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Nick Nanos, LCBO Director of Traffic, Customs & Excise, together with Executive Vice President George Soleas and SAQ’s Stéphane Groleau.

Shipping & Handling

Shipping costs reduced through strategic partnership with SAQ.

(JUNE 2014)—The LCBO and the SAQ are testing a shipping collaboration that, if successful, could lead to additional partnerships between the two liquor boards in the future.

Long considered the beverage-alcohol industry equivalent to the Toronto Maple Leafs and Montreal Canadiens NHL hockey rivalry, the LCBO and SAQ are finding that, by working together, they can reduce costs, help the environment, and better serve customers.

The pilot project involves the co-loading of freight from several eastern and central European countries, including Bulgaria, Croatia, Estonia, Latvia, Lithuania, Finland, Sweden, Slovakia, Slovania and Russia. 

“The LCBO doesn’t flow a large volume of product from these markets and neither does the SAQ,” explains Nick Nanos, director, Traffic, Customs, Toronto & Ottawa Logistics Operations. “But by co-loading freight, we’re able to receive a dispatch every one or two weeks instead of every four.”

The shipping challenges faced by the LCBO and SAQ are dramatically different. Montreal is a port city, which means the SAQ has the ability to move product directly from shipping vessels to its distribution centres. On the other hand, the LCBO has to transport the containers to a terminal, via rail or truck, and hire another carrier to transport the product to one of its own distribution centres.

“This extra leg is significant,” Nick says. “By better utilizing space, we reduce costs as well as our environmental footprint. You always want to transfer more product by ship than by air,” Nick says.

“The initial results of our collaboration with the LCBO have been positive and we look forward to continuing to explore other ways we can work together in the future,” says Stéphane Groleau, director, Transportation and Procurement, at the SAQ.

Nick adds that it’s taken some time to build a relationship with the SAQ to this point, but now that a solid foundation has been established, it should be easier to explore other opportunities.

For instance, the Ontario and Quebec markets are quite different. Since spirits sales are much higher in Ontario, it may make more sense for the SAQ to purchase product directly from the LCBO with products shipped from the Durham Warehouse. 

“As a single entity, we transport more volume over the North Atlantic than anyone else. Together we basically dominate this trade. Having this additional freight would help continue to drive down our costs,” Nick says.

Further down the road, Nick says the LCBO could benefit by working more closely with other liquor jurisdictions as well in terms of the overall management of transportation and leveraging economies of  scale of all the organizations.

“If it works between us and the SAQ, then it would definitely work with other liquor boards,” he says. “If the majority of product is shipping through the eastern seaboard, anything going to Manitoba is going right by our doorstep.”

 

 

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