Leadership in Logistics, a Québec Perspective
Infrastructures for Global Strategy
As companies implement their global strategy, they must count on infrastructures and key service providers to support their operations. As an example, companies with international operations and global market require accessibility to ports and airports. It is a key enabler to strategy execution. The services provided by ports and airports must be reliable, flexible, cost efficient and of very high quality. More so, they should be surrounded by a variety of service providers and business partners, who can offer: transportation, customs brokerage, subcontracting, third party logistics and other services.
These logistics hubs benefit all partners. The service providers can count on volume to develop operation synergy and cost efficiency, and the companies can focus on their core competencies to compete.
These infrastructures require major capital investment. The government must provide orientation, funding and develop programs to attract entrepreneurs, companies and service providers.
It sounds good! But… you will say.
Well, the Port of Montreal and the Montreal Foreign Trade Zone are pursuing this model successfully. They already play a very important role in Canadian and North American East Coast logistics and their future is bright.
The Port of Montreal
The Port of Montreal is a bustling hub of international trade. A leader among North Atlantic container ports, it handles all types of cargo in all seasons – approximately 20 million tonnes per year. As the international port closest to North America’s industrial heartland, it offers the shortest route between North Europe and the Mediterranean, and the vast markets of North America.
A wide selection of respected international shipping lines link the port to more than 100 countries around the world and offer swift, reliable, door-to-door service at competitive prices. The port offers frequent arrivals and departures, modern infrastructure and high-tech equipment, not to mention careful handling.
The Port of Montreal distinguishes itself from most other ports by its own rail network on port territory, operated by the Montreal Port Authority. Its six locomotives come and go on more than 100 kilometres (60 miles) of track. This port railway network provides the two national railway companies, Canadian National and Canadian Pacific, with access to almost every berth. Every day, trains connect the port to the major metropolitan centres of Toronto, Detroit and Chicago. Trucks also link the port to markets in Central Canada, New England, New York State and all over North America.
The Port of Montreal also welcomes thousands of passengers every year to its Iberville cruise terminal, located in the city’s historic district. A major cruise destination, the City of Montreal offers these passengers beautiful sights and – for many visitors – the cachet of Europe without having to cross the ocean.
The Montreal Foreign Trade Zone at Mirabel
A program tailored for logistics created by the Quebec government in 1999, in order to enhance the industrial potential and the high quality infrastructures of the Montreal-Mirabel International Airport as well as to promote new investments, the Montreal Foreign Trade Zone at Mirabel has many competitive advantages for the development of logistics-related activities.
The Montreal Foreign Trade Zone at Mirabel is strategically located at an international airport, in operation 24 hours a day with no curfew, and it benefits from the proximity of the North American East Coast market (130 million consumers within a 1,000 km radius). The landing fees are 55 percent to 80 percent lower than in Toronto, Boston, Chicago, Detroit or New York. The operating costs for a distribution centre are amongst the lowest in North America.
The fiscal and financial incentives provided by the Montreal Foreign Trade Zone, for a period of ten years, allows logistics businesses to reduce their set-up costs by 25 percent, with refundable tax credits on the construction of plants or with the acquisition or leasing of eligible capital assets. The operating costs can also be reduced by Quebec tax holidays on income tax and tax on capital, as well as with the Quebec refundable tax credits (30 percent until January 1st 2005 and 20 percent thereafter) on eligible employee salaries and customs broker fees. Investors can also receive financial assistance on manpower recruiting and training.
The investments, so far, in the Montreal Foreign Trade Zone, total over $500 million dollars with the creation of more than 3,000 jobs. Among the many companies that have chosen to establish their businesses in the Montreal Foreign Trade Zone, there are, Bombardier Aerospace, a world leader in the aerospace industry, and Technicolor, a leader in motion picture film distribution.
The Port of Montreal and the Montreal Foreign Trade Zone already offer enhanced operation efficiency to many key international companies. As these infrastructures develop, Montreal is becoming one of the most cost efficient logistics hubs in North America.