities3. Information dissemination

Membership is a sound investment for e�cient logistics. Contact us to �nd out how you can help shape

the future of the freight transportation industry.

FOR MORE INFORMATION CONTACT FMA: (613) 599-3283 | [email protected] | www.fma-agf.ca

REPRESENTING CANADIAN SHIPPERS FOR 100 YEARS

Documents

Spring 2016 The Shipper ADVOCATE - fma-agf.ca and Publications/Publications-Shipp… · Spring 2016 ADVOCATE The Shipper Official Publication of the Freight Management Association