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Why we are adding staff and expanding services

	Michael Glionna – President, Universal Logistics

While many companies in the logistics sector enacted cutbacks during the recession, Universal Logistics maintained staff levels. Now the company is adding staff and expanding services. In the following interview, Universal Logistics President Michael Glionna explains the company’s strategy and what it means for the company’s clients.

Route: Last year, during the depths of the recession, you announced that there would be no staffing cuts. Why did you take that stance when so many of your competitors were cutting back?

Michael Glionna: We have always understood that we are in a service business. Our staff delivers the service, so any cutback in staff would also mean a cutback in service, and we were not prepared to accept that. It wasn’t easy with volumes being down across the board, but we did it.

Route: It’s also interesting that so many of your clients stayed with Universal Logistics, even though the business environment was highly competitive.

Michael Glionna: Yes, we are very thankful for the loyalty shown by our clients. I trust that we have earned the continuing confidence of our clients by doing everything possible to give them extra value for their money.

Route: You have made some key additions recently, both in terms of services and staff. What was your thinking?

Michael Glionna: It’s simple, really. What our clients need today is much different than what they needed just a few years ago, and that meant we had to change too, particularly in terms of the services we offer in Asia and the U.S.

Route: Let’s start with the Asia service and the opening of your new office in Hong Kong.

Michael Glionna: This is really great news for our clients because we want to offer in the Far East the same high quality service that has made us so successful in other trade lanes, such as Europe/Canada. With a unique and complex market such as Asia, that is only possible when you have a physical presence at both ends of the trade lane. We have that now.

Route: What really changes?

Michael Glionna: Our Hong Kong office General Manager, Nick Ng, has the inside story on what’s going on in Asia – and can share that information with our clients. In addition, Nick can speak directly to a customer’s vendor in Asia. He may even visit the vendor’s plant. This is an invaluable benefit because there is only so much you can do by email and over the phone. I think it is also important to note that we are learning a lot and, once again, that translates into improved service.

Route: Are you applying the same thinking in the U.S., where you are planning to open an office in Buffalo and will have your own staff who are licensed to provide U.S. customs brokerage?

Michael Glionna: Yes, to meet the changing needs of our clients and to accommodate our growth in the U.S. brokerage market, we need to have a physical presence in the United States. We have already made some key hires and we expect our Buffalo office will open this Fall.

Route: You have also made a key staffing addition, with the hiring of Jaime Cruz to manage your new Transportation Consulting Services team.

Michael Glionna: Yes, this is a very important addition because there are some new challenges in the Transportation sector. For example, there are capacity shortages in air and ocean because the carriers made such deep cuts during the recession and were slow to respond when the demand started picking up again. Jaime’s job will be to review what is happening and look for solutions that minimize or, when possible, eliminate delays and extra costs for our clients. We expect the current capacity shortage will last for at least a few more months, so Jaime is going to be very busy.

Route: Improved service is always valued, but isn’t price the most important thing, especially at a time when everyone is under pressure to reduce costs?

Michael Glionna: Of course, price is important. But that is really a simplification because what really matters most to our clients is the total cost of their logistics transportation, not just what they are paying to their service provider in terms of customs brokerage and freight forwarding service fees. These fees represent just a tiny fraction of overall costs. Moreover, a cheap price is not a good value if it means you have to accept poor service and what results, which includes missed deadlines, unanswered calls, inflated costs and upset customers. When you consider all that, a low price is not a good deal because, in the end, you are actually spending more.

U.S. Brokerage Office opening soon

Responding to increasing demand for U.S. clearances, we are opening a U.S. Brokerage office.

The office, scheduled to open in the Fall, will be located in Buffalo. “Despite the recession, our U.S. brokerage service has expanded to the point where we need a U.S. office to handle client shipments and to ensure complete compliance with the U.S. customs regulations,” explains Michael Glionna, President of Universal Logistics.

Another key factor is the rising complexity of U.S. customs enforcement, a by-product of concerns about terrorist threats. “Our clients need expert support and an office in the U.S. and that is exactly what we are going to give them,” says Brian Rowe, General Manager – Customs Consulting Services. “We are also committed to providing the same service level our clients have come to expect for Canadian customs clearances.”

Mr. Rowe says the new U.S. Customs Brokerage office will offer clients of Universal Logistics the following benefits:

• Efficient handling of all shipments and rapid resolution of any issues that come up
• The convenience of having a single source for both Canadian and U.S. brokerage
• A professional staff with the local knowledge and expertise required to handle all aspects of U.S. clearance procedures & regulations
• More rapid movement through U.S. Customs when you combine our trucking service with the new U.S. clearance service

For more information, contact Brian Rowe, General Manager – Customs Consulting Services.

Have questions about international transportation?
Call our new Transportation Consulting Services team

Unpredictability is a given when it comes to global trade. But it is fair to say that the degree of unpredictability has risen. For example, can you remember the last time a major trade lane was shut down for weeks by a volcanic eruption? Then add the man-made changes that continue to disrupt freight worldwide:

• Major rate fluctuations across all modes of traffic
• Capacity crunch as a result of reduced equipment
• Constant changing regulations in security

Universal Logistics has responded by adding the staff and services our clients need to avoid – or mitigate – the impacts of so much market volatility. “You can’t meet the changing needs of your clients while maintaining business as usual,” explains Michael Glionna, President – Universal Logistics.

	Jaime Cruz, Manager – Transportation Consulting Services

“You need to make changes, too, and the most important change you can make is the hiring of talented people like the new manager of our Transportation Consulting Services team, Jaime Cruz.”

Jaime was a natural choice because she has more than 18 years of transportation experience and, as such, can answer the growing demand for expertise on how to handle intricate air and ocean exports to countries in Asia, South America and other destinations far from Canada.

	Debbie McGuire – Transportation Consulting Services

Another key change is the transfer of existing Universal Logistics employee Debbie McGuire to the Transportation Consulting Services team. Debbie brings to her new position more than 15 years of general logistics experience, plus special expertise on the management of import traffic – a key aspect of transportation consulting.

Just one call can make a significant difference in your freight costs and transit times. For example, both Jaime and Debbie can open doors that might otherwise be closed, simply because they have built up over the years special relationships with the major airlines and steamship lines.

“Volatility presents challenges,” acknowledges Jaime, “but it can also create options that the client has never considered.” “It’s also possible that we may be aware of a one-time opportunity that has suddenly appeared. You never know because things are changing almost daily.”

To learn more, call today (905-882-4880) and ask to speak with either Jaime Cruz or Debbie McGuire.

What you need to know about freight quotes

You already know the importance of making an “apples to apples” comparison when evaluating the merits of two freight quotes. But what’s missing from the quote is often just as important as what’s included. Reduce the risk of making a bad decision by using the following freight quote checklist.

• Ask whether a lower price also means a longer transit time. For example, a higher quote could be based on a vessel that makes a direct voyage while the lower quote is based on a vessel that makes multiple stops.
• Recognize that any non-direct service comes with increased risk of a delay caused by missed connection, typically caused by overbooking.
• If you are buying ocean freight, ensure the quote specifies how the freight will be moved to the port. If it is rail, there could be savings, but you also have to accept longer transit times and increased risk of a delay.
• Ask if barges will be used to transport freight to a port. It’s cheaper than truck transit, but also much slower.
• Ask whether the rate provided is based on the availability of space, an important issue given that many carriers currently have a shortage of space. If you accept a rate based on the availability and space is not available, you will likely end up paying a higher rate. You may even have to accept a longer transit time.
• Ask whether there is a time limit on a rate and check to ensure that your shipment will move within the time limit.
• Ensure you are not wasting money on unnecessarily fast transit time that only benefits the carrier. With a little planning, you can save a lot of money by choosing a longer transit time that still meets your production needs.

For more insights on how to manage and route your freight, call our offices
(905-882-4880) and ask for the Transportation Consulting Services team.

Opening of Hong Kong office puts Universal Logistics
"in the centre of the action"

With the opening of a new office in Hong Kong, Universal Logistics is now ideally positioned to expedite the handling of freight moving through the Hong Kong trade lane.

"You need a local presence to provide the best service,” says Nick Ng, General Manager of Universal Logistics’ Hong Kong office, which will trade as Universal Logistics Asia (H.K.) Limited. “We know how freight moves in this region and we can meet directly with our clients’ suppliers," Mr. Ng says. "That translates into freight savings and optimized transit times."

Mr. Ng recently visited Universal’s Toronto office to share his experience, exchange ideas and meet many of the company’s clients in Toronto and the GTA. He also joined other senior Universal Logistics executives at BookExpo America in New York City. "This was a very important part of my North American tour because we have so many book publishing clients who use Hong Kong and Chinese printers."

Mark Glionna, Vice-President – Client Relations, says the opening of the Hong Kong office and the hiring of Mr. Ng are proof positive that Universal Logistics is serious about offering the same high quality service in the Far East that Universal has delivered in other trade lanes for over 60 years.

It's quick and easy to take advantage of the special expertise now offered by Mr. Ng. Just call us today (905-882-4880). "There’s a lot happening here in Hong Kong," says Mr. Ng, "and we are right in the centre of the action."

Evolving Administrative Monetary Penalty System
will include higher penalties

The formula used to apply penalties for contraventions of the Administrative Monetary Penalty System (AMPS) has been changed to a graduated or flat penalty amount, with higher penalties applied to contraventions related to Health and Safety and National Security.

Penalties will be determined with the Risk Matrix shown below:

The changes are the first phase of a three-phase revision of AMPS, which was launched April 14, 2010 and will see the total number of contraventions reduced from 247 to 79. More changes are scheduled for October 2010 (Phase 2) and 2011-2012 (Phase 3).

For more details, read Customs Notice 10-002 or contact Brian Rowe, General Manager – Customs Consulting Services.

Duty dropped or reduced on a wide range of materials

Effective March 5, 2010, over 1,500 machinery and manufacturing input Harmonized Tariff Classifications (HS) became duty-free or began Phase 1 of a 5-year tariff removal plan.

The duty drops to 0% for classifications ranging from raw materials and textiles to machinery and production equipment. For a complete list of the HS Classifications impacted, review Budget 2010. To obtain direct assistance, contact Darren Lair, Customs Consulting Services.

China becomes Canada’s third largest country
of destination

China replaced Japan as Canada's third largest country of destination, behind the United States and the United Kingdom. Exports to China, which have been growing for the past seven years, increased 6.6% to $11.2 billion, fuelled by strong exports of canola, iron ores, coal and other bituminous substances.

Canada's exports to Japan declined by 25.0% to their lowest level since 2003. Similarly, imports from countries other than the United States fell for the first time in eight years. Imports from Europe declined to $55.5 billion, largely due to a drop in imports of crude petroleum from the United Kingdom and Norway.

Canada imported $39.7 billion worth of merchandise from China, down 7.0% from 2008. Imports of telecommunication equipment increased while imports of computers, games and toys all declined.

Source: CIFFA

Highway eManifest program delayed

The target start date for implementation of the Advance Commercial Information (ACI) Highway eManifest program has been pushed back to September. The original target was June.

This is Phase Three of the Advance Commercial Information program. Phases One and Two, covering marine and air, were implemented in 2004 and 2006, respectively. Under Phase Three, trade information must be forwarded electronically to the Canada Border Services Agency one hour before truck or rail shipments arrive in Canada.

Cargo volumes are picking up as world economies recover, but many air and ocean carriers continue to operate reduced fleets, lowered to reflect the economic downturn experienced in 2009. The one bright spot is that some carriers have now given notice that they are putting more ocean vessels and aircraft back into commission on the Asia - North America lane. The increased capacity should lead to rate stabilization on that trade lane in the short term. Longer term, there could be rate reductions and fewer rolled bookings. More ships on the water means more capacity, less demand for space means carriers will have to compete for business. This should eventually lead to lower rates for shippers.

The situation is much different on the North American/Europe trade lane, where most carriers are booked solid. It’s particularly difficult to get capacity for freight headed to the UK or Europe, mainly because there has been a surge in North American exports.

Similar conditions prevail on the import side. However, you still have options, including a premium ocean freight service, available exclusively from Universal Logistics for clients who need to ship freight from the UK to Canada. This service takes your shipment from date of sailing to your front door in just 12 days.

For more information on our Premium Ocean Service and other freight solutions, please call our offices (905-882-4880) and ask for the Transportation Consulting Services team.

Carrier responds to complaints about shortage of container space on vessels

Responding to complaints about a shortage of container space, Maersk Line CEO Eivund Kolding says shippers and ocean carriers alike are “experiencing an instant change in the market” that has led to volatility and made business-as-usual impossible.

“We realize that this abrupt change in market conditions has not been managed well by us in all instances, causing undue problems, for which we apologize,” he wrote “A particular challenge has been an extraordinary amount of overbookings on many of our sailings,” he said, promising to find ways to alleviate the problems.

He suggests it could take the summer for this situation to right itself because lines are afraid of bringing too much capacity online.

Demand for global air cargo surges in February

Reports of strong air freight volumes out of China are expected to continue for a variety of reasons, including a shortage of available sea freight containers. There are indications that the demand for air freight out of China could continue through the year, and some forwarders are already making bookings for the final quarter.

The latest figures from the International Air Transport Association (IATA) have shown that international scheduled air traffic in February 2010 continued to strengthen. Compared to February 2009 cargo demand grew by a staggering 26.5%.

IATA, however, cautioned that the corresponding period in 2009 was close to the bottom of the cycle for air cargo, which had reached its nadir in December 2008. According to IATA, cargo traffic has a further 3% to recover in order to return to pre-crisis levels.

“We are moving in the right direction. In two to three months, the industry should be back to pre-recession traffic levels. This is still not a full recovery. The task ahead is to adjust to two years of lost growth,” said Giovanni Bisignani, IATA’s Director General and CEO.

European airlines are benefiting least from the strong upturn in air freight volumes, with year-on-year growth of just 7.2% in February, compared to 26.5% on average. Despite the sluggish U.S. economy, North American airlines have seen a rebound (+34.1%) equivalent to those experienced by Asia Pacific (+34.5%), Latin American airlines (+41.9%) and those based in the Middle East (33.1%).

IATA puts the bulk of the air cargo expansion down to businesses restocking inventories and the business inventory cycle. This impact can be expected to wear-out in the second half of the year when inventories reach normal levels. From that point, slower growth is expected as air freight will be driven by consumer spending and world trade.

Rising U.S. freight volumes

Rail and sea freight volumes into and within the US continue to grow, suggesting a sustained recovery in the logistics sector. Figures from the Association of American Railroads report freight car loadings in March hitting levels last seen in November of 2008. This represents a 16.5% increase on the levels of March 2009, but is still more than 10% lower than the levels seen at the beginning of 2008. Total volume was 31.7bn ton-miles. Intermodal traffic remained a comparatively buoyant sector of the market with volumes up 12% on the depths of the recession last year. In contrast container volume is up 2.1% on the same period last year.

It should be noted that the ‘bounce-back’ from the abnormal lows of last year is still being felt. For example, automotive related traffic grew by 28.5% in the 12 months to the end of March although car sales remain some way off their previous levels. It can hardly be expected that such rates of growth will be maintained.

Other surveys are also showing steady, if not spectacular, expansion. The freight billing mechanism, Cass Information Systems saw increases of 4.5% for the month of March on a shipments basis, with expenditure up 6.9%. The survey from management consultancy Ben Hackett Associates has also seen growth in retail driven shipments in the container sector, with volumes up around 20% on last year. Their survey estimates that ports will handle 1.07m TEUs in April, which will represent an 8% increase on the same month last year, a trend which will continue well into the middle of this year resulting in double digit growth. This is driven by a modest recovery in American retail sales with retailers maintaining lean inventories during the recession which they are now slowly building back up.

Small businesses feeling good about the future

The Canadian Federation of Independent Business (CFIB) reports that confidence among small and mid-sized business owners remains on the rise. CFIB’s Business Barometer Index rose for the third consecutive month in March, reaching 69.9 – its highest level in five years. This level of optimism is consistent with a healthy sustained economic growth rate of about 4%, which suggests Canada’s strong economic rebound to date will continue.

Measured on a scale between 0 and 100, an index level above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 75 when the economy is growing.

In business confidence is highest in the retail sector (72.9), followed closely by wholesale (72.5). At the same time, despite a strong Canadian dollar, manufacturers are near the top of the list with 71.8 index score. The western economies, optimism in the natural resources sector has rebounded strongly from dismal levels of late last year. Business confidence remains low for farmers and the hospitality industry.

For more information regarding the above articles, please contact David Lychek, Manager – Ocean & Air Services.

Challenging market conditions addressed at
BookExpo America meetings

Recognizing that 90% of success is “being there”, two senior Universal Logistics executives, Mark Glionna, Vice President – Client Relations and Chris Barnard, Vice President – Projects & Market Development, attended BookExpo America 2010, held at the Javits Convention Center in New York City, May 25-27, an annual event that attracted more than 22,000 publishers, booksellers, authors, librarians, agents and publicists.

The industry is going through a period of rapid change and no one knows exactly how this will impact the future landscape. “With this in mind, there is no better place to learn about what is happening in the international publishing industry and how we can adapt our logistics services to meet those changing needs,” explains Mr. Glionna.

Meeting with Codasat Canada Limited at BookExpo America L-R: Chris Barnard, Thea Kooy, Sandra Hargreaves and Mark Glionna

Several meetings were held with clients, who were pleased to see that Universal Logistics, Canada’s leading provider of customs clearance and international freight services for more than 100 book clients, was well represented at the Expo. “It was also a great opportunity to meet with the many printers we deal with to discuss processes with the aim of streamlining services for our book clients” advises Nick Ng, General Manager, who also attended from Universal’s newly opened Hong Kong office, set up to meet the growing needs of our clients.

The Universal team also held productive meetings with representatives of World Transport Agency (WTA), the company’s key partner in the UK for the last 40 years. The WTA representatives included Gerry Lawler, Managing Director, Alan Hilton, Operations Director and Martin Watts, Logistics Director and John Sommer, a Vice President in WTA’s U.S. division.

“There was a lot to discuss, particularly due to the ever increasing presence of electronic alternatives to traditional publishing” said Mr. Barnard. “I think we picked up some good insights on these new forms of distribution and their impact on the industry going forward which underlines our reason for attending - to remain on the leading edge of what’s taking place in the book publishing industry.”

For more information, please contact Chris Barnard, Vice President – Projects & Market Development.

Book and Periodical Council endorses Universal Logistics for 15th consecutive year

Universal Logistics is honored to have been endorsed for the 15th consecutive year by the Book and Periodical Council (BPC). The company was told about the most recent endorsement in the following letter from Anne McClelland, Executive Director for the BPC.

I am pleased to inform you that, for the 15th consecutive year, the Book and Periodical Freight & Distribution Committee is recommending Universal Logistics as the international freight forwarder and customs broker. Universal has earned this continued confidence on the strength of a full complement of customs brokerage services at competitive prices, AMPS consulting and ocean and air consolidation services from the UK, and other international printing centres such as China, Hong Kong, Singapore, Italy, Australia and New Zealand.

Your continued dedication to education and seminar training on issues of particular interest to our industry has been invaluable. Universal has provided our membership with the tools required to help streamline and maximize their operational capabilities. Your partnership approach to compliance and your ability to bring representation from Canada Customs to discuss those issues specific to our industry are unique.

We value the tradition of fine service Universal has provided to the publishing trade and look forward to developing our ongoing relationship.

For more information contact Mark Glionna, Vice President – Client Relations.

	Jaime Cruz, Manager – Transportation Consulting Services

AT YOUR SERVICE

As part of our ongoing effort to meet the changing needs of our clients, we have created a new position, Manager – Transportation Consulting Services, and appointed Jaime Cruz to fill that role.

"There are a lot of changes happening right now in the transportation business," explains Ms. Cruz. "My job is to help our clients navigate through all the challenges and opportunities."