Posted on: November 19th, 2017
By Mark Cardwell
When it comes to inland ports in Western Canada, Calgary is in a league of its own.
Located 1,000 kilometres from Vancouver and 1,500 kms from Prince Rupert, Calgary is the premier inland intermodal terminal for both British Columbian sea ports. It is also Canada’s primary hub for big-box retail and consumer packaged goods west of Toronto.
“Calgary’s big advantages are proximity to regional markets and competitive costs,” says Patti Dunlop, Business Development manager, Transportation and Logistics for Calgary Economic Development, a non-profit group that works with businesses and governments to better position Calgary as a location of choice for investment and trade.
According to Dunlop, Calgary has the lowest cost of operations compared to regional logistics hub competitors like Regina, Spokane, Vancouver and Seattle/Tacoma. It is also the most competitive location in Western Canada for all-in distribution costs.
“With containers, you’re going to truck them inland because it’s too costly to cross-dock and have facilities in a place like Vancouver,” said Dunlop. “Sure, you can do last-mile there. But it’s a lot cheaper to destuff containers and shipments here in Calgary. We are and have been for some time the lowest cost location across Western Canada to set up a distribution centre.” In addition to the lowest effective tax rates and highest affordability and livability rates among North America’s major port cities – whether coastal or inland – Dunlop said Calgary also has geography on its side. Calgary is at the crossroads of several highways – notably the Trans-Canada – that go in all four cardinal directions. Many of those corridors have been revamped of late.
Both of Canada’s two national Class 1 railways also run lines into the city and have built state-of-the-art intermodal terminals there that are connected to their respective country- and continent-wide networks.
And Calgary’s airport recently underwent a billion-dollar makeover that enhanced the movement of people and products.
“There is more and more activity in the supply chain and logistics industry here,” Dunlop said during a recent media trip designed to promote Calgary’s preeminence as the leading transportation and logistics hub in Western Canada. “Things are really starting to take off.”
Tony Bianco agrees. “Calgary is a unique and robust market,” said Bianco, Canadian National’s Director, Intermodal sales (domestic).
In 2013, CN moved its Calgary operations from its decades-old serving yard in the Sarcee industrial area in the city’s south-end to a $300-million logistics park in the village of Conrich, 3 kms east of Calgary’s northeast corner.
Equipped with four automated in-gates and three out-gates that keep in-terminal truck turnaround times to under an hour, the 1,000-acre intermodal facility also features six mobile cranes, 6,600 feet of working pad tracking, a container yard for international container storage, specialized equipment for temperature-controlled products, CN’s own trucking fleet, and co-location facilities that can be leased or purchased by retailers wanting to move goods across Canada or down to the Gulf of Mexico on CN’s 19,600 route-miles of track. In June, officials with CN and future tenant Whirlpool Canada broke ground on a nearly half-million-square-foot regional distribution warehouse that will provide major suppliers to the Calgary market with direct connection to CN’s rail network and transportation services. According to Bianco, Calgary is the perfect site for such a major intermodal facility because of its strategic location between consumer-dense Central Canada and the West Coast.
“There are some imports which come in from Asia, either through Vancouver or Prince Rupert, and are shipped to Central Canada through Calgary. Some are unloaded and reworked, and then shipped out across Alberta and the Prairies through our network,” he said.
Though Calgary is the newest of CN’s 21 intermodal facilities across North America, Bianco said it already ranks among the top five in terms of volume of goods handled. “Calgary is a great inland port and market," Bianco said at a briefing in the administration building of the new intermodal terminal. “It is a tremendous transportation hub and network for Western Canada.”
For its part, Canadian Pacific Railway – or CP – which founded Calgary in 1875 and shaped the city’s development for more than a century, has moved its head office from downtown Calgary to the massive Odgen Yards campus in the city’s south-east area. The 100-acre site, which is home to CP’s Calgary Intermodal Facility, has 12,000 feet of working track, 30,000 feet of staging track, six top lifts and capacity for more than 250,000 containers annually. On a weekly basis, the facility services an average of more than 3,500 trucks.
“Calgary serves as the hub of our entire network, which includes over 12,400 miles of track and 12,000 employees,” says Jeremy Berry, CP’s Director, Media Relations. “Calgary is also a key intermodal hub for CP. From the city, our main line travels east, west, north and south with the shortest routes to key locations including Vancouver, Chicago and Toronto.
It’s not only the railways that have improved their services in Calgary. Several sections of the Stoney and Deerfoot Trails, which make up the heart of Calgary’s 70-mile-long ring road system, have recently been improved and/or completed. The system connects Alberta’s Highway 2, which runs north to the provincial capital of Edmonton, with Calgary’s international airport in the city’s north end and the TransCanada Highway in the south.
In August, a $78-million section of the road that features the first divergent-diamond design interchange in Canada opened to traffic. It was the second of four interchanges to open in Calgary this summer alone.
“Now is exactly the right time to be building,” newly-reelected Calgary Mayor Naheed Nenshi said in a press release about the interchange constructions, which cost the city $255 million. “With the downturn in the economy and accelerated funding for projects like this, we’re creating jobs, taking advantage of lower prices, and building critical transportation infrastructure that will reduce congestion on our roads.”
Those road improvements have been synchronized with several major development projects at Calgary International Airport. In June 2014, for example, the airport opened its fourth and largest runway. The $600-million, 14,000-foot-long concrete strip is the longest of its kind in Canada. The facility has spent another $400 million since then on new parking lots and cargo-dedicated aprons. The latter are lined with modern warehouses and low-rise office buildings that are leased to transportation and logistics partners like carriers, couriers and freight forwarders.
New access roads were also built beginning in 2014, to grant trucks and vans immediate access to the ring road. Users say the new roads are a major improvement over the airport’s old congested and confusing service roads. “That direct access is a huge time saver,” said James Craig, Western Canada operations manager for global logistics giant DHL Express. According to Craig, his facility at the Calgary airport, which serves as a gateway for import volumes into the Alberta capital of Edmonton and the neighbouring province of Saskatchewan, can now unload and process more than 1,000 inbound and outbound items an hour.
DHL’s drivers also make between 2,000 and 3,000 shipments and pickups a day. “Aircraft arrive right behind our facility here and cargo is unloaded and scanned and sorted within minutes,” said Craig. “Our couriers are out within 15 to 20 minutes of a plane landing, and they’re in downtown Calgary seven minutes later. “That might not sound like a lot to most people. But it’s huge in our business, it can take you to the next level.”
Craig said the increased flow of goods, which is aided by the fact the Canadian Border Services Agency is literally next door (in the event inspections are required), has led to an expansion of DHL’s sales force. That has enabled DHL, which is celebrating its 40th year in the Canadian market in 2017, to increase its market share in Calgary “by several points,” said Craig, to 17 per cent.
Officials with Air Canada Cargo, which is located right next door in a new 10,000-square-foot facility on Tarpon 9, say they have experienced similar increases in efficiency and volume handling thanks to airport improvements. “Our old building was smaller and much harder to get to,” said Rob Flood, Cargo Products Business Development manager for Canada’s national airline. “This new building is much more convenient and congruent to our activities.”
Though cargo represents only 5 per cent of Air Canada’s revenues, Flood said that rate is growing thanks to new routes, bigger aircraft and modern facilities like Calgary’s. However, unlike the days of $100-a-barrel oil, when Calgary-based companies built and exported oil pumps, parts and drilling equipment around the world, Flood said outbound cargo from Calgary now consists mostly of agriculture products from Saskatchewan like canola, flax and seeds, and live Alberta beef cattle and horses bound for the world’s meat markets.
Flood credited the new runway for opening Calgary up to new lines and lanes of distribution, such as direct flights to Bogota, Dublin and Bombay. “It brings access and awareness to markets,” he said. “We see if we can accommodate requests and capacity.”
The biggest change at Calgary’s airport however is the new $2-billion international terminal and connections corridor. Opened in Oct. 2016, it includes 24 gates and five levels spread over 2 million square feet, enough to cover 32 football fields.
In addition to original Canadian artwork, geothermal heating and cooling and space-age passenger services like automated passport controls in three dozen languages, full-service self-baggage check-ins and inter-terminal shuttles, the new building also features North America’s first call-to-gate boarding system that allows passengers to eat, relax or shop in central waiting areas that are only a five-minute walk from their departure gate.
According to Bernie Humphries, Vice-President, Operations with Calgary Airport Authority, the expansion reflects and dovetails with the growth and emergence of Calgary as a major hub for the movement of goods and people across Canada and around the world. “Despite the recent downturn, the number of passengers we welcome continues to grow each year,” said Humphries. He said the Calgary airport handled some 15.7 million passengers in 2016, making it the fourth busiest in Canada after Toronto, Vancouver and Montreal.
He said Calgary will likely soon surpass Montreal, like it has already done in previous years, thanks to the opening of three new European routes by WestJet, which is headquartered at the Calgary airport and is Canada’s second-largest carrier with 420 flights daily, many of which pass through Calgary. The expansion of three international routes by Air Canada – to San Francisco, London and Beijing – and the advent of direct flights to Calgary by new airlines like national flag carriers Aero Mexico and Air China are also expected to shore up the city’s reputation as a world-class destination and North American travel hub.
As for cargo and logistics, Calgary handles 75 per cent of all air-borne cargo out of Alberta. That amounts to nearly 140,000 metric tons of material, up nearly 2 per cent since 2015. “We are providing the necessary facilities and infrastructures,” said Humphries. “But equally important are the good relationships we have developed with our clients and partners.”
Trucking companies are also seeing the benefits of massive transportation infrastructure spending in the Calgary area, together with a rebound in the region’s economy since 2015, when oil prices tanked.
“It hit all of Western Canada, but Calgary got it the worst,” said Doug Romanuk, Vice-President, Western Region of Winnipeg-based Bison Transport, one of Canada’s top truck carriers with a fleet of 4,000 trailers, 1,800 drivers and 1,200 trucks that travel some 150 million miles a year across North America.
“The volume of goods coming inland through the port of Vancouver really declined,” said Romanuk. “This is a very service-intensive business, especially for the retail space. We go where demand is high, so we had to diversify and look for more growth in eastern Canada and the northern United States.” He added, however, that there has been renewed demand for full truckload and logistic services, intermodal, LTL and warehousing and distribution services to and from Calgary. “Calgary has been through booms and busts before, that’s the nature of the oil business, but it’s always been a great place to do business, and to be in business,” said Romanuk. “Now that the economy’s doing better, there’s a renewed sense of optimism here.”