Ashcroft Terminal: Western Canada’s Supply Chain Game Changer 1 Ashcroft Terminal: Western Canada’s Supply Chain Game Change ii Ashcroft Terminal: Western Canada’s Supply Chain Game Change Foreword Throughout history, as far back as the fur trade, Canadian economic One way to do that is to move products with onward destinations to success has depended on successfully selling products into move through major cities as quickly and seamlessly as possible, international markets. And it was made possible because, in spite of using inland ports as transhipment and cargo handling centres. Canada’s massive geography, efficient and innovative transportation Social and environmental impacts are mitigated, wear and tear on — by road, rail, shipping, or by air — enabled our products to reach road systems reduced and the overall efficiency of the logistical global markets on a highly competitive basis. In fact, transportation system improved. corridors and gateways have fundamentally shaped the pattern of settlement and the country’s economic geography. Towns and cities Ashcroft Terminal is an excellent example of the kind of innovation formed around the transportation systems of the day, whether it was the country needs. on waterways, along railways or at important convergence points <Original signed by> along highways. Today all modes of transportation are being integrated into massive logistical systems with thousands of parts moving millions of products at high speed, across all modes of transportation, spanning Dr. David Emerson continents and oceans. Granular service offerings and precision Vancouver, British Columbia, Canada timing are the expectation of todays’ customers and shippers. Mastery of the supply chain is now critical to commercial life and David Emerson, P.C., O.B.C., was the author of the 2016 Review Report on the competitive success. Canada Transportation Act and related policies, titled Pathways: Connecting Canada’s Transportation System to the World. He has held senior positions with the Looking to the future, the protection, management and development Government of Canada, including: Minister of Foreign Affairs, Minister of Industry of logistical trade corridors will be essential to the health and and Minister of International Trade with responsibility for the Asia Pacific Gateway Initiative and the 2010 Vancouver Olympics. In British Columbia, he was the competitiveness of the economy. This is already emerging as a Province’s Deputy Minister of Finance, Secretary to Treasury Board, Deputy major issue on Canada’s west coast where rail corridors and ports Minister to the Premier and Secretary to Cabinet. His leadership roles in the private are heavily concentrated in metro Vancouver, with land scarce, sector included: President and CEO of Canfor Corporation, President and CEO of congestion growing and the social appetite for industrial activity the Vancouver International Airport Authority, and Chairman and CEO of Canadian weak at best. With todays focus on reducing carbon, noise and Western Bank and Chairman of BC Ferries. David is currently Board Chair of Maple Leaf Foods, GCT Global Container Terminals Inc., and the Asia Pacific Foundation. pollution, the application of technology and supply chain innovation He also serves on the Board of Directors of New Gold Inc. David is a member of the will be essential. Achieving environmental improvement without Privy Council of Canada, a recipient of the Order of British Columbia as well as the serious economic sacrifice will require supply chains to debottleneck, Peter Lougheed Award of Excellence in Public Policy, and was also named an operate more smoothly, consistently and burn less fuel per dollar of Honorary Associate of the Conference Board of Canada. David holds a Bachelor and Masters Degree in Economics from the University of Alberta and Doctorate in national output. Economics from Queen’s University. iii Ashcroft Terminal: Western Canada’s Supply Chain Game Changer Synopsis • Unique Strategic Location. • Intermodal transportation hub. Ashcroft Terminal is the most strategically located inland port in • 24/7 Operation with no negative community impact. Western Canada to serve regional, intercontinental and international trade. It has been steadily growing and is shovel ready for more • High added value for clients. growth. It has the potential to lower the cost and increase the • Significant environmental benefits in terms of reduced carbon effective capacity of Canadian supply chains, which are at the heart emissions. of Canada’s Asia-Pacific Gateway and Corridor Initiative and Canada’s trade objectives with the U.S. • Cost savings for clients, communities and the province from lower supply chain costs, reduced road maintenance Trade is the lifeblood of the Canadian economy. Sixty percent of and improved road safety. Canada’s economic output depends on trade and thus Canada’s economic success relies on how efficiently Canadian goods are • Distribution of the economic benefits of the Vancouver moved from source to market. Today, and in the future, trade will be Gateway to the Interior of B.C. the driver for Canada’s economic well-being, and supply chain efficiency will be the key to trade. The recent review of the • Reduced pressure on agricultural lands in Richmond and Canada Transportation Act was critical of the lack of innovation in Delta. Canada’s supply chain, noting that Canada’s rank on a global Ashcroft Terminal offers a whole new way to look at Western logistics performance index fell from 9th in 2007 to 12th in 2014, and Canada’s supply chains. It is a game changing approach to concluded that Canada is “lagging in innovation.” Supply chain achieving the supply chain improvements needed to enhance west efficiency must be improved. coast marine port efficiency and improve Canada’s trade An important opportunity for supply chain improvement is the competitiveness. use of inland ports. The OECD and others have pointed out that the growing use of inland ports increases the capacity of land- constrained marine ports and improves supply chain efficiency. Ashcroft Terminal offers a unique set of attributes that position it to become among the most successful of inland ports. It is already becoming a supply chain game changer. Its advantages include: iv Ashcroft Terminal: Western Canada’s Supply Chain Game Changer efficiency of the entire system, not individual components of that Executive Summary system. An important opportunity for supply chain improvement is the Ashcroft Terminal is the most strategically located inland port use of inland ports. The OECD and others have pointed out the in Western Canada to serve regional, intercontinental and growing use of inland ports both increases the capacity of land- international trade. It has been steadily growing and is shovel constrained marine ports and improves supply chain efficiency. ready for more growth. It has the potential to lower the cost and Inland ports have been used to great success in Asia and Europe, increase the effective capacity of Canadian supply chains, which are and examples such as the Port of Charleston’s Inland Port Greer, at the heart of Canada’s Asia-Pacific Gateway and Corridor Initiative the Midwest Inland Port (MIP) in Decatur, Illinois and CN’s Prince and Canada’s trade objectives with the U.S. George transload facility show this concept works successfully in Trade is the lifeblood of the Canadian economy. Canada’s wealth North America as well. is fundamentally reliant on trade with the U.S. and, increasingly, with Ashcroft Terminal offers a unique set of attributes that position the Asia-Pacific markets. Sixty percent of Canada’s economic output it to become among the most successful of inland ports. It is depends on trade and thus Canada’s economic success relies on already becoming a supply chain game changer. Its advantages how efficiently Canadian goods are moved from source to market. include: To be competitive, Canada needs its transportation and logistics systems to be the best in the world. The recent Canada • Unique Strategic Location Transportation Act review identified the importance of supply chain Ashcroft Terminal is located on the banks of the Thompson efficiency in improving Canadian trade competitiveness. Today, and River just over 300 kilometres east of downtown Vancouver in the future, trade will be the driver for Canada’s economic well- and it is the only major industrial property in Canada through being, and supply chain efficiency will be the key to trade. which mainlines of both the Canadian Pacific Railway (CP) and Canadian National Railway (CN) run. This means that That same CTA review, however, was critical of the lack of every train on both of Canada’s Class 1 railways that innovation in Canada’s supply chain, noting that Canada’s rank connects the Port of Vancouver and the rest of North on a global logistics performance index fell from 9th in 2007 to 12th in America must pass through Ashcroft Terminal. Both 2014. The report concluded that Canada is “lagging in innovation.” inbound and outbound; every train. Given the importance of trade to Canada’s prosperity, and the critical Not only is Ashcroft Terminal the only private rail facility with role of supply chains in facilitating trade, Canadians simply cannot capacity to access the mainline of both Class I railways, it is afford to continue to slide down the ranks of global competitiveness. strategically located at the western end of the two railways’ Supply chain efficiency must be improved by enhancing the directional running zone. Directional running (also known as v Ashcroft Terminal: Western Canada’s Supply Chain Game Changer CN Mainline Train Entering Ashcroft Terminal Co-Production) is an approximately 200 kilometre stretch of production being 155 rail miles of this distance; in an their mainlines from the southern interiors of BC to the important sense Ashcroft Terminal is effectively only 49 rail Vancouver mainland. All Rail traffic heading Eastbound from miles from Deltaport. Mission to Ashcroft travels on the CP mainline.