2004 Press Release
CANADA, 13 September 2004 – Halifax-based Holmes Maritime Inc. is helping its international customers navigate through the unfamiliar waters of new security regulations.
Since 1993, Holmes has served as the local port agent for Asian-, European- and Latin American-flagged, non-scheduled or "tramp" container carriers.
"They don't have offices here because they don't stop here regularly," says Louis Holmes, company founder and president. "They rely on us to line up the necessary services -- stevedoring, customs clearance, freight forwarding, provisioning and refuelling -- to offload cargo smoothly and move out ships as quickly as possible."
The recent launch of the Automated Commercial Information (ACI) initiative by the Canadian Border Services Agency (CBSA) has added new wrinkles to delivering those services.
For ocean freight, ACI now requires shippers or their agents to transmit shipment data -- information such as product descriptions, names of producers, consignees and carriers -- electronically to the CBSA 24 hours before cargo is to be loaded on ships at a foreign port for delivery to Canada. After the information undergoes risk analysis at its Ottawa data centre, the CBSA issues a permission to load or a do not load order.
"These new security procedures now put enormous pressure on us," Mr. Holmes says. "Before, it was dead-easy. After the ship docked in Halifax, we just dropped off arrival notices at the Customs House. It was a stress-free, cookie-cutter process."
But security everywhere increased after Sept. 11, and those free-and-easy days are gone. "ACI has created more work for us," Mr. Holmes says. "For example, if we have to handle 30 bills oflading and it takes us only 10 minutes each, there's at least five hours of work that we did not have to do before."
The new rules are a double-edged sword. While they increase the workload for trade services providers such as Holmes Maritime, they also open the door to expanded market opportunities. To avoid the cost and complications of updating their business processes and technology infrastructure, many carriers and shippers are contracting out such tasks to third-party providers.
Nevertheless, Holmes Maritime must steer carefully between the shoals of meeting higher demands from future government regulations and client resistance to paying additional costs to comply with the new rules. "To succeed in this business, companies need knowledge, technology and contacts," says Carol Beaul, Toronto-based president of IntelliTrade Inc. "The continuing government downloading of services adds cost and time to the process."
Competition is everywhere. The East Coast shipping marketplace is crowded. Besides Halifax, other Canadian ports of call include Saint John, St. John's and even Montreal. In Halifax, Holmes Maritime must compete with many other service-providers.
Mr. Holmes, a 30-year veteran of the business, has the knowledge to adapt quickly to these changes.
"Our greatest challenge is re-educating shippers," he says. "They are not used to doing business electronically or under the new deadline system. We insist that they provide us with the necessary information 96 hours in advance. Gradually, we are achieving that goal."
The firm has only five core employees. Technology helps keep them productive and provides the flexibility to increase staff for peak periods or special assignments. The record is 23 employees at one time.
To update its technology capability, Holmes Maritime recently began using a software package from CrimsonLogic's TradePalette suite. The software converts paper-based cargo data from carriers and shippers to the acceptable CBSA electronic format. In addition, the CrimsonLogic software meets the International Ship and Port Facility Security (ISPS) code.
But technology alone does not create a competitive advantage. In today's uncertain business world, it is more likely to be data management -- collecting, organizing, analyzing and sharing information -- that gives companies the edge.
"Complying with ACI requirements does not help companies differentiate themselves from the competition because it is the law," says Peter Owsiany, Toronto-based vice-president and general manager North America for CrimsonLogic (NA) Inc. "All companies must send cargo-related data electronically to the CBSA. However, our system will enable Holmes Maritime to create value through sharing accurate cargo data earlier in the process and then collaborating with its business partners to strengthen the network of supply chain service suppliers."
Mr. Holmes's years in the business enable him to call on government and other industry contacts to smooth out problems as they crop up. Some of ACI's startup problems include potential clashes with its counterpart in the United States, the Automated Manifest System (AMS).
"There is a still a grey area about what the U.S. Customs and Border Protection Agency (CBPA) will decide if a liner wants to drop off Halifax-bound cargo that it picked up overseas after receiving AMS-approval for all its other U.S.-bound shipments on board. We are working with officials on both sides of the border to find out what they will do."
In 2003, Holmes Maritime, a privately held company, handled several hundred ships. This year, volume is expected to remain steady.
Diversification may help smooth out any dips in the agency's business. Holmes Maritime can call on its experience in related fields that include servicing the needs of companies involved in offshore oil and gas exploration, laying undersea fibre-optic cable, and assisting import and export firms.
Still, the key for all small businesses is customer service, Mr. Holmes says. "You have to learn to do whatever it takes to keep the client happy."
That commitment is fuelled by passion for the business. "Every day brings a new problem to solve and a new sense of adventure," he says. "That forces you to think on your feet, run fast and use your brain."