The Canadian Transportation Market: What Shippers Need to Know
By: Brian Ware, VP, Business Development, Canada
As the second largest geographical country in the world and the 10th largest economy, Canadian supply chains face different operational challenges than those in the U.S. Recently, I was interviewed by Adrian Gonzalez on Talking Logistics and discussed some of the current trends in the Canadian transportation industry. In this post, I will highlight some of those trends; as well as explain some of the current challenges shippers are facing, ways to reduce supply chain costs and some best practices for improving operations.
Common Shipping Challenges in Canada
Taking into consideration the geographical size of Canada and its small population of only 36.5 million people – with 85% of the population located 150 miles from the U.S. borders (Toronto, Montreal, Vancouver, Calgary and Edmonton) and the other 15% spread across the rural parts of the country – there is little population density.
Similar to some of the less-densely populated areas in the U.S., the ability to serve rural Canada poses some unique challenges, including:
- Managing Supply Chain Cost: In Canada, shipment sizes can tend to be smaller, leaving businesses relying heavily on LTL transportation. This can be more expensive than traditional TL costs by the pallet.
- Service: Because there can be more LTL shipments, service can be unreliable, especially when moving goods cross-border. With the use of more LTL shipments, Canadian carriers and their U.S. partners have been known to miss requested arrival dates; causing customers to often lose trust in the service and incur additional costs in non-compliance fines and penalties
- Production Volatility: Challenges occasionally arise when U.S. manufacturers produce Canadian goods. As a bilingual country with different packaging standards, Canada is often the end run in the production line. The Canadian consumer is highly dependent on the U.S. production schedule, causing volatile day-to-day shipment imbalances and instability and ultimately adding overall supply chain cost.
Strategies for Canadian Shippers to Improve Cost and Service
In order to combat some of these cost and service challenges, there are some best practices that Canadian shippers can follow, including:
- Shipment Consolidation. By taking LTL shipments and building them into consolidated TL shipments that are being delivered to the same location, shippers can pull excess trucks out of their network and improve overall savings.
- Collaborative Loading (ie. “Co-Mingling”). This collaborative approach allows for multiple customers who are shipping products to the same region build dynamic multi-stop truckloads – and this has been a very successful strategy for Transplace in Canada.
- Improving processes through technology. With the help of the right transportation management technology, shippers can accurately evaluate the number of full-time resources that might be reduced, eliminated or reallocated throughout their supply chain.
- Putting metrics to work. When viewing transportation processes, shippers should start by consistently reviewing their business metrics to help them work toward continuous improvements. Tracking and analyzing the right data can support business decisions that will help enhance supply chain efficiency and eliminate waste.
The Best Approach to Managing Canadian Transportation Operations
When shippers are assessing various approaches of managing their Canadian transportation operations, they should keep a few best practices in mind:
- Increase visibility within the entire network: Look at the full view of the supply chain and understand all of the related costs. Analyze all expenses, starting with base transportation spend and work toward more complex supply chain functions such as; accessorials, fuel, prepaid goods and fines and penalties.
- Improve with technology: With the help of the right TMS, shippers can make information-based decisions about their entire network. The right data points can enable shippers to understand both the day-to-day and the macro view of all supply chain operations.
- Be open to new ideas: Maintaining a continuous improvement culture starts by encouraging employees to look at new and strategic ideas across all areas of the supply chain: including people, processes and technology.
For more on current Canadian trends and best practices, check out the video here.
What trends are you seeing in the Canadian transportation market? Share your insight in the comment section!