By Brian Dunn
A new study conducted by KPMG-SECOR for CargoM, Montreal’s logistics and transportation cluster, revealed the industry’s importance to the local economy and some of the challenges it faces in the Greater Montreal Area (GMA). “Obtaining the most accurate information available on our sector is key to CargoM’s mission. It makes it possible for our members to rally around common objectives and concerted actions,” said Madeleine Paquin, President and CEO of Logistec Corporation and Vice-Chair of CargoM’s Board of Directors.
One of the main findings of the study was that the sector contributed more than $4.2 billion to the GMA economy or 40 per cent of the total volume of transportation and logistics activities in the province. The shipping industry accounted for close to $300 million of the total. The study also revealed there are close to 1,200 local companies in the logistics and transportation sector in the GMA with five or more employees accounting for 53,000 related jobs. If logistics functions in manufacturing, retail and other industries were included, another 70,000 jobs would be added to the total. About 142 million tonnes of cargo is handled in the GMA each year, with trucking accounting for 67.7 per cent, shipping 19.3 per cent, rail 12.8 per cent and air cargo less than one per cent.
The study identified five key factors affecting competitiveness in the GMA, namely labour costs, the quality of road infrastructure, government regulations, fluidity of transportation and the quality of the port’s infrastructure. A crucial industry concern is an aging workforce, particularly when the number of jobs is expected to grow over the next three years.
“Identifying these competitiveness factors confirms the relevance of various working groups we implemented since the creation of the CargoM cluster,” said the cluster’s Executive Director, Mathieu Charbonneau. “Therefore, these preliminary results allow all partners to agree on CargoM’s priority actions over the coming weeks and months.”
To maintain or improve its position as a North American logistics hub, Montreal must contend with competition from other eastern hubs such as Norfolk and Savannah where labour and land costs are comparable, according to the study. More competition could also come from the opening of an expanded Panama Canal this year, it added.
On the plus side, the free trade agreement with the EU could present new opportunities both on the import and export fronts, while a potential alliance between Maersk, MSC, and CMA-CGM currently being discussed could result in greater frequencies and lower costs for container shippers.
A number of recommendations were contained in the study, including the need to improve road congestion by having deliveries made outside of morning and afternoon rush hours, introducing reserved trucking lanes and by reviewing overall trucking restrictions.
It was also suggested the role of the Port of Contrecoeur should be increased while the role air transport can play in Montreal’s growth should be “demystified.” In addition, an alliance of firms and transportation companies to adopt some commonality for the management and transport of goods should be encouraged. And finally, CargoM should work together with other local clusters to promote the GMA.