Calgary Stampedes Onward
Matko Papić, vice president of Engineering and Product Development for Evans Consoles Inc., the world’s leading custom maker of control room console solutions, sums it up simply: “Calgary is a perfect location for everything.”
While that characterization may be a tad hyperbolic, it captures the spirit of a Western Canadian city that is assertively living up to its longtime one-word motto—“Onward”— as a center of commerce and a crossroads of logistics.
Sure its location is propitious, at the roadway nexus of the east-west Trans-Canada Highway and the CANAMEX Corridor stretching to Mexico, at a critical point in the transcontinental rail networks of both the Canadian National Railway and Calgary-based Canadian Pacific, and at an ideal spot along international air routes.
But to understand what is propelling Calgary, Alberta, to prominence in the global trade arena requires a knowledge that transcends mere geography. And Papić is among the burgeoning numbers of businesspeople who recognize it.
Evans Consoles was started by Calgary oil and gas industry accountant Ross Evans in 1980. In that year, Papić was a kindergartner in his hometown of Sarajevo, then the capital of the Socialist Republic of Bosnia and Herzegovina. Papić emigrated from the embattled city to Calgary in 1996 and hired on with Evans Consoles three years later, seeking to live out his North American dream. He couldn’t have found a better place to do so.
The company’s head office and North American manufacturing center in Calgary—which serve clients from NASA and the Federal Aviation Administration to Boeing Co. and Union Pacific Corp.—not only is convenient to multimodal transportation links, which are key since 95 percent of the Evans’ customers are outside Canada, but also is well located for employing superior engineering expertise.
“The highest horsepower talent is here,” Papić says, making an unintentional reference to the Calgary Stampede, the annual rodeo and western-themed festival that began putting the city on the maps of many nearly a century ago.
Calgary is no longer known just for horses and cowboys, nor only for the energy products that flow from the oil sands that sprawl north of it. As Papić points out: “It went from ‘Calgary is where?’ to ‘I know where Calgary is.’”
David Kalinchuk, Economic Development manager for Rocky View County, which surrounds the City of Calgary on three sides, notes, “It’s not just all about oil and gas anymore.”
And it’s not just about the city, either. Rocky View County is home to such facilities as a 1.3 million-square-foot distribution center for Target Corp. and 1 million square feet of cold storage for Wal-Mart Stores Inc., plus a $200 million, 680-acre Canadian National Railway logistics park and intermodal yard that opened in 2013 to serve the flow of containers coming eastward from British Columbia’s Port of Prince Rupert. Construction in the county is moving at an equally fast pace as within Calgary’s city limits, drawing investments and workforce from far beyond Canadian borders.
Calgary and its environs have truly become a multicultural melting pot, where new habitants are now more likely to relocate from Asia and other parts of the world than inter-provincially from traditional Canadian business centers such as Toronto or Vancouver. Fully 26.2 percent of those living in the Calgary metropolitan area are immigrants, according to the quasi-governmental Calgary Economic Development agency, with those from the Philippines, India, China and Pakistan leading the way and the United States, Nigeria, United Kingdom and Iran not far behind.
F. Bruce Graham, president and chief executive officer of Calgary Economic Development, points out that, as the comparative value of the Canadian dollar and the price of oil decline, spending in Calgary actually increases. Calgary continues to boast Canada’s second-lowest unemployment rate, at 4.9 percent in 2013, after Edmonton at 4.8 percent, and Canada’s highest per capita annual wage, at CA$67,259 in 2013.
At the same time, Calgary’s population growth continues. In 1968, when the Calgary Tower opened as the city’s tallest structure, about 350,000 people called Calgary home. That number is up to nearly 1.2 million now and is forecast to exceed 1.5 million by 2018.
Calgary already is home to 21 international banks and 132 head offices for global companies. Adding diversity to the commercial mix, a $23 million film and television production center is targeted to open by late 2015, serving the area’s up-and-coming creative entertainment industry.
Recognizing the importance of transportation and distribution centers to Calgary’s continued success, logistics programs are in place or getting started at the University of Calgary, Mount Royal University, SAIT Polytechnic (formerly Southern Alberta Institute of Technology) and Bow Valley College, plus several area high schools.
Indeed, it was transportation that made the locale a settling place of First Nations peoples, who appreciated the confluence of the Bow and Elbow rivers, and later first made a town of Calgary (with 506 residents) in 1884, the year after the Canadian Pacific’s westward-expanding rail tracks—laid primarily by Chinese immigrants—reached the area that lies 50 miles east of the Rocky Mountains.
The CP moved its headquarters to Calgary from Montreal in 1996, two years before the railroad opened the first phase of its intermodal facility in the city’s southeast industrial sector. There’s still room for yard expansion on the 100-acre tract, where consumer goods that came in from Asia the previous day at Port Metro Vancouver arrive in containers double-stacked on railcars. Sears Canada Inc. and Canadian Tire Corp. have major distribution centers at the facility, and a 1 million-square-foot-plus Home Depot rapid deployment hub is slated to open in late summer 2015 on an adjoining property.
Vancouver, on the British Columbia coast, more than 600 often-rugged highway miles west of Calgary, had traditionally been the distribution hub of choice for all of Western Canada, but a trend is sweeping eastward toward Calgary, elevating the commercial climate just as the warm Chinook winds can raise winter temperatures as they pour in over the Rockies.
Brampton, Ontario-based third-party logistics provider Hopewell Logistics Inc. is among companies recognizing that Calgary’s inland crossroads location—within a 24-hour drive of 50 million people— is ideal for distribution over a wide area.
Hopewell’s 427,000-square-foot Calgary facility dedicates more than half that space to Kraft Canada Inc. products, from Kraft cheeses and peanut butter to Stove Top stuffing and Maxwell House coffee. It’s a perfect fit with Kraft’s philosophy of being close to consumers, according to Chris Marko, general manager of the Hopewell facility.
“Customer service is probably the biggest piece of what we can continue to provide,” says Marko of advantages to serving Western Canadians from Calgary as opposed to direct shipping from Eastern Canada warehouses.
Marko, who serves on Calgary Economic Development’s Logistics Advisory Committee, notes that Campbell Co. of Canada soups, Payless ShoeSource footwear and Under Armour Inc. apparel also move through the Hopewell facility, as do large items ordered by Western Canada consumers via the Walmart.ca website that are delivered to doorsteps by owner-operator truckers.
Trucking firms with significant Calgary-area presences include Canadian Freightways, a less-than-truckload unit of Montreal-based TransForce Inc., which since 2008 has operated a 96-door service center and headquarters facility just across the city line into Rocky View County.
“Calgary as a hub is perfectly situated for serving Western Canada from a central location,” says Jon Finnimore, director of Sales and Marketing at Canadian Freightways. The closing in early 2014 of four Canadian Freightways terminals in British Columbia has added to volumes through the suburban Calgary location.
In fact, through its partnership in The Reliance Network, Canadian Freightways can provide single-bill service throughout North America, with deliveries by Averitt Express Inc. and a half-dozen other regional partner trucking companies.
Major accounts served by Canadian Freightways’ Calgary-area service center include Starbucks Coffee Co., Whirlpool Corp., Bridgestone Corp., Panasonic Corp., LG Electronics Inc. and Shell Canada Ltd. Finnimore notes that shipments directly related to oil and gas activity represent about 20 percent of the center’s business, but, when groceries and other consumer products hauled to the Alberta oil sands area are added in, the impacts of the energy boom are far greater.
Finnimore adds that Canadian Freightways uses Canadian National intermodal rail for an increasing number of shipments and offers air freight as an additional alternative.
How AI can Amp Up Thematic Investment Strategies