Welcome to RCC

There is nothing more imperative in retail supply chain management than the 3 R's: Reliability. Reliability. Reliability.

And in the ultra-competitive arena that is Canadian retail today, supply chain efficiencies are increasingly and mercilessly defining winners and losers. Financial success is now inextricably connected to supply chain excellence.

Many Canadian retailers have been aggressive in supply chain investment. In recent years, numerous retailers have poured millions into solutions that expedite global processes that align supply with forecasted demand.

"Hitting the target" in the retail supply chain world means getting a piece of merchandise which is produced on the other side of the globe onto a display shelf in Canada at precisely the moment the customer expects it: because the retailer's flyer promised it would be there and the customer has come to expect nothing less.

It's about continuous reengineering of business processes to increase productivity while lowering costs for retail customers. Systems are required to get the right product to the right place at the right time, making logistics operations demand-centric.

And in recent years Canadian consumer demand has shifted retailers' sourcing focus to the other side of the Pacific — driving retailers to push an increasing volume of goods through the supply channel linking Asia with North America.

Globalization has shifted much manufacturing from North America to Asia. China, in particular, has emerged as a source of products sought by Canadians and, particularly with the lifting of import quotas on Chinese textiles earlier this year, that trend shows no sign of diminishing any time soon.

The Port of Vancouver, one of the world's best deep harbours, is a logical retail gateway to Canada and North America. It is closer to Asia than ports in California or Washington State.

Figure 1 illustrates the growth of retail imports through the Port of Vancouver between 2003 and 2004. Growth this year is forecast to be in the double digits for most product categories.

Figure 1:

The growth of container import traffic has been equally dramatic at Fraser Port.

Figure 2:

Container volumes at British Columbia seaports are expected to grow from 2 million 20-ft. equivalent units (TEU) to between 5 million and seven million TEUs by 2015. At the Port of Vancouver, it is projected that container volumes will more than triple to nearly 5 million TEUs within 15 years.

Approximately 60% of landed containers leave Vancouver-area port terminals by rail. Retailers have a significant stake in the timely and efficient movement of the remainder by truck. Small and medium-sized retailers in BC and Alberta rely principally on trucked containers for import merchandise. As do retailers across the country that receive merchandise from specialty importers - many of whom have warehousing facilities in the Vancouver area and receive containers by truck.

A prime attraction for national retailers of the Port of Vancouver and Fraser Port is the potential to develop regional distribution centres in the Greater Vancouver area that receive containerized import goods by truck for de-stuffing and distribution to retail outlets across regional areas. Supply chain efficiencies can be realized by relying less on rail to ship intact containers to central Canada for processing and then shipped back to points west. Retailers are gradually developing strategic distribution centres in the Lower Mainland of BC.

But the "3R's" of retail supply chain management remain the essential ingredient for future plans and investment.

Says one Retail Council member: "Retailers need absolute reliability. We have increasing product volumes from the Asian market and consumers want to know that the product is going to be on the shelf when they are ready to buy."

There are many partners in the modern supply chain. It takes just one weak link to trigger a retailer's sensitivity about reliability. And in the eyes of the Canadian retail community, as thousands of containers piled up stranded on the docks in the heat of July, the Port of Vancouver's short-haul trucking network was revealed to be just such a weak link.