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Seminar: What You Need to Know About Today's Distribution Industry

There is a perfect storm of factors contributing to higher shipping rates but there are steps your company can take to minimize the impact. That was the key take-away at the April 19th CHHMA seminar on Today’s Distribution Industry at the CHSI facility in Mississauga.

Members were treated to an excellent presentation by Paul Publow of Logistics Solutions Services Inc. (LSS) who discussed the current landscape in the distribution industry and the challenges that lay ahead for product suppliers.

Mr. Publow has over 45 years experience in the distribution and supply chain industry including time as a CEO of a major Canadian freight forwarding and transportation company.Over the past 24 years, he has been President of LSS which provides ongoing supply chain consulting services to members of the CHHMA and other associations including the Canadian Office Products Association (COPA) and Promotional Products Professionals of Canada (PPPC).In addition, LSS has completed logistics and distribution projects for some of Canada’s largest retailers including Home Dept, TJX Companies, Rogers and Air Miles to name a few.Paul has worked with thousands of companies and his wealth of industry knowledge has led to significant savings for many CHHMA members who have undertaken his services.

During the presentation, attendees heard about the factors contributing to higher carrier rates such as the strong U.S. and Canadian economic growth of late which has led to a record level of freight and not enough drivers and equipment to move it.In addition, industry consolidation in the transportation market is lessening competition and service options.

Meanwhile, changing consumer behaviour has led to exponential growth of online purchasing requiring direct to home delivery and thus creating the need for more B2C distribution models from B2B. This is putting increasing pressure on manufacturers to deliver the “final mile” as well as deal with the issues of re-deliveries and return charges which all contribute to higher shipping costs.

Finally, increased government regulations are adding to shipping costs through minimum wage increases, the introduction of various provincial carbon taxes leading to fuel surcharges (FSCs) and changes to driver logs.Starting in December 2017, U.S. drivers are now mandated to use Electronic Logs (ELD) and in Canada, ELD will be implemented 2020, although many carriers have already started the transition.The net result is that there is no “fudging” of drivers’ hours leading to less hours being available to handle growing volume and contributing to the shortage of drivers.It is reported that there is a shortage of 900,000 drivers right now in the U.S. with the Canadian number probably around 75,000.In addition, the average age today of a truck driver is 55 so in order to start attracting more and younger people to the job, companies will need start paying more and adding even more to shipping costs.

Mr. Publow provided some recommendations on what companies can do to minimize the impact of rising shipping rates during the information session and some important keys to negotiating better rates.

An initial consultation meeting with Paul is free for being a member of the CHHMA and LSS can review your distribution program and benchmark your current shipping arrangements against your competition to come up with a negotiation strategy to get the best rates and services.

We want to thank Mr. Publow once again for taking the time to present to our members and if you would like to talk to Paul further about your distribution needs, he can be reached at 905-826-9080,

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