Armstrong & Associates, Inc., a supply chain management market research and consulting firm, recently published “Slow Dance – 2012 3PL market analysis and 2013 predictions”, which revealed that U.S. third-‐party logistics (3PL) market revenues increased modestly to $141.8 billion in 2012 in a slow dance mirrored by the U.S. gross domestic product (GDP). Results outside the U.S. reflected a recessionary Europe and warm but not hot results in Asia.
Did you think that last year’s Perimeter Vision Action Plan agreed to by the United States and Canada might signal an end to the nickel and diming of cross-‐border commerce between the world’s two major bilateral trade partners? Think again, says the Canadian Trucking Alliance, a federation of the provincial trucking associations representing over 4,500 trucking companies.
By Mark Cardwell
Champagne, smiles and sunshine were the order of the day for the christening of the Laurentian Pilotage Authority’s new pilot boat and the inauguration of its new pilotage station in the port of Quebec on the last day of May. “This day have been a long time coming,” Daniel Ouimet, past President of the Pilots’ Corporation of the Lower St. Lawrence and master of the dockside ceremonies, told the gathering of about fifty people, many of them river pilots. “We are all very pleased with the result (and) we want to thank the LPA for its efforts.”
By Brian Dunn
Fulvio Fracassi, the new CEO of Laurentian Pilotage Authority (LPA), said it took him a while to adjust to his new position in Montreal after 21 years in Ottawa where he began his career in 1991 with the Department of Justice. “But it was harder on my teenage son and daughter who had made a lot of friends at school. They seem to be fitting in nicely now,” said the McGill University law school graduate who took over from Capt. Réjean Lanteigne last October following his retirement.
Born in Italy, the new 47-‐year-‐old LPA boss immigrated to Montreal with his family at age seven, because most of his relatives were already here. He attended school at Laurier MacDonald in St. Leonard before going to Dawson College.
“I was always interested in politics and history which have a natural link with the legal profession. I had good marks at Dawson and one of my professors suggested I apply to law school,” said Mr. Fracassi.
After his stint at Justice, he moved to other positions in Ottawa, including Foreign Affairs and International Trade, Environment Canada and Transport Canada. His last position in the nation’s capital was Director General of Transport Canada’s National Maritime Security Program from 2009-‐2012. In that position, Mr. Fracassi was responsible for the management and delivery of the program, including overseeing regional operations related to compliance and intelligence activities within the scope of the Marine Transportation Security Act and the International Ship and Port Facility Security Code. He was also chairperson of the Interdepartmental Marine Security Working group, heading the activities of seventeen federal departments and agencies with marine responsibilities in providing an integrated “whole of government” approach to marine security.
While he spent most of his career in legal affairs, Mr. Fracassi noted he spent three years at Transport Canada where he was responsible for national programs across Canada. “I had an opportunity to get to know the maritime world and met a lot of people from the Shipping Federation (of Canada) and so on. I became very interested in the industry and I also wanted to work in the private sector. It’s (LPA) more like a company even though it’s still part of government. And the experience gained in Ottawa helped with this job.”
LPA’s annual meeting was held May 15 in Montreal, where Mr. Fracassi reported on the activities for 2012 and its objectives for this year.
LPA reported a profit of $2.7 on revenue of $78.8 million last year, compared to a profit of $5 million on revenue of $77.4 million in 2011. The decline in profit was due to new agreements signed by two pilot groups, la Corporation des pilotes du Bas St-‐Laurent (for five years) and la Corporation du St-‐Laurent Central (for three years), said Mr. Fracassi.
“It’s important to understand that our mandate is not to make as much profit as possible, but to keep our costs under control and to maintain a cash reserve of 10 per cent of gross revenue. We have to find a balance between being profitable and being financial autonomous and offering efficient service while the industry remains competitive.”
The number of assignments was stable at 22,096 last year, but down 1.7 per cent from 22,474 in 2011, with larger ships requiring two pilots. In fact, between 2008 and 2012, the DWT of vessels on the St. Lawrence increased by 38 per cent, noted Mr. Fracassi who expects the number of assignments to remain steady over the
next few years. “Is the growth in larger vessels going to continue? And do larger ships mean less traffic? It’s not clear at this point.”
Because of the new pilot contracts, Mr. Fracassi is looking for a rate increase to maintain the 10 per cent cash reserves. Previous increases were around 2.35 per cent to reflect the increase in the cost of living, but Mr. Fracassi is not sure what the new rate will be. “We will consult with the industry and arrive at a consensus.”
LPA was 99.87 per cent accident-‐free last year and 99.88 per cent of its operations had no delays, an improvement over 2011. “For me, one accident is too many and we take the same approach for delays. When there is an accident or delay, we want to know what we can do to avoid another delay or accident.”
LPA completed two projects during the year. One was the construction of a new dock at its station in Les Escoumins and the other was the construction of a new winter pilot boat called Taukamaim. The organization is trying to sell an older boat, the Charlevoix.
To improve the quality of service and help with billing, pilots will be issuing electronic receipts to replace paper invoices. Pilots have a role to play to reduce costs, but so do agents, Mr. Fracassi suggested. “If pilots wait for a vessel and it’s late, then they will be late for other clients. We have to assure good communications between the pilots and ship captains. We’re also training for post-‐Panamax and spending $1.5 million with the pilots on new navigational aids or portable pilot units.”
Mr. Fracassi would like to review restrictions that place limits on when vessels longer than 294 metres can leave ports along the river and possibly lift the ban on night time navigation for these larger vessels. “Can we look at lifting those restrictions to minimize the delay of departures since pilots are trained to work on those post-‐ Panamax vessels?”
LPA’s objectives for LPA this year are to remain financially self-‐sufficient while offering quality service, implementing a rate increase, negotiating a new collective agreement with the Public Service Alliance of Canada for office staff and to focus on cooperation and communications with stakeholders. Shipping isn’t the only passion Mr. Fracassi has in the world of transportation. He has a private pilot’s licence and would like to become an instructor when he retires.
By R. Bruce Striegler
Coal production internationally
• Coal is mined commercially in over 50 countries and used in over 70. Estimates show over 984 billion t of proven coal reserves worldwide, the largest in the U.S., Russia, China and India. This means that there is enough coal to last over 190 years.
• Coal provides 30.3 per cent of global primary energy needs and generates 42 per cent of the world’s electricity. In 2011 coal was the fastest growing form of energy outside renewables.