Vice By Brian Dunn
For the past two decades, MSC has offered reefer services to and from Canada. These services are growing, as they are elsewhere around the globe. On the export side, Canada’s overall containerized export reefer traffic was up eight per cent last year, while dry cargo business was up six per cent, according to Darren Edwardson, Vice-President Commercial Export. Average annual growth in Canada’s containerized reefer traffic has been around five per cent over the past couple of years.
“Back in 2016 we realized not just here, but globally, that we needed to add more reefer personnel to the market. So globally, we have close to 1,000 dedicated employees (including nine in Canada) that handle MSC’s reefer services.” While the reefer business represents under 10 per cent of the company’s overall operations, it’s an important part of the market because it’s more profitable than regular cargo, Mr. Edwardson pointed out. In addition to handling a customer’s request commercially, the team also handles bookings and related services. “The results have been huge, and customer satisfaction has been tremendous. I can’t tell you exact numbers about our volumes, but they’ve been very good just by doing that little change. The additional resources went a long way.”
While almost everybody associates temperature controlled transportation with food products in Canada, especially products such as poultry, pork, beef, seafood, fruits and vegetables, a lot of pharmaceuticals and flower bulbs are also shipped in reefers. However, while most people think reefers are for frozen products only, “temperature controlled” spans a wide variety of temperatures, from 30 degrees below zero for some frozen products to above freezing temperatures for most refrigerated products.
“The Canadian market tends to be more of a frozen market because of the types of products that we export. When you consider the domestic market, a lot of product is shipped by truck. However, when you look at international markets, longer distances are associated with longer transit times, so the frozen segment of the market is more important. On the import side, there is more fresh produce and wine, which is carried in chilled units.”
MSC uses two different reefer models, namely thin line and prime line. The thin line ranges from -25 to +30 C and the prime line ranges from -30 to +30 C. They are both for frozen foods with seafood requiring the deeper freeze, said Mr. Edwardson. Asia is the largest export market from Canada out of both Vancouver and Montreal. But Africa has seen some growth as the continent develops a taste for western products. Russia was once an important market for Canadian reefer exports, but sanctions against the country have diminished demand.
“We’ve seen tremendous growth for our services from Canada, so we have several services in Canada that touch Asia. We offer service from our traditional Vancouver gateway, but also offer service from Montreal to the Mediterranean that continues to Asia. To be honest, the majority of our products are shipped through that gateway.”
While MSC reefer personnel do not follow qualifying academic courses, they are trained by the company in the specifics of the reefer business, explained Mr. Edwardson. They’re also knowledgeable about the different commodities and export markets and what customers need. In addition, they are versed in the different sectors where the commodities are being shipped. “We are not necessarily looking for people who worked for a competitor, or have backgrounds in a reefer sector. We pride ourselves in people that joined the company and over the years have grown and learned the different businesses.”
When food is exported from Canada, the Canadian Food Inspection Agency (CFIA) sets the standards and testing criteria of products for diseases and bacteria, whether they are being shipped by air or sea. Most products need certification and the freezing time and temperatures are verified. “Once that is all passed, the containers are checked by CFIA to make sure they’re in good order. We don’t want to load containers that have mechanical defects, or whose reefer unit is not set properly or functioning properly.
“From our side, once in our care, the reefer units are monitored around the clock. They have software installed in them and if a sensor sends an alarm, the engineers are notified immediately to make sure the product is not compromised, whether on board or at the terminal.”
MSC has a segregated area for its reefers at the Maisonneuve and Viau terminals at the port of Montreal where they are monitored by the terminal operator. Hunt Refrigeration does the pre-trip inspection to ensure the units are set to the required temperature and settings.
“Our capacity at the terminals via TIL/Termont Maisonneuve and Viau to hold and monitor the units varies depending on the volume coming in and going out. We have a tower system at both terminals that can power, maintain and monitor close to 200 reefers at Maisonneuve and 100 at Viau. Additionally, we have mobile generators that move between the two terminals that can maintain and monitor another 400 units simultaneously.”
From a capacity standpoint, MSC has between 200 and 500 reefer plugs on its vessels calling eastern ports. However some vessels operating out of Vancouver can have upwards of 1,000 plugs. Reefers transported by train are clustered together and tied into one power generator, usually in groups ranging from of six to eighteen units.
“We have the capability to deliver within the reach of rail or truck. For long distance domestic shipments, we will use rail. However, for shorter routes, we would ship by truck. With reefers, it’s not always about costs. Quite often, it’s more about speed and efficiency.”
MSC also offers door to door service, with export customers loading the necessary reefers in their plant, and with MSC responsible for transporting the reefers from the plant to the port. “So we control the truck movement from the warehouse to the port, and load the container onto the ship. At the other end, we would arrange the exact same thing upon arrival.”
To help forecast local demand for reefers, and assist in the scheduling of service, MSC has service contracts with major clients that contain “Take or pay provisions”. However, the latter provisions are considered contract mechanisms of last resort, after all other efforts of accommodation have been exhausted.
MSC is developing an e-platform for reefers that will allow it to track, monitor and transmit data affecting the reefers on board vessels. “If you’re a customer and something happens on a ship, you don’t know if there’s a problem on a transit that could last as long as 40 days. With this technology, however, customers can be provided with different types of alerts, such as temperature of reefer cargo and transit times. It can even monitor bumping of a container on a rail transit which could be important for high value cargo.”
MSC hopes to reap benefits from the Comprehensive Economic Trade Agreement with the EU and Trans-Pacific Partnership, particularly on the export side. “It comes down to the savings on the duties that will allow Canadian exporters to ship more, and importers to buy more. We’re hoping to increase shipments of frozen produce, and we are hoping that on the seafood side, we will see increases as well.
“We are a country that is able to produce high volumes of agricultural products that other countries want. The low Canadian dollar helps to keep us competitive and in some cases, our operating costs are lower, which is another help. And in certain product categories, the quality of Canada’s products as beef or pork or seafood is a strong consideration underpinning strong demand for Canadian farm products.