Construction of a $20-million regional distribution centre at Canadian Pacific Railway’s Vancouver Intermodal Facility and a new long-term contract with the railway are setting the stage for Westfair Foods Ltd. to increase its share of the retail grocery market in Western Canada.
“Building our new facility in close proximity to CPR’s Vancouver Intermodal Facility makes good business sense,” said Bruce Kent, Vice President, Westfair Foods Ltd. “This move will reduce our costs and give us the ability to service the long-term growth of our retail stores.”
Construction of the new 260,000 square foot distribution centre east of Vancouver in Pitt Meadows is scheduled to begin in August and open late in 2003. Westfair is consolidating two departments from its existing Vancouver warehouse at the new centre and creating approximately 100 new jobs.
“We have a long-term relationship with CPR and we’re committed to growing with them. Transportation is a major cost factor in the distribution of food and any initiative to make transportation more efficient is a step forward,” Kent said.
Vancouver and the lower mainland comprise a large market for Westfair, which has 23 retail stores operating under commercial banners such as the Real Canadian Superstore and Extra Foods.
John McBoyle, CPR’s General Manager, Domestic Intermodal, said Westfair’s move is a first in the Canadian retail food industry. No other grocery chain in Canada has tied its distribution facilities to rail. McBoyle said the co-location is a good fit for CPR, which has land available next to its Vancouver Intermodal Facility and is already using its intermodal service to help Westfair source a range of products worldwide.
Other major shippers such as Sears Canada, Canadian Tire and Consolidated Fastfrate have also partnered with CPR by building their regional distribution centres next to CPR intermodal facilities in major Canadian cities. Under this co-location arrangement, these shippers have their own private access to CPR’s facilities. Containers and trailers are delivered and picked up within minutes of the arrival or departure of time sensitive intermodal trains without truck movements on public roads.
Intermodal service is the strongest growth area for CPR, with revenues increasing by $19 million, or 9 per cent, in the first quarter of 2003.
Intermodal was also CPR’s leading revenue growth performer in 2002, increasing 10 per cent. In all, revenue from intermodal service has grown by more than $200 million or 30 per cent in the last five years. This is more loads,revenue and growth than traditional traffic such as coal, grain and other bulk products.