Winnipeg Free Press - PRINT EDITION

Airships can do heavy lifting

Developing Manitoba's north hinges on solving logistical challenges

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In 2011, the North West Company generated $1.5 billion in sales and it had to work pretty hard for every bit of it.

Compared with Walmart's $444 billion, the NWC's total may not seem like much.

But to service its mostly northern retail locations, the NWC has to deploy resources in a way even Walmart may never have to.

I'm not sure if Walmart needs to regularly rely on helicopters or barges to directly supply stores, but the NWC does.

I don't think Walmart has to count on the condition of winter roads to get to their stores, but the NWC does. Every year, it sets up a 65,000-square-foot special-purpose warehouse in Winnipeg to be ready to deploy close to 400 truckloads on winter roads the moment the roads are open. The NWC delivers close to 3.6 million kilograms of goods on winter roads to 34 stores in the northern Prairies. (That's about one-third of the total annual supply to those stores that do not have all-weather road access.)

Walmart may not have to factor in the expense of air shipments directly to its stores and then be prepared to absorb the costs of a certain number of those planes having to turn back to their base because of bad weather. But that's all built in to NWC's logistics system.

Walmart may not have to rely on ships to deliver directly to stores, but NWC vessels -- between nine and 12 ship loads a year -- transport 5.5 million kilograms of merchandise directly to 41 stores, which have no access to rail or truck shipments.

In the retail logistics business, direct store delivery (DSD) is a typical scenario where the likes of Coke, Pepsi, Frito-Lay and other major brands stock store shelves directly with their own equipment.

At the NWC, it's called DSD-crossdock, because the Cokes and Pepsis of the world can't get to the NWC's store locations with their conventional truck fleet and instead deliver their supplies to the NWC warehouse.

At the University of Manitoba's Transport Institute's conference Friday on northern transportation issues called Northern Exposure 2: Realities of Remote Logistics, Mike Sorobey, the NWC's vice-president of logistics, said when he joined the company three years ago, he'd never heard of DSD-crossdock.

But as it turns out, 40 per cent of NWC's out-bound merchandise is of this nature.

"The North West Company is one of the oldest companies in the world and it has one of the most complex networks in the world," Sorobey said.

It may not be doing hundreds of billions of dollars in business, but Walmart has nothing on NWC's extremely multi-modal logistics network.

Operating out of Winnipeg and servicing stores from Morden to Brochet, there is likely no other enterprise as regularly engaged in shipping goods across the entire north-south expanse of the province as the NWC.

For many years, Barry Prentice, the University of Manitoba professor in the department of supply-chain management, has written about and studied logistics challenges in northern Manitoba.

"It's so much more difficult to do things in the north," Prentice said. "That's a function of the difficulty and unreliability and the cost of transport in the north. But if we want to develop the north we have to solve the transportation problems."

Prentice has become well-known as one of the country's leading proponents of the use of airships for strategic heavy lifting, especially in the hinterland and regions with little or no transportation networks.

Prentice has endured the giggle factor for a long time, but he notes politicians are now talking out loud about airships' potential.

Even the likes of Sorobey acknowledge the benefits of airships -- that can take off and land anywhere -- with a straight face.

"I think there is a huge opportunity for airships," Sorobey said. "We are sitting in the background watching closely, talking to airship companies. I truly hope it does happen. It will be a game-changer for the communities up north."

One of these days we'll see airships in action.

An official from the U.K. company Hybrid Air Vehicles Limited -- the company that has a $500-million contract to build an airship for the U.S. military -- confirmed this week it's coming to Canada to build commercial hybrid airships.

Republished from the Winnipeg Free Press print edition March 2, 2013 B5

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About Martin Cash

Martin Cash joined the Free Press in 1987 as the paper’s business columnist.

He has spent two decades chronicling the city’s business affairs.

Martin won a citation of merit from the National Newspaper Awards in 2001 for his coverage of the strike and subsequent multi-million-dollar union settlement at the Versatile tractor plant. He has also received honours and awards for his work on agriculture and technology development in Manitoba.

Martin has written a coffee-table book about the commercial and industrial make-up of the city, called Winnipeg: A Prairie Portrait.

Martin Cash on Twitter: @martycash


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