CentrePort will find its own reason for being

In the same month a Calgary company bought a controlling stake in Canwest -- whose local presence the city has derived an enormous amount of pride from -- two separate $100-million industrial developments were announced for the Alberta city.Both of them -- a CN intermodal facility with an industrial park attached to it and a massive Wal-Mart distribution operation -- sounded awfully similar to what is to be eventually attracted to CentrePort Canada, the inland port that is being developed near the airport.

There are some people in the city who are already wringing their hands in concern over a perceived missed opportunity, but that would be misguided angst.

Both the CN and the Wal-Mart projects were Calgary-specific operations that are required to service the Calgary marketplace.

Winnipeg was not in the running for either development. Good thing, too, because work to install services for the 20,000 acres of CentrePort has not begun and the manner in which the land will be developed is still a long way from being determined. So even if Wal-Mart wanted to build a 450,000-square-foot high-tech refrigerated distribution centre at CentrePort, it wouldn't be able to for some time.

When asked if those Calgary developments will have a negative implication for CentrePort, one industry official said, "It is difficult to say absolutely no, because infrastructure and distribution infrastructure will always attract more of the same."

Another logistics industry professional, who asked that his name not be used, said, "Does this add a sense of urgency to the CentrePort development? I think it does."

But the same person said he would shy away from going after an "early win" until CentrePort's strategic direction has been determined.

Diane Gray, CEO of CentrePort, is pretty clear already about what CentrePort will not be -- and that is an import-driven consumer-oriented distribution operation, essentially the kind of function the new Calgary Wal-Mart development will serve.

"Consumer distribution is what's made some of the big inland ports in the U.S. work," Gray said.

But Winnipeg does not have the population size that could support an inland port operation that depends heavily on import distribution.

Gray said a more likely scenario is to somehow add value to stages of the export business.

"It is very early days," she said. "But for instance, we are already in discussion with CN about back-haul opportunities to Asia."

The thinking there is that since containers are shipped back to the manufacturing centres in Asia about 80 per cent empty, there ought to be a business case for the right commodity to fill those containers.

"If there were attractive back-haul rates, access to containers and access to ships there could be an opportunity for export markets out of Winnipeg to Asia for specialty commodity or specialty forage products," Gray said.

That is the kind of play that is being discussed at this point with the rail and shipping companies, who are always interested in talking about commercial back-haul opportunities.

Perhaps most importantly, especially in light of the Calgary announcements, is that CentrePort is trying to focus on taking advantage of existing strengths of the region. Gray said there are serious discussions taking place with two groups about the commodity back-haul concept, including Mexico as perhaps one of the destinations.

Coincidentally, Barry Prentice, the U of M logistics expert, is in Mexico talking to a group of railroads about the shipment of frozen food products from Mexico to Canada and the regulatory challenges of shipping frozen beef and pork from Canada to Mexico. These are not CentrePort-specific projects, but could become so in time.

In an e-mail exchange, Prentice imagined Winnipeg as an international frozen food depot.

The point is that CentrePort will have to hone in and remain focused on its own specialized offering and not be distracted by some who believe there was one that got away.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition February 18, 2010 B5