Regina’s Global Transportation Hub is a model of inland port business strategy
There are elements that, once put together, become something greater than the sum of their parts. That’s seems to be the case in Regina, Sask., where a series of local initiatives led to the creation of the Global Transportation Hub (GTH), which has aspirations of becoming one of Canada’s premier inland ports.
The incident that jump-started the process was the relocation of the CP Rail’s Regina facility. “There is no change in efficiency without an infrastructure change,” says GTH’s president and CEO Bryan Richards. “Moving the rail facility out of the totally congested landlocked downtown location was step one.”
The CP facility became fully operational in its new location in January of 2013 and the 84-acre GTH was legally created only months later, in August.
Canadian food retail giant Loblaw was the first major business partner to identify the value and potential of the soon to be GTH location when it decided to establish a distribution centre in Regina in 2012 to service 250 stores from Vancouver to Thunder Bay. According to Darcy Scott, general manager of the facility until September of 2016, who now manages Loblaw’s Vancouver distribution centre, up to 15,000 unique SKUs fill half of the warehouse’s one million square feet, while the other half of the building—outfitted with 40 foot ceilings—is reserved for perishable items destined for Saskatchewan and parts of Manitoba.
Loblaw’s decision helped get the ball rolling, says Richards. “The opportunity arose, primarily driven by Loblaw’s decision to purchase land right next to where the intermodal facility was going to be and we thought: Who else would benefit from being co-located right next to the rail?”
The other building block of infrastructure to boost GTH’s growth as inland port is the Regina Bypass, a new highway system that will allow trucks to bypass the city’s congestion, which is crucial for time-sensitive logistics and distribution operations. While parts of the new highway are now in service, the official opening is scheduled for October of 2019. The project will see 60 kilometres of four-lane highway and 55 kilometres of new service roads built, as well as 12 new overpasses.
According to Richards, the new road link will provide direct access to not only the Trans-Canada Highway, but also Highway 11 North to Saskatoon and Edmonton and ease the congestion on the east side of Regina by offering more direct access to the Trans-Canada from Winnipeg.
“This project is a game changer, no question,” he says. “It has been anticipated to support this inland port. That access to the national highway network was critical. It has been planned from the inception of this particular facility.”
And that’s far from being over, according to him: “We’re also considering a bulk access rail, transload capabilities and other service components that the transportation shipper would use on an effective basis, so it’s very much a work in progress.”
GTH president and CEO Bryan Richards.
Growth, synergies and workforce
And that progress is tangible with more than a third (669) of the available 1,871 acres of land at the GTH still up for grabs. “We currently have about 860 people working there every day and we firmly believe that’s probably going to expand to 3,000 people by the time we’re built out,” Richards says, comparing the site to a small community. For example, 3,000 out of Regina’s census metropolitan area (CMA) population of 241,000 is the equivalent of 80,000 people working within the same shared zone in the Greater Toronto Area, which has a population of 6.4 million.
The good news, says Richards, is that all these people interact on a daily basis and that creates business partnerships that speeds up the flow of goods in the GTH. “If I only have to go across the street with my truck to do the pick-up and deliver it to the rail, there’s some real efficiency benefits,” says Richards. “You’re starting to see what I call vertical integration of services, side by side.”
The challenge was to find workforce for all this economic activity in a region where natural resources—not only oil, potash, too—attract a lot of people. Loblaw had to deal with this worker shortage almost from day one, says Scott, but managed to convince enough people from Canada and abroad to join its ranks. “Staffing is always a challenge in warehousing. The resource sector pays very well but it is cyclical. Our appeal has always been that we’re consistent. No matter what, people have to eat so we can provide that permanent long term employment. We created a culture that’s very appealing to our people but the province was also very helpful in getting us to connect with communities.” Scott points to the crucial role played by the GTH, the Chamber of Commerce and local First Nations in the success of the recruitment effort.
In fact, there are now 40-plus different flags representing countries from around the world that fly in the warehouse at Loblaw and living in Regina, says John Hopkins, CEO of the Regina District Chamber of Commerce.
The Chamber took similar action for other companies settling in Regina, says Hopkins. “We had companies, whether they were small or large businesses, like Loblaw, literally screaming for people.”
Lowering total landed cost
Hopkins says he can feel a real “buzz” surrounding the Regina area. “We’ve seen some positive growth and growth creates other opportunities,” he says, adding that he can’t wait for the new Bypass project to be completed. “That was really needed, particularly to ensure that logistical timelines were met, particularly for companies where every minute in a lot of cases does certainly matter in terms of how you manage the business.” At Loblaw, Scott expects that the Bypass will save “30 to 45 minutes for all of our loads that are either going North towards Saskatoon or East towards Winnipeg.”
The GTH also has other selling points. For starters, it has a legal status that’s similar to a municipality’s, which makes it kind of a city within the city. According to Richards, the major advantage of that status is the simplicity and efficiency it affords decision makers.
“We’re capable of being a single point of contact and work for the client,” he says. Scott agrees: “What it really translates to is less bureaucracy. You can pick up the phone and you can talk to them directly and they are the decision-makers in terms of regulations and bylaws related to the site. If there are issues, you can get them resolved quickly.”
The GTH is also Saskatchewan’s only designated Foreign Trade Zone (FTZ), which makes it eligible for tariff and tax exemptions with respect to the purchase or importation of raw materials, components or finished goods. Such materials and goods can generally be stored, processed or assembled in the FTZ for re-export (in which case taxes and duties generally would not apply) or for entry into the domestic market (in which case taxes and duties would be deferred until the time of entry), according to Canada’s Department of Finance.
For the GTH, easy access to rail and road transportation, being located in the heart of western Canada, the foreign trade zone designation, all contribute to a lower total landed cost for shippers, which is one of the main advantages of the inland port business model.
The coming together of all of these factors in Regina can only be beneficial to Saskatchewan as a whole, Richards says, underlining how much the local business community contributes to the provincial GDP. “We’re Canada’s most trade-reliant province. Seventy-five per cent of what we grow or pull out of the ground here needs to go for export and we’re a thousand miles away from Taiwan.”
That’s how a sequence of local actions can open the door to global ambitions.