Mainland Machinery Ltd

Potential Marine Port Trucking Crisis

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marine port trucking crisisPotential Marine Port Trucking Crisis   

Could there be a crisis in the North American port trucking industry? According to Phil Davies of Davies Transportation Consulting, there is. The recent strike taken by Vancouver port truckers could be just the tip of the iceberg, according to Davies. In fact, truckers engaged in a stoppage at ports in New York, New Jersey, Georgia, and Seattle.

One of the primary areas of concern has to do with the reduction of productivity across many North American container terminals. In markets with weak numbers, terminal operators are forced to bring their own labor costs under control. Obviously, the truckers will be the first to take a hit and that doesn’t sit well with that group.

Another issue appears to be time management. There are too many trucks sitting idle outside of terminals because of a rise in turn times (PDF report). Since truck owners are paid by the trip, anytime they are delayed because of terminal congestion, it costs them money. They want to get in and get out as quickly as possible.

In a recent report, Phil Davies points out various factors that can contribute to poor productivity in truck handling. These include the following:

  • Large container ships: When larger container vessels become the focus of a terminal, congestion is created as resources are deployed for those kinds of ships; while others wait their turn.
  • Restrictive union contracts: The average shift for a truck gate is 8 hours. Apparently, that’s only the situation in North America. Around the rest of the globe, you’ll find that gate operations are ongoing around the clock. One of the reasons that North American operations haven’t adopted this strategy is because of challenges with adapting long-shore collective agreements. At current contract rates, it becomes cost prohibitive to incur overtime. Ironically, this is what is contributing to those longer turn times which the truckers have an issue with.
  • No proper incentives for efficiency: A lack of financial incentives at North American terminals means operators aren’t likely to go the “extra mile” to change the status quo. Down under, at Port Botany Australia, financial penalties that are tied to mandatory performance standards have actually dropped the turn times to 30 minutes or less. Compare that with the average 64 minute turn time at the Port of Vancouver and the 90 minute turn time at Los Angeles and you can see why those incentives could motivate better productivity.

Then there is the issue of the logistics service “blame game” to contend with. This crisis factor was highlighted in the Surface Transportation Annual Review 2014. This survey found that the warehouse distribution centers laid blame with the rail sector for delays. On the other side, the container sector found fault with the level of service delivered from drayage companies.

Clearly, these entities need to be brought to the table for a dialogue about how to improve the situation. None of these problems are insurmountable, as long as concessions are made and everyone keeps their eye on the big picture of improved productivity. 

Mainland Machinery Ltd

Key Issues of Canadian Logistics

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Canadian logisticsKey Issues of Canadian Logistics

In order for the Canadian transportation system to meet the demands of a trade-reliant economy, adjustments will have to be made all across its logistical supply chain. This will mean a cohesive working arrangement between the Canadian government and the private sector. Yes, a working arrangement is in place today; however, it needs to be adjusted to align with the changing times. This will allow Canadian businesses to remain competitive in the global marketplace.

It is this issue of increased globalization that is forcing a top to bottom review of Canadian logistics. To meet the growing demand from emerging economies found in China, Brazil and India, the production and excavation of Canada’s natural resources is on the rise. Along with those increases in production comes a greater dependency on the transportation system.

Keep in mind that these upgrades don’t have to occur just within the Canadian borders. A perfect example can be found in the expansion project underway in the Panama Canal. By building out the current lock system, more shipping traffic can flow through the canal. That can have a huge impact on the Canadian economy as more goods can be exported in less time.

The issue of accommodating larger ships is also in play across ports, railways and trucking companies. Coordinating efforts to keep up with the demand is much needed. If there is a breakdown anywhere along the supply chain, then the entire system suffers. Since the United States is still the largest trading partner that Canada has, a focus on improved transborder shipments is essential. This is why an initiative by Beyond the Border is aimed at streamlining the transportation chain all across the US/Canada border.

It’s not just commodities that will require a functioning and expanded transportation system. As the foreign economies grow, Canada can expect to see a rise in tourism. According to some estimates, the total number of airline passengers booking flights through Canada could rise by 3%. To hold these passengers, the standard 74-seat airliner needs to grow to 95 seats. Those planes are already being built. This presents a unique opportunity for the Canadian airline carriers to get on board with an expansion program, or risk being left behind. This goes for both the low-cost airlines and the big players. Suppose new airliner designs require larger runways. Will Canadian airports be able to meet the challenge of welcoming those aircrafts?

On the roads, cross-border passenger traffic is also expected to increase between Canada and the US. Both governments are working on upgraded driver’s licenses that will ease the flow at border crossings. Furthermore, frequent travelers should be able to make use of pre-clearance systems at participating border crossings.

The bottom line is that there won’t be a segment of the transportation industry that will be left untouched by a projected increase in traffic. By getting out in front of these challenges, Canada can play a vital leadership role in modeling how supply chains can adapt. The prevailing wisdom is that we’re all in this together, so let’s make it work