Understanding the Canadian Freight Market – Part 5 – Some Tips for Shippers

The first four blogs in this series looked at the fundamentals of road and rail transportation within Canada and between Canada and the United States. This blog will focus on a set of Best Practices in Canadian Freight Transportation. Here are a few thoughts to consider if you wish to be proficient in this area.

Educate yourself on your Canadian domestic and cross-border freight

As a starting point, learn as much as you can about your Canadian customers and vendors. It is essential to study the density and packaging of the freight, the proximity of your Canadian customers to rail, truck, air and port facilities and to the closest border crossings. The density of freight moving within the United States and between the US and Canada may differ. Canadians may buy more of your light bulbs and less of your lawn mowers.

Canadian LTL and parcel carriers are very focused on the density of the products being moved. To ensure you pay the lowest rates possible, you need to be fully informed on the characteristics of the freight you manage.

Educate yourself on Canadian and cross-border modes and carriers

Similarly, take the time to come to Canada and meet with representatives of the leading carriers in each mode of transport. Gather the following information.

 Visit the carriers’ facilities;

 Learn as much as you can about the modes they use for line haul (road or rail or both);

 Check out the size and type of equipment in their fleets;

 Assess the quality of their management;

 Gain an understanding of their shipping days and transit times;

 Study the rates of your modal and carrier options. Determine where they need back haul freight;

 Find out if they are Smartway certified;

 Ask what percentage of their business moves cross-border versus domestic and

 Find out the customs processes where they have expertise.

Ask these questions to ensure you make good decisions. Test out any new modes and carriers with trial shipments.

Make an assessment of company shipping patterns and the potential cost trade-offs

Every shipper wishes to move their goods to their clients in the most efficient and cost effective manner. If you are shipping goods to Canada, here are some things to consider. Do you have enough volume to build full loads to your Canadian clients and/or warehouses? If not, could you build full loads by consolidating freight over a few days? If you are shipping loads of LTL freight, can you move these loads directly to a Canadian LTL carrier and then have them perform a distribution from their terminal? If not, can you ship partial truckloads to Canada using partial truckload carriers?

If you have LTL freight moving to Canada from geographically dispersed origin points, are there locations where you could pool your freight and then ship consolidated LTL shipments into Canada. Looking at the location of your vendors or factories in the US, would it make sense to pool shipments in Chicago and then move full or partial loads directly into eastern and western Canada? What about Buffalo, NY or Detroit, MI and/or Blaine, WA as potential pool points.

Even after the large discounts off NFTB rates, cross-border LTL rates are typically more expensive than domestic United States or Canada LTL rates. Do you need to move full loads to or from Canada over the road? Can you build some additional time into your shipping cycle so as to utilize intermodal transportation for longer lengths of haul? On LTL freight moving from central to western Canada, have you explored the use of LTL intermodal service?  Have you thought about shipping to warehouses in Toronto and/or Montreal and/or Moncton, NB and/or Calgary, AB and then supplying the local markets from these locations?

Leverage the Cross-Border, Domestic Canada and Domestic US Volumes Effectively

Volumes translate into leverage with freight companies. There is value in leveraging domestic and cross-border volumes as effectively as possible. If you are shipping freight domestically within the US, and also pay for your cross-border freight, try to link them together in your carrier negotiations. Similarly, if a Canadian company pays for its inbound freight and its outbound domestic shipments, it should bid the business as a combined entity to minimize freight costs. Is your company utilizing different supply chains to serve different markets or customers? Would there be efficiencies in consolidating some of your supply chains?

The point we make with our clients is that if you are shipping a reasonable volume of freight between the countries and/or within these countries, you often have options. It is important to explore these options to keep freight costs to an absolute minimum.

Learn as much as you can about Customs Clearance Processes

Learn how to properly fill out NAFTA documents. Do your homework on e-Manifests and the FAST program. Cross-border freight transportation will work more smoothly if you understand the key processes. If you take short cuts, you run the risk of your goods being held up at Customs. Please review the list of key processes outlined in blog 2 in this series and take action to fill in any information gaps.

If you need assistance in serving the Canadian or cross-border market, contact me at dan@dantranscon.com. To stay up to date on Best Practices in Freight Management, follow me on Twitter @DanGoodwill, join the Freight Management Best Practices group on LinkedIn and subscribe to Dan’s Transportation Newspaper (http://paper.li/DanGoodwill/1342211466). To learn more about the Canadian freight market, come to the 2016 Surface Transportation Summit (www.surfacetransportationsummit.com ) on October 13.