Transportation, Warehousing and Logistics

The Transportation, Warehousing and Logistics Cluster

As part of the cluster process, late in 2001, working groups consisting of key leaders in the transportation, warehousing and logistics cluster came together to work on shared challenges. These were challenges that no group or company could tackle on their own. They need the strength and collaboration of working on teams that involved other components of the cluster.

To overcome their challenges they decided to develop shared solutions. Those shared solutions are called Action Initiatives and the action initiatives for transportation, warehousing and logistics are listed below.

• Develop a fully integrated skills and career path
• Develop a cluster market strategy
• Establish a cluster advocacy group

For more information about the Transportation, Warehousing and Logistics Action Initiatives

Background information:
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 per cent more than the past ten years, far ahead of the North American average of 1.8 per cent. Calgary is ahead of the crowd in growth, but is only just beginning to reach a critical mass of concentration.

Cluster inclusion
As a distribution hub Calgary's cluster is made up of:

• 51 per cent wholesale trade employment-which drives demand with: 
• Air transportation at 9 per cent
• Rail at 10 per cent
• Truck transportation at 15 per cent
• Warehousing and storage at 7 per cent
• Support activities at 8 per cent

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 per cent.
• Growth of air cargo will continue at an estimated 6.5 per cent 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 per cent annually compared to global average of 6.4 per cent.
• 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.

Challenges
To continue to grow Calgary needs to:

• Improve highway infrastructure
• Reduce congestion,
• Develop workforce skills,
• Address trucking and rail tax imbalances
• 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.