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Calgary: A strong transport hub

Is the Calgary region becoming a transportation hub to rival those in other regions across the west? It appears to be the case, and it’s happening almost via osmosis – in that the region is booming and it only makes sense for commerce to want a piece of that action.

That was the basic sentiment at The Calgary Region as a Transportation Hub conference, held in late 2014 at a venue in the Calgary Zoo. Far from being the kind of “animal act” one might expect at such a facility, however, the Van Horne Institute-led event saw a quite civilized group of presenters extolling the virtues of the Calgary area, while not ignoring the challenges of facilitating international trade in an area far inland.

Calgary Mayor Naheed Nenshi kicked off the conference, saying “Here in Calgary, we’re particularly blessed. We have great access to the ports of Vancouver and Prince Rupert, and we have access to the United States and Mexico. Whether it’s air, rail or road, our geography is extraordinary. What’s important is that we’re able to capitalize on it.”

He claimed Calgary is home to more tech startups per capita than anywhere else in Canada, and cited the old saw “location, location, location” as one of the reasons.

On the other hand, a city that grows by tens of thousands of people each year risks bursting at the seams, which is leading to plentiful scrambling to keep up. That means major ongoing roadwork, a major expansion of Calgary International Airport, including a recently-opened runway and a new international terminal scheduled to open later this year, and burgeoning logistics facilities throughout the area. Nenshi boasted that the airport expansion is “by far the largest public works project in
Alberta’s history” and noted that, when it comes to roads, the province finally has a deal to build the southwest portion of the ring road, some 60 years after it was first proposed.

“They haven’t actually funded that yet,” he claimed, “but I’m sure that at some point they will.” Once that’s finished, he said, the city’s road system will be “world-class, bar none.”

Alberta Transportation’s Ross Danyluk reminded attendees of the importance of focusing globally “to develop an effective and efficient transportation system” and called on Albertans to adopt a strategic and proactive approach to facilitating economic development.

“We are hoping to become less transactional and much more collaborative,” he said of his department, noting “we continue to shift our efforts by adopting a multimodal perspective versus what was often perceived as solely highways and bridges.”

He outlined provincial goals including fostering competitiveness, access to markets, ensuring environmental stewardship as well as innovation and technological integration, and long-term sustainability. 

Calgary Regional Partnership’s Reg Johnston outlined some of Calgary’s competitive advantages, claiming that when it comes to container volumes, Calgary is actually a busier port than Prince Rupert. “We are in the center of the population in Western Canada,” he said, noting that Calgary is at a crossroads of the east-west Trans-Canada Highway and the north-south Hwy. 2, the latter of which facilitates commerce from the north to the American border, and he claimed YYC is one of only two Canadian airports with dedicated freight service to Asia and Europe.

Bison Transport’s senior vice-president Trevor Fridfinnson noted that, despite his company being headquartered in Winnipeg, circumstances demanded they expand to Calgary.

“Winnipeg had the advantage of being the geographic center point,” he said, “but as Calgary and Alberta gained momentum in the last decades, the population grew and activity grew as well. That caused a lot of transportation providers, retailers, distributors to really take notice. We were no exception.”

Bison, Fridfinnson said, decided to put boots on the ground in Alberta in 2005 and it’s to the point now that about half of Bison’s employees and contractors call Calgary their home turf or primary operating hub. He credited the popularity of long combination vehicles as one of the engines of this growth, saying they’ve been “a big help from environmental, economical and efficiency standpoints” and he praised the City of Calgary and Alberta Transportation for “providing a smart regulatory environment and infrastructure that supported this innovation.”

Fridfinnson said Calgary is a good fit for Bison because of its ready labour market, cooperative governments and infrastructure. “There’s no better
place to live and do business,” he said. “The opportunity here in Calgary is unparalleled.”

Home Depot finds the area attractive enough that it broke ground on a Rapid Deployment Centre in southeast Calgary last October, one of two in Canada (the other’s in Vaughan, Ont.) Both locations dovetail with neighbouring CP Rail operations and represent a new way of thinking for the retailer. “Home Depot did not really have a supply-chain about five years ago,” said Todd Cooper, the company’s director of supply chain transportation. “Each store ordered its own product and each store made its own shipping arrangements. By putting in (these) distribution centres, we reduce our inventory in the stores and improve the customer experience.”

“We are located across the street from Home Depot’s new RDC’s,” Ian Murray, CP’s managing director of intermodal marketing said, “and by connecting the two we (gain) lots of efficiencies and benefits. And as rail raises its game around speed and consistency, we’re finding that rail provides great opportunity for truckers to leverage, and also for the retailers who can take advantage of cost efficiencies. They’re looking for access to highways and major roadways, and as we connect the rail to the roads it just makes it that much more efficient to get those goods to market.”   

“It works better for us,” Cooper agreed, noting that Home Depot chose Calgary because “it allowed us to reduce our delivery times to our customers. Secondly, we improve our bottom line, because moving product is a huge expense for us and this helps us keep the costs as low as possible.”

He noted that once the Calgary centre is up to speed fully, they’ll be closing their current one on the west coast.

CP isn’t the only railway finding Calgary the place to be in the west. CN has completed phase one of a new site just to the northeast of Calgary.

“We’ve integrated our brand new state-of-the-art intermodal terminal on that property,” said Tony Bianco, CN’s director of sales intermodal domestic, adding “we’ve actually moved all of our resources and all of our terminal staff under the one roof.”

He said the 265,000 sq.-ft. facility is on track to be completed in the first quarter, and promised that businesses who co-locate there can eliminate a large part of their transportation costs.

“That’s true savings both for the rail carrier and the other customer located on that particular property.” Bianco said the importance of Calgary to CN is significant. “We wouldn’t have made a $200-million investment if we didn’t feel the transportation hub was here. It’s one of the most important components in the transcontinental railway system.”

Stephan Poirier, senior vice-president and chief commercial officer for the Calgary Airport Authority, focused on YYC’s expansion, which he said is possible in part because Calgary was already a decent air hub. Referring to the airport’s cargo program as “the economic pipeline program” linking Calgary and the rest of the world, he said air commerce through Calgary has been limited traditionally by the fact that there’s very little cargo space on most commercial passenger planes.

“We understood this in 2000 and focused and worked really hard (on a) cargo program that would enable the city to be connected properly to the rest the world,” he said. Poirier announced the airport has attracted “a very large European cargo player” and claimed the Authority’s biggest achievement to date was bringing Cathay Pacific’s cargo service to the Calgary market to “plug the hole we have in bridging the gap between buyers and sellers in North America and Asia.”

He also mentioned that Mississauga-based Cargojet has secured the Canada Post contract, which will bring even more air traffic, including two 767s, and three 757s daily.

There’s also airport growth that isn’t strictly aviation-related. “We saw a natural fit with warehouse and logistics service providers that could locate at the airport to conduct business efficiently,” Poirier said, outlining the development of the industrial park on the airport’s western edge, which started at 330,000 sq.-ft. in Y2K and rose to more than three million – more space than Toronto’s Pearson Airport has on airport land, Poirier claimed – as companies such as FedEx and UPS moved in. He said another 1.5 million square feet will come on stream over the next six years.

Justin Reimer, of the Alberta Government’s Innovation and Advanced Education department, noted that with the equivalent of the population of Red Deer moving to Alberta each year “it puts a lot of stress on the existing infrastructure and transportation capabilities. It’s going to be critical that all the supply-chain stakeholders are engaged in building our key gateways and portals for the future.”

He predicted that the amount of goods moving through Western Canada’s key gateways and ports will double over the next 10 years.

Reimer said having competitive transportation is fundamental in assuring Alberta’s future prosperity. “We did some economic modeling and found that on average, for every 1% reduction in the cost of transportation, our GDP would increase by $500 million per year. This would in turn result in the creation of approximately 40,000 new jobs.”

To get there, he said, “we need to grow our presence economically, reputation-wise, both across Canada and internationally and become a world centre for resource-based industries.”

He noted that the resource sector will continue to be Alberta’s economic foundation for the foreseeable future, but said Albertans “need to work on policies and programs to further broaden our economic base,” including embracing policies that foster high growth and inspire entrepreneurs to innovate, commercialize and expand.

Arenso Bakker, a consultant from the Netherlands, wrapped up the conference saying it’s wishful thinking to only invest in infrastructure and assume that’s going to bring assured economic progress. “Infrastructure is an enabler,” he said, noting that infrastructure only supports logistics – the transportation of goods – while what’s needed is to support business in the broader sense and he challenged stakeholders to decide what they want their region to become so that “strategies can be put into effect” to achieve them. He said it isn’t enough for transportation hubs to be located in places that are good for commerce, but that they should also be “good places to live.”

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