A Workforce Strategy for Alberta's Supply Chain Logistics ...work.alberta.ca/documents/workforce-strategy-supply-chain-logistics.pdf · Alberta’s supply chain logistics industry

Supply Chain Logistics IndustryA Workforce Strategy For Alberta’s

A Workforce Strategy for Alberta’s Supply Chain Logistics Industry

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FOREWORD

A Workforce Strategy for Alberta’s Supply Chain Logistics Industry was developed by stakeholders from this sector with support from the Alberta government. Stakeholder representatives were involved in a series of discussions between November 2007 and October 2008 and the input from those sessions forms the content of this strategy. Individual associations have identified actions they support and to which they will contribute with related projects and initiatives. The following organizations participated in the development of this workforce strategy:

• AgriumInc.

• AlbertaMotorTransportAssociation

• BJServicesCompanyCanada

• BrenntagCanadaInc.

• CalgaryChamberofCommerce,Transportation&LogisticsCommittee

• CalgaryEconomicDevelopment

• CalgaryLogisticsCouncil

• CanadianSupplyChainSectorCouncil

• CFCanada

• EdmontonAirportAuthority

• InternationalBrotherhoodofTeamsters

• LafargeCanadaInc

• JointLearningInitiative

• SupplyChain&LogisticsAssociationCanada

• TheVanHorneInstitute

• WesternTransportationAdvisoryCouncil

• WomeninLogistics

A Workforce Strategy for Alberta’s Supply Chain Logistics Industry A Workforce Strategy for Alberta’s Supply Chain Logistics Industry

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BACKGROUND

WhileAlbertaisaleaderineconomicgrowthinCanada,theprovinceisfacedwithlabourandskillshortagesthatwillpersistintothefuture.Iftheseissuesarenotaddressed,theywilllimitourprovince’scontinuedeconomic growth and prosperity.

Building and Educating Tomorrow’s Workforce(BETW)isAlberta’scomprehensivelabourforcedevelopmentstrategy.Thisstrategy,releasedin2006,identifies17government-ledpriorityactionstoensuretheprovincehasmoreworkers,bettertrainedpeopleandinnovativeworkplaces.Thesegovernmentactionsaddresslabourforce issues across several industry sectors. Individual government ministries are responsible for implementing thepriorityactionsthatfallundereachministry’sspecificrolesandmandates.

MeetingAlberta’slabourforcechallengesoverthenextdecaderequirestheparticipationandinvolvementofall stakeholders. Strong collaboration and partnerships between government and various stakeholder groups arekeytosuccessfulimplementationoftheBETWstrategy.Stakeholdersincludeindustry,labourgroups,professionalorganizations,volunteerandcommunityagencies,educationandtrainingproviders,Aboriginalgroupsand,whereappropriate,otherordersofgovernment.Eachstakeholderhasanimportantroletoplay.Therefore,industrysectorswillneedtheirownactionsandinitiativestoaddresstheiruniqueeconomicpressures and challenges.

INDUSTRY WORKFORCE STRATEGIES

Industry is committed to playing a lead role in building and educating their workforce. The Alberta government is working with industry stakeholders to develop workforce strategies specific to each sector. Thesestrategiesprovideaframeworkofindustry-ledactionstobuildthelabourforceneededtosupportcontinued growth over the long term. It is also a starting point for industry leaders to initiate discussion amongtheirmembersastowhatconcreteactionsaremostimportantandrequireimmediateaction.

Becausetheworkforcestrategyisaframeworktohelpindustryidentifyactionsandinitiatives,industrymaychoosetoenhance,addordeletesomeofthepriorityactionslistedinthedocument.Itisindustry’sresponsibilitywhetherornottoimplementtheseactions.Government’sroleistofacilitateandenableindustrytoimplementthesector-ledworkforcestrategy.

Highlevelsofco-operationandcollaborationamongstakeholderswithinanindustrysectorarerequiredforsuccessfulimplementationoftheworkforcestrategies.Creativesolutionsandasynergisticapproachtoimplementinginitiativesworkbestwhenstakeholderscometogetherinpartnership.Therefore,government is working with industry to facilitate stakeholders coming together on common projects and initiatives.

AlbertanswillbethebeneficiariesofthisimportantcollaborationtobuildAlberta’sworkforceduringthe nextdecade.


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PROFILE OF ALBERTA’S SUPPLY CHAIN LOGISTICS INDUSTRY

Sector Definition

Alberta’ssupplychainlogisticsindustryisalargeandmulti-facetedsectorthatisintegratedintothevaluechain of virtually every other industry in the province.

Forthepurposesofthisworkforcestrategy,supplychainlogisticsisdefinedasthestrategicplanningandmanagementofsourcing,procuring,movingandstoringmaterials,partsandfinishedinventoryandtheassociatedinformationflowsrelatedtothatprocess.Increasinglyreferredtoassupplychainmanagement, thissectorincludesthefollowingsevensub-sectors:

• Logistics Information Systems – the information/computer systems supporting the management ofmaterial,service,informationandcapitalflows

• Warehousing and Distribution–receiptandstorage,orderpickingandshipmentofproducts

• Transportation/Movement–themovementofgoodsandpeoplebyroad,railorairincludingshort-haulandlong-haultrucking,courier,airlines,ports,railways,terminalsandinter-modalfacilities

• Inventory/Material Control – documenting and managing the supply of products in storage

• Purchasing/Procurement –planning,purchasing,inventorycontrol,traffic,receiving,incominginspection and salvage operations

• Management –seniormanagersinvolvedinallsub-sectors

• Marketing/Sales –marketing,salesofproductsorservices,customerserviceandsupport

Importance to the Provincial Economy

SupplychainlogisticsisanundeniablecornerstoneoftheAlbertaeconomy.Virtuallyeveryenterpriseintheprovincereliesonahighlyefficientsupplychainlogisticsindustrytodobusiness.Supplychainlogisticsmustbringtheseenterprisesthematerialsneededtocreateproducts,processgoodsorofferservices.Goodsproduced must also be moved to market. It is necessary that this movement of input materials and finished productsbetrackedatanypointintheprocess.Delays,stallsandbottlenecksinthissectorcancauseothersectorstoslowdownorgrindtoahalt,causingdamagetobusinessandtheeconomy.

Otherindustriesrecognizetheirdependenceonthisindustry.Forexample,workforcestrategyparticipantsfortheenergy,constructionandmanufacturingsectorsallidentifiedsupplychainlogistics(andinparticular,transportation)asbeingcriticaltotheirsuccess.Thisisespeciallyimportantinland-lockedAlberta,whichdependsonroadandrailtransporttomovegoodstoseaportsforshippingtooffshoremarkets.Logisticalfactors are among the most important considerations made by industries when looking to select new locations for development.


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1 StatisticsCanada,20072 Ibid3 Incomparison,Alberta’sRealGDPforallindustrieswas$40.34perhourworkedor$74,088RealGDPperworker.4 Alberta’s Transportation Advantage,January,20005 Ibid6 2004AlbertaTransportationandTradeReport,http://www.infratrans.gov.ab.ca/INFTRA_Content/docType56/Production/pol299.htm

MeasuringtheeconomicimportanceofthesupplychainlogisticssectorinAlbertaisdifficultbecausethetraditionaldatacollectionsystemsarenotalignedwiththerapidchangesandexpandingscopeofthissector.Economicdatapresentedinthissectionthereforecomeslargelyfromtraditionalinterpretationsofthesector,rather than the industry as a whole.

Transportationandwarehousing,whichisoneofthesub-sectorsofthesupplychainlogisticsindustry,is thefifthlargestsectorinAlberta’seconomy.Itmakesasignificantcontributiontotheprovincialeconomy as shown in the table below:

Transportation and Warehousing Statistics (Alberta)

GrossDomesticProduct(2006) $8.8billion1

%ofAlberta’sGrossDomesticProduct(2006) 6%2

ContributiontoRealGDPperhourworked(2005) $40.49ContributiontoRealGDPperworker(2005) $82,2643

PercentageofAlberta’s$82billionininternationalexportsmovedtomarket bytruck,railorair

40%4

Supportedbyastronginfrastructureofhighway,railandairtransportation,AlbertahasbecomewesternCanada’sdistributionhubfortheretail,wholesaleandmanufacturing/processingsectors.Therearemorethan368,000registeredcommercialvehiclesinAlbertacarryinggoodswithintheprovince,betweenprovincesandinternationally.5ThisstronginfrastructureprovidesaccesstoboomingmarketsinnorthernAlberta,aswellaswesternCanada,theUnitedStatesandoffshorethroughtheAsia-PacificGatewayandCorridorInitiative.Thisaccesstomarketsiscrucial.BecauseofAlberta’ssmallpopulationbase,theprovinceishighlydependentonthisabilitytoexportmostofwhatitproduces.

Thetransportationsub-sectorconsistsofservicesofferedbyroad,railorair.Truckingactivityaccountsfor 33percentofthegrossdomesticproduct(GDP)generatedbythissub-sectorandisoneofthefastergrowingmodesoftransportation.Byvalue,trucksareresponsibleformoving$7.01billionor29percentofAlberta’snon-pipelineinternationalexportsvalue.6

Alberta’smorethan8,000kilometresofrailnetworktransportspetroleum,chemicals,grain,fertilizers,coal,metalsandminerals,forestproductsandautomotiveshipments.Railprovidesavitallinkfromtheresourcerichnorththroughmainlineservicetopointsacrossthecontinent.ItenablesaccesstomarketsintheUnitedStatesand,ofincreasingsignificance,tothewestcoastterminalsthatserveasgatewaystooverseasmarkets.


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Intermsofairtransportation,AlbertaishometointernationalairportsinEdmontonandCalgary,providingdirect service to many North American and international cities. These two airports were responsible for the movementofmorethan18.3millionpassengersin2007.7Inadditiontopassengertraffic,theseairports arehandlingincreasingvolumesofinternationalairexports.In2004thevalueoftheseexportstotalled $1.84billion.8Theprovince’ssmallerregionalairportssupportthesedomesticandinternationalcargo services and also play a vital role in tourism and emergency medical and firefighting services.

Thewarehousinganddistributionsub-sectorisespeciallyimportantinAlberta’surbancentres,whichareemergingasregionalandnationaldistributionhubsduetotheprovince’sfavourablegeographiclocationandvibranteconomy.Inadditiontowarehouseanddistributioncentres,companiesinthissectorprovidesupplychainmanagementservicesforcoordinatingincomingandoutgoinggoodsatmajorterminals,warehouses and distribution centres.

Employment

Mostoftheindustry’savailableemploymentdataisbasedontwokeysub-sectors:transportationandwarehousing.In2007,5.5percentofallemployedAlbertansor105,800peopleweredirectlyemployed intransportationandwarehousingwithmanymorecloselytiedtotheindustry.Thisnumberisexpected toincreasebyanaverageoftwopercentperyearto117,407by2011.9Thesub-sector’sunemploymentrateof2.5percentiswellbelowtheprovincialrateof3.5percent,whichis,inturn,thelowestinCanada.10

In2007,55percentofpeopleemployedinthissectorworkedforcompanieswithfewerthan100employees(26.3percentforemployerswithfewerthan20workersand28.7percentforemployerswith20to99employees).Companieswith100to500employeesemployed26.7percentofworkersintheindustryand thosewithmorethan500workersaccountedfor18.5percent.11

Alargemajority(72percent)ofworkersinthetransportationandwarehousingsub-sectorsaremale,muchhigherthantheprovincialworkforceaverageof54.9percent.12 Studies at the national level indicate that while women were“reasonably”representedinsupplychainlogisticsjobs,theytendtooccupylowerlevelpositions (e.g.,operationalversusmanagerial)andwerefoundtoearnapproximately20percentlessthanmen.13 In terms ofagedistribution,73.9percentofallworkersinthissectorarebetween25and54yearsofage,and16.8percentare 55 and over.14

The2006averagehourlywageof$22.90inthetransportationandwarehousingindustryishigherthantheprovincialaverageof$22.40andcontinuestorise.Aswell,thesupplychainmanagementindustrywasone

7 The Calgary Airport Authority 2007 Accountability Report and a new day Annual Report 2007,EdmontonAirports8 2004AlbertaTransportationandTradeReport9 Alberta Modified COPS Outlook 2006-2011,IndustryEmploymentOutlook10 Industry Profiles: Transportation and Warehousing Industry,AlbertaEmploymentandImmigration,September2008:311 Ibid 12 Ibid13 Strategic Human Resources Study of the Supply Chain Sector,CanadianSupplychainlogisticsSkillsCommittee,200514 Industry Profiles: Transportation and Warehousing Industry,AlbertaEmploymentandImmigration,September2008:6


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15 Annual Alberta Labour Market Review,200616TSIGroup,CanadianTransportation&Logistics,SupplyChainSectorCouncilandLogisticsCanada andLaurierBusiness&Economics,2007

17 Industry Profiles: Transportation and Warehousing Industry,AlbertaEmploymentandImmigration,September2008:7

ofthetopthreeindustriestoexperienceasignificantincreaseintheaveragehourlywagerate,withtheaveragerisingfrom$21.57in2006to$22.40in2007.15

However,compensationwithinthisindustryvarieswidelydependingonthespecificoccupation.Forexample, theaverageannualsalaryformanagementpositions,includingmanagementbonuses,was$86,532in2006.16 Thefollowingtablesillustratethevariationincompensationfordifferentmanagementpositionsandoccupations.

Average Annual Total Compensation for Management Positions (Canada)

ExecutiveManagers $120,781SeniorManagers $96,135OperationsManagers/Supervisors $68,944

Average Hourly Starting Wages in Transportation and Warehousing (Alberta)17

TransportationManager $19.71TruckDrivers $20.13MaterialHandlers $14.18

Careeropportunitiesinthesupplychainlogisticssectorarewide-ranging,farbeyondtraditionalcareersastruckdrivers,mechanicsandshipper/receivers.Companiesinthissectorneedsupplychainlogisticsspecialists,computerprogrammers,dispatchers,regulatorycompliancespecialists,safetyandenvironmentalexpertsandairtrafficcontrolsupervisors.Someadditionaloccupationsthatmaybeneededareinventorymanagers,salesandmarketingpersonnel,railtransportationmanagers,accountants,losspreventionandqualitycontrolpersonnel and human resource specialists.

Outlook

The supply chain logistics sector is heavily integrated and influenced by the industries it serves as well as by changes in the marketplace. It operates in a dynamic environment with change being driven by national and international events such as natural disasters or major global economic fluctuations. These constant changes requirethesectortoadaptandrespondrapidly.

Thefluctuatingcostoffuel,aswellasgrowingconcernsaboutgreenhousegasemissions,meanstheindustryisseekingwaystobothminimizecostsandreduceitsenvironmentalfootprint.Atthesametime,increasedfuelcostshaveledsomecompaniestoapplywhateconomistscalla“neighbourhoodeffect,”i.e.,factoriesarebeinglocatedclosertobothsuppliersandconsumersinanefforttoreducetransportationcosts.


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AsAlberta’seconomymovestowardsmorevalue-addedproducts,theindustryisrespondingwithincreasedinter-modalismandcontainerization,whichischangingthefaceoftheindustry.Whileadaptingtothesechanges,thesectorisexpectedtogrowanaverageof2.1percentannuallyfrom2008to2012,slightlybelowthepredictedprovincialaverage,andprovide6.7percentofnewjobs.18

Market Growth

InrecentyearstheAsianmarkethasplayedasignificantroleindrivingimportandexporttraffic.Whiletherecentglobalfinancialcrisishasmoderatedtrafficvolumesinthiscorridor,theAsianmarketisexpectedtocontinuetoplayanimportantroleintradewithAlberta.EdmontonandareamayserveasamajordistributionhubforthismarketthroughthePortAlbertaprojecttakingshapeattheEdmontonInternationalAirportandcommunitiesinthenortheastandnorthwestregionsoftheprovince.PortAlbertaisaimingtobethelocationofchoiceforcargoandlogistics-relatedbusinessthroughabroadspectrumofcoordinatedregionalfacilitiesthatwillincludefreighteraircraftparkingramps,terminals,warehouse/storageandinter-modaltransfer.Thissinglepointtransportationinfrastructurewillserveasasolidcomplementtothefar-reachingservicesoftheCalgaryInternationalAirport,whichprovideswesternCanada’sonlymaindeckaircargoservicedirecttoAsiaandEurope.Infact,aircargocanbeshippedfromCalgarytoanywhereintheworldwithin48hours.

TheoilsandsdevelopmentintheFortMcMurrayregionhasputconsiderablestrainonexistingsupplychainsystems.Whilethedownturnintheglobaleconomyandaccompanyingoilpricereductionshavecontributedtoaslowdowninactivity,theregionwillcontinuetoplayanimportantroleintheproductionof bitumen and synthetic crude oil. Another development that may impact the logistics sector is the potential fortheconstructionofupgradersinAlberta’sIndustrialHeartland(AIH)northeastofEdmonton.Whilethisregionofover317squarekilometersalreadyhassignificantpetroleumindustrydevelopmentsinplace,thereareanumberofadditionalmulti-billiondollaroilsandsupgraderprojectsunderconsideration.Liquidityissuesinthemarketplace,combinedwithlowcrudeoilprices,haveforcedseveralupgraderstodeferfurtherinvestmentuntilthereisgreatercertaintyinthemarket.ShouldtheseprojectsinAlberta’sIndustrialHeartlandproceed,theyhavethepotentialtoaddtothelabourforcepressureforworkersinthesupplychainlogisticsfieldinanareaoftheprovincethathastraditionallyexperiencedsignificantdemandforworkersinother sectors such as construction and energy.

Inadditiontotheupgraderprojects,theAlbertagovernmenthasidentifiedasignificantopportunityto createaworldscalechemicalclusterwithintheCapitalRegion(Edmontonandarea).Thechemicalclusterwouldstimulatethedevelopmentofworldclasseco-industrialrefiningandchemicalinitiativesintheAIHandnortheastEdmonton.Furtherworkcontinuesonthedevelopmentofthisinitiative,whichifbrought tofruition,willplaceadditionalpressuresonthesupplychainlogisticsindustry.

18 Ibid


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19 The Transportation Sector in Alberta: Present Position and Future Outlook: An Update,TheVanHorneInstituteandProloguefortheAlbertaEconomicDevelopmentAuthority,April30,2005

20 Ibid

Implications for the Supply Chain Logistics Sector

Thisanticipatedactivityintheprovincewilltriggerconsiderablegrowthinthetransportationsub-sector,particularly for trucking and air.19

TheAlbertaMotorTransportAuthorityisforecasting$7billionworthoftrafficbetweenAlbertaandtheUnitedStatesby2013,doublethecurrentlevel.20Carrierswillbelookingtolargerequipmentcombinationsandnewtechnologiestomanagethisgrowth,whilegrapplingwithacriticalshortageofqualifieddrivers.Intelligent logistical systems and advanced vehicle communications are being adopted by many firms to managethegrowthandoffercompetitiveadvantagestotheircustomers.

Competitionintheaviationindustryisexpectedtoincreasewithsomeregionalairlinesexpandingtheirservicesinternationally.Risingcostsforfuelandlabourshortageswillchallengetheviabilityofsmallerairlinesandregionalairportsintheprovince.Consolidationintheairfreightindustrymaycontinueasanavenue to cost cutting.

Therailcomponentanticipatescurrentvolumesoftransportincoal,fertilizer,sulphur,forestandagriculturalcommoditiestoremainrelativelyconstantforthenearterm.Itisexpectedtoexperiencegrowthinfertilizer,petrochemicals,othermanufacturedproductsandinter-modaltraffic.Railwayswillneedtofocusonproductivity and operating margins and seek new innovations in order to grow the industry.

ThefuturemayalsoseeanincreaseinshippingbybargesonAlberta’snorthernwaterways.Todate,freighthasbeenmovedfromFortMcMurraytocommunitiesandworksitesinnorthernCanada.Thismaybeexpandedas increased development occurs in the north. There is also the possibility that in coming years large oil sands processingequipmentwillbebuiltinAsiaandmovedbyboatandbargeacrossthePacificandthenuptheMackenzie,SlaveandAthabascariverstominingsitesintheFortMcMurrayarea.

Thewarehousinganddistributionsub-sectorisgrowinginAlbertaduetoapositivebusinessenvironmentandtheprovince’scentralgeographiclocation.Thissub-sectorwillmaintainitsimportanceinthefutureasmanyfirmsareoutsourcingtheirwarehousinganddistributionneeds.Costeffective,state-of-the-artcomputersystemswillberequiredthroughouttheindustryforittoremaincompetitive.

Logistics Labour Market Trends

TheAlbertaOccupationalDemandandSupplyOutlookforecastssupplyshortagesintransportationofficersandcontrollers,othertransportequipmentoperatorsandrelatedworkeroccupationseveryyearbetween2005and2015,driveninlargepartbyanincreaseinconstructionprojects.Whilethereisconsiderablediscussion


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21 Canada’s Driving Force, Phase 2: Integrated Summary Findings,CanadianTruckingHumanResourcesCouncil,200722 Strategic Human Resources Study of the Supply Chain Sector,CanadianSupplychainlogisticsSkillsCommittee,200523 Strategic Human Resources Study of the Supply Chain Sector (PowerPoint Presentation),CanadianSupplyChainSectorCouncilPowerPointPresentation,Fall2005

aboutashortageoftruckdrivers,manyintheindustryindicateitisnotsomuchanissueofsupplyasitisashortageofqualifiedtruckdriverswhoholdaClass1Alicence.A2007studybytheCanadianTruckingHumanResourcesCouncil21identifiedanescalatingshortageofqualifiedClass1AcommercialtruckdriversacrossCanada,and80percentofemployerssurveyedfeltthisshortagewillworsenoverthenextfiveyears.

Nationally,strongdemandispredictedforstrategicbusinessmanagers,supplychainspecialistsincludingplannersandanalysts,logisticsinformationsystemsanalysts(e.g.,systemsanddata),andsupplychain-specificcustomer/client-focusedstaffinsales,accountmanagementandclientmanagement.22Whenfactoringinnewjobcreation,retirementandturnover,thetotalnewemployeedemandgrowthrateissetnationallyat 12.3percentor86,300employees.Clearly,thereareopportunitiesforemploymentinthissector.23

Challenges and Issues

Alberta’ssupplychainlogisticsindustryoperatesinadynamicandchallengingenvironmentthatisconstantlyimpacted by global events. It is a sector that both proactively drives and reactively responds to change. This means the industry faces a number of labour force challenges; these are listed below and divided into four central themes.

Public Perceptions of the Industry

• Limited public profile for the supply chain logistics sector. There is a general lack of public awareness oftheindustry,bothintermsofwhatoccupationsandopportunitiesexistinthesectoranditsimportanceintheeverydaylivesofAlbertansandCanadians.Thislackofawarenesslimitsthenumberofpeopleconsideringcareersinsupplychainlogistics,aswellastherequiredsupport/momentumforaddressingissuesintheindustry.Moreover,publicperceptionofemploymentintheindustryisoftenlimitedtooutdatedandnegativeimagesoflong-haultruckdrivers,forexample,withoutanunderstandingofthebreadth and diversity of options for a career in supply chain logistics.

• Labour force data is fragmented and difficult to find. Severalstudieshaveindicatedaneedforexpandedcollectionandcentralizeddisseminationofcurrent,usefullabourmarketinformationforthesupplychainlogisticsindustry,bothprovinciallyandnationally.TheUnitedStatesbycomparison,hasdevelopedaTransportationServicesIndexthatmeasurestheimportancetotheeconomyofthemovementoffreightand passengers. Amendments to statistical data collection and analysis are needed to more accurately capture the scope and diversity of the industry beyond conventional fields such as transportation andwarehousing,andtoprovideabasisforeffectiveanalysisoflabourmarketissuesandworkforcedevelopment. There is also a need for more consistent use and interpretation of the data by and for the industry.Labourmarketinformationneedstobeorganizedinaformatthatismoreusefulandrelevant to the industry and easily accessible via the Internet.


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Changing Face of the Industry

• Dynamic changes in global traffic.Alberta’ssupplychainlogisticssectoristakingitsplaceontheglobalstage,movingthehorizonsoftradefromlocalandprovincialdestinationstopointsanywhereintheworld.IncreasesintradewithEurope,SouthAmericaandemergingmarketsarecontributingtochangesinthetradecorridors.OneexampleistheunprecedentedincreaseinfreightflowingthroughtheAsia-PacificGatewayandCorridor.ThismassivemovementofgoodsfromthewestcoastthroughtocentralCanadaandtheAmericanmid-westcompeteswithandtiesupsupplychainlogisticsandtransportationcapacitythatmayberequiredbyAlbertabusinesses.SimultaneoustotheincreaseinimportsisthesignificantgrowthinexportsthroughtheAsia-Pacificgateway.Thisdramaticincrease,particularlyinthetransportofgrain,sulphur,potashandcoalisdrivingtheneedformoreworkersinportfacilities,railandinter-modalelements of the industry.

• Increased qualifications needed. Thesupplychainlogisticsindustryoperatesinanincreasinglycomplexandsophisticated environment. The strategic importance of staying competitive in a global market means new entrants,aswellasthoseadvancingthroughtheindustry,needspecializedtrainingtomeetindustryneeds.Logisticsmustalsobeidentifiedasabonafideprofessionandlogisticspractitionersascertifiedprofessionals.Thegrowthinsupplychainprogramsofferedatthepost-secondarylevelwillhelpsecurethisstatus.

• Pressures on system infrastructure.Whilethedemandisthere,systemcapacityandmaintenanceofthesurfacetransportationinfrastructureisaconcern.Containerandhoppercarcongestioninwestcoastports adds pressure to the rail transportation systems and related infrastructure. Increased use of transport vehiclesonAlberta’shighwayshasanimpactonthebuildingandmaintenanceofahighqualityroadnetwork.Albertaneedstobeproactiveinmanagingincreasedtrafficwhileensuringcapacityisavailable tomoveexportsoutoftheprovince.However,effortstoincreasethecapacity(e.g.,road/railexpansion orimprovements)willcreateanadditionaldemandontheprovince’salreadytightlaboursupply.

• Work of the industry is becoming 24/7/365. The supply chain logistics industry is increasingly under pressuretodelivereveryday,aroundtheclocktorespondtobusinesstrendssuchasjust-in-time(leanproduction)processing.Inthepast,stockwasdeliveredinlargevolumestocompaniesthatstoredtheproductsinwarehousefacilities.Withjust-in-timeprocesses,companiesdonotstorelargeinventories. Theyexpecttoreceivetheirproductswhentheyneedthemandarenotpreparedtowait.Moreover,inaneraofinstant,globalinformationflowsandhigh-techtrackingtechnology,companiesexpecttobeabletotrackwheretheirordersareatanypointintheprocess.Respondingtoenhancedconsumer/customerdemandsrequiressophisticatedsupplychainlogisticsinformationsystemstocommunicateandacquireproductsonanas-neededbasis.Thisincreasestheneedfortechnicalinfrastructuresandtechnicallyskilledsupplychainworkersequippedtomeetbusinessdemand.Anadditionalchallengeforhumanresourcerecruitmentevolvesfromthisroundtheclockenvironment.Manyyoungpeopleenteringtheworkforcearenotinterestedinshiftwork;theyprefercareersthatmaintainwork-lifebalanceandemployerswhoaddresslifestyleissues.


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• Variation in government regulations and cross-border trade.Transportationofgoodsoftenmeanscrossingmultiplemunicipal,provincialandinternationalborders,eachofwhichmayhavedifferent “rulesoftheroad”governingtransportation(e.g.,hoursofservice,weights,materialstorageanddangerousgoods),licensingrequirements,customs,securityandcross-bordershipments.Managingandmeetingalloftheserequirementsincreasesthecomplexityoftheworkandtheskillsrequiredofemployeestolearn,follow and document procedures.

• Increased border delays and security restrictions.Inthepost9-11era,cross-bordertrafficandshipmentsbyrail,roadandairhaveallfacedsubstantiallyincreaseddelaysinenteringandleavingtheUnitedStatesdue to increased security processes. Some drivers may not even be able to gain security clearance for cross-bordertransport,addingyetagaintothelabourcrunch.

• Increased worker safety requirements set limits on operators’ hours. In the interests of safety for transportationworkersandthepublic,newlimitshavebeensetonequipmentoperatorhours.Thismeansthatthoseoperatingtrains,planesandtrucksmustadheretosafetyregulationsthatrestricthoursofworkwhileatthesametime,balanceefficientscheduling.Thisoftenmeanslogistics-relatedcompaniesneedtohiremoreworkerstofulfillrequirements,furtherexacerbatinglabourshortagesinthetransportationsub-sector.

• Increased public environmental concerns and regulations.Likemanyindustries,thesupplychainlogistics sector is responding to heightened awareness of and concern for the environment. This is reflected innewandproposedregulationssuchasthosegoverningemissionlevels,hazardousmaterialssafetycompliance and fuel consumption. All links in the supply chain must meet increased environmental requirementsandthelogisticssectorisseekinggreenpracticesthatwilllimittheirenvironmentalfootprint.Newregulationsmayincreaseexpenses,drivingsomeoutoftheindustry.Forexample,regulationsconcerning mileage and emission standards for commercial vehicles may increase the costs of buying newvehiclesandresultinowner/operatorsleavingthetruckingsub-sector.

Changing Face of the Workforce

• Shortage of appropriately skilled workers. This is a challenge faced by all sectors in the supply chain logistics industry in order to meet forecasted growth. A shortage of skilled workers poses real problems for employerswhofindthemselvescompetingwithotherindustriestoattract,recruitandretainemployees. Inthetruckingsub-sector,forexample,anationalshortageofqualifiedcommercialdriverswithaClass1Alicense was rated the most critical issue in the prairie provinces.24

• Changing skills requirements.ChangesinthesupplychainlogisticsindustrysuchastheemergenceofAlberta’smajorcitiesasregionaldistributionhubs,technologicalinnovationinintelligenttransportation

24 Canada’s Driving Force Phase 2 Integrated Summary Findings,CanadianTruckingHumanResourcesCouncil,2007


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systems,globalizationandenhancedinformationsystemsareallraisingthebarinthisindustryandresultinginaneedforspecializedskills.Businessacumen,interpersonalskills,problem-solvingandanalyticalabilityareincreasinglyseenasanessentialfoundationformanyrolesandaqualificationforadvancementinthissector.Inaddition,workersinthisindustrymayfindthemselvesneedingtoupgradetheirtechnicalskillsandknowledgeinnewinformationsystems,processesandtechnology.Toproducegraduateswiththenecessaryskills,educationandtrainingprogramsneedtobecontinuouslydeveloped,enhancedandexpandedinordertoevolvewiththeindustry.

• Education/training programs lack focus and cohesion. National research25 has revealed wide variation insupplychainfocusededucationalprogramsinCanada,bothinfundamentaltermsofreferenceandinhowtheydefinethescopeanddiversityoftheindustryanditsoccupations.Concernshavebeenraisedaboutthequalityandbreadthofstudyintheseprogramsandtheirlackofnationalintegration.Theneedforhighqualityeducationandtrainingisacuteinanindustrywheremanycompaniesdonothaveinternaldevelopment programs.

• An aging workforce. All facets of the supply chain logistics sector are dealing with an aging workforce. Forexample,statisticsavailablefromtheCanadianTruckingHumanResourcesCouncilindicateacurrentnational retirement rate for the industry of 3.2 per cent with the number of new hires failing to keep pace with those leaving the workforce.26Inthissituation,theindustrynotonlylosesitsvaluedworkersbutalsotheirskillsandexpertise.Proactivesuccessionplanning,knowledgemanagementandtheupgradingofskills for current employees in the industry are potential ways of responding to this challenge.

• Attraction, recruitment and retention challenges.Attractionandretentionoftalent,especiallyofknowledgeworkerswhocancapitalizeonthetechnologicalinnovationsintheindustry,isvitaltothefuturegrowthandstability of the supply chain logistics sector. In a labour market characterized by rising labour costs and strong competitionforthesameworkers,employersarechallengedtoattract,recruitandretainvaluedemployees.Smallercompaniesfaceparticularchallenges,especiallywhencompetingwithlargeremployersofferingattractive compensation packages. The cost of training to enter some components of the industry (such as commercialtruckdriving)canbeprohibitive.However,traineesareoftennoteligibleforfundingprograms anddonotreceivethetaxcreditsassociatedwithcommunitycollegeanduniversitytuitions.27

• Increased risk to workplace health and safety. The labour crunch means that work once reserved for seasoned employeesisnowpassedontolessexperiencedworkerswho,accordingtostatistics,areatgreaterriskforworkplaceinjuries.InallsectorsoftheAlbertaeconomyin2007,workersaged15to24yearsconstituted 11.9percentoftheworkforce,butaccountedfor15.1percentoflost-timeclaimsand17.6percentofdisablinginjuryclaims.Likewise,acrossAlberta,newworkerswithlessthansixmonthsonthejobaccountedforwelloverathird(38percent)oflosttimeinjurieswhilemakinguponly16.3percentoftheworkforce.28

25 Strategic Human Resources Study of the Supply Chain Sector,CanadianLogisticsSkillsCommittee,200526 Canada’s Driving Force, Phase 2: Integrated Summary Findings,CanadianTruckingHumanResourcesCouncil,200727“GroupsJoinForcestoAddressDriverShortage,”CanadianTruckingHumanResourceCouncilpressrelease,Feb200628 Occupational Injuries and Diseases in Alberta: Lost-Time Claims, Disabling Injury Claims and Claim Rates, 2007 Summary,AlbertaEmployment,ImmigrationandIndustry


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AnotherdemographicthatmustbeconsideredistherisingnumberofworkerswithlimitedEnglishlanguageproficiency.Inthiscase,employersmustbesurethathealthandsafetyprogramsarenotonlysoundlymanagedbuteffectivelycommunicated.

Socio-Economic Factors

• Pressures on the social infrastructure.InAlberta,affordablehousing,reliabletransportation,andtheavailabilityofschools,doctors,dentistsandchildcareallplayaroleintheabilityofanemployertoattractworkers and their families. Some communities in the province are struggling with an oversubscribed social infrastructure that could place a severe limit on future growth.

PRIORITY INDUSTRY ACTIONS

Industry has lead responsibility for implementing the priority actions in the supply chain logistics workforce strategy. Industry associations and labour groups working in this sector are best positioned to implement these actions to address their labour force issues and challenges.

A number of organizations within the supply chain logistics sector have indicated their willingness to be a contributor to one or more priority actions. These organizations are either involved in or will undertake activities or projects.

The contributing organizations which will undertake specific priority actions include:

• AlbertaMotorTransportAssociation(AMTA)

• CalgaryChamberofCommerce,Transportation&Logistics(T&L)Committee

• CalgaryEconomicDevelopment–CalgaryWorks(CED)

• CalgaryLogisticsCouncil(CLC)

• CanadianSupplyChainSectorCouncil(CSCSC)

• InternationalBrotherhoodofTeamsters(Teamsters)

• JointLearningInitiative(JLI)

• TheVanHorneInstitute(VHI)

• WesternTransportationAdvisoryCouncil(WESTAC)

• WomeninLogistics


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INFORM

InformationsharingwillplayavitalroleinaddressinglabourforcepressuresinAlberta’ssupplychainlogisticssector.TheInformthemefocusesonincreasedaccesstoinformationtosupportinformeddecision-makingonthepartofemployers,workers,youthenteringtheworkforceandindividualsconsideringemploymentinthissector.

1.1 Supportthedevelopmentofamulti-prongedcommunications/publicawarenesscampaigntore- brand the image of the supply chain logistics industry and encourage more people to pursue careers inthesector(e.g.,nationalorlocalcampaignsoranindustryweektopromotethehumanresourceneeds,labourmarketinformationandcareerawarenessopportunitiesforthesector).

JLI

1.2 Developcareerpromotionalcampaignsdirectedatfivetargetmarkets:women(forexample www.womeninlogistics.com);youth(includingsecondaryandpost-secondarystudents,parents andcareerpractitioners);Aboriginalpeople;internationallytrainedindividuals;andworkers moving from one career to another.

Women in Logistics; JLI, WESTAC

1.3 MaintaincommunicationswiththeCanadianSupplyChainSectorCouncilandindustryassociationsto coordinate and harmonize activities that address priority actions.

JLI, VHI, CLC, CED, Calgary Chamber of Commerce T&L Committee

1.4 Solicitindustrychampionswhocaneffectivelypromotethepriorityactionsemergingfromthisstrategy(Presidents/CEOsandotherinfluentialpeopleincompanies,unionsorindustryassociations,forexample).

AMTA, Teamsters, VHI, CSCSC

1.5 Planandimplementastrategytoincreaseemployerawarenessof,accessto,andsupportforexistingresourcessuchasthoseproducedbyJLIandtheeducationalprogramsavailablethroughpost-secondaryinstitutionsinAlbertaandtherestofCanada.

VHI, CSCSC, JLI

1.6 EngageStatisticsCanadaindialoguewithindustryrepresentativestomodifyexistingdatacollection to more accurately and fully describe the supply chain logistics industry and its labour forcedemographicsandneeds.Forexample,explorethepotentialofadoptingoradaptingtheTransportationServicesIndexusedintheUnitedStates.

CSCSC


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ATTRACT

The Attract theme relates to attracting workers from outside Alberta to meet some of the demand for labour inAlberta’ssupplychainlogisticssector.

2.1 PartnerwiththeAlbertagovernmenttopromoteAlbertaasadestinationofchoiceforskilledworkersin underperforming economies or industries in other provinces or countries.

CED

2.2 Continuetoadvocatetogovernmentforstreamlining,expansionandmodificationoffederal/provincialprogramssuchastheAlbertaImmigrantNomineeProgramtoencourageandfacilitateimmigration of workers to meet labour market needs.

Calgary Chamber of Commerce T&L Committee CED, CSCSC

2.3 Workwiththegovernmenttodevelopresourcesandcreateadatabaseofresourcesforemployersinsupplychainlogisticstosupportattractionandretentionofimmigrants,temporaryforeignworkersandinter-provincialmigrants.

CED, CSCSC, WESTAC

2.4 Advocateforgovernmenttoidentifyandaddresssocialinfrastructureshortfallssuchasalackofaffordablehousing,reliabletransportationanddaycareinAlbertacommunitiesfacingalabourshortageinordertofacilitatein-migrationofworkers.

CED, Teamsters


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DEVELOP A HIGH PERFORMANCE WORKFORCE

TheDevelopthemehastwocomponents.ThefirstfocusesonbuildingthecapacityofAlberta’ssupplychainlogisticsworkforcetosupportatransitiontoamorevalue-addedandknowledge-basedeconomy.

3.1 Develop,promoteandsupportprogramsthatprepareunder-representedgroupssuchaswomen,Aboriginalpeople,immigrants,Albertanswithdisabilities,andunderemployedpersonsforemploymentinthesupplychainlogisticssector(e.g.,pre-employmentandpre-apprenticeshiptraining).

Women in Logistics, CSCSC, AMTA

3.2 Increase support for individuals employed in the supply chain logistics sector to upgrade their knowledgeandskills,includingsupervisory,management,apprenticeshipandskilledtradestraining(e.g.,part-timetraining,mentoring,workplace-basedtraining,EnglishintheWorkplaceclasses).

JLI

3.3 Supportdevelopment,deliveryandaccesstoavarietyoflearningsystemsthrougharangeofinnovative delivery models including the Internet.

VHI, JLI

3.4 Workwithgovernmenttofundsupplychainlogisticsprogramsatthesecondaryand post-secondarylevel.

VHI, JLI

3.5 Workwitheducationalinstitutionstoensurethattrainingprogramsalignwithindustryneedsandstandardsandare,wheneverpossible,articulatedalongacareerpathway(e.g.,serveonindustryadvisoryboardsofpost-secondaryinstitutionsofferingtrainingintheindustry).

VHI, JLI, CSCSC

3.6 Developaretrainingprogramtoassistlate-career,matureworkerstoshiftintoacareerwithinthesupply chain logistics sector.

CSCSC, Teamsters

.


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DEVELOP A HIGH PERFORMANCE WORK ENVIRONMENT

ThesecondcomponentoftheDevelopthemerelatestodevelopinghighperformanceworkenvironmentsinAlberta’ssupplychainlogisticssector.Examplesincludeimprovingworkplacesandworkarrangements,increasing capital investment and technology adoption and improving business processes.

3.7 Supportforumsforcollaborationandcooperationamonggovernment,industry,educationalinstitutionsandotherstakeholderstocontributetoworkforcedevelopmentinAlberta’ssupply chain logistics sector.

VHI, JLI, CSCSC, CED, CLC, WESTAC

3.8 Support the development of regional industry clusters or networks to address common problems such astraining,labourshortages,productivityetc.,facingcompaniesinthesupplychainlogisticssector.

CSCSC, CLC, CED

3.9 Proactivelyidentifyandplantoaddressemergingworkforcedevelopmentneeds.ThesemaybeissuessuchastheimpactofnewupgradersorothermajorindustrialexpansionsontheAlbertalogisticsindustry. It might also include the use of changing technology to address environmental concerns.

JLI

3.10Encourageandequipemployerstoofferarangeofinnovativeworkarrangementssuchastelecommutingandtheuseofweb-basedcollaborationtoolssuchasSuperNettomeetvirtually and reduce travel.

VHI, WESTAC


RETAIN

TheRetainthemerelatestoenhancingtheattractivenessofworkinginAlberta’ssupplychainlogisticssectorsothatworkers–includingmatureworkers,immigrants,Aboriginalpeopleandthosewhomayexperiencedifficultymaintainingemployment–continuetoworkintheindustry.

4.1 Identifyandencouragetheapplicationofeffectivepracticestohelpemployersimprovetheretentionofamorediverselabourforce(i.e.,matureworkers,Aboriginalpeople,immigrants,women,under-employedAlbertans).

Calgary Chamber of Commerce T&L Committee CSCSC, WESTAC, AMTA

4.2 Supportemployersinimplementinghumanresourcepracticesthatencouragematureworkerstomaintainemployment(i.e.,offerpart-timeorflexibleworkarrangements,phased-inretirement plans,mentoringandtrainingroles,etc.)toensureretentionoftechnicalandcorporateknowledge inAlberta’ssupplychainlogisticssector.

CLC, CED, CSCSC, Teamsters, WESTAC

4.3 Workcollaborativelywithcommunityagenciesrepresentingtheinterestsofunder-representedgroupstoidentifyanddevelopstrategiestoattractandretainworkersfromunder-representedgroups.

CSCSC

4.4 Developandofferworkshopsinvaluingdiversitytosupervisoryandfront-linestaffinAlberta’ssupplychainlogisticsindustrytohelpimprovetheretentionofunder-representedgroupsin the industry.

CSCSC

4.5 Surveytheindustrytoidentifyandshowcasepositivetestimonialsofpeopleworkinginsupplychainlogistics as a means of celebrating and instilling pride in choosing a career in this sector.

CSCSC, VHI

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MOVING FORWARD

TheSupplyChainLogisticsIndustrycontributorswillworkwiththeirmemberstoimplementtheactionsfoundinthisstrategy.Basedonfeedback,theywillselecttheconcreteactionswiththegreatestandmostimmediate impact as priorities. The Government of Alberta will work with industry contributors in a facilitativeandenablingrole.Thisincludesidentifyingsituationswhereitismoreeffectiveandefficientto collaborate – within and across sector industries – on similar projects. Government will facilitate these opportunities,keepabreastofemergingissuesandtakefurtheractionasrequired.

Industrycontributorsmayfacesomechallengesinimplementingtheworkforcestrategy,including:

• obtainingtheactiveinvolvementofindustrymembersandotherstakeholders;

• workingwithstakeholderssuchasassociationsandlabourgroupswithinandacrossindustries;

• eliminatingfragmentationandduplicationofinitiativeswithinandacrossindustries;

• selectingtheactionsandinitiativeswiththegreatestimpacttoworkonfirst;

• identifyinggapsinthepriorityactionsinordertoaddressbothcurrentandevolvingneeds,and;

• ensuringsustainabilityofthestrategyoverthelongterm.

TheSupplyChainLogisticsIndustrywillworkwithgovernmenttomonitorsuccessofthisstrategyoverthenextten years. Industry contributors are asked to report on their progress by sharing achievements and best practices. Byindustryandgovernmentworkingtogether,Albertawillcontinuetoexcelandallindustrieswillbenefit.

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A Workforce Strategy for Alberta’s Supply Chain Logistics Industry

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978-0-7785-7473-6

Documents

A Workforce Strategy for Alberta's Supply Chain Logistics ...work.alberta.ca/documents/workforce-strategy-supply-chain-logistics.pdf · Alberta’s supply chain logistics industry