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Economic Performance:
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Calgary Region Cluster
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Calgary
Region Cluster Portfolio
Transportation,
Warehousing & Logistics
Calgary is a vital
hub that is growing into a major distribution centre for Western Canada.
Calgary's transportation and logistics cluster is growing more rapidly
than key competitors, at a rate of 5% over the past ten years, far ahead
of the North American average of 1.8%. Calgary is ahead of the crowd in
growth, but is only just beginning to reach a critical mass of concentration.
As a distribution
hub Calgary's cluster is made up of 51% wholesale trade employment-which
drives demandÑwith air transportation at 9%, rail at 10%, truck transportation
at 15%, warehousing and storage at 7% and support activities at 8%. All
of these segments are well represented in the region and have had steady
growth over the past decade. Due to the region's history in oil and gas,
petroleum wholesaler-distributors account for a large share of establishments.
Calgary's transportation
and logistics workers are relatively well-paid, with nominal salaries
having increased by almost 25% over the past eight years, slightly lagging
the national average. Calgary's growing transportation and logistics cluster
includes new facilities such as the Walmart Distribution Centre, Canadian
Freightways, Canadian Tire Distribution Centre, and Consolidated Fastfrate.
Calgary's regional
growth is consistent with a global trend in expanding trucking and air
cargo business that will increasingly be linked together, along with rail,
as intermodal shipping. Trucking will grow at the expense of rail with
total tonnage in primary freight rising to 14.4 billion in 2008, and trucking's
share of shipments increasing to 64.3%. Growth of air cargo will continue
at an estimated 6.5% annually for the next 20 years as the global economy
expands.
Intra- Asian shipments
will be the fastest growing segment of the global marketplace increasing
at an estimated 8.6% annually compared to global average of 6.4%. The
agility of trucking to customer needs is being enhanced by the use of
new information technologies such as global positioning systems (GPS).
Satellites, tracking systems, the Internet and other tools will all enable
more efficient management of global shipping systems.
Third party logistics
providers (3PL) will be a source of increasing value in the transportation
and logistics cluster. New 'inland ports' that provide integrated networks
of services for all modes of shipping and distribution will grow at strategic
locations around the world. Calgary's growth as a potential superhub will
depend upon continued belief that it is an alternative to the West Coast,
as are competing locations such as Minneapolis, Salt Lake and possibly
Winnipeg. Low costs, a growing airport and strong population growth are
currently attractors to the region.
However, to continue
to grow Calgary needs to improve highway infrastructure, reduce congestion,
develop workforce skills, address trucking and rail tax imbalances, as
well as improve industry-government relations. As trucking and rail improve,
air cargo is racing ahead. Air cargo operations in Calgary are expanding
and the region is capturing an increasing share of the regional market.
There should be good synergies between each component of this cluster
in the future.
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