Canadian airport builds logistics beachhead for American e-commerce

At first glance, Edmonton, Canada, seems unlikely to be an international airlift destination for online shoppers in the United States.

After some promising trial runs with e-commerce providers, Edmonton International Airport is relying on its geographic location along polar routes, congestion-free facilities and Canada's trade-friendly customs rules to advance its multi-billion dollar air logistics village and become a major cargo hub.

"Planes that would normally dock at another point [are using] Edmonton is not only a place to dock and refuel, but actually the end point.Then we move the goods to parts of the United States by air, road or rail, "Myron Keehn, the airport's vice president for aviation services and business development, said in an interview."We are seeing a sharp increase in freight volume because companies are realizing the efficiency of actually using Edmonton as the starting point for them to enter the United States and then in turn return to Asia or the Middle East."

In late July, Transport Canada announced allocations of up to C $100 million (US $77.3 million) to bolster cargo and logistics operations at Edmonton International Airport.The funding comes from a national infrastructure program aimed at strengthening cross-border trade and making Canada more competitive.

The entire 2,000-acre development, with 60 million square feet of e-commerce logistics and operations center, is being fully expanded at a cost of $2.7 billion to $3.9 billion, Keehn said.Initial consultations and measurements are underway and the Airport Authority plans to begin exploring design concepts and timetables in the coming months.Once the road access is in place, site development can begin, with the goal of renting the plot to the developer within two years.When the initial part will be opened for occupancy has not yet been determined, so has the date of the final expansion.

Construction began in recent weeks on a new highway overpass, a supporting infrastructure funded by the Alberta government to improve access to the airport.

Even before the new development plan began, EIA was strengthening the existing freight area.Construction workers began pouring concrete for six other wide-body freighter locations this month, which will enable the facility to accommodate 11 wide-body freighters at the same time.

In addition to the expansion of the cargo apron, the C $36 million (US $28 million) project (half funded by the federal government) includes a new runway connection, installation of a new hydrant refueling system dedicated to cargo planes and tripling the space of the cold storage.

The complete hydrant system is connected to two large Shell aviation fuel tanks, which eliminates the process of trucks constantly driving out of the fuel yard and makes refueling faster, more efficient, cleaner and safer.

Build it and they will come

Freight traffic in Edmonton remains small by the standards of major airports but has grown steadily over the past six years.Last year, EIA's freight tonnage increased by 12.8% compared with 2019 to 53,000 tons, which is 5% higher than the level in 2020.Despite the decline in global air cargo volume, passenger traffic in June increased by 20% year-on-year.From the beginning of 2020 to the end of 2021, EIA's charter cargo volume increased by 165%.

Officials say more capacity is needed to position the metropolitan area as a major logistics hub.

The new cargo facility is a speculative investment as Edmonton's use as an e-commerce air transit point has so far been restricted.But airport authorities are confident of attracting a large number of freight and tenants destined for the United States.

"There is a bit of'build it and they will come '."But it's also very strategic in making sure we have the assets that people need, "Keane said.

Some entities have already tested Edmonton Airport as a beachhead to serve the US market, but Keane would not reveal any specific retailers or distributors as they do not want to reach out to rivals.

EHL International Logistics Co. is a company known to use Edmonton Airport as a hub for Chinese exports to North America, as EIA announced a deal in late 2018.

EHL, an arm of the Henan provincial government, temporarily operates a series of Boeing 747-400 charter flights from Zhengzhou Airport to Edmonton to continue to the United States

Spokesman Elizabeth Dwernychuk said several international companies are now renting space at EIA to import and export goods, including e-commerce goods, via dedicated lines and scheduled flights.Transshipment of goods by air and Land utilizing an extensive express network of integrated logistics companies and freight corridors depending on the level of service.

Edmonton is selling speed and low cost.

Since the pandemic, third-party logistics providers and shippers have increasingly turned to less crowded secondary airports in the U.S., which have faster turnaround times compared to crowded international gateways such as Chicago O 'Hare, Los Angeles, New York and Atlanta.

Freight forwarders can take days-up to two weeks during peak times-to retrieve inbound cargo from freight terminals at those locations, where resources are more focused on passenger operations.Large airports receive a higher proportion of all-cargo aircraft, and the capacity of cargo terminals to sort and sort cargo is limited due to limited space and labor shortage.American customs officers are also stretched in passenger transport hubs.Delivery trucks usually have to queue for hours waiting to be loaded due to poor information sharing, outdated access roads and narrow parking areas.

The capital of Alberta is basically in the middle of an hourglass, with large cargo planes from Europe and Asia crisscrossing on their way to the west and east coasts of the United States respectively.

Air shippers can unload and transport cargo through Edmonton faster than direct shipments to the United States, Keehn said, and the system allows large aircraft to return to the air and immediately begin their next revenue mission.

"I like what they are doing.It makes sense.This is definitely something we're looking at, "said Brian Bourke, chief growth officer at Seko Logics.

In recent years, Headquarters's Chicago-based Seko has made cross-border e-commerce a core service.Bourke said Edmonton International Airport had a "very creative" strategy and leadership to put freight first.

"When you have an airport that puts their resources, focus and intensity into freight, you usually see success.He said it is on par with Rickenbacker Airport in Columbus, Ohio, in terms of the cargo-centric airport Seko is considering supporting its fast-growing e-commerce business.

Multimodal cluster

Edmonton also boasts other local advantages, such as a young workforce and a lower cost of living, which makes hiring easier than many crowded metropolises, and lower property prices.The cost of land for industrial development is cheaper than that on the East Coast of the United States.Keane explained that because the US dollar strengthened against the Canadian dollar, American developers could also save money.

But Edmonton's industrial rental rate (measured in square feet) is not cheap compared to many U.S. cities, according to data shared by real estate services and investment firm CBRE.Rents are significantly lower than other Canadian cities, New Jersey and Southern California, but equal to or higher than other U.S. metropolitan areas

The airport is part of Multimodal's logistics cluster, which is already the main entry point for a variety of seaborne goods, not just e-commerce goods, into North America.

There are extensive railway and road connections, as well as large industrial parks near the airport.

A key component is the relationship with Prince Rupert Port Prince Rupert is expected to become the second largest Canadian Container port this year, as well as Vancouver Port.As an inland port, Container, from Asia, was spun off and remixed at Edmonton before being shipped by ground to eastern Canada and the United States

Goods are able to reach Edmonton in 14 to 18 days because it is the closest North American port to the Asian manufacturing hub and is much less congested than North American ports.Multimodal is also faster, a third of Vancouver's, because Prince Rupert Port is already in a high altitude area, meaning trains don't have to struggle up the Rockies.

The Edmonton Logistics Community used the customs program and the region's status as a foreign trade zone to facilitate the transfer to U.S. warehouses.Container are not cleared by customs at western seaports, but are transported by rail and then trucked to bonded facilities, where they can remain duty-free as long as they are not released into the Canadian market.Transit deposits are used for goods immediately destined for the United States or Mexico (including air cargo), which can also delay customs clearance and payment of customs duties.

Edmonton is the first airport in Canada to conduct commercial delivery trials of cargo drones.

"Edmonton is a model of how airports are managed, operated and worked," Stan Wraight, an influential air cargo expert who lives in Montreal, told FreightWaves."It will have a fair share of the trans-Pacific business because, in addition to being an efficient hub, it offers the possibility of importing and exporting goods."

Business development officials say all these factors make Edmonton an ideal base for shipping and manufacturing goods to foreign markets.

The airport's role in supporting Edmonton's inland port model was highlighted in a company (Keehn declined to be named) that shipped goods from Asia to Prince Rupert Port and then to Edmonton by rail.Goods are trucked to warehouses at airports, unpacked and shipped to the United States by road and air

With the increase of air cargo services, more and more Canadian companies turn to Edmonton for export.For example, EmmyDeveaux, Headquarters's Edmonton-based fashion brand, opened an e-commerce export facility at EIA in 2021. The company sells products directly to consumers and focuses on expanding into the US and overseas markets.

"We're also connecting outbound goods," Keane said."It's beneficial from an Asian perspective.Everything from agricultural products to medicines, manufactured goods, medical equipment is shipped to Edmonton and then shipped back to Asia. "

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