Mercifully, the U.S. election is in its final days. As a Canadian with friends, family, colleagues and clients in the United States, it has been distressing to watch the talk shows, debates and the steady bombardment of election ads on television.

There is no doubt that Mitt Romney and Barrack Obama are two very intelligent, gifted people. Their respective parties each have a vague plan to restore America to its rightful place as the leader of the free world. Regrettably, neither party has provided a detailed substantive roadmap on how they would reduce the deficit and put Americans back to work. The reasons for this are simple. Every policy statement offered by one party would be parsed and ripped apart by the other party. There is safety in being vague. Even worse, the Republican plan, if you can really call it a plan, would likely increase the size of the U.S. deficit and be of most benefit to affluent Americans, those who are least in need of more financial perks.

Also troubling is the fact that the party leaders and pundits cannot acknowledge any value in their opponent’s program. Each party demonizes the other with misstatements, half-truths and exaggerations that make the level of political discourse very negative and unpleasant. America is very a polarized and divided country. Almost every poll shows the two leaders in a virtual dead heat. Millions of dollars are being spent in a handful of “swing” states and in a select group of counties where a small number of so-called undecided voters control the fate of the election. After four and a half hours of debates, hundreds of hours of chatter on television and radio and millions of words in the social media, is there anyone truly “undecided” at this late stage?

The election appears to be based on two polarized versions of the past four years. If one believes that President Obama was faced with the worst financial crisis since the Great Depression and that he did everything possible to stimulate jobs, protect U.S. autoworkers, provide universal health care and keep America safe, you will vote for the President. If you buy into the scenario that President Obama and the Democrats could have done a better job of stewarding the economy during this period, that employment would have been higher and gas prices lower under a Republican administration, that the social policies proposed by the Democrats are too radical, that universal health care is too rich for America and that it is time for a change, you will vote Republican. The few undecided voters ultimately have to accept one of these distorted views of reality. Neither one of these scenarios is an accurate reflection of the current state of America.

Fortunately or unfortunately, I live in Canada and have to deal with our own very troubled political realities. Sadly, we lost one of our best political leaders to illness and lost one of our major political parties to a series of inept leaders and policies. The son of former Prime Minister Pierre Trudeau, a young and inexperienced man, may end up becoming its leader and face the very difficult task of resurrecting the fortunes of the Liberal party against a very crafty Stephen Harper, Canada’s current Prime Minister - - a very tall order. We have our own problems in Canada.

But looking south, I see the election this way. President Obama is a very hard-working, dedicated family man who understands much better than Governor Romney, the plight of middle class Americans. If he remains President, he and his party will likely reap the rewards of the low interest rate, stimulus initiatives that have been in place the past few years. He is focusing on the right things – education, affordable health care, the middle class and addressing the fiscal cliff through a combination of cost reductions and tax increases for those most able to pay more. This plan makes sense to me, more sense than the tax reduction, no revenue increase, cancel Obamacare policies of the Republicans. I believe his policies will be better for the economies of the United States and Canada. I also believe that his policies will be better for the transportation industry that is of most concern to me and my clients.

I endorse President Obama for re-election. I hope many Americans will weigh their options and make the right choice on Nov. 6. Good Luck.

Pierre Berton, the late, famous Canadian author noted in his book, “The Last Spike,” that CP Rail has held a respected place in the country’s history. He wrote that “no other private company, with the single exception of Hudson’s Bay Company, has had such an influence on the destinies of the nation.” For most of the past 15 years, CP Rail faced stiff competition from CN Rail as Paul Tellier and Hunter Harrison led the company’s move from a bloated government run enterprise to a highly profitable public company. In fact CN’s operating ratio of 61.3 is not only the best among the major North American railroads, it is one of the best of any company in the transportation industry.

The fact that CP Rail lagged so far behind CN Rail and the other class 1 railways in North America led the activist investor Bill Ackman, of Pershing Square Capital, to launch his “palace revolt” proxy battle that resulted in the replacement of CP’s former President with Hunter Harrison, whom he brought out of retirement to drive the railway’s profit improvement.
As we pass through the last quarter of this year, Canada’s two largest railroads are heading down separate tracks. With an operating ratio is the low 80’s, Mr. Harrison has embarked on a series of actions to reduce costs through improved asset utilization. This is another way of saying that CP Rail is planning to move its equipment more quickly and efficiently, to become Canada’s second “precision” railroad. It is seeking to accomplish this by undertaking a series of initiatives. These include:

• Building trains at CP’s intermodal terminal in Vancouver with blocks of cars for long haul destinations. This reduces stops and streamlines connections.
• Increasing average train lengths to 7,000 to 12,000 feet
• Speeding up the fueling of trains
• Improving daily scheduling
• Investing $1.2 billion in 2012 and $1 billion in 2013 on key infrastructure projects
• Working with customers at both ends to improve coordination

The net result of these changes is that CP Rail now provides 4 day transit times between Vancouver and Chicago and Toronto. These changes represent half of the transcontinental trains that CP launches daily across its network. Mr. Harrison is not expecting an overnight drop in the company’s operating ratio. He told Bloomberg News that he is targeting about 65 percent in the next four years.

Shippers appear to be taking notice of improved service on both major Canadian railways. In the 2011 Canadian Industrial Transportation Association Shippers’ Pulse Survey, the respondents gave the railways’ intermodal service a 78 percent favourable rating as compared to 82 percent for LTL and 84.5 percent for truckload. Carload service was ranked at 70 percent. These scores are 45 percent better than the ratings in 2009. The railways’ quality rankings were also up 22 percent as compared to 2010.

The railways offer three primary types of services to its customers - - unit trains, carload service and intermodal. Both railroads are positioned to capitalize on trade between NAFTA partners but also trade with Asia and Europe. Michael Bourque, President and CEO, Railway Association of Canada, highlighted in his presentation at the 2012 Surface Transportation Summit that Oil, LNG, shale development (sand, steel pipe, chemicals) are now moving by rail. This is not just a stop gap measure. There are many long term contracts now in place alongside pipeline shipments. The railways can supply capacity and service to a variety of industries.

CN Rail, that already climbed the efficiency mountain under Hunter Harrison, is seeking profit growth from these specific opportunities. CN is enjoying steady growth through the Port of Prince Rupert, BC, the closest North American port to the Asian market. The 13% year/year growth in intermodal traffic through this port is helping drive CN’s intermodal volume increase.

It is also planning to capitalize on the boom in commodities, namely iron ore. It is expecting to invest $3 to $6 billion on infrastructure to service the mines in Sept-Iles, Quebec, on the Gulf of St. Lawrence, in northern Quebec. Iron ore exports are expected to rise more than 35 percent as China seeks to diversify its sourcing of this key steelmaking ingredient.

With such a high profile and well publicized change in leadership, everyone is expecting big things from Hunter Harrison and CP Rail. As rail speeds and efficiencies improve, this will open up a larger share of the truck market for conversion to rail service. With rail being such an energy efficient alternative to road transportation, on longer lengths of haul, we should expect an ongoing series of sales and operations initiatives as both Canadian railways look to capitalize on these opportunities and spur growth in the Canadian economy.

Last weekend I walked into one of my favourite Men’s stores in a local mall, Yorkdale Shopping Centre in Toronto, to arrange for a pair of pants to be mended. The retailer, Harry Rosen, asked me to stick around for a few minutes while they did the repair. After looking at their display of Armani ties, I walked across the hall into the Hudson’s Bay store. Like many men, I don’t shop for clothes too often and when I do, I go to a select group of stores, in a very focused way, to buy what I need.

After passing the cosmetics counters that have always been across the hall from Harry’s, I had quite a shock. In fact, I would say that the HBC store was unrecognizable to me. The previously rather bland retail environment was replaced with a dazzling array of designer fashions. The men’s department that had always been on the main floor was nowhere to be found. This caused me to reflect on the many changes taking place in the retail sector.

As I walked through the mall, I saw a number of well-known American retailers that have found their way to Canada. The list now includes Victoria’s Secret (also just next to Harry’s), American Eagle (a few doors away), J Crew and William Sonoma. Another one of my preferred men’s shops (Brooks Brothers) has also landed in downtown Toronto. Canada has been discovered, not by Christopher Columbus, but by Target Stores and Nordstrom, that have announced their intentions to head north.

Canadian retailers have been preparing for the invasion for some time. Clearly, the HBC makeover is directed at blunting the attack from Nordstrom, Target and others. Holt Renfrew, one of Canada’s leading luxury retailers, that is affiliated with Lord and Taylor in the United States, has announced its intention to open a chain of HR2 stores. The stores will feature unique merchandise sourced from many of the same designers that supply Holt Renfrew, but at a lower price point. While Holt Renfrew executives have denied the suggestion, the stores will likely resemble Barney’s New York’s less expensive Co-Op chain or Neiman-Marcus’s lower-priced Cusp stores.

Not to be outdone, one of Canada’s major furniture retailers, Leon’s Furniture, bought The Brick this week to gain efficiencies and economies of scale and to more effectively respond to a slowing housing industry. They also hope to compete more successfully against Target Stores.

Product mix is another area of rapid change. Shoppers Drug Mart stores have been selling high end cosmetics and food products in their drug stores for some time. Food sales are a big part of the revenues at Wal-Mart and Target Stores. Retailers of books, music and electronic gear are also transforming their operations. For people who live in Canada and frequent their local Indigo bookstore, the change in product mix is profound. A significant percentage of the books and CDs have been replaced by gifts and toys as an increasing number of people download their music, books, magazines and newspapers on their tablets and smart phones.

The major Canadian retailers are also playing the product mix expansion game. Canadian Tire is now selling electronics, Home Depot is selling appliances, Future Shop is selling bedroom sets and Loblaw companies, one of Canada’s pre-eminent food retailers, is selling “Joe Fresh” clothes and pharmaceuticals.

Of course a large part of the retail battle is not going on in the malls. Rather it is taking place on peoples’ computers. While online sales represent about 7 percent of U.S. retail sales, they are expected to represent 16 percent of the total ($586 billion) in holiday sales in 2012, according to the National Retail Federation.

Online sales are transforming certain industries. These changes are having significant impacts on the logistics and transportation industries. In the U.S., Target, Macy’s, Nordstrom and others are trying thwart challenges from rivals Amazon and EBay by offering same day shipping. Retailers such as Macy’s and Nordstrom, that used to operate their stores and websites independently, are integrating them. Wal-Mart Stores is starting to view its 4,000 plus US stores as mini distribution centres and is testing same-day delivery on its web purchases. Target and Saks Fifth Avenue understand that consumers with tablet computers are shopping online while in their stores. As a result, they are supplying visitors with a mobile app and free Wi-Fi access, in their stores, to encourage additional purchases. Toys “R” Us lets its online shoppers pick up their purchases at a local store within three hours.

Wal-Mart, always at the leading edge of cost efficient logistics, is testing a 60 foot tractor-trailer prototype unit in their network of stores in Ontario, Canada. They claim that this configuration offers 30 percent more cubic space. They have also launched an initiative to encourage their vendors to use their transportation network to haul their inbound freight. Home Depot in Canada outlined, at the recent 2012 Surface Transportation Summit, that they converted from LTL store deliveries to consolidated truckloads of LTL freight.

Technology, cost pressures, consumer preferences, competition, and in Canada, the US invasion, are transforming retail operations. They are forcing transportation service providers to adapt to this “brave new world” of retailing.

The decision by Wal-Mart to conduct a pilot of a 60 foot high cube tractor-trailer in Ontario, Canada caught the transportation industry off guard. The surprise is not so much that a newer and longer piece of trucking equipment is being trialed. This was inevitable. The surprise is that the initiative was driven by a large shipper and not by a Trucking Association or trucking company in Canada or the United States.

The arguments in support of the trial are compelling and are the same arguments that were made when 53 foot trailers and every other innovation in transportation occurred. A 60 foot tractor-trailer that offers 30 percent more cubic space promises to make the North American economy more efficient. It places fewer trucks on the road, thereby reducing congestion and lessening the need to refurbish our existing highway infrastructure. It reduces the impact of a driver shortage. It would reduce fuel consumption and greenhouse gas emissions. It permits drivers to accomplish more under HOS restrictions. It would allow trucking companies to derive a better return on their investment.

The arguments against Wal-Mart’s pilot are the same as those made each time there is a proposed change of this nature. The most frequently mentioned reservation is that this will make our roads less safe. It will result in more highway fatalities. The prototype trailer is not in compliance with existing laws in various jurisdictions. There will be problems in backing up a tractor-trailer combo of this nature into many existing loading and unloading docks. Longer high cube equipment will contain heavier payloads that will speed up the damage to our roads and highways. It will require infrastructure changes to accommodate vehicles of this length.

While all of these comments deserve discussion, it must be pointed out that the transportation industry has dealt with all of these issues before. Laws can be amended. Loading areas can be reconfigured. Bridge crossing can be modified. Weight configurations can change. It wasn’t that long ago that Ontario ran a trial on long combination vehicles (LCVs). What makes a 60 foot tractor-trailer so different?

Perhaps the biggest issue is the impact that the widespread standardization of 60 foot equipment would have on the capital budgets of trucking companies and shippers who have their own fleets. The industry has billions of dollars invested in 53 foot equipment. With an economy that is less than robust, trying to “keep up with the Jones” by having to convert part of a fleet to 60 foot equipment is certainly not what the industry is looking for at this time. This issue alone explains why longer tractor-trailer lengths have not been driven by the trucking industry. A change of this nature would cost enormous amounts of money. The cost alone creates a certain amount of inertia and resistance.

The bottom line is that change is inevitable. The lengths of road trailers and rail cars have evolved over the years. The railways have been extending the geographic availability of double stack trains. They supply rail cars that go up to 86 feet in length. The trucking industry cannot afford to be left behind.

The current economic challenges we face in Canada and the United States suggest that we have to be open to opportunities to increase efficiencies. In a global economy, we need to evaluate every change, whether fracking, the Keystone Pipeline and/or longer tractor-trailer lengths, that will give us an edge in these difficult times. Hats off to Wal-Mart for taking this initiative.