Photograph taken by Chong Wei | Edmonton, AB, Canada
Empty store shelves were already a problem and then unprecedented flooding in British Columbia effectively blocked the flow of goods from Asia to Canadian businesses and consumers. The holiday season now hangs in the balance as goods remain stuck on ships unable to dock in Vancouver’s ports or move by train or truck to the east. “Edmonton suddenly stands out as Canada’s best positioned inland port and we’re ready to step up and help out,” says Dave Young, Managing Director for CBRE in Edmonton.
The Port of Prince Rupert is the closest North American port to Asia and is well connected to the Edmonton region by rail, according to Edmonton Global, an economic development organization. In fact, Edmonton is the first major city through which goods travel out of and into the port – a strategic advantage for the region. Beyond geographic benefits, Prince Rupert has some of the lowest dwell times on the West Coast. On average, ships are taking 18 days to unload at Los Angeles, 16 days at Long Beach and 13 days at Seattle. Prince Rupert’s dwell time is 3.5 days, meaning goods shipped through this port can save time and money for companies exporting to and importing from Asian markets.
The Edmonton region could also help save Christmas thanks to the available industrial space and development land that has all but been exhausted in most other Canadian cities. The region currently boasts a considerable supply of big-box distribution space that’s available for lease today. In the third quarter alone nearly 600,000 sq. ft. of build-to-suit warehouse space was completed for Uline in St. Albert’s Anthony Henday Business Park, where an additional 200,000 sq. ft of distribution space has also come online.
And the next two quarters should see a steady stream of new warehouse spaces coming to market, with several big developments set to be completed in the next six months. This is large bay industrial space that is more affordable than Vancouver by a considerable margin, with average net rents for this sought-after type of building at $8.75 per sq. ft., compared to $15.00 in Vancouver. The Edmonton region also boasts plentiful skilled labour to service its burgeoning industrial market.
“Sometimes it takes a crisis to make you realize you could be doing things differently, and 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,” says CBRE Senior Vice President Kevin Hughes, an Edmonton-based industrial broker. “We could help Vancouver weather this immediate crisis by easing its logistics load for the holiday season. And going forward we believe Edmonton offers clear advantages over many other North American cities, including Calgary, which has up to this point been the first choice for those establishing an industrial footprint in Alberta.”
Hughes points to the flurry of new industrial projects, such as a 2.9 million sq. ft. robotic warehouse being built by Panattoni in Acheson’s Highland Business Park, the first multi-floor industrial distribution facility in the Edmonton region and one of the largest single-phase industrial facilities ever developed in Canada. And at Leduc Business Park, Ford Motors built a 400,000 sq. ft. parts distribution facility.
“What may start as a solution to a temporary problem may become an advantageous long-term arrangement,” says Braylon Klemchuk, Senior Sales Associate with CBRE in Edmonton. “We have an abundance of land, qualified developers, and the labour needed to staff these warehouses. Our market is getting tighter, but we can still accommodate 90,000 sq. ft. to 200,000 sq. ft. logistics and distribution users in new construction and existing inventory.”
The Edmonton region should be at the top of the “nice list” this holiday season as businesses attempt to reroute goods quickly. The connection to Asia via Prince Rupert, the quick movement of goods by rail, lower industrial costs and development potential could make the city a key part of a more resilient North American supply chain going forward.