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CP, Maersk ink deal to develop Vancouver transload and distribution facility

Canadian Pacific (NYSE: CP) and Maersk have agreed to build a “world-class” transload and distribution facility at CP’s intermodal facility in Vancouver, British Columbia, that will be ready to serve customers in 2021.

As part of the agreement, CP will shuttle the containers of Maersk’s customers to and from the ocean terminals at the Port of Vancouver. The arrangement “will rely on the substantial use of rail instead of truck in the Vancouver market,” the parties said.

The new multicommodity transload facility will be an expansion of CP’s existing intermodal facility in Vancouver.

“CP’s unique landholdings in Vancouver enable us to bring to market a first-of-its-kind transload facility that creates tremendous opportunity for sustainable growth,” said CP President and CEO Keith Creel. “Together with Maersk, the global shipping leader, we will transform intermodal transportation in North America.”

Maersk says the expansion comes at a time when warehouse space in Vancouver is tight. That, coupled with Vancouver’s high port utilization rate, is putting pressure on supply performance, the container liner owner said.

“This agreement installs more agile supply chain options and capacity to and from Vancouver for our North American customers. Marketplace fluctuations, e-commerce demands and omnichannel fulfillment are testing every company — so this integrated logistics solution with CP will clearly elevate supply chain performance,” said Maersk Canada President Omar Shamsie.

“So, we applied our global integrator strategy to simplify the current situation and create more end-to-end supply chain solutions by reducing multimodal handoffs. We can now offer more responsiveness to the pace of business by giving supply chain leaders more control of order timing/fulfillment through inland routing flexibility, better velocity gained from one-day savings of rail versus truck and cost savings through seamless transload operations into domestic 53-foot trailers,” Shamsie continued. “We feel this is quite compelling to lower their year-on-year cost goals while creating a more sustainable supply chain with less truck emissions.”

The new transload facility comes at a time when Maersk is reorganizing itself in order to focus on customer efficiency.

Meanwhile, CP has been seeking to expand its network capacity in eastern Canada as part of a wider goal to have a network that touches both the eastern and western coasts of the country.

CP and Class I railroads CN (NYSE: CNI) and BNSF (NYSE: BRK) already have access to the Port of Vancouver, with CP and CN also providing service to the port’s on-dock rail facilities at the port’s container and cargo terminals. 

Although the Port of Vancouver said on Sept. 3 that overall cargo volumes were down by 1.1% to 71.7 million metric tonnes for Jan. 1 to June 30, container trade volumes on a monthly basis have been recovering. Two terminal expansions are still underway: the Centerm expansion project, which will be able to accommodate a 65% increase in container traffic, and the Roberts Bank Terminal 2 project, which would increase container capacity at the port by 50%. 

In an unrelated announcement, CP said Monday that it opened its new multicommodity transload facility in Montreal on Tuesday. The facility will offer transloading services and supplementary intermodal transportation and distribution services from CP’s Côte Saint-Luc yard, with more space available for future expansions to provide customers with access to new markets, CP said.

The Montreal facility, which CP will operate with Quebec-based freight transportation services provider TYT Group, has 118,000 square feet that can be configured to receive, unload, carry and deliver rail traffic, CP said. More than 4,000 feet of existing and adjacent track also surrounds the facility, which is ideal for outdoor transloading, CP said. 

The facility also has access to the Montréal-Pierre Elliott Trudeau International Airport and highways 15, 20, 13 and 520, and it is in close proximity to the Port of Montréal.

Click here for more FreightWaves articles by Joanna Marsh.

Related articles:

Vancouver records second-highest cargo volume despite trade ‘challenges’

Why Maersk axed Safmarine and Damco — and what’s next

Railways see untapped potential in Atlantic Canada ports

Canada invests over $100 million in rail-related infrastructure projects

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