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April 2011
Dear Members:
The pace of change accelerates daily. With the increasing awareness of threats to air cargo, Transport Canada and governments around the world have responded with changes to security procedures. With a return of shipping demand and the slow but inexorable climb in fuel charges, ocean carriers have introduced slow steaming, an energy conserving strategy that has wide-ranging repercussions for the shipping community. As an industry and as an association we have faced many challenges and achieved considerable successes as we incorporate these changes into the fabric of our organizations.
When I accepted the two-year mandate as President following the annual general meeting in May 2009, I was committed to strengthening the association; to creating a strong organization focused on delivering Member value by focusing on three foundation elements. With the support of the dedicated Directors on CIFFA’s National Board, the enthusiasm of our many Regional Committee volunteers, the engagement of the membership in general and the hard work of the Secretariat staff we have accomplished much.
One of the association’s three foundations, ‘Leadership Through Advocacy’, allows CIFFA to represent Member firms, raising a strong and united voice with various government, regulatory and carrier bodies. We inform Members, educate regulators, seek input and strive to enhance trade capabilities, assisting Members in the delivery of competitive solutions. We consult with government – Transport Canada, the Canada Border Services Agency, DFAIT, CFIA and others.
In a letter last fall to Canada’s Ministers of Transport and Public Safety, CIFFA discussed how ‘there exists opportunities for the Government of Canada to participate to a much greater extent with industry to implement practical solutions within acceptable timeframes.’ We urged government to take a global approach to air cargo security as lead by ICAO, to engage industry and to focus funds and attention on cargo security, thus ensuring Canadian traders remain competitive within a secure air cargo supply chain.
The association engages frequently with the CBSA, filling a seat on the strategic Border Commercial Consultative Committee (BCCC) where we provide stakeholder input on issues ranging from container examinations to AMPS revisions to eManifest. This year, 2011, is poised to bring some of the most significant change in the freight forwarders’ role with the CBSA that we have experienced in decades. With ‘Advanced Commercial Information (ACI) Phase Three’ our world is about to change. Every CIFFA Member involved in the inbound ocean consolidation business must prepare for the new world where deconsolidation data are provided electronically in advance. In the regulations, ‘in advance’ means at least 24 hours prior to loading. In reality ‘in advance’ means that the Canadian freight forwarder will provide all 8000 deconsolidation data days and weeks in advance of loading a container overseas. After years of input to the design stages of eManifest Marine, CIFFA will be spearheading communications to ensure that all Members understand the regulatory changes and are prepared to take commercial advantage of the new reality.
Leadership on the international stage is also important for the long term sustainability of the association. Our industry requires a global perspective, which can only be achieved through participation at global events. CIFFA is strongly committed to our international association FIATA, providing financial support to its educational Foundation and resources to its committees and institutes. When I travel to Vietnam or China or Dubai I often meet with the local freight forwarding association which is also a FIATA member, building ever stronger relationships.
Last spring I attended the TPM - Transpacific Maritime Conference in Long Beach, California where major ocean carriers, governments, labour unions and port organizations came together for a series of serious discussions on the state of the industry. Then, as now, rate increases on Transpacific and Asia-Europe freight had moved from record lows to record highs. Then, as now, insufficient equipment and capacity had left thousands of containers waiting for weeks, just to get on a ship. Then, as now, forestry and agribusiness shippers were booking as far as 8 weeks in advance, in order to secure space. That conference identified three considerable hurdles facing the marine intermodal industry on its path to achieving sustainable, consistent service.
- Volatility - Market volatility must stabilize. Establishing long term strategies focused on planned response to change is much better than the reactionary peak and valley approach to supply and demand we have experienced over the past two years.
- Forecasting - Carriers claim, as do the railroads, that the biggest challenge our industry faces is lack of reliable forecasting. One major carrier confirmed that they book their ships at 125-135% with hope of filling 90% of the space. This creates havoc, instability and increased costs for everyone along the supply chain. ‘No shows’ are costly. There seems to be willingness between carriers and the trade to work together to improve this problem. One idea presented to alleviate overbooking was a system of penalties: penalize the industry for no shows and vice versa, penalize carriers not able to provide space for booked cargo. Almost a year later, it remains to be seen if any viable solution is possible.
- Carrier and equipment reliability - Reliability and equipment availability impact inventories and speed to market. Last fall the European Shippers’ Council announced it is advocating industry-wide reconsideration of the “gray box” concept in container shipping. The concept is based on container lines pooling container equipment in order to facilitate container repositioning and reduce maintenance and repair costs. Today, the industry remains in the midst of a global container shortage, due primarily to a lack of equipment orders the last two years and slow steaming measures by carriers. Despite a record level of new container orders, lack of equipment remains an issue.
CIFFA is also committed to working with carriers in a consultative, mutually respectful approach. Because we have developed this relationship with many carriers, the association is asked to provide early input to anticipated change, often allowing the carrier to consider the impacts of its decision on the freight forwarding customers. Following our submission to Transport Canada’s Rail Freight Services Review, CIFFA has been asked several times to represent the freight forwarding perspective through industry conferences and panels. In the past year CIFFA supported carriers and ports in their efforts to reach a stable labour situation – first with the Port of Montreal work stoppage and then in anticipation of a strike at CN Rail. The association will continue to support the need for a stable and reliable labour situation at the Port of Vancouver which is so critical to carrier’s decisions to call at Vancouver.
While it is impossible to say which of our three foundation elements is most important to CIFFA achieving its mission, “To represent and support members of the Canadian international freight forwarding industry in providing the highest level of quality and professional services to their clients”, undoubtedly our focus on ‘Excellence Through Education’ cannot be underestimated. The Secretariat staff has been increased and resources allocated to reviewing, editing and updating our entire set of materials in support of CIFFA’s four programs in international freight forwarding. Four textbooks, four workbooks, hundreds of hours of PowerPoint presentations and teacher notes, exams, quizzes and the entire e-learning content are being re-written. Employees of Member firms who achieve the Certificate or Advanced Certificate in Freight Forwarding can be assured that their learning is best in class, current and based on industry-validated content. Colleges such as George Brown College offer CIFFA’s programs as part of a ‘post-graduate diploma’ program, while others such as Seneca and Vancouver Central College include CIFFA’s education programs as part of an undergraduate two or three year diploma program. Whether CIFFA provides the evening classroom or eLearning training to employees of Member firms, or provides content and curriculum to colleges so they can produce well educated candidates for Members to hire, our focus remains on industry leading education.
In response to natural disasters and terrorist threats, CIFFA has developed a new one-day course 'Business Continuity'. This in-class, hands-on workshop prepares employees of member firms to survive and thrive in the face of business disruption. As pressures build on training time and efficiencies, the association has invested in developing on-line solutions to training. Revisions to Transport Canada’s Air Cargo Security regulations last fall necessitated complete revision of Cargo Security Plans for Participants. CIFFA responded quickly and efficiently by providing facilitated, web-based updates to the Cargo Security Coordinator (CSC) and Authorized Cargo Representative (ACR) training. With the change in January to the Incoterms 2010, CIFFA was fast off the mark with revised in-class workshops, new facilitated on-line workshops and a variety of employee and customer focused training. In 2011 the association plans to roll out a new eLearning ‘Elements of Freight Forwarding’, designed especially for the non-freight forwarding employees of Member firms.
Needless to say, advocacy and education are nothing without our membership. CIFFA exists to serve Members and 'Best in Class Membership', is the third foundation element of our three-pronged approach to building a strong association. Last fall a Working Group of the Board began deliberations on revisions to membership criteria, with the intentions of driving credibility and professionalism in the industry. Debate is ongoing so plan to attend the Annual General Meeting in Vancouver on May 5th, 2011 where we hope to get early feedback on proposed changes. As Regular Membership approaches 250 organizations, CIFFA is recognized across the country and around the world as truly representational of the industry in Canada.
One of the most encouraging markers of the return to economic growth is the enthusiastic participation in Regional events last year. The local presence of CIFFA is best seen in the faces of freight forwarders as they network. More than 1200 people celebrated at the Forwarders Choice Awards gala dinners in Montreal, Toronto and Vancouver while our golf tournaments attracted more than 350 golfers. Every event was well sponsored, with Associate Members wholeheartedly supporting all of CIFFA’s activities. These successful events are only possible through the commitment of your Regional Committee volunteers. I thank them all for their hard work and I thank you for your participation. Together we can deliver success.
Sincerely,
Marc D. Bibeau
President
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