Meeting the goals of safety, sustainability and transparency is the focus of craig olley and his dedicated supply chain team at Teck Coal Ltd.
The winner of this year’s Freight Management Association of Canada’s Supply Chain Executive of the Year is Craig Olley, Director Logistics, with 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 Logistics, Commercial Teck Coal Limited, (who 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 economic driver, particularly in Western Canada. Teck’s operations alone directly employ over 4,000 people and contribute over $4.5 billion to GDP annually. 70% 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 will be approximately 26-28 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 from Simon Fraser University through Beedie School of Business 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 US Sales Manager for Futura Forrest Products supplying pressure treated lumber into the Pacific Northwest, I returned back 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% 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% owned subsidiary of Teck. My new role was as Sr 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. As such, we are very focused on monitoring 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 by 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 approx. 1150 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 BC, Alberta and Saskatchewan. At any given point we could have upwards of 20-24 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 Jan 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 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, Manager Logistics, Commercial Teck Coal Limited: 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 singular and factual baseline for discussions and continuous improvement. The relationship with 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 mutually 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 Logistic 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 minimize any chance of dust during transportation 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 re-applied half-way to the port at a special re-spray station constructed 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 terminal 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 the hobbies/activities/community interests you like to pursue in your spare time, that keep you engaged in your work ?
Craig Olley: I enjoy all activities including 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 family 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 the Mining for Miracles supporting BC Children’s Hospital. In 2014, representing Coal/Energy we collectively raised $209,630.00 versus our Copper/Zinc group which raised $205,743.00 for a total of $$415,373.00. I had never thought that by asking friends, colleagues, business partners and family that I could raise almost $110,000.00, and have the satisfaction of knowing you and your support group could make such a difference. It was a remarkable experience.