DAILY NEWS Nov 11, 2012 9:24 PM - 0 comments

Redeployment of transportation assets to inter-Asia trade a threat: Bellville Rodair's Cullen

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By: Lou Smyrlis

HALIFAX, NS -- The rise of inter-Asia trade and the anemic growth of the North American economy is one of several issues leading to a shift in trade patterns that could pose a threat to Canadian shippers, Jeff Cullen, CEO of freight forwarder Bellville Rodair, told CITT’s Reposition 2012 conference this week.

The strength of the Asian economies and the weakness of the North American recovery is creating independence from North American trade, said Cullen, one of the panelists of the Modal C-Suite Panel.

“This leads to redeployment of assets (the larger containerships for example) to inter-Asian trade routes. Smaller vessels back here lead to lower economies of scale and higher pricing,” Cullen said.

Meanwhile, growing issues with border clearance are introducing increasing complexity to North American trade routes.

“Since 9/11 a changing North American perimeter has become an obstacle to trade,” Cullen charged.

For air cargo operators in Canada 2013 will start with a bang -- the implementation of Transport Canada's mandate to screen all cargo in the bellyholds of passenger planes taking off from Canadian airports. Cargo not prescreened can’t be mixed with prescreened cargo.

Lise Marie Turpin, vice president, Air Canada Cargo, joined Cullen on the C-Suite Panel and confirmed the last few months have been very challenging because on the one hand many shippers don’t want to pre-screen the cargo themselves and want the airfreight carriers to handle that task while it has not always been clear what Transport Canada expects from the new regulation.

Cullen concurred with the communication difficulties experienced in dealing with the government on security legislation.

“There isn’t a whole lot of consultation with industry. What we see is a lot that is well-intentioned but totally impractical,” he said.

The rethinking of single region sourcing after natural disasters such as the tsunami that hit Japan in 2011 may also shift global trade patterns, Cullen said. And the continuing focus among shippers on cost control will continue to push modal shifts.

“Some large customers are seeing significant shifts to marine freight from air freight,” Cullen said.

Investment in technology to boost efficiencies among carriers and freight forwarders can be a positive development but is also not without its challenges, Cullen said.

“Technology has become an enabler but it’s also starting to get way ahead of us,” Cullen said. He added that while technology is good for creating “stickier” relationships with customers, the flip side is that it also makes it difficult to attain new clients because supply chain visibility has become so critical shippers may be reluctant to abandon service providers who provide them with such visibility.

Cullen was joined on the blue-chip panel by Neil McKenna, vice president, transportation, Canadian Tire; Rudy Mack, founder Rudy Mack Associates; Jean Jacques Ruest, executive vice president & chief marketing officer, CN Rail; Doug Harrison, COO of Day and Ross Transportation Group; and Lise Marie Turpin, vice president, Air Canada Cargo.

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