Article
Why Edmonton Could Stem Canada’s Supply Chain Chaos
December 8, 2021 3 Minute Read
When devastating floods swept through British Columbia late last year, an already strained supply chain was made worse as ensuing mudslides destroyed major highways and railways.
With container ships still piling up at the port two months later and a ban on older truck models looming, the flow of goods from Asia into Canada has thinned to a trickle.
As supply chain chaos continues to the west, Canada’s Gateway to the North could provide an entryway to the east.
“Edmonton suddenly stands out as Canada’s best positioned inland port,” says Dave Young, Managing Director for CBRE in Edmonton. “And we’re ready to step up and help out.”
Edmonton’s shining moment is, in part, courtesy of its rail connection to the Port of Prince Rupert.
Situated roughly 750 km north of Vancouver, Prince Rupert is not only the closest North American port to Asia, but also boasts some of the lowest dwell times on the west coast.
On average, ships are taking 18 days to unload in Los Angeles, 16 days at Long Beach, 13 days in Seattle and seven days in Vancouver. In Prince Rupert, they’re taking just three and a half days.
Edmonton furthers its heroic position thanks to the abundance of skilled labour, development land and unoccupied industrial space found within its borders.
The city enjoys a considerable supply of big-box distribution space that’s readily available for lease. In the Q3 2021 alone, Anthony Henday Business Park saw 200,000 sq. ft of distribution space come online, and nearly 600,000 sq. ft. of build-to-suit warehouse space completed for Uline.
Several other large developments are slated for completion in the next five months, which should bring a steady stream of new warehouse spaces to market.
The abundant space comes with a nice price tag, too. In Edmonton, average net rents for the sought-after buildings are $8.75 per sq. ft. In Vancouver, they’re $15 per sq. ft.
“Sometimes it takes a crisis to make you realize you could be doing things differently,” says CBRE Senior Vice President Kevin Hughes, an Edmonton-based industrial broker.
“In this case, it has become clear that Edmonton’s industrial market has the connections and capacity to take on a substantial amount of Western Canada-focused logistics and fulfilment traffic.”
Going forward, Hughes adds, Edmonton offers “clear advantages” over other North American cities, including neighbouring Calgary.
Hughes’ point is bolstered by the aforementioned flurry of new industrial projects: Ford Motors’ 400,000 sq. ft. parts and distribution facility in Leduc Business Park, and a 2.9 million sq. ft. robotic warehouse being constructed by Panattoni in Highland Business Park.
Between new construction and existing inventory, the city can accommodate 90,000 to 200,000 sq. ft. logistics and distribution users, says Braylon Klemchuk, Senior Sales Associate with CBRE in Edmonton.
“What may start as a solution to a temporary problem may become an advantageous long-term arrangement,” says Klemchuk.
“We have an abundance of land, qualified developers, and the labour needed to staff these warehouses.”
As businesses franticly reroute goods across the country, Edmonton’s connection to Asia, rapid rail lines, and low industrial costs could be the answer to Canada’s supply chain chaos.
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