Posted on: October 15th, 2017
By Tom Peters
A strong collaborative effort between private and public stakeholders is required to keep Canada competitive in the global marketplace and there are parts of the supply chain that need innovation and investment to elevate Canada’s ability to compete, said industry leaders at the annual Halifax Port Days.
Expert panelists at the event’s business session, Jean-Jacques Ruest, Executive Vice-President and Chief Marketing Officer, CN; Wolfgang Schoch, Managing Director, Hapag-Lloyd (Canada) Inc.; and Madeleine Paquin, President and CEO, Logistec Corporation, agreed there needs to be strategic, not haphazard investment in infrastructure and technology to sustain and improve Canada’s trade competitiveness on the global stage.
One of the stronger topics of the discussion dealt with the investment in technology, and the sharing of data at ports. Schoch told delegates that bigger ships put more stress on ports’ infrastructure and “ports are an essential part of the supply chain.” The degree of port complexity will be based on “players’ needs in the future,” he said. Schoch pointed to the growing need for digital technology, the ability to track cargo and the need to share the data with all port users. He said having a “digital platform” where all port players could extract or input data would “improve cargo flow and port efficiency.”
JJ Ruest said in an interview that digitization starts with CN’s customers “like in the case of the container world, either the importers or shipping line that deals with these imports.” They expect to be able to find out where their products are at all times, he said. Ruest said customers really need “a feed from the entire supply chain they are using, from ship to terminal to rail to truck to their warehouse. That is what they are looking for, so really it is something that is expected of us.”
He said when a container is in CN’s care “whether it is on my train or on my terminal or in my trucking firm, I can tell them where their product is at all times so if a transit is going to be disrupted and if I have good visibility, I can do a better job and my customers will have a higher level of confidence if I know where things are at all times.”
But being in the CN system “is not enough because that is just part of the journey,” he said. “We want to create a system that is open at both ends so we can get the feed every 15 minutes, say from a company like Halterm (Halifax container terminal operator) which would have the containers of Hapag-Lloyd and eventually, if Hapag wants to give us a feed of what is on a ship on its way to Halifax and in the container that is to be discharged, we can start the visibility of that as a product as it enters the supply chain in Europe,” he said.
So, for the more efficient movement of cargo, digitization and data sharing becomes critical, delegates were told.
Ruest said, “Importers would like to have visibility from beginning to end, not just when it’s in the care of just one company,” so an open system needs to be created “so we can reach out to others and offer them our data and they give their data. I think that is partly what the Port of Hamburg has. People put information into the system and the port can share it with the users of that gateway,” Ruest said.
The CN official said if you have a system able to track container cargo movement from port of origin to destination, it can also give a port a competitive advantage and be a tool to attract customers, for instance from the U.S.
“If we have a product that makes Canadian manufacturers more competitive, we can sell that product to U.S. manufacturers,” he said. Manufacturers in the U.S. Midwest could be enticed to use the port of Halifax if they can be given “visibility” of their products that they may not be able to get in a U.S. port.
“And if they come to Halifax, we have partners who are ready to focus on your container so it doesn’t stay in the port any longer than three days,” said Ruest. If the experience of moving cargo through Halifax is better than that of a U.S. port, and generates a new customer for the port, then more supply chain jobs are created, he added.
CN is now involved in a three-year project with an estimated capital investment of $300 million to digitize its supply chains. Ruest said the first supply chain CN wants to digitize is the supply chain that deals with marine containers.
Ms. Paquin, supporting the technology idea, said in an interview she would like to see investments in supply chain infrastructure based on data.
“It has to be based on real information and the only way you can get real information is by having good data,” she said. “Customers need to know today, especially with e-commerce, where their goods are at all times. We must do that well by capturing the data along the way and make sure that bottlenecks are captured and dealt with, and that takes data,” she said.
Ms. Paquin said “we are fortunate in this environment today to have funding available for investing in our infrastructure in order to make our ports more efficient and more effective. What I would not like to see is scattered investments to 50 ports. I would rather that we worked on a few very strategic ports and made sure they were ready and competitive for tomorrow’s needs,” she said.