By Brian Dunn
Steve Felder has only been President of ZIM Canada for less than three months, but is no stranger to this country. He has been travelling to Canada for decades, has close family here and in fact used to have a house in Toronto.
In 1995, the 46-year-old South African/Lithuanian executive was working on a Bachelor of Commerce degree at University of Cape Town, when he left to work for Sweets from Heaven, a franchise chain of candy stores, initially in South Africa and then as Retail Director of the U.S. operations. He returned to his native South Africa in 2000 as National Franchise Director of Jetline Print Franchises. Next stop was National Head of Special Projects at African Bank (Africa’s largest microlending bank), before landing his first job in the shipping industry in 2004 as Regional Executive – Johannesburg and Botswana for Maersk Line.
Mr. Felder worked for Maersk as Commercial Head for sub-Saharan Africa, followed by Managing Director for Israel, then Eastern Africa (based in Kenya) and then South Asia (based in India) before accepting his current position earlier this year at ZIM. Along the way, he completed an MBA in South Africa and a Management Acceleration Program at France’s INSEAD Business School in France.
“I first came into contact with ZIM during my five-year assignment in Israel, where they were competitors of the company I worked for. I have truly admired the turnaround that the company has made over the past five years and the innovative and can-do attitude that ZIMmers demonstrate. When the opportunity arose to lead the ZIM Canada organization, I embraced it professionally and personally. Canada has a special place in my heart. I have close family here, and at one stage was intending to emigrate to Canada. My wife and three children were also excited about the move.” Mr. Felder has already established himself in Canada as an active member of Young Presidents Organization (YPO) – Quebec chapter and a Board member of the Shipping Federation of Canada.
ZIM is also no stranger to Canada, with some of their ships calling on Canadian ports as early as the 1950s. “We launched our pioneering container service in 1972. It was known as ZIM Container Service, which originated in Israel and sailed to Halifax, then to New York and through the Panama Canal to the Far East. “We then launched the first transpacific service to Vancouver in the early ‘90’s. We were originally represented by multiple agents in different parts of the country. Our agent in Montreal was Clarke Transportation and today we in fact occupy their offices in Tour CIBC. We established our own offices in Montreal and Toronto in 1976, and expanded to Halifax in the early ‘80’s and to Vancouver in 2000. (Service to Prince Rupert was added in 2018). “Today we have five weekly services in Canada, a team of 100 dedicated ZIMmers across four offices, and serve more than 1,300 customers.”
Although ZIM Canada is based in Montreal, it doesn’t offer a service to the city. “Our Canadian headquarters have been situated in Montreal since inception and we have chosen to maintain this despite not calling on the Port of Montreal at the moment. Although the corporate functions are centralized in Montreal, we have strong commercial and operational teams in Vancouver, Toronto and Halifax.”
ZIM operates four services in Canada. It serves the West Coast via the ZIM Pacific Procyon (ZP8) which provides a gateway from Prince Rupert to the U.S. Midwest and the ZIM Pacific Pollux (ZC9) which connects Asia with Vancouver. The East Coast is served by the ZIM Container Service Atlantic (ZCA) which is a connection to the Mediterranean and the Canada Feeder Express (CFX) which connects Halifax to Latin America and the Far East via its ZCP service. In addition, ZIM serves 15 depots across the country and provides extensive inland services to markets like Toronto, Saskatoon, Calgary and Winnipeg.
When Covid-19 hit, ZIM offices continued to remain open, although with reduced attendance. It scaled up its IT infrastructure quickly and re-engineered some key business processes in order to remain fully operational and to serve its customers. The company has decided to maintain an element of working from home, at least for the next six months.
Freight rates globally appear to increase each month. Mr. Felder was asked if higher freight rates are the new normal. “The situation in North America at the moment is characterized by unprecedented consumer demand for durable goods, as spending has shifted away from services. On the supply side, there is a cocktail of upstream and downstream bottlenecks, ranging from temporary port closures in parts of the world due to COVID-19 outbreaks, to immense port congestion on the West Coast, to a shortage of chassis and truck drivers in the U.S. While there is an expectation that this will begin to normalize at some point, the demand outlook remains strong, inventory to sales ratios remain rather low and some supply side bottlenecks will likely take some time to resolve.”
A record number of empty containers are leaving both Montreal and Vancouver. When does Mr. Felder see a turnaround for the industry? “On the one hand, it is important for shipping lines to reposition empties to markets of high export demand and turn them around quickly. On the other hand, there is a prerogative to support Canadian exports. At ZIM, we try hard to strike that balance.”
As far as congestion at West Coast ports is concerned, Mr. Felder believes Vancouver and Prince Rupert can play a limited role to alleviate the problem.
“For imports that are destined to the Midwestern states, Canadian ports provide a competitive offering. ZIM moves tens of thousands of units from Vancouver and Prince Rupert to the U.S. annually. However, for imports that are destined for markets or distribution centers on the west coast of the U.S., it is more challenging, as supply chains are well established. Moreover, a lot of shipping lines call on both west coast American ports and Canadian ports, so Vancouver and Prince Rupert are also impacted in that sense.”
Asked what the shipping industry needs to do to meet the Paris Accord’s objective of zero emission fuels by 2030 or even if the goal is achievable, Mr. Felder noted ZIM is part of the “Getting to Zero” coalition, as well as the Clean Cargo Working Group. “We are walking the walk, most recently by announcing a long term chartering agreement of 25 LNG vessels. In fact, ZIM is currently part of the cutting edge of shipping technology, involved in the development of future “clean fuel ready” tanks for some of these new ships. “The industry is constantly accelerating sustainable shipping initiatives, which gives us confidence about the feasibility of “Getting to Zero” sooner rather than later. We also have a host of sustainability goals, linked closely to the UN’s sustainable development goals, including biodiversity conservation and waste reduction.”
Turning to its home country, ZIM has been active in the tech start-up sector of Israel where it has partnered with start-ups to improve internal efficiencies and grow revenue. “An example of this is our investment in Cyberstar, which is a leading maritime-focused cybersecurity company. We have also recently launched Ship4wd, which is a business-friendly digitally-enabled logistics provider. We believe the industry in Canada can benefit from these ventures.”
Asked how ZIM will compete in a future world of mega-carriers, ultra-large ships and carrier alliances, Mr. Felder was quite clear of where the company is headed. “As a global niche carrier, ZIM focuses on markets where we have scale and competitive advantage, like Canada. We also focus on trades where we have a substantial market share, like the Transpacific and where we can provide our customers with a differentiated top-notch service. Our size and focus makes us agile and flexible, also when it comes to alliances and asset-sharing.”