Cross Border Security Between Canada and the United States Steve Shepherdson Vice President Project Logistics Schenker of Canada Limited 21 May 2009

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1 Cross Border Security Between Canada and the United States Steve Shepherdson Vice President Project Logistics Schenker of Canada Limited 21 May 2009 Schenker, Inc.

2 Today s Presentation I want to present three logistics case studies, that represent typical transactions in the freight forwarder community. First case an engineered vessel, a one-off project move. Second case an air charter from Houston TX to Edmonton AB Third case daily air service from our hub in Toledo OH to Calgary AB Look at C-TPAT and PIP in context of: the moves the stakeholders involved But, first to set the context Who is Schenker? The Integrated Logistics Group Slide 2

3 Schenker is a International Freight Forwarder Sales (Million CAD) Employees Global Locations Land Transport $ 8,175 Air and Ocean Freight $11,100 Logistics $ 1,926 Total $21,201 88,000 2,000 The Integrated Logistics Group Slide 3

4 Worldwide Network DB Schenker in the USA and Canada DB Schenker has operated in the United States since 1947, and Schenker of Canada started operations in We represent globalization at work The Integrated Logistics Group Slide 4

5 We have a broad range of services Land Transport Airfreight Intra Americas Seafreight Logistics Dedicated Freight Management Customs Brokerage and Consulting Fairs/Specials The Integrated Logistics Group Slide 5

6 The current economic climate Source CASS Information Group, US Transportation Index Baltic Exchange Dry Index and the S&P 500 In retrospect we can see the downward trend since spring of But, have we hit the bottom? The Integrated Logistics Group Slide 6

Case 1: Condensate De-Gassifier from Vancouver BC to Fort McMurray AB Manufacturer Vancouver BC Owner Fort McMurray AB Dimensions =103.4 long by 16.3 wide and 17.

7 Case 1: Condensate De-Gassifier from Vancouver BC to Fort McMurray AB Manufacturer Vancouver BC Owner Fort McMurray AB Dimensions =103.4 long by 16.3 wide and 17.1 high Weight = 138,000 lbs. Loaded height of 18 8 exceeded height restrictions on route through Rocky Mountains. Challenge: find another route! The Integrated Logistics Group Slide 7

8 Case 1: Condensate De-Gassifier from Vancouver BC to Fort McMurray AB Routing Vancouver BC to Bellingham WA Bellingham WA to Lewiston ID Lewiston ID to Sweetgrass MT Sweetgrass MT to Fort McMurray AB The Integrated Logistics Group Slide 8

9 Case 1: Condensate De-Gassifier from Vancouver BC to Fort McMurray AB Loading truck at manufacturer s site on Annacis Island, Vancouver BC Loading river barge in Vancouver, Annacis Island The Integrated Logistics Group Slide 9

10 Case 1: Condensate De-Gassifier from Vancouver BC to Fort McMurray AB On the Fraser River leaving Vancouver for the Port of Bellingham WA (port of entry). Transferred to the sea barge for the trip down the coast and up the Columbia River to the Port Of Lewiston, ID The Integrated Logistics Group Slide 10

11 Case 1: Condensate De-Gassifier from Vancouver BC to Fort McMurray AB In Port of Lewiston ID, preparing to move north back to Canada and the job site. On the Montana Prairies or the Alberta Prairies?! The Integrated Logistics Group Slide 11

12 Case 1: Project Move Hi Complexity! Stakeholders Project Owner Engineering, Procurement and Construction Company Manufacturer Schenker of Canada Transportation Companies x 4 Crane company Marine Surveyor Port Authorities x 3 Two companies that allowed use of their dock facilities to enable the move and transfer from one barge to the other Owner s Canadian Customs broker cleared cargo back into Canada Carrier Bonding Agent which allowed barge and truck carriers (not bonded in US) to transit the US US Customs Brokers, sets-up the Transit & Exit bond on entry into the United States so that goods are non-dutiable US Customs and Border Protection Services verified documentation and Transit & Exit Bond, in advance. They provided notice of arrival and inspection at Bellingham WA and cancelled the Transit & Exit Bond at the Sweetgrass MT border crossing. Canada Border Services Agency, approve or reject the customs entry. Compliance and collaboration required! The Integrated Logistics Group Slide 12

13 Case 2: Industrial Supplies Charters IAH-YEG Loading Emergency Spare Parts from United States to Canada. Required at a heavy oil upgrader located in northern Alberta. Ready to go! The Integrated Logistics Group Slide 13

14 Industrial Supplies Charters IAH-YEG Documentation & process 1. Commercial Invoice 2. NAFTA Certificate 3. Air Waybill hours notice to CBSA or aircraft ETA Stakeholders 1. Owner 2. Supplier 3. Schenker for freight and customs clearances 4. Charter Operator 5. Ground Handling 6. Trucker for final delivery 7. CBSA The Integrated Logistics Group Slide 14

15 Case 3: Daily Air Operations Calgary CYYC What are the issues with planning daily operations in terms of C- TPAT? The Integrated Logistics Group Slide 15

Daily Air Operations Process all cargo requires 1. Commercial Invoice 2. NAFTA Certificate if applicable 3. Air Waybill 4. Employ EDI to transmit data to CBSA electronically (inbound to Canada). 5.

16 Daily Air Operations Process all cargo requires 1. Commercial Invoice 2. NAFTA Certificate if applicable 3. Air Waybill 4. Employ EDI to transmit data to CBSA electronically (inbound to Canada). 5. Unless cleared on landing, cargo moves in bond. Stakeholders 1. Shippers 2. Carriers 3. Schenker for freight and customs clearances 4. Third party Customs Brokers 5. Ground Handling 6. Trucker for final delivery 7. CBSA/Customs and Border Protection YYC MSP TOL The Integrated Logistics Group Slide 16

17 Conclusion: We need both compliance and collaboration Trade is vital for our two countries Together, we have a track record of doing the right things and doing things right The processes we have developed and adapted post 9/11 have served us well, but we can not forget the context in which we do business today. Canada and the United States enjoy a long and enviable history as good neighbors. Let s not forget what we are trying to do, it is about both trade and security. The Integrated Logistics Group Slide 17

Around the world. Delivered.

FREIGHT FORWARDING Around the world. Delivered. INTERNATIONAL FREIGHT FORWARDING FOR companies of all sizes Air, Ocean, Land Worldwide Network Signed, sealed, delivered. Freight forwarding peace of mind