Canadian Intelligent Super Corridor - Smart Inland Port Network

January 2007 

Canadian Intelligent Super Corridor - Smart Inland Port Network 

Canadian Intelligent Super Corridor (CISCOR) 

CISCOR Smart Inland Port Network 

January 2007 

Business Case Report 

Copyright 2007: Saskatchewan Agrivision Corporation Inc.

January 2007 


Acknowledgements 

Funding for this business case project was provided by Western Economic Diversification 

Canada, Saskatchewan Agriculture and Food, and the Saskatchewan Canola Development 

Commission. 

This project was administered by Saskatchewan Agrivision Corporation Inc. Guidance on this 

project was supplied by the Saskatchewan Trade and Export Partnership, Regina Regional 

Economic Development Authority, Moose Jaw Regional Economic Development Authority and 

the Saskatoon Regional Economic Development Authority. 

Special Thanks to: 

Ken Hoffman, Kansas City SmartPort 

This report was prepared by: 

John Vickerman, Principal 

Christopher Matson, Project Manager 

Shannon McLeod, Transportation Planner 

TranSystems Corporation Consultants 

150 Boush Street, Suite 1000, 

Norfolk, VA USA 23510 


January 2007 


Table of Contents 

Executive Summary - French....................................................................................................................E-1 

Executive Summary - English................................................................................................................. E-11 

Introduction .............................................................................................................................................IN-1 

Section 1: Global Industry Trends and Conditions................................................................................... 1-1 

Growth in Containerized Trade and Asian Market .................................................................. 1-1 

Increasing Vessel Size and Industry Consolidation ................................................................ 1-2 

Panama Canal Expansion ...................................................................................................... 1-3 

North American Port and Intermodal Congestion ................................................................... 1-3 

Driving Forces Behind Inland Port Development .................................................................... 1-5 

Section 2: Canadian Solution ................................................................................................................. 2-1 

Canadian Trade Partners and Statistics ................................................................................ 2-1 

Canadian Ports and Containerization Growth........................................................................ 2-2 

Canadian Railways and Intermodal Traffic ............................................................................ 2-7 

Canada’s Strategic Location................................................................................................ 2-10 

Pacific and Atlantic Gateway Strategies ............................................................................... 2-13 

Section 3: The Prairie Region – The Saskatchewan Advantage ............................................................. 3-1 

Benefits................................................................................................................................... 3-1 

Challenges.............................................................................................................................. 3-4 

Section 4: Canadian Intelligent Super Corridor Smart Port – Bringing It All Together ............................. 4-1 

Agile Port System ................................................................................................................... 4-2 

Logistic Management System................................................................................................. 4-2 

Inland Port Services................................................................................................................ 4-3 

Benefits to Carriers, Ports and Shippers................................................................................. 4-8 

Section 5: Case Studies .......................................................................................................................... 5-1 

Winnipeg, Manitoba................................................................................................................ 5-1 

CN Edmonton Grain Distribution Centre................................................................................. 5-3 

Kamloops Intermodal Container Facility ................................................................................. 5-4 

Northern Plains Commerce Centre......................................................................................... 5-5 

Minnesota North Star Rail Intermodal LLC ............................................................................. 5-6 

Inland International Port of Dallas........................................................................................... 5-8 

Section 6: Market Assessment ................................................................................................................ 6-1 

West Coast Trade Growth ...................................................................................................... 6-2 

Canadian Trans-Pacific Trade Flows...................................................................................... 6-3 

Smart Inland Port Network Potential Market and Prospective Throughput ............................. 6-5 

Section 7: Cost Analysis – A Business Case........................................................................................... 7-1 

Import Containerized Trade .................................................................................................... 7-1 

Containerization of Export Bulk Products ............................................................................... 7-2 

Conclusion, Recommendations and References................................................................................... CR-1 


January 2007 


Sommaire exécutif 

Les exportations et importations ont dépassé les 10 billions de dollars en 2005-06. La majorité des 

nouveaux navires porte-conteneurs sur les cinq prochaines années seront des navires post-Panamax 

prêts à transporter des marchandises de la Chine, du sud-est de l’Asie et de l’Inde vers des ports 

nord-américains déjà poussés à la limite de leur capacité. Le Canal panama approche son taux maximum 

d’opération et le réseau de transport américain se démène pour répondre à une augmentation annuelle 

prévue de 15% du trafic de contenants. En réponse à la croissance raide dans le commerce nordaméricain, 

les changements dans la chaîne d’approvisionnement mondiale de marchandises, et la 

congestion accrue dans les ports américains et le long du système multimodal, les expéditeurs redirigent 

maintenant de plus en plus de marchandises via les ports canadiens. 

La solution canadienne 

En tant que premier port d’escale nord-américain sur la route trans-Pacifique de l’Asie et la route trans- 

Atlantique de l’Europe, le Canada a l’occasion de développer un réseau sophistiqué de distribution 

multimodale pour desservir les zones de consommation croissantes dans le Midwest des États-Unis et au 

Canada. Le Canada peut servir de point de passage nord-américain au carrefour de trois réseaux de 

commerce puissants et itinérants : l’Accord de libre-échange nord-américain (ALENA) nord-sud, l’ALENA 

européen et la route trans-Pacifique hautement utilisée. Le résultat désiré est un corridor de transport de 

marchandises en direct qui transporte des marchandises des ports aux chemins de fer et autoroutes et 

vers un centre de logistique de port intérieur qui dessert tous les marchés nord-américains. 

Puisque les ports de Vancouver et de Prince Rupert sont situés sur la côte ouest du Canada, et que les 

ports de Halifax, du détroit de Canso et de Montréal sont sur la côté Est, il y a des avantages distincts en 

faveur d’une stratégie intégrée nationale multimodale pour le Canada en tant que nation. Ce pont terrestre 

transcontinental naissant et le port intérieur central judicieux pour desservir les marchés américains et 

canadiens des océans Atlantique et Pacifique seraient avantageux pour les ports impliqués, le chemin de 

fer et les lignes maritimes, les grands détaillants et la nation. 

Illustration SE-1. Réseau multimodal canadien 

Source: TranSystems, Association des chemins de fer du Canada 

Copyright 2007: Saskatchewan Agrivision Corporation Inc. E- 1

January 2007 


La région des Prairies : les avantages de la Saskatchewan 

La Saskatchewan est le carrefour du transport de la partie nord du continent nord-américain, avec des liens 

dans toutes les directions. Son emplacement idéal et son accès central au réseau de logistique des 

marchandises font de la Saskatchewan un site idéal pour l’établissement d’un complexe portail intérieur 

prospère, loin des lieux de congestion. 

La proximité géographique de la province aux centres de population nord-américains, à moins de deux 

jours de route de 80 millions de personnes au Canada et aux États-Unis, est appuyée davantage par un 

commerce régional solide ainsi que des temps de transit et des frais d’expédition compétitifs. La province 

est branchée par une autoroute principale, un corridor multimodal qui encourage la croissance du 

commerce domestique et international. La Saskatchewan offre aussi l’accès à une main d’œuvre très 

productive et des entreprises du savoir avancées en génie du transport et dans les technologies de 

l’information (TI). 

Ces attributs, en plus de la disponibilité vaste de terrain et d’infrastructure à des prix modiques, ainsi qu’un 

climat d’investissement et d’affaires solide, font ensemble de la Saskatchewan un lieu de choix pour 

l’établissement d’un port intérieur le long d’un corridor intégré en Amérique du Nord. 

Autoroutes – La Saskatchewan est accessible par l’autoroute Yellowhead et l’autoroute transcanadienne 

n° 1, et se branche de façon centrale au corridor de transport CANAMEX et à l’autoroute de l’ALENA qui 

rejoint le Canada, les États-Unis et le Mexique. 

Chemin de fer – Les voies principales du Canadien National (CN) et du Chemin de fer Canadien Pacifique 

(CFPC) offrent un service de chemin de fer à deux niveaux, reliant ainsi la province à Vancouver, Toronto, 

Montréal, Chicago et à d’autres zones de consommation clé aux États-Unis. La Saskatchewan est le 

terminus canadien du chemin de fer CFPC/Soo Line, qui sert de corridor direct vers Chicago et la région du 

nord-est des États- Unis. De plus, la ligne ferroviaire sur courte distance de OmniTRAX offre un accès 

direct de la Saskatchewan au port de Churchill, et fournit un accès efficace à toutes les destinations nordaméricaines 

à travers le système de chemin de fer CN. 

Commerce – Le total de commerce mondial en Saskatchewan a augmenté de 102 pourcent au cours des 

dix dernières années. Depuis 2005, la Saskatchewan a fait l’expérience d’une augmentation de 13,8 

pourcent en exportation internationale et d’une augmentation de 8,2 pourcent en livraison manufacturière 

(Bureau des statistiques de la Saskatchewan). 

• La Saskatchewan est responsable actuellement pour près du tiers de l’énergie produite au Canada. 

• La Saskatchewan est le plus grand producteur de potasse au monde, et produit près la moitié de la 

demande sur le plan mondial. 

• La Saskatchewan produit 30 pourcent de la production totale d’uranium au monde, et est la seule 

région du Canada à produire de l’uranium. 

• Le Canada est le plus grand exportateur de lentilles au monde, et la Saskatchewan produit 95 pourcent 

de la production totale au Canada. 

Main d’oeuvre – La main d’œuvre de la province compte parmi les meilleures éduquées du pays ; environ 

60 pourcent de la province a suivi une formation post-secondaire. Les taux salariaux sont aussi plus 

concurrentiels que ceux de la Colombie-Britannique et de l’Alberta. 


January 2007 


Technologie – Au cours des dix dernières années, la Saskatchewan a établi des partenariats avec des 

experts de l’industrie et d’autres entreprises pour établir des centres de transfert des technologies 

innovatrices en vue d’appuyer la recherche et la commercialisation de nouvelles technologies. La province 

sert de centre des opérations et appuie les industries et initiatives technologiques suivantes : 

• Deux des entreprises du savoir avancées en génie du transport et dans les technologies de 

l’information, International Road Dynamics et la Massload Technologies Corporation. 

• Des entreprises de TI et des firmes de recherche et de logistique : Axon Development Corporation, 

Clevor Technologies, Integrated Designs, Numa Technologies, et la Technology Management 

Corporation, LMS Logistics, Ghost Transportation Services, et le centre des ports à conteneurs Yanke. 

• Innovation Place à Saskatoon – un des parcs de recherche les plus grands et les plus avancés de 

l’Amérique du Nord en pharmaceutique, bioressources et sur l’environnement. 

• Le parc de recherches provincial, Regina Research Park – l’un des parcs de recherche les plus récents 

au Canada, dont la spécialisation porte sur l’industrie pétrolière, les technologies de l’information et les 

sciences de l’environnement. 

• SR Net – un consortium de réseau et une largeur de bande de recherche à très haute puissance, 

branchée dans un réseau de distribution informatique fort. 

Investissement – En 2005, plus de 7,8 milliards de dollars en nouveaux investissements capitaux ont été 

investis dans des projets en Saskatchewan, une augmentation de 4,6 pourcent du total en 2004. Plus de 

75 pourcent de cet investissement provenait du secteur privé en vue d’agrandir, moderniser et construire 

de nouvelles installations dans la province. 

Taxes d’affaires – En avril 2006, le gouvernement de la Saskatchewan a donné son approbation pour les 

plus grandes coupures aux taxes d’affaires dans l’histoire de la province, rendant ainsi la Saskatchewan 

l’une des juridictions les plus concurrentielles au Canada. 

Avantage concurrentiel - En 2006, KPMG, une firme de consultation, a publié un rapport qui compare le 

coût de faire affaire dans 128 villes de neuf pays en fonction du coût des intrants pour la main d’œuvre, la 

taxation, les installations (terrain, construction, coûts de location). Parmi les villes canadiennes étudiées, 

les quatre villes de la Saskatchewan (Saskatoon, Regina, Prince Albert et Moose Jaw) se plaçaient audessus 

de l’indice canadien et en meilleure position que Calgary, Winnipeg et Kamloops. Saskatoon a 

aussi été classé comme juridiction la moins coûteuse parmi les 21 villes en question du Midwest de 

l’Amérique du Nord (KPMG 2005) 

La réalisation du projet 

Le développement et la promotion d’un réseau de port intérieur intelligent au centre de la Saskatchewan et 

un Super corridor intelligent du Canada (CISCOR), y compris des activités de chaîne d’approvisionnement 

basés à l’intérieur, loin des zones actuelles de congestion, assureront que le Canada ait l’infrastructure 

nécessaire en place pour améliorer la compétitivité et tirer avantage des opportunités croissantes du 

marché mondial. 


January 2007 


Le Réseau de port intérieur intelligent CISCOR en Saskatchewan servirait de plaque tournante de 

coordination centrale, joignant le corridor est-ouest canadien (CISCOR) avec le grand corridor nord-sud 

nord-américain (NASCO), le corridor entre le Canada et le Mexique (CANAMEX) et la River of Trade 

Corridor Coalition (ROTCC). Le port intérieur servirait de port intelligent, fournirait des services physiques 

de port intérieur et irait se joindre avec et fournirait de l’appui intelligent à des installations de chargement 

des conteneurs à travers le réseau nord-américain. 

Comme port intelligent, des services de gestion de chaînes d’approvisionnement à valeur ajoutée 

assureraient que les cargaisons soient acheminées efficacement, économiquement et à temps, en fonction 

de la stratégie de entre le Canada et les Etats-Unis serait atteint grâce à l’intégration de services 

d’informations et de sécurité à la fine pointe de la technologie pour l’échange de données de transport et 

d’échange. 

Il est recommandé que le Réseau de port intérieur intelligent CISCOR, qui offre et coordonne les services 

et installations suivants : 

• les zones de libre échange ; 

• les entrepôts de distribution ; 

• le dédouanement ; 

• les opérations de transbordement ; 

• la gestion de conteneurs vides ; et 

• un centre de logistique avancée qui emploie des systèmes d’informations d’échange à la fine pointe de 

la technologie. 

Avantages 

Ce complexe de port intérieur sera avantageux pour les transporteurs ferroviaires commerciaux et les 

lignes d’expédition, les ports nationaux et le personnel des ports privés, d’autres installations de 

chargement, les propriétaires des cargaisons (d’importation ou d’exportation), ainsi que tous les niveaux du 

gouvernement du Canada. Ces avantages dépendent de la création d’une plaque tournante de port 

intérieur intelligent qui répondrait aux besoins de tous les intervenants et développerait une base 

d’expédition suffisamment grande pour soutenir une masse critique d’opération. Le volume de cargaison 

est la clé de la viabilité d’un port intérieur, son élément d’attrait pour les intervenants et ses avantages 

potentiels en termes de coût, d’efficacité, d’accessibilité, de service et de fiabilité. 


January 2007 


Transporteurs ferroviaires 

• Attrait potentiel d’au moins 130 000 EVP par année de cargaisons importées de l’Asie qui recherchent 

des routes alternatives vers le cœur de l’Amérique du Nord, un chiffre qui augmentera avec le temps. 

• Attrait potentiel d’au moins 130 000 EVP par année de cargaisons d’exportation recherchant des 

routes surtout vers les marchés de l’Asie Pacifique, un chiffre qui augmentera avec le temps. 

• La capacité de remplir des contenants destinés à être expédiés vers l’Ouest et des wagons 

multimodaux destinés à être expédiés vers l’Ouest avec une cargaison à revenu qui ne serait pas 

autrement retournée, augmentant ainsi la capacité en raison d’une meilleure utilisation des actifs et 

d’un nombre réduit de déplacements non productifs. 

• Un service plus fréquent et à l’heure pour les clients à courte distance, les destinations à faible taux de 

volume, et les destinations américaines à l’ouest des plaques tournantes du chemin de fer américain, 

ainsi que des nouveaux services aux clients locaux, de l’ALENA et internationaux. 

Lignes d’expédition 

• Le dédouanement automatisé pour réduire les arrêts temporisés et permettre les passages spéciaux à 

haute vitesse à la frontière. 

• Des services consolidés de données à valeur ajoutée et un cadre de professionnels de gestion de 

données à l’intérieur d’une seule plaque tournante de logistique d’information pour servir le Super 

corridor intelligent du Canada. 

• Attirer des cargaisons de cargaisons de retour à revenu, à l’aide d’une gestion intelligente du 

déploiement et du positionnement de conteneurs vides. 

Ports 

• Un service de livraison plus rapide pour les conteneurs, qui seront entreposés, classés ou transbordés 

en Saskatchewan. Cela aidera à augmenter de débit des installations de port de mer existantes. 

• Recouvrement de terrain de port de mer critique pour l’offre de fonctions de port essentielles et pour 

réduire le besoin d’infrastructure locale additionnelle. 

• Avantage compétitif envers les ports américains rivaux grâce à une gestion efficace du transport 

terrestre, contribuant ainsi à augmenter davantage la concentration de cargaisons. 

Expéditeurs 

• Une source abordable de chargement de produits d’exportation, contrairement à la conteneurisation au 

port. 

• Produits d’exportation nécessitant une « préservation de l’identité » qui peut être obtenue par 

l’emballage ou la mise en conteneur en Saskatchewan sans mélange de produits d’origine d’ailleurs. 

• De meilleures options de logistique augmentant l’efficacité et la productivité des actifs existants 

d’infrastructure de chemin de fer. 

Le gouvernement canadien et la Province de la Saskatchewan 

• La croissance et le développement d’occasions d’affaires sur le plan local, incités par la présence d’un 

centre de cargaisons à proximité, y compris l’entreposage et la distribution commerciales, les services 

de maintien des équipements, les services de transport et des services de logistique auxiliaires. 

• La diversification de l’économie vers d’autres secteurs industriels en vue d’éviter les baisses cycliques 

qui ont lieu dans la plupart des secteurs industriels menés par les produits de base. 

• Une augmentation des revenus d’impôts en raison de nouveaux reçus d’affaires et de paie. 


January 2007 


Évaluation du marché 

La viabilité des installations de port intérieur intelligent proposées pour la Saskatchewan dépend, en partie 

du volume de chargements qui y passeraient. La demande pour un système de port intérieur coordonné 

en Saskatchewan viendrait d’abord des marchés multimodaux du Canada et des Etats-Unis. Une des 

difficultés de l’estimation du trafic potentiel est que le montant de trafic dépend des taux et des niveaux de 

service, éléments inconnus chez de nouvelles installations. Pour identifier le flux de chargements vers et 

en provenance des provinces contenant des ports importants (Colombie-Britannique, Québec, etc.) Selon 

les statistiques d’échange, les connaissances de l’industrie et d’autres analyses quantitatives, il a été 

déterminé que l’analyse devrait se concentrer sur le marché trans-Pacifique et sur le marché de l’ALENA 

car celles-ci présenteraient les meilleures opportunités, à la fois de la perspective du volume et de la 

croissance future. 

Tableau SE-1 : Sommaire de la conteneurisation future de l’exportation de la Saskatchewan vers l’Asie (données de 

2004-2005) 

Tonnes Part EVP EVP 

Exportation de produits agricoles de base 4 865 369 29 % 69 373 

Exportation de produits agricoles traités 512 979 100 % 29 020 

Exportation de potasse 3 147 870 5 % 9 258 

Exportation de pâtes et papier 108 639 50 % 2 173 

Total des exportations dans l’analyse 8 634 856 25 % 109 824 

Tableau SE-2 : Sommaire de la conteneurisation future de l’exportation de la Saskatchewan vers l’ALENA (données de 

2004-2005) 

Tonnes Part EVP EVP 

Exportation de produits agricoles de base 1 325 724 18 % 11 877 

Exportation de produits agricoles traités 754 927 100 % 45 783 

Exportation de potasse 5 437 230 5 % 15 992 

Exportation de pâtes et papiers 286 411 25 % 2 864 

Exportation totale dans l’analyse 7 804 293 20 % 76 516 

Tableau SE-3: Marché potentiel du réseau de port intérieur intelligent CISCOR 

EVP EVP – 30 % EVP + 10 % 

Vers l’Asie 109 824 76 877 120 807 

De l’Asie 1 109 824 76 877 120 807 

Vers l’ALENA 76 516 53 561 84 168 

De l’ALENA 1 76 516 53 561 84 168 

Débit total 372 681 260 877 409 949 

(1) Tient pour acquis que les lignes d’expédition chercheront à maintenir un débit balancé, où chaque chargement d’exportation 

sera équilibré avec un chargement d’importation. 


January 2007 


Il est raisonnable d’assumer que les lignes d’expédition du port intérieur auraient au minimum un débit 

équilibré, c’est-à-dire qu’un conteneur arrêté au port intérieur doit arrimer un chargement d’exportation. 

Dans ce cas, la taille estimée du marché annuel vers l’intérieur se chiffrerait vers 130 000 à 205 000 EVP 

selon les estimés des exportations actuellement disponibles dont l’origine est la Saskatchewan. En se 

basant sur cette approche, le port intérieur aurait un débit total de 260 000 à 410 000 EVP par année, ce 

qui comprend des importations et exportations asiatiques et des importations et exportations nordaméricaines. 

Un facteur qui risque d’encourager les lignes d’expédition à arrêter les conteneurs destinées vers l’intérieur 

au port intérieur serait la capacité de retourner rapidement les conteneurs vides vers l’Asie pour des 

chargements d’importation à plus grand revenu. De plus, la capacité de transbordement des produits 

d’exportation de partout au Canada et du coin nord-est des États-Unis avec des capacités intelligentes 

pour le dédouanement est un avantage de plus. Ainsi, le potentiel total de débit pourrait dépasser 500 000 

EVP, en tenant pour acquis que le coût, le transport et les conditions de service soient en place pour faire 

du port intérieur intelligent une installation viable de distribution, de transbordement et de dédouanement 

pour les expéditeurs, les lignes de transport et les chemins de fer. 

Selon l’expérience du port intelligent de Kansas City, inclure une zone de libre échange près des 

installations de port intérieur pourrait créer un nouveau centre compétitif de fabrication, de distribution et 

d’échange, ce qui améliorera les produits composants destinés pour l’intérieur et les produits fabriqués 

destinés vers l’extérieur (exportés à nouveau). 

Analyse de coût 

Un des aspects importants dans la détermination de la faisabilité d’un système coordonné de port intérieur 

en Saskatchewan consiste à évaluer si le port serait compétitif avec les options existantes de transport. 

Une connexion multimodale vers le Midwest, surtout Chicago, représenterait l’une des meilleures 

opportunités pour un port intérieur CISCOR proposé. Cette analyse de coût examinerait les coûts actuels 

de transport par camion et par chemin de fer entre le Port de Vancouver et Chicago. Ces coûts sont 

comparés aux coûts estimés pour le transport de marchandises via le port intérieur en Saskatchewan. 

Le Tableau SE-4 démontre que l’utilisation d’un port intérieur impose un coût supplémentaire de 400 $ pour 

le transbordement pour chaque conteneur de 40 pieds. Cependant, ces estimés simplifiés ne considèrent 

pas le potentiel de recouvrir ces coûts à d’autres endroits dans la chaîne d’alimentation, tels que dans la 

réduction de déplacements sans revenu en chargeant les conteneurs vides avec des marchandises 

locales, une meilleure gestion de l’inventaire ou un prix compétitif pour l’envoi de nombres considérables 

de conteneurs à destination et en provenance du port intérieur. 


January 2007 


Tableau SE-4. Comparaison des coûts estimés d’un conteneur international en transbordement dans un port intelligent 

versus la livraison directe. 

Dollars canadiens Vancouver - 

Saskatchewan 

Vancouver - 

Saskatchewan 

Vancouver – 

Chicago 

- Chicago 

- Chicago 

Mode de transport Chemin de fer Chemin de fer et Chemin de fer 

camion 

Coût par conteneur de 40 pieds 1 

Chemin de fer multimodal 1 400 $ 1 400 $ 2 200 $ 

Coûts de levage/charrette 50 $ 50 $ 

Transbordement intérieur 350 $ 350 $ 

Coûts de levage/charrette 50 $ - 

Chemin de fer multimodal 2 800 $ - 

Camion 3 - 1 000 $ 

Charrette de destination 4 120 $ - 175 $ 

Coût total par conteneur de 40 2 770 $ 2 800 $ 2 375 $ 

pieds 

(1) Les taux ne comprennent pas le supplément carburant. 

(2) Tient pour acquis le transbordement de trois conteneurs de 40 pieds vers deux conteneurs domestiques ; le taux par 

conteneur domestique est de 1 200 $ chacun. 

(3) Tient pour acquis le transbordement de trois conteneurs de 40 pieds vers deux remorques domestiques ; le taux par 

remorque domestique est de 1 500 $ chacune. 

(4) Tient pour acquis le transbordement de trois conteneurs de 40 pieds vers deux conteneurs domestiques, et un taux de 

charrette sur place de 175 $. 

L’analyse tient aussi compte de l’épargne dans la conteneurisation des produits en vrac pour exportation 

au port intérieur. La tendance mondiale favorisant la conteneurisation des produits de base en vrac reflète 

l’établissement d’un équilibre entre les taux d’expédition en vrac et par conteneur, les temps plus courts 

pour la livraison multimodale, et un plus grand souci de la qualité du produit et de la sécurité de la 

cargaison. Le tableau SE-5 indique que le chargement à la source des conteneurs a un coût inférieur 

l’expédition de produits par wagon-trémie au port suivi du transbordement dans des conteneurs au port. 


January 2007 


Tableau SE-5 : Analyse des coûts de transport pour expéditeurs 

Source chargée aux 

points en Saskatchewan 

Chargé au port, origine 

en Saskatchewan 

Charrette d’origine 430 $ - 

Chemin de 

fer/wagontrémie 

- 3 550 $ 

Chemin de 

fer/conteneur 

1 100 $* 890 $** 

Charrette de 

destination 

- 230 $ 

Empotage - 545 $ 

Total par 

contenant 

1 530 $ 1 665 $ 

Différence - +9 % 

*Basé sur 90 MT par wagon-trémie, l’équivalent de quatre conteneurs de 20 pieds à 22,5 MT par conteneur. 

** Taux équivalent par contenant basé sur quatre chargements de conteneur par wagon-trémie. 

Source : « Container Measures Study: Issues and Discussion for Proposed Measures for the Grain 

Monitoring Program » Juin 2006, Gouvernement du Canada 

Conclusion 

L’étude a identifié une occasion viable de développer des installations de port intérieur intelligent en 

Saskatchewan, à condition que certaines conditions critiques soient présentées : 

• Une masse critique de cargaisons, à la fois des importations destinées vers l’intérieur pour la 

distribution, et des exportations destinées vers l’extérieur, doit être développée en Saskatchewan. 

Cela comprend le transbordement et la distribution de produits importés pour le marché nordaméricain, 

ainsi que le chargement des conteneurs vides avec des produits locaux et transbordés 

destinés à l’exportation. 

• Un volume suffisant de wagons de chemin de fer doit être présent au port intérieur intelligent pour 

justifier des trains spécialisés à destination et en provenance de la côte nord-ouest du Pacifique. 

• Le port intérieur doit offrir des services de logistiques attrayants, à valeur ajoutée pour motiver la 

communauté d’expédition et créer un avantage compétitif intelligent distinct en comparaison avec les 

modes conventionnels de distribution de cargaisons. 

• L’économie du port intérieur doit être attrayant pour les intérêts des opérateurs, des investisseurs et de 

l’expédition. 


January 2007 


Lorsqu’on aura répondu à ces critères, le port intérieur de la Saskatchewan deviendra une partie viable du 

réseau multimodal et engendrera des avantages compétitifs importants : 

• Développement d’un portail national viable et sécuritaire, compétitif et à la fine pointe de la technologie. 

• Amélioration et exécution du pont terrestre multimodal naissant au Canada (Super corridor intelligent 

canadien, ou CISCOR). 

• Intégration de services de technologies de l’information avant-gardiste pour les fournisseurs de 

transport en vue d’atteindre l’excellence en chaîne d’approvisionnement, et permettant un contrôle 

maximal des cargaisons de bout en bout. 

• Création de zones de libre-échange pour attirer les fabricants pour la réexportation. 

• Stimulation d’occasions d’importation et d’exportation asiatiques additionnelles pour le Canada et le 

nord-ouest des États-Unis. 

• Établissement d’échange par la consolidation et la conteneurisation de cargaisons d’importation et 

d’exportation à des centres d’entreposage et de logistique au port intérieur. 

• Établissement d’installations terminales incultes, « prêtes pour l’avenir », qui intègrent des 

équipements à la fine pointe de la technologie et les avances technologiques prêts à réagir aux défis 

de port et multimodaux d’aujourd’hui et de demain. 

Pour réaliser la promesse de l’initiative de développement d’un port intérieur en Saskatchewan servant de 

noyau au Super corridor intelligent du Canada, les étapes de faisabilité suivantes devraient être 

entreprises : 

• Commencer une réforme législative ; 

• Effectuer une analyse en détail du marché et une étude de développement ; 

• Vérifier les coûts de l’équipement et de la construction capitale ; 

• Quantifier les coûts d’opération et les retours prévus ; 


Executive Summary 

January 2007 


Global merchandise exports and imports exceeded the $10 trillion mark in 2005-06. A majority of the 

new containerships entering the world fleet in the next five years will be post-Panamax vessels 

ready to transport cargo from China, Southeast Asia and India to North American ports already 

strained by capacity limits. The Panama Canal is approaching operational capacity and the U.S. 

transportation network is struggling to meet the predicted 15 percent annual rise in Asian container traffic. 

In response to the rapid growth in North American trade, the shift in the global freight supply chain, and the 

increased congestion at U.S. ports and along the intermodal system, shippers are now routing a growing 

share of cargo via Canadian ports. 

Canadian Solution 

As the first North American port of call on the trans-Pacific route from Asia and the trans-Atlantic route from 

Europe, Canada has an opportunity to develop a sophisticated intermodal distribution network to serve the 

growing U.S. Midwest and Canadian consumption zones. Canada can serve as the North American 

gateway at the intersection of three powerful and shifting trade networks—the north-south North American 

Free Trade Agreement (NAFTA), the European-NAFTA, and the highly-utilized trans-Pacific route. The 

desired result is a fully-integrated, seamless cargo transport corridor moving cargo from the ports to rail and 

highways and to an inland port logistics centre that serves all North American markets. 

Since the Vancouver and Prince Rupert ports are located on the West Coast of Canada, and Halifax, Strait 

of Canso and Montreal ports are on the East Coast, there are distinct advantages in promoting the 

development of an integrated national intermodal strategy for Canada as a nation. This emerging 

transcontinental land bridge and a central smart inland port to serve Canadian and U.S. markets from 

Pacific to Atlantic oceans would benefit the ports involved, the rail and shipping lines, the large retailers and 

the nation. 

Figure ES-1. Canadian Intermodal Network 

Source: TranSystems, Railway Association of Canada 


January 2007 


The Prairie Region – The Saskatchewan Advantage 

Saskatchewan is the transportation crossroads of the northern half of the North American continent with 

linkages to the four points of the compass. Its optimal location and central access to the freight logistics 

network makes Saskatchewan an ideal site for a thriving inland cargo gateway complex away from 

congestion points. 

The province’s geographic proximity to North American population centres, within two days travel from 80 

million people in Canada and the U.S., is further supported by strong regional trade and competitive transit 

times and shipping rates. The province is connected by a principal highway and intermodal corridor that 

supports growth in domestic and international trade. Saskatchewan also offers access to a highly 

productive labour market and advanced intelligent transportation engineering and information technology 

(IT) companies. 

These features, together with broad availability of land and infrastructure at advantageous cost, and a 

strong investment and business climate, combine to confirm that Saskatchewan is the location of choice for 

an inland port along an integrated North American corridor. 

Highways - Saskatchewan is accessed by the Yellowhead Highway and Trans-Canada Highway #1 and is 

centrally linked to the CANAMEX transportation corridor and NAFTA Superhighway connecting Canada, 

the U.S. and Mexico. 

Rail - Canadian National (CN), Canadian Pacific Railroad (CPR) main lines run double-stack rail service 

through Saskatchewan, linking the province to Vancouver, Toronto, Montreal, Chicago and other key 

consumption zones in the U.S. Saskatchewan is the Canadian terminus of the CPR/Soo Line, which is a 

direct corridor to Chicago and the U.S. northeast. In addition, the OmniTRAX short line provides direct 

access to the Port of Churchill from Saskatchewan, and provides efficient access to all North American 

points through the CN railway system. 

Trade - Total world trade from Saskatchewan has risen by 102 percent over the last decade. In 2005, 

Saskatchewan experienced a 13.8 percent increase in international exports and an 8.2 percent increase in 

manufacturing shipments (Saskatchewan Bureau of Statistics). 

• Saskatchewan currently accounts for nearly one-third of the energy produced in Canada. 

• Saskatchewan is the largest producer of potash in the world, providing nearly one-half of the total 

global demand. 

• Saskatchewan supplies 30 percent of the world’s output of uranium and is the only jurisdiction that 

produces uranium in Canada. 

• Canada is the largest lentil exporter in the world, and Saskatchewan produces 95 percent of Canada’s 

total production. 

Labour force –The province’s workforce is one of the best educated in the country with approximately 60 

percent of employees having some post-secondary education. Wage rates are also more competitive than 

British Columbia and Alberta. 


January 2007 


Technology – In the past decade, Saskatchewan has partnered with industry experts and other 

enterprises to establish innovative technology transfer centres to assist in research and the 

commercialization of new technology. The province serves as the centre of operations and supports the 

following technological industries and initiatives: 

• Two of the most successful intelligent systems transportation engineering, IT and design companies in 

Canada - International Road Dynamics and Massload Technologies Corporation. 

• IT companies and research and logistics firms - Axon Development Corporation, Clevor Technologies, 

Integrated Designs, Numa Technologies, and Technology Management Corporation, LMS Logistics, 

Ghost Transportation Services, and Yanke Container Port Centre. 

• Innovation Place in Saskatoon - one of North America’s largest and most advanced research parks for 

pharmaceuticals, bio-resources, and the environment. 

• The Regina Research Park - one of Canada’s newest research parks specializing in petroleum, 

information technology and environmental sciences. 

• SR Net - an extremely high-powered research bandwidth and networking consortium, plugged into a 

powerful distributed grid computing network. 

Investment - In 2005, over $7.8 billion in new capital investment poured into Saskatchewan projects, up by 

4.6 percent from the level in 2004. More than 75 percent of that investment came from the private sector to 

expand, modernize and build new facilities in the province. 

Business taxes - In April 2006, the Government of Saskatchewan approved the largest business tax cuts 

in the province’s history, making Saskatchewan one of the most tax-competitive jurisdictions in Canada. 

Competitive advantage - In 2006, the international consulting firm KPMG released a report that compares 

the cost of doing business in 128 cities in nine countries based on input costs for labour, taxation, facilities 

(land, construction, leasing rates), transportation, utilities, depreciation, and financing (interest costs). 

Among the Canadian cities studied in the report, the four Saskatchewan cities (Saskatoon, Regina, Prince 

Albert and Moose Jaw) rated better than the Canadian index and ahead of Calgary, Winnipeg and 

Kamloops. Saskatoon was also ranked the lowest-cost jurisdiction among the 21 featured cities from the 

North American Midwest (KPMG 2005) 

Bringing It All Together 

The development and promotion of a Smart Inland Port Network in central Saskatchewan and associated 

Canadian Intelligent Super Corridor (CISCOR) - including a more efficient inland-based supply chain 

activity away from current congestion points - will ensure that Canada has the necessary infrastructure in 

place to improve competitiveness and take advantage of the growing opportunities in world trade. 

The CISCOR Smart Inland Port Network in Saskatchewan would serve as the central coordination hub, 

connecting the Canadian east-west corridor (CISCOR) with the major North American north-south corridor 

– the North America SuperCorridor (NASCO), the Canada Mexico Corridor (CANAMEX) and the River of 

Trade Corridor Coalition (ROTCC). The inland port would function as an intelligent “smart port”, provide 

physical inland port functions and connect with and provide intelligent support to container loading facilities 

throughout the North American network. 


January 2007 


As a “smart port”, value-added supply chain management services would ensure that shipments are 

executed efficiently, economically, on time, and according to each customer’s logistics strategy. The 

seamless and timely clearance of international shipments between Canada and the U.S. would be 

achieved through the integration of leading-edge information and security technology services for the 

exchange of transportation and trade data. 

It is recommended that the CISCOR Smart Inland Port Network offer and coordinate the following services 

and facilities: 

• free trade zones, 

• distribution warehouses, 

• customs clearance, 

• transload operations, 

• empty container management and 

• advanced logistics centre employing state-of-the-art trade information systems. 

Benefits 

This inland port complex will benefit the commercial rail carriers and shipping lines, the national ports and 

private port operators, other loading facilities across the CISCOR network, the cargo owners (both import 

and export) plus all levels of government within Canada. These benefits are contingent on creating a smart 

inland port hub that would fulfill the needs of all of the stakeholders and develop a large enough cargo base 

to sustain a critical mass of operation. Shipment volume is the key to the viability of an inland port, its 

attractiveness to the stakeholders and its potential benefits in cost, efficiency, accessibility, service and 

reliability. 

Rail carriers 

• Potential capture of at least 130,000 TEU per year of import cargo from Asia that are seeking 

alternative routes into the heartland of North America, which will increase over time. 

• Potential capture of at least 130,000 TEU per year of export cargo that is seeking routes primarily to 

the Asia Pacific markets, which will increase over time. 

• The ability to fill westbound containers and westbound intermodal cars with revenue cargo that would 

otherwise be returned empty, thereby increasing capacity due to better asset utilization and fewer nonproductive 

moves. 

• More frequent and timely service for short-haul customers, low-volume destinations and U.S. 

destinations west of the existing U.S. rail hubs, as well as new services to local, NAFTA and 

international customers. 

Shipping lines 

• Automated customs clearance to reduce cargo dwell and allow high-speed “blue lane” border 

crossings. 

• Consolidated value-added data services and a cadre of supply chain data management professionals 

into a single logistics information hub to serve the Canadian Intelligent Super Corridor. 

• Attract backhaul revenue cargo through the intelligent management of empty container deployment and 

positioning. 


January 2007 


Ports 

• Faster cargo velocity for containers, which will to be stored, sorted or transloaded in Saskatchewan. 

This will help increase the throughput of existing seaport facilities. 

• Recovery of vital seaport land areas to serve essential port functions and reduce the need for 

additional local infrastructure. 

• Competitive advantage over rival U.S. ports through effective landside-transportation management, 

further boosting cargo concentration. 

Shippers 

• Cost-effective source loading of export products as opposed to containerizing at the port. 

• Export products requiring “identity preservation” that is attained by packaging or containerizing in 

Saskatchewan without admixture of products originating elsewhere. 

• Enhanced logistics options that increase efficiency and productivity of existing rail infrastructure assets. 

Canadian Government and Province of Saskatchewan 

• Growth and development of local business opportunities brought on by the presence of a nearby cargo 

centre including commercial warehousing and distribution, equipment maintenance services, haulage 

services and ancillary logistics services. 

• Diversification of the economy into other industries in order to avoid the cyclic downturns that occur in 

most commodity driven industries. 

• Increased local tax revenues due to new payroll and business receipts. 


January 2007 


Market Assessment 

The viability of smart inland port facilities proposed for Saskatchewan is dependent, in part, on the volume 

of freight which it would attract. Demand for a coordinated inland port system in Saskatchewan would 

primarily originate from Canadian and U.S. intermodal markets. One difficulty in estimating potential traffic 

is that the amount of traffic depends on rates and service levels, and these are unknown for a new facility. 

In order to identify flows between the Saskatchewan region and other global partners, it was necessary to 

study freight flows to and from provinces that contain major ports (British Columbia, Quebec, etc.). Based 

on trade statistics, industry knowledge and other quantitative analyses, it was determined that the analysis 

should focus on the trans-Pacific and NAFTA market as these lanes present the greatest opportunity, from 

both a volume and future growth perspective. 

Table ES-1: Summary of Future Containerization of Saskatchewan Exports to Asia (2004-2005 Data) 

Tonnes TEU Share TEU 

Ag Commodity Exports 4,865,369 29% 69,373 

Ag Processed Exports 512,979 100% 29,020 

Potash Exports 3,147,870 5% 9,258 

Pulp Exports 108,639 50% 2,173 

Total Exports in Analysis 8,634,856 25% 109,824 

Table ES-2: Summary of Future Containerization of Saskatchewan Exports to NAFTA (2004-2005 Data) 





Pulp Exports 286,411 25% 2,864 


Table ES-3: Potential CISCOR Smart Inland Port Network Market 

TEU TEU - 30% TEU + 10% 

Asia Outbound 109,824 76,877 120,807 

Asia Inbound 1 109,824 76,877 120,807 

NAFTA Outbound 76,516 53,561 84,168 

NAFTA Inbound 1 76,516 53,561 84,168 

Total Throughput 372,681 260,877 409,949 

(1) Assumes shipping lines will seek to maintain a balanced flow with each export load offset by an import load. 

A reasonable floor for the potential throughput of the inland port is the assumption that the shipping lines 

would seek to have a balanced flow – that is, a container stopped at the inland port must secure an export 

load. In this case, the estimated annual inbound market size is around 130,000 to 205,000 TEUs based on 

estimates of currently available exports originating in Saskatchewan. Based on this approach the inland 

port would have a total throughput of 260,000 to 410,000 TEUs per year, comprising Asian imports and 

exports and North American imports and exports. 


January 2007 


A factor that may encourage shipping lines to stop inbound containers at the inland port would be the ability 

to rapidly return empty containers to Asia for high revenue import loads. A further benefit is the ability to 

transload export-oriented products from across Canada and the north-east U.S. with intelligent capabilities 

for customs clearance. Therefore, the total potential throughput could be over 500,000 TEUs assuming 

the cost, transit and service conditions are in place to make the smart inland port viable distribution, 

transloading facility and customs clearance for the shippers, shipping lines, and railroads. 

Based on the experience of Kansas City Smart Port, including a free trade zone near the inland port 

facilities may create a competitive new manufacturing, distribution and trading centre, which will enhance 

inbound component products and outbound (re-exported) manufactured goods. 

Cost Analysis 

An important aspect of determining the feasibility of a coordinated inland port system in Saskatchewan is 

evaluating whether the port would be competitive with existing transportation options. An intermodal 

connection to the Midwest, specifically Chicago, would represent one of the best opportunities for a 

proposed CISCOR inland port. This cost analysis examines the current trucking and rail costs between the 

Port of Vancouver and Chicago. These costs are compared with the estimated costs for transporting goods 

through the inland port in Saskatchewan. 

Table ES-4 reveals that an additional $400 associated with transload costs is incurred per 40-foot container 

by using an inland port. However, these simplified estimates do not account for the potential to recover 

costs elsewhere in the supply chain, such as reduced non-revenue moves by loading empty containers with 

local cargo, better management of inventory or competitive pricing for volume container shipments moving 

to and from the inland port. 

Table ES-4. Estimated Cost Comparison of an International Container Transloaded at Smart Port vs. Direct Shipment 

Canadian Dollars Vancouver - 

Saskatchewan 

Vancouver - 

Saskatchewan 

Vancouver – 

Chicago 

- Chicago 

- Chicago 

Transport Mode Rail Rail & Truck Rail 

Cost per 40-ft Container 1 

Intermodal Rail $1,400 $1,400 $2,200 

Lift / Dray Cost $50 $50 

Inland Transload $350 $350 

Lift / Dray Cost $50 - 

Intermodal Rail 2 $800 - 

Truck 3 - $1,000 

Destination Local Dray 4 $120 - $175 

Total Cost per 40-ft Container $2,770 $2,800 $2,375 

(5) Rates exclude fuel surcharges 

(6) Assumes three 40-ft containers transloaded to two domestic containers and rate per domestic container is $1,200. 

(7) Assumes three 40-ft containers transloaded to two domestic trailers and rate per domestic trailer is $1,500. 

(8) Assumes three 40-ft containers transloaded to two domestic containers and local dray rate is $175. 


January 2007 


The analysis also considered the cost savings in containerizing export bulk products at the inland port. The 

global trend towards containerization of bulk commodities reflects the balancing of bulk and container 

shipping rates, shorter intermodal delivery times, and increased concerns about product quality and 

shipment safety. Table ES-5 indicates that source loading of containers costs less than shipping product by 

rail hopper car to the port and then loading into containers at the port. 

Table ES-5: Shipper Transport Cost Analysis 

Source Loaded at Points 

in Saskatchewan 

Port Loaded, Origin 

Saskatchewan 

Origin Dray $430 - 

Rail / Hopper Car - $3,550 

Rail / Container $1,100* $890** 

Destination Dray - $230 

Stuffing - $545 

Total per Container $1,530 $1,665 

Difference - +9% 

*Based on 90 MT per hopper car, the equivalent of four 20-foot containers at 22.5 MT per container. 

** Equivalent rate per container based on four container loads per hopper car. 

Source: “Container Measures Study: Issues and Discussion for Proposed Measures for the Grain 

Monitoring Program” June 2006, Government of Canada 


January 2007 


Conclusion 

The study identified a viable opportunity to develop smart inland port facilities in Saskatchewan given that 

certain critical conditions are met: 

• A critical mass of cargo, both inbound imports for distribution and outbound exports, must be 

developed in Saskatchewan. This includes transload and distribution of imported products for the 

North American market, as well as loading empty containers with local and transloaded products for 

export. 

• Sufficient rail car volume must take place at the smart inland port to justify dedicated unit trains to and 

from the Pacific Northwest. 

• The inland port must offer compelling, value-added logistics services to engage the shipping 

community and create a distinct intelligent competitive advantage over “business as usual” cargo 

distribution modes. 

• The economics of the inland port must be attractive to operators, investors and shipping interests. 

When these conditions are met, the inland port in Saskatchewan will be a viable part of the Canadian 

intermodal network and will result in significant competitive advantages and benefits: 

• Development of a state-of-the art, competitive, secure and sustainable national gateway. 

• Enhancement and fulfillment of Canada’s emerging national intermodal land bridge (Canadian 

Intelligent Super Corridor). 

• Integration of leading-edge information technology services for transport providers to achieve supply 

chain excellence, allowing maximum control of end to-end shipments. 

• Creation of free-trade zones to attract manufacturing for re-export. 

• Stimulation of additional Asian import and export opportunities for Canada and Northwest U.S. 

• Establishment of trade through consolidation and containerization of import and export cargo at 

warehousing and logistics centres at the inland port. 

• Establishment of unique “greenfield” terminal facilities made “future ready”, integrating state-of-the-art 

equipment and technological advancement tailored to meet port and intermodal challenges of today 

and tomorrow. 

To realize the promise of the initiative to develop an inland port in Saskatchewan that serves as the nucleus 

to a Canadian Intelligent Super Corridor, the following feasibility steps should be undertaken: 

• initiate legislative reform, 

• perform detailed market assessment and development study, 

• verify the capital construction and equipment costs, 

• quantify the operational costs and projected returns, and 

• build a comprehensive financial model. 


Introduction 

W value in 2005-06 and 

exceeded the USD $10 trillion mark. 

World and North American 

merchandise exports were nearly twice 

the gross domestic product (GDP) in 

2005 as shown in Figure I-1. 

January 2007 


orld merchandise trade (exports and imports) grew by 6.5 percent during 2005, according to the 

World Trade Organization. Global merchandise exports, as well as imports, rose by 13 percent in 

Figure I-1. Growth in Volume of World and North American 

Merchandise Trade and GDP, 1995-2005 (annual percentage change) 

12 

10 

8 

6 

Maritime container traffic has grown to 

represent over 85 percent of 

4 

merchandise cargo shipped worldwide. 

2 

World container traffic is growing at a 

compound rate of over 6.7 percent per 0 

year and is expected to double in the 

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 

-2 

next two decades. The majority of this 

increase will be in the trans-Pacific 

-4 

trade lanes where up to 15 percent 

-6 North America Merchandise Exports World Merchandise Exports 

compound annual growth is expected 

World GDP 

North America GDP 

through the year 2015. The Panama 

Source: World Trade Organization 

Canal is presently operating at 85 

percent capacity and even with a 2015 expansion will not absorb the predicted rise in Asian traffic. 

Therefore, shippers and beneficial cargo owners continue to seek stable and reliable supply chain routes. 

North America, Western Europe and Pacific Asia are the dominant global trading regions handling the 

majority of worldwide manufacturing and distribution trade. Cargo volumes continue to increase rapidly at 

ports in North America, adding more than four million TEUs 1 every year to the current annual volume of 48 

million TEUs. This increasing growth in world trade is changing the distribution landscape and putting 

pressure on existing North American ports. In the U.S., moving this volume of containers has strained the 

capacity at West Coast ports such as Los Angeles and Long Beach and congested the intermodal rail and 

road systems that connect these ports to inland destinations. 

As the first North American port of call on the trans-Pacific route from Asia, Canada has an opportunity to 

develop a sophisticated intermodal distribution network to serve the growing North American market, 

particularly the U.S. Midwest and Canadian consumption zones. The creation of an Intelligent Super 

Corridor linked by a state-of-the-art inland logistics facility will answer the growing need for additional North 

American gateway capacity and strengthen Canada’s position in the competitive world of international 

commerce. An inland port in Saskatchewan offers a favourable site wherein a program of strategic 

investment can result in a thriving inland cargo gateway complex at the heart of the Canadian 

transportation network. 

1 

A forty-foot container equals two twenty-foot equivalent units (TEUs). 

Copyright 2007: Saskatchewan Agrivision Corporation Inc. 

Page IN-1

January 2007 


Project Goals and Objectives 

The overall purpose of the CISCOR Smart Inland Port Network business case paper is to articulate 

Saskatchewan’s competitive position as a centre for international trade processing and landside logistics 

operations. The paper provides a summary analysis of market, economic, transportation, and other 

business dynamics of Saskatchewan’s future development of an inland distribution and logistics service 

port. The stated goals of this report are: 

• Explore evolving global trade trends that necessitate a strategic North American inland port along a 

national transportation corridor. 

• Highlight the general benefits of locating an inland port at the convergence of the Pacific and Atlantic 

gateways in central Canada. 

• Define the strategic advantages that Saskatchewan will offer the region, North America and the global 

trade corridors through development of an inland port. 

• Demonstrate how the features of the inland port initiative will complement the parallel initiatives of 

Canadian carriers, shippers, coastal ports and government initiatives. 

• Examine functions performed by successful inland port facilities and identify the concept elements that 

will allow Saskatchewan to build on its strengths and allow the region to carry forward a feasible option. 

• Estimate existing and forecasted freight flows, and institutional and organizational advantages of 

Saskatchewan where such a facility would be located. 

• Recommend future strategies to advance the inland port concept that will ultimately stimulate growth in 

various provincial industries and benefit the national economy. 

Study Process 

The study team collected and reviewed background materials regarding Canadian industries, freight and 

transport systems and interviewed key stakeholders including various shippers, CN and CPR railways and 

the ports of Vancouver, Montreal and Prince Rupert. Information on relevant case studies was also 

collected to compare the Saskatchewan project with other initiatives. The market opportunities and 

economic aspects were subsequently analysed and interpreted. 

A number of study constraints should be noted: 

• The study was exploratory in nature, designed to identify issues and opportunities for a Canadian 

inland freight transport centre. 

• Macro-level analyses and provisional conclusions were derived from a limited set of indicators in part 

due to corporate restrictions in disclosing commercially-sensitive information. 

• The indicators, together with other transport operating statistics and exclusive consultations with 

industry stakeholders, may be used in further analysis to assess the micro-economic benefits of the 

project. 


Page IN-2

January 2007 


Global Industry Trends and Conditions 

Growth in Containerized Trade and Asian Market 

Containerized trade is the fastest growing marine sector today and, coupled with the expansion of global 

manufacturing into Asia, has led to explosive trade growth between North America and the Far East. In the 

past five years, container trade in 

North America has increased at a 

Figure 1-1. Global Growth in Containerized Trade 

compound annual growth rate of 6.85 

percent per year reaching 48 million 

TEU in 2005. The largest volume of 

700 

600 

that trade is along the trans-Pacific 

500 

eastbound route, which grew by 7.5 

400 

percent in 2003, 17 percent in 2004, 

and 14 percent in 2005. 

300 

Approximately 24 million TEUs of 

200 

North American trade moved through 

West Coast ports with Asian traffic 

100 

representing approximately 18 million 

TEUs. North American container trade 

2000 2002 2004 2006 2008 2010 2012 2014 

is predicted to soar by 50 percent to 

North America World 

72 million TEUs by 2015. As imports 

Source: TranSystems, Containerization International statistics 

to North America continue to increase, 

freight volumes are expected to double and even triple at the busiest ports by 2020. 

Million of TEUs 

Currently, more than 60 percent of all North American container trade is with Asia, predominantly from 

China and Hong Kong. Container traffic to and from Asia is expected to grow at a higher rate than the 

world average in the next decade. China is expected to see the majority of the expansion, as it has in the 

last five years, and solid growth is expected in South Asia. Overall, Asia's share of containerized exports is 

Figure 1-2. 2015 Global Distribution of Container Volumes 

Central/South America 

6% 

North America 

13% 

Europe 

17% 

Australia/New 

Zealand/Pacific 

2% 

Source: UNESCAP 2005 

Africa 

3% 

North Asia 

8% 

Middle East 

2% 

South/Southeast Asia 

16% 

East Asia 

33% 

expected to rise to 64 percent in 2015; the 

share of containerized imports is expected to 

rise to 53 percent (UNESCAP, 2005). 

The Port of Hong Kong, currently the world’s 

largest port, handled 23.2 million containers in 

2005. By 2010 Shanghai container throughput 

is expected to surpass Hong Kong. However, 

by 2020 Shanghai is expected to be overtaken 

by Shenzhen to become the world’s largest 

container port. Shanghai and Shenzhen are 

expected to be moving 56.2 million and 57.9 

million TEUs respectively by 2020 (UNESCAP, 

2006; Fairplay, 2005). In 2005, Shanghai 

moved 18 million TEUs and Shenzhen 16 

million TEUs. 

Copyright 2007: Saskatchewan Agrivision Corporation Inc. Page 1-1

January 2007 


Increasing Vessel Size and Industry Consolidation 

In order to meet the estimated increase in shipping volumes, leading carriers have invested in mega-sized 

container ships. Larger containerships have been found to offer greater economies of scale, which will 

result in lower costs to shippers and higher profit margins for carriers. Scale increases in vessel size result 

Figure 1-3. Container Ship Orderbook by TEU 

(% share) as of July 2006 

6000-7999 TEU 

15% 

4000-5999 TEU 

25% 

>8000 TEU 

31% 

2000-3999 TEU 

16% 

Source: Institute of Shipping Economics and Logistics 2006 

January 2007 


Panama Canal Expansion 

The Panama Canal is the gateway for over 140 Figure1-4. Maximum Sustainable Capacity of the Canal 

maritime routes that operate with vessels of 

various types and sizes. The larger the vessels, 

the smaller the number of transits the canal is 

able to handle. The canal has a finite capacity 

determined by the operational times and cycles 

of the existing locks. Consequently, with its 

present capacity, it will become harder for the 

canal to handle growing traffic volumes in terms 

of size as well as vessel numbers. For instance 

of the 73 percent of vessels that requested a 

reservation slot to transit the canal in 2005, only 

55 percent were able to get a reservation. With 

the completion of a few improvements, the 

Panama Canal will have a maximum sustainable Source: Panama Canal Authority 

capacity of approximately 13,800 and 14,000 

ocean-going vessel transits per year. This capacity will be reached between fiscal year 2009 and 2012, 

depending on the behaviour of the demand (Panama Canal Authority, 2006). 

The Panama Canal Authority’s Proposal for the Expansion of the Panama Canal report released in April 

2006 estimates that the final design for the Third Set of Locks Project will be completed in FY 2007 and 

operations will begin in FY 2015. The canal will reach its maximum sustainable capacity between the years 

2009 and 2012. Once it reaches this capacity, it will not be able to continue to handle demand growth until 

a third set of locks is built (Panama Canal Authority, 2006). This three- to six-year period where the canal 

will not be able to meet demand growth will result in a reduction in the competitiveness of the Panama 

maritime route. 

If the canal does not have the capacity to accommodate the Northeast Asia–U.S. route, the unexpanded 

Canal’s market share would go down from 38 percent in 2005 to 23 percent in 2025. Consequently, its 

competitors’ share would increase–the intermodal system would reach 65 percent and the Suez Canal 12 

percent (Panama Canal Authority 2006). It is unlikely that the canal would regain its lost market share once 

new competitor routes were established and transportation and trade patterns changed. This is because 

canal users will have to make decisions and investments to increase their use of existing and potential 

alternative routes in order to guarantee the continuous and uninterrupted flow of the trade that they serve. 

North American Port and Intermodal Congestion 

While shippers are taking advantage of the economies of scale by the combination of increasing ship sizes 

calling on fewer ports and with increasingly restricted access through the Panama Canal, dramatic 

demands are being placed on major container ports along the West Coast of North American. For example, 

when a super post-Panamax container ship holding 9,000 TEUs calls at the Port of Los Angeles, it requires 

five cranes working simultaneously 16 hours per day for at least three days to unload the vessel. Moving 

this vast quantity of containers puts an enormous strain on port resources and requires a large amount 

terminal storage space to support the transfer of containers. 


January 2007 


A recent U.S. Chamber of Commerce study of North American port and intermodal systems estimates that 

14 of the 16 major deep-water North American ports considered will experience at least a 50 percent 

increase in container traffic, while 12 of the 16 ports will need to add extensive new terminal and intermodal 

capacity by 2010 to meet the estimated growth. Adding to the capacity challenge, land constraints fuelled 

by population growth in coastal states, provinces and around ports will limit North American ports’ ability to 

resolve the congestion problems. The challenge of transferring cargo seamlessly from and to intermodal 

rail and truck landside access facilities requires significant logistic distribution capabilities. 

Case Study: Los Angeles/Long Beach Terminal Capacity 

The twin ports of Los Angeles and Long Beach (LA/LB) accounted for 30 percent of the continent’s total 

international container volumes in 2005. The ports are experiencing rapid growth with trade volume 

projected to triple over the next 20 to 30 years. This growth has created stress throughout the entire supply 

chain, including shipping lines, terminal operators, transportation infrastructure (trucks, railroads, and 

roads/freeways), and shipper distribution systems. In 2004, gridlock at the LA/LB ports forced more than 

100 ships with $4 billion in cargo to be diverted to other ports. 

Figure 1-5. Ports of LA/LB Containerized Trade Growth and Current Capacity 

Million TEUs 

40.0 

35.0 

30.0 

25.0 

Current Capacity 

20.0 

15.0 

10.0 

5.0 

0.0 

1980 1985 1990 1995 2000 2001 2002 2003 2004 2005 2010 2015 2020 

Long Beach 

Los Angeles 

Source: TranSystems, American Association of Port Authorities statistics 

In response to this growth, LA/LB 

has been involved in substantial 

“planning efforts, starting with the 

2020 plan, first devised in the late 

1980s and updated several times 

since. The plan involves two types 

of developments - consolidation 

and minor expansion of existing 

terminals to create a few ‘megaterminals’, 

and large-scale land 

reclamation and creation of large 

new terminals. The most notable 

future expansion is in Long Beach, 

including the 200-acre Pier S and 

the 400-acre plus Pier W. Los 

Angeles’ future expansion hinges 

on conversion of a coal terminal 

and completing Pier 400 and Pier 

300. Theoretically, there is still a 

vast area within the breakwater, in 

the Outer Harbour. However, due to environmental resistance and prohibitive cost, reclamation there 

should be mostly considered as unattainable. One especially difficult obstacle for land reclamation is the 

requirement to provide mitigation of a same-area wetland. Altogether, a rough, but realistic, long-term 

expectation would be for an addition of about 1,400 to 1,600 acres, or about 60 to 70 percent of existing 

acreage. This means that even assuming implementation of operational and technological improvements, 

these ports will have great difficulties in coping with future demand, as the combination of the two factors 

falls short of future demand” (Ashar 2004, 59-60). 


January 2007 


“An even more critical constraint for LA/LB is hinterland connectivity, especially the congestion created in 

the port area by trucking the non-local or intermodal cargo between marine terminals, distribution centres 

and intermodal rail yards. The rail movement of containers to/from the LA/LB port area is routed through 

the Alameda Corridor. The corridor is a dedicated 20-mile, grade-separated triple-tracked route, developed 

through a joint venture between the railroads, ports, local and federal government at cost of $2.4 billion. 

Just 35 trains per day pass through the corridor, far short of its capacity of 100 a day. The trains carry 

about 37 percent of the ports' cargo, about the same percentage as before the corridor opened and well 

short of the 50 percent that planners had envisioned. It now appears that the 20-mile railway corridor will 

not be able to meet its projection of carrying half the cargo generated by the ports without an investment of 

hundreds of millions more dollars and major changes in the way the shipping industry operates” (Ashar, 

2004, 59-60). 

Driving Forces Behind Inland Port Development 

As a majority of the new ships entering the world fleet in the next five years will be post-Panamax vessels 

ready to transport cargo from China, Southeast Asia and India to North America, leading carriers are 

poised to phase larger container ships with service at fewer hub ports to capture economies of scale. This 

shift in global trade trends will strain North American port capacity limits over the next 10 years while ports 

lacking space for infrastructure improvements will be confined. The growth will also present supply chain 

vulnerabilities due to road and rail congestion, and security considerations at North American ports. 

In response to the increasing container traffic and capacity constraints, North American seaports are 

turning to inland ports as means to process cargo while avoiding coastal congestion, making use of Free 

Trade Zones and adding value to the freight supply chain. “The concentration of container flows…generate 

a disproportionate increase in distribution requirements both from the perspective of individual carriers as 

well as the ports as a whole. The immense pressure on the collection and distribution networks…enhances 

the development of inland hubs” (Notteboom, 2002). In an effort to determine the rationale behind the 

movement toward increased development of inland terminals, Notteboom analyzed cost models of eight 

network configurations and concluded that the bundling of cargo in a hub port generates some economies 

of scale in inland transportation. The feasibility of such an inland network increases if the average distances 

between neighboring ports decline. This study substantiates the evolution of “scattered, poorly connected 

ports along the coastline into a main network consisting of corridors between gateway ports and major 

hinterland centres” (Notteboom and Rodrigue, 2005). 


January 2007 


Canada’s Inland Solution 

The rising Asian container trade, emerging shifts in vessel routes, and increasing consolidation favour a 

Canadian solution to the systemic port and intermodal congestion problems in the U.S. Canada serves as 

an ideal terminus for large container ships by providing deep water ports and excellent intermodal 

connections to inland destinations. 

Canadian Trade Partners and Statistics 

Canada’s solid trade performance in 2005, as well as in the past decade, is a result of the growth in the 

Canadian economy, trade liberalization through the NAFTA and the reduction of global trade barriers 

through the World Trade Organization (WTO), the emerging economies of China and India, and increased 

demand for natural resources including energy products. Canada exported a record $516 billion in goods 

and services in 2005, equivalent to 37.7 percent of Canadian gross domestic product. Imports also rose by 

5.8 percent to $463.1 billion. Canada’s largest trading partners are the United States, the European Union 

(EU), Japan, China, Germany and Mexico. Exports of goods and services to and imports of goods and 

services from all principal trading areas increased in 2005. 

Table 2-1: Canadian Trading Partners and Percent of Trade ($ billions) 

Exports by Country 2005 % Share % Change 

2005/2004 

U.S. 365.7 83.9 5.1 

EU-25 24.7 5.7* 8.2 

Japan 9.1 2.1 6.6 

UK 8.2 1.9 6.7 

China 7.1 1.6 6.1 

Mexico 3.3 0.8 8.7 

Germany 3.2 0.7 21.0 

Imports by Country 2005 % Share % Change 

2005/2004 

U.S. 215.1 56.5 2.9 

EU-25 45.6 12.0* 8.5 

China 29.5 7.8 22.4 

Japan 14.8 3.9 9.4 

Mexico 14.6 3.8 8.6 

UK 10.4 2.7 7.7 

Germany 10.3 2.7 9.0 

*Includes Germany, France, Belgium and Netherlands 

Source: 2006 Annual Report on Canada’s State of Trade adapted from Statistics Canada 

Canada’s top five exported goods in 2005 were mineral fuel and oil ($88 billion), motor vehicles and parts 

($78.2 billion), machinery ($33.7 billion), electrical machinery and equipment ($20.5 billion), and wood 

($20.3 billion). The top five imported goods were motor vehicles and parts ($65.7 billion), machinery ($62.2 

billion), electrical machinery and equipment ($37.6 billion), mineral fuel and oil ($35.6 billion), and plastics 

($13.7 billion). 


January 2007 


In trade between the United States and Canada in 2005, the primary mode of transport was by truck, 

representing approximately 60 percent of total exports and imports moved, while rail represented 

approximately 17 percent, marine at three percent, air at 5.6 percent and other modes, such as pipeline, at 

approximately 14 percent. 

Table 2-2: Canada and U.S. Export and Import Trade by Value and Percentage by Transport Mode 

Year Total exports 

and imports 

($ million) 

Transport 

(%) by road 

Transport 

(%) by rail 

Transport (%) 

by marine 

Transport 

(%) by air 

Transport (%) 

by other 

mode** 

2000 588,947 65 16 2.2 8.1 8.7 

2001 570,040 63.7 16.6 2.3 7.5 9.8 

2002 563,861 65.9 17.2 2.6 6.4 7.8 

2003 530,439 63.2 17.3 2.9 6.2 10.5 

2004 556,541 62.2 17.7 2.9 5.7 11.5 

2005* 579,806 60.3 16.9 3.4 5.6 13.9 

* Preliminary data for 2005 **Other largely pipeline 

Source: Transport Canada, adapted from Statistics Canada, International Trade database 

Canada has been successful in generating international trade volumes and growth over recent years. 

Future areas to explore include the identification and development of new export opportunities in China, 

India and Mexico. 

Canadian Ports and Containerization Growth 

From 1995 to 2005, container traffic through Canada increased by a compound annual growth rate of nine 

percent from 1.74 million to 4.2 million TEUs. Inbound container traffic volume has been growing at 12.5 

percent a year between 2000 and 2005 on a tonnage basis, while outbound container traffic has increased 

almost five percent per year since 2000 (WESTAC 2006). 

Canada’s major container ports 

– Vancouver, Halifax and 

Montreal – have been the 

principal beneficiaries of this 

increased growth in 

containerization. These former 

bulk coal and grain ports have 

become some of the most 

productive terminals in North 

America. Total container 

throughput for the three ports in 

2005 was over 3.6 million TEUs, 

compared to 2.7 million in 2000 

(AAPA Statistics), and forecasts 

indicate Canadian ports will 

need to handle nearly seven 

million TEUs by 2015 (Ircha, 2004). 

Millions of TEUs 

Figure 2-1. Growth of Containerized Traffic in Canadian Ports 

4.5 

4.0 

3.5 

3.0 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

1995 1997 1999 2001 2003 2005 

Source: TranSystems, American Association of Port Authorities statistics 

Vancouver (BC) 

Fraser 

Montreal 

Halifax 

St. John's 

Toronto 

Saint John 


January 2007 


Pacific Ports 

Since the majority of the future growth in containerization is expected to be from China and other Asian 

regions, much of the cargo will be transported along the trans-Pacific route and focused on West Coast 

ports. This containership route is not limited by canal infrastructure and thus offers virtually no physical 

limitation on the size of container vessels. At present, the principal West Coast container ports in Canada 

are the Vancouver Port Authority and Fraser River Port Authority. Already, inland China and Hong Kong 

account for 64 percent of the inbound container traffic tonnage handled at Vancouver facilities. Imports 

from this area have grown 21.9 percent annually since 1998 and represent about 79 percent of the tonnage 

growth through the port during this period. Containerized exports to inland China and Hong Kong are also 

growing at 18.8 percent a year, and represent 38 percent of Vancouver's total exports (WESTAC, 2006). 

Vancouver Port Authority is Canada’s largest Pacific port and a major international trade port for Canadian 

trade with Asia. The port also handles some trade between Asia and the U.S. Midwest. Over the past 10 

years, the Port of Vancouver has become the fastest growing container port in North America, registering 

an average annual growth rate of 13.5 percent. In 2005, the port handled 1.77 million TEUs, up 6.2 percent 

from 2004. 

The port includes three on-dock container terminals - Centerm and Vanterm, located in the Port of 

Vancouver’s Burrard Inlet Inner Harbour, and Deltaport, located on Roberts Bank around 20 miles from the 

Inner Harbour. These terminals can accommodate the largest post-Panamax container ships. The port is 

linked to CN, CPR and Burlington Northern Santa Fe (BNSF) rail networks. 

Although there is a significant local market in Vancouver for containerized goods, approximately 70 percent 

of Vancouver's import containers are destined for central and eastern Canada. Cargo shipments are 

relatively balanced, with the Vancouver Port Authority reporting inbound traffic of 884,324 TEUs and 

outbound traffic of 883,056 TEUs in 2005. Outbound containerized freight consists primarily of forest 

products, specialty grains and waste products. Approximately 25 percent of outbound containers are empty 

while only three percent of inbound containers are empty (VPA, 2005). 

Table 2-3: Vancouver Container Terminal Characteristics 

Location 

Berth Terminal 

Terminal 

Operator Length Area 

Name 

(Metres) (Hectares) 

Vancouver Centerm 

DP 

World 

650 29 

Vancouver Vanterm 

TSI 

(OOCL) 

619 31 

Roberts 

Bank 

Deltaport 

TSI 

(OOCL) 

Depth 

(Metres) 

12.2– 

15.5 

15.2– 

15.5 

# of 

Cranes 

2005 

Throughput 

(TEU)* 

Throughput 

per Hectare 

5 350,000 12,870 

7 400,000 13,818 

670 65 15.85 7 910,000 14,903 

Total 1,939 125 15.85 19 1,660,000 14,160 

*Individual terminal throughput estimated based on 2004 volumes and total 2005 throughput of the port. 

Source: TranSystems 


January 2007 


This growth has led to increasing congestion that is threatening the long-term viability of Vancouver as an 

international gateway for transport of goods to and from other countries. In order to meet its business and 

operational requirements, the port will need to react more quickly and efficiently to market needs and in 

handling forecasted traffic. 

The total container traffic forecast for West Coast ports in 2015 is 5.41 million TEUs, almost triple the 2005 

volume (WESTAC, 2006). However, according to the British Columbia’s Pacific Strategy Action Plan for 

2006 to 2020, British Columbia ports are aiming to become the “preferred gateway for Asia-Pacific trade” 

and increase their share of the market to 17 percent by 2020. This means that the ports would need to 

capture nine million TEUs of the projected 51.6 million TEUs destined to the American Pacific Coast by 

2020. Canadian West Coast ports are planning and developing facilities to try to meet the growing demand 

and targeted goal. 

The Port of Vancouver is upgrading and expanding its capacity through five separate container projects, 

including conversion of a forests products terminal to a container terminal, berth expansion, upgrading lift 

equipment and developing a new terminal (Ircha, 2006). The fourth terminal and other capacity expansion 

projects are expected to raise the port’s container capacity by another 3.1 million TEUs, to a total of 5.5 

million TEUs once completed. However, the Port of Vancouver is geographically constrained, so a majority 

of capacity growth in the future will depend on efficiency enhancements (B.C. Gateway Advisory 

Committee). 

The Port of Vancouver has indicated that although capacity is a major challenge, freight mobility is equally 

challenging. “Freight mobility refers to improving the movement of goods in and out of the port by 

increasing the efficiency of railways, truckers, port services and third party service providers using coproduction 

agreements and new practices and technologies such as reservation systems and mobile 

container screening equipment” 2 (DDC Consulting Services, Inc., 2006). 

The use of off-dock facilities for storage of empty containers, as well as container cleaning and repair in 

Vancouver has also increased as a response to short-term congestion problems. Off-dock container 

facilities report increases in daily gate transactions ranging from 20 to 400 percent over the last 18 months 

(Davies, 2006). 

Fraser River Port Authority, located on the main arm of the Fraser River south of Vancouver, handled 

372,844 TEUs in 2005, up 17 percent from 2004. The port’s single container terminal has experienced 

increased container traffic by a compound annual growth rate of 41 percent from 2000 to 2005. The 

container terminal, Fraser Surrey Docks, can receive deep-sea vessels up to Panamax size. Rail services 

are provided at the terminal by BNSF, CN, CPR and Southern Railway of British Columbia (Fraser River 

Port Authority). 

2 

Address to 12th Pan Pacific Ports Conference, Jim Cox, VP Infrastructure Development, Vancouver Port 

Authority, May 11, 2004. 


January 2007 


After a recent completion of a terminal expansion in 2005, the annual capacity at Fraser Surrey Docks is 

415,000 TEUs per year, up from 250,000 TEUs. The port is considering a second phase of expansion, 

including upgrading equipment and adding more yard area for storage to further increase its capacity, if 

growth in container volumes is sustained. The port is also considering building a container terminal at its 

Fraser Richmond property on 120 acres (WorldCargo News, 2006). 

The Port of Prince Rupert is currently a multi-use port that is converting its Fairview terminal into a new 

container facility to be open in 2007. The new $120 million container port facility will initially be capable of 

handling 500,000 containers per year. A second phase of the expansion initiative would accommodate an 

additional annual capacity of 1.5 million TEUs to be completed in 2010. The port has been designed to 

efficiently handle the largest concentration of intermodal rail business. As such, the new container terminal 

will be North America's purest marine-to-rail intermodal transfer facility. CN will provide full double-stack 

clearance along the route and invest in additional rolling stock. The port expansion will be complemented 

by infrastructure upgrades of $150 million on highway improvements in northwest British Columbia and $15 

million in rail upgrades (Port of Prince Rupert). 

Table 2-4: Estimated Projected West Coast Canadian Port Capacity Levels 

Port 2006 2010 2015 2020 

Vancouver 2,280,000 2,680,000 3,480,000 5,480,000 

Centerm 780,000 780,000 780,000 780,000 

Vanterm 600,000 600,000 600,000 600,000 

Deltaport 900,000 1,300,000 1,300,000 1,300,000 

Lynnterm 0 0 800,000 800,000 

Roberts Bank 2 0 0 0 2,000,000 

Fraser River 415,000 415,000 415,000 415,000 

Prince Rupert 0 500,000 1,500,000 1,500,000 

Total 2,695,000 3,595,000 5,895,000 7,895,000 


Together, the ports of Vancouver, Fraser River and Prince Rupert will have the capacity to handle 7.9 

million containers by 2020. However, this does not meet the 2020 throughput goal of nine million TEUs per 

year (WorldCargo News, 2006). Additional container terminal capacity will be required as well as 

improvements to Canada’s road network. An additional 1,800 trains per year will be destined for Central 

and Eastern Canada, about five more trains per day. Tripling the current inbound container volumes will 

have significant implications for the transportation system - the rail and road networks, terminals, and other 

logistics service providers. 

Atlantic ports 

The growth of container traffic was not as significant at Canadian East Coast ports as West Coast ports. 

The two major container ports, Port of Halifax and Port of Montreal, grew 4.7 percent and 2.3 percent 

respectively in 2005 (AAPA, 2006). However, capacity constraints at U.S. West Coast ports have caused 

Asian shipping lines to redirect some of their trade through the Suez and Mediterranean to the East Coast. 

This shift provides opportunities for Canadian East Coast ports to capture some of the forecast growth in 

container trade. Canada’s Atlantic ports are natural gateways to capture growth of Asian economies like 

India and China. 


January 2007 


The Port of Halifax has two deep-water container terminals - Fairview Cove and South End - which handled 

550,000 TEUs in 2005. Forty-seven percent of containerized cargo leaving the port of Halifax is destined to 

Europe and 27 percent is bound for Asia. The port recently completed a dredging project that provided 

16.8-metre deep container berths, thereby making it the only port that can handle the world’s largest 

container vessels on the eastern seaboard of North America. The port received its first post-Panamax 

vessel carrying Asian exports via the Suez Canal in late 2005 (Port of Halifax). CN is the only rail carrier 

providing service to the port. Seventy percent of containers through Halifax travel by rail, yet the track 

capacity is only utilized at 30 percent (WorldCargo News, 2006). 

The Port of Halifax is operating at approximately 50 percent of its current capacity of 1.2 million TEUs per 

year. Improvements to the wharf could increase the capacity by 100,000 to 200,000 TEUs per year, 

however, there is not a pressing need for expansion. The port is planning a long-term project to develop an 

inland port that would increase the port’s capacity by 250,000 TEUs (WorldCargo News, 2006). 

Containerized cargo accounts for nearly half the 

Port of Montreal’s total traffic. Montreal serves a 

niche market, as it is the international port closest 

to North America’s industrial heartland, offering 

shortest over-land route to the main U.S. Midwest 

markets. The four container terminals at the Port of 

Montreal handled 1.25 million TEUs in 2005. 

Seven percent of total containers are exported 

empty while three percent of containers are 

imported empty. The port’s container berths have a 

depth of 13 metres. As a result, the largest vessel 

that Port of Montreal can currently accommodate is 

roughly 4,000 TEUs. Approximately 60 percent of 

the containerized traffic moving through the Port of 

Montreal is carried inland by rail, mostly to and from markets in Ontario and the U.S. Midwest. Both the CN 

and CPR networks are accessible from the port (Port of Montreal, 2005). 

The Port of Montreal estimates that its capacity is approximately 1.5 million TEUs, representing 92 percent 

of its current throughput (Port of Montreal). The port is currently converting areas between two container 

terminals from gypsum to container handling to provide additional short-term capacity. Additional capacity 

growth is expected over the next five years as the Port Authority plans to devote most of its $152 million 

capital expenditure budget to container facilities. Since the existing port faces geographic constraints, longterm 

efforts may include developing land off Montreal Island at Contrecouer into a container terminal or 

building a terminal inland to increase capacity (WorldCargo News, 2006). 

The challenge facing Canadian ports is in responding to the surging volumes of global trade without 

duplicating the problems of congestion and landside constraint found today on the U.S. West Coast. 

Although Vancouver, Montreal and Halifax are subject to capacity constraints, the ports’ recent 

achievements in higher port performance through operational enhancements and terminal expansions 

could be further augmented by developing a new inland port logistics park and intelligent transportation 

corridor that serve their local markets as well as entire regions. 


January 2007 


Canadian Railways and Intermodal Traffic 

Canadian railways experienced strong growth in freight cargo for the second consecutive year in 2005. 

The railways reported an increase of 6.5 percent and 3.7 percent in total rail traffic tonnage in 2004 and 

2005 respectively. Non-intermodal traffic, such as lumber, coal and iron ore, accounts for approximately 90 

percent of total railway freight. However, intermodal container traffic has become increasingly important to 

the Canadian freight market and represents the fastest growing market segment of the two major Canadian 

railways. Only intermodal traffic has experienced consistent positive growth in the past three years. From 

2000 to 2005 intermodal rail traffic grew at an average annual rate of 4.9 percent. Containerized cargo 

consists mainly of finished manufactured goods from Asia and the U.S. The western provinces 

experienced the majority of growth in containerized cargo. Intermodal cargo tonnage in the west grew by 

11.6 percent between 2000 and 2005, compared to 3.2 percent growth east of Manitoba (Statistics 

Canada, 2006). 

Figure 2-2. Canada Class I Railways Intermodal (containers and trailers) Rail Traffic (units originated in thousands) 

2,500 

2,000 

1,500 

1,000 

500 

0 

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 

Source: Railway Association of Canada, Railway Trends. 

CN operates the largest rail network in Canada and the only transcontinental network in North America. 

The company offers coast-to coast service from the Atlantic and Pacific oceans to the Gulf of Mexico, 

serving the ports of Vancouver, Prince Rupert, Montreal, Halifax, New Orleans and Mobile, Alabama. CN 

has approximately 19,200 route-miles of track in Canada and the U.S., and 20 intermodal terminals in 

major industrial centres in Canada, New England, and the U.S. Midwest. Canadian CN intermodal 

terminals are located in the cities of Vancouver, Edmonton, Calgary, Saskatoon, Winnipeg, Brampton 

(Toronto), Montreal, Moncton and Halifax. In 2005, the company earned CDN $7.2 billion in revenue - 55 

percent of revenues came from U.S. domestic and cross-border traffic, 21 percent from international traffic 

and 24 percent from Canadian domestic traffic (Canadian National). 

CPR provides rail and intermodal transportation services over a network of approximately 13,600 miles, 

serving the principal business centres of Canada from Montreal to Vancouver, and the U.S. Northeast and 

Midwest regions. CPR’s trans-Pacific service offers the shortest route between the Port of Vancouver and 

Chicago. CPR operates 20 intermodal terminals and 13 major classification yards. CPR intermodal 

terminals are located in the cities of Vancouver, Edmonton, Calgary, Saskatoon, Regina, Winnipeg, 

Dryden, Thunder Bay, Toronto and Montreal. 


January 2007 


In 2005, the company earned CDN $4.4 billion in revenue with 35 percent from U.S. domestic and crossborder 

traffic, 43 percent from international traffic and 22 percent from Canadian domestic traffic. CPR’s 

international traffic is represented primarily by containerized traffic moving via the ports of Vancouver, 

Montreal, New York and Philadelphia to and from inland points across Canada and the U.S. Intermodal 

freight revenue accounted for 27 percent of CPR’s total revenue in 2005 (Canadian Pacific Railroad). 

Figure 2-3. Canadian Rail Network in North America 

Source: Railway Association of Canada, 2004 

Currently, much of Canada’s rail network is under-utilized, with over 90 percent of CN and CP tonnage 

carried on 40 percent of their tracks. Despite this overall excess capacity, the Western Corridor from the 

Port of Vancouver to Regina, Saskatchewan experiences the highest utilization and can occasionally 

become congested. Rail freight congestion in 2004 on this intermodal rail network at the Port of Vancouver 

has required the Canadian railroads to work together on joint capacity development. CPR, for example, 

plans to increase its train capacity on its Western Corridor by at least 10 percent, and perhaps as high as 

20 percent, depending on the level of economic growth (DDC Consulting Services, Inc., 2006). Similarly, 

CN spent $5 million for infrastructure improvements to the North line in British Columbia to accommodate 

doublestack container cars in 2005 (WorldCargo News, 2005). 


January 2007 


1200 

1000 

Figure 2-4. Canadian Class I Railway Additions to Property ($ millions) 

800 

600 

400 

200 

0 

2002 2003 2004 

Source: Railway Association of Canada, Railway Trends 

Other equipment 

Work equipment & roadway 

machines 

Intermodal equipment 

Rolling stock 

Terminals & fuel stations 

Signals, communications & 

power 

Buildings, related machinery & 

equipment 

Track & roadway 

CN and CPR have made major 

investments to improve traffic flow and 

increase access to key inland U.S. 

markets. This has included 

constructing more tracks, increasing 

the length of sidings, running longer 

and heavier trains, implementing a 

reservation system, and entering into 

‘co-production’ agreements. In 2005, 

CPR made substantial investments in 

upgrades spending $920 million, its 

largest investment program in two 

decades. $160 million was spent on a 

25 projects to extend sidings or add 

double track in the Western Corridor 

that increased train capacity by four 

trains per day, or 12 percent. In 2006, 

the railway allocated another $825 million for new equipment and track improvements. In the past year, CN 

has invested in upgrades, expanded its trackage and increased equipment inventory enough to 

accommodate an additional 125,000 containers per year. The railway is targeted to spend $1.6 billion on 

capital programs in 2007. More than $1 billion will be spent on improving track integrity and safety and $60 

million will be dedicated to constructing new sidings in Western Canada to respond to the growth in trade 

with Asia (WorldCargo News, 2005). 

CN and CPR have entered into a number of co-production agreements, whereby they share trackage to 

speed rail movements in and out of Canada. The agreements jointly increase capacity on key sections of 

track in the Vancouver area to improve the mobility of rail operations over existing infrastructure. For 

example, an arrangement for “directional running” where westbound traffic going to Vancouver travels on 

CN track and eastbound traffic moves on the CPR system for a 250 kilometres stretch of track. Other joint 

network arrangements initiated by CN and CPR improve railway transit times and asset utilization in British 

Columbia, Alberta and Ontario including eliminating “handoffs”, whereby one railway halts its delivery at an 

interchange point and transfers the shipments to the railway that owns the line. In December 2005, CN and 

CPR’s car utilization increased by 1.1 percent and reported that inter-terminal movements jumped by an 

impressive 12 percent (WorldCargo News, 2005). 

CN has also entered into a border agreement with BNSF railroad where traffic from the Canadian prairies is 

consolidated in Minnesota for movement to the western U.S. and in Wisconsin for movement to the central 

U.S. and Texas. The agreement was established to speed interchange for international freight movement 

(WorldCargo News, 2005). 


January 2007 


These strategic Canadian agreements provide more efficient rail service, improve network and equipment 

utilization, and increase productivity on existing infrastructure. The result is a compelling competitive 

Canadian intermodal rail corridor solution that can bypass congested U.S. routes. 

Figure 2-5. Canadian Intermodal Network 


Canada’s Strategic Location 

Canada can serve as the North American gateway at the intersection of three powerful and shifting trade 

networks—the north-south NAFTA, the European-NAFTA and the highly-utilized trans-Pacific route. 

Canada's road network of over 1.4 million kilometres includes the longest highway in the world, the Trans- 

Canada Highway (TCH). The TCH connects to Interstate-35, the “NAFTA Superhighway”, linking all 10 

provinces to U.S. and Mexico markets. In 2005, approximately 13 million truck trips carrying a total of 

approximately $400 billion in goods crossed the Canadian/U.S. border. Canada's road network includes 18 

major trade gateways to the U.S. that accommodate nearly 90 percent of Canada's trade with its southern 

neighbour. 

In 2005, nearly 67 percent of Canada-U.S. trade carried by trucks was concentrated at six border crossing 

points: Windsor/Ambassador Bridge, Sarnia, Fort Erie, Niagara Falls/Lewiston Bridge in Ontario, Lacolle in 

Quebec, and Pacific Highway in British Columbia. Due to increased growth in cross-border trade, the 

government of Canada has allotted a sizeable amount of funds for road maintenance and infrastructure 

upgrades, often carried out through public-private partnerships (Transport Canada). 

To accommodate the growth in international trade and commerce, Canada and the United States have 

signed a “Smart Border” action plan. The pact outlines a 30-Point Action Plan, which provides for ongoing 

collaboration in identifying and addressing security risks, while efficiently expediting the flow of goods and 

people across the Canada-U.S. border. 


January 2007 


Highlights of the plan include: 

• Expedited movement for pre-approved, low-risk commercial traffic at the six high-volume border 

crossings. 

• Integrated border enforcement teams deployed in 14 areas along the border. 

• Joint customs and immigration inspection facilities located away from the border to improve security 

and relieve congestion. Both governments continue to explore approaches to the legal challenges that 

flow from border inspection services of one country operating in the other (U.S. White House, 2002). 

In order to stay competitive, many companies in the U.S. have taken full advantage of Canada's 

transportation infrastructure and geographic location, realizing that many Canadian production hubs are 

actually closer to U.S. target markets than American production sites. Specifically, major Canadian 

industrial sites, such as Windsor, Toronto, and Montreal, are actually closer to such major U.S. markets as 

New York, Boston, and Chicago than are popular production hubs in the southern U.S. Canadian railways 

often offer the shortest and fastest routes to key NAFTA markets. Compared to the competition, routing by 

Canadian rail is 700 miles shorter to Toronto and Memphis, and 650 miles less to Chicago depending on 

port and intermodal yard pair. Additionally, Canada offers the shortest route from the Atlantic coast to the 

U.S. Midwest by rail. 

Canada also offers the closest North American ports, in terms of sailing times, to the trans-Pacific and 

European trade routes. Western Canadian ports are a natural entry and exit point for Asian trade with 

North America while Eastern Canadian ports offer an attractive gateway for imported goods from Europe 

destined for Canada and Central and Northeast U.S. Canadian West and East coast ports are an average 

of 1.5 days closer to Asia and Europe respectively. Canadian Pacific ports are 77 to 1,313 nautical miles 

closer to Asia than U.S. West Coast ports. As shown in Table 2-5, the distance from Vancouver to 

Shanghai is 4,887 nautical miles, which is a 750 nautical mile difference than from LA/LB. Canadian 

Atlantic ports also have the advantage of an approximate 157 to 1,118 nautical mile geographic proximity to 

Europe and ports along the Suez Canal as compared to U.S. East Coast ports. 


January 2007 


Table 2-5. Distance in Nautical Miles to Major Trans-Pacific Destinations from North American West Coast Ports 

Location Port Kobe, Shanghai Hong Singapore Busan, Korea 

Japan 

Kong 

Canada Prince Rupert 3,917 4,489 5,153 6,537 7,111 

Vancouver 4,301 4,887 5,550 6,932 7,498 

U.S. Seattle 4,378 4,971 5,634 7,013 7,600 

Oakland 4,710 5,353 6,003 7,350 8,154 

LA/LB 4,989 5,637 6,285 7,625 8,424 

Shortest Difference 84 77 102 84 81 

Longest Difference 1,132 1,072 1,313 1,148 1,088 


Table 2-6. Distance in Nautical Miles to Major Trans-Atlantic Destinations from North American East Coast Ports 

Location Port Felixstowe Rotterdam Hamburg Marseille Port Said 

Canada Halifax 2,550 2,659 2,817 2,897 4,355 

Montreal 2,872 2,973 3,112 3,257 4,700 

U.S. New York 3,061 3,168 3,320 3,414 4,872 

Hampton Roads 3,289 3,398 3,555 3,626 5,088 

Savannah 3,667 3,777 3,935 3,994 5,458 

Shortest Difference 189 195 208 172 157 

Longest Difference 1,117 1,118 1,118 1,103 1,097 


The emergence of China as an economic superpower has forced industrialized nations to shift global 

supply chains and realign patterns of trade and investment. Canada has taken advantage of its strategic 

location and plans to continue to enhance its position by initializing Pacific and Atlantic Gateway Strategies. 


January 2007 


Pacific and Atlantic Gateway Strategies 

The Canadian and various provincial governments have now recognized transportation as a key driver of 

economic development. Governments have made funding available to improve transportation infrastructure 

as part of transportation, trade and economic development policies. Some time ago the federal government 

announced funding of $591 million for the Pacific Gateway as part of Canada’s Asian Trade strategy. This 

funding was dedicated largely to transportation infrastructure upgrades in British Columbia that will 

enhance the ports of Vancouver and Prince Rupert. Key components will focus on strategic infrastructure, 

private investment and innovation, security and border efficiency, 21st Century governance, and policy 

renewal. Recently, the concept of an Atlantic Gateway has emerged. The Atlantic Gateway is being 

vigorously pursued by the office of External Affairs Minister 3 who has additional responsibilities for the 

Federal Government’s Atlantic Canada Opportunities Agency. In a recent budget the federal government 

has allocated $2.5 billion to transportation infrastructure upgrades. 

Canada’s Pacific Gateway strategy with 

its development of the new gateway 

container transhipment terminal 

capabilities at the Port of Prince Rupert 

and the planned improvements 

envisioned for the British Columbia ports 

has led to the logical systemic focus on 

the emerging Canadian Atlantic 

Gateway strategy and developments in 

Nova Scotia. By integrating capable 

container terminals at the extreme 

Western and Eastern ends of Canada’s 

growing intermodal rail network, a new 

competitive national intermodal logistics 

system emerges. Developments in 

central Canada such as Saskatchewan’s 

desire to create an inland smart port 

further bolster the emergence of a new improved North American intermodal land bridge. 

Since the Vancouver and Prince Rupert ports are located on the West Coast of Canada, and Halifax, Strait 

of Canso and Montreal ports are on the East Coast, there are distinct advantages in promoting the 

development of an integrated national intermodal strategy for Canada as a nation. In addition, developing a 

central smart inland port to serve North American markets from Pacific to Atlantic oceans would stimulate 

economic development throughout the country. This emerging transcontinental landbridge would benefit 

the ports involved, the rail and shipping lines, the large retailers, and indeed, all of North America. 

The development and promotion of Canada’s Pacific and Atlantic Gateways and associated intermodal rail 

trade corridors - including consideration of more efficient inland based supply chain activity away from 

current congestion points - will ensure that Canada has the necessary infrastructure in place to improve 

competitiveness and take advantage of the growing opportunities in world trade. 

3 

External Affairs Minister at this writing is the Honourable Peter MacKay who is domiciled in the Province of Nova Scotia. 


January 2007 


The Prairie Region – The Saskatchewan Advantage 

Saskatchewan is the transportation crossroads 

of the northern half of the North American 

continent with linkages to the four points of 

the compass. In the heart of North 

America, Saskatchewan is bordered on the 

west by Alberta, on the east by Manitoba, on 

the north by the Northwest Territories and 

Nunavut, and on the south by Montana and North 

Dakota. Saskatchewan has an area of 651,900 square 

kilometres. Over one half the Province is covered by 

forest, one-third by farmland and one-eighth by fresh 

water. Most of the approximate one million population live 

in the southern part of the province. The capital city of 

Regina has a population of 200,854, neighbouring Moose 

Jaw has a population of 34,857, while the largest city, 

Saskatoon, has a population of about 237,017 (Statistics 

Canada). 

Saskatchewan is strategically located along an efficient 

inland-based supply chain away from current congestion 

points. Intermodal transport is considered most cost effective 

for trips 1,130 kilometres or longer. Saskatchewan is 1,742 kilometres 

from Vancouver, 2,012 kilometres from Chicago and 2,979 kilometres from Montreal. 

The province is also well-situated for a distribution centre; it is only a day away 

by land from markets totalling 10 million people, and within two days travel from 80 million people in 

Canada and the U.S. Due to Saskatchewan’s proximity to the geographic and population centres of 

Canada and the U.S., transit times and shipping rates are competitive with other markets. Rail generally will 

have a longer transit time than truck, but service is available and reliable. 

Benefits 

The province is connected by an integrated principal highway network and intermodal national supply chain 

that supports growth in domestic and international trade and offers access to a highly productive labour 

market and intelligent systems transportation engineering and information technology (IT) companies. 

Highways - Within the 26,163 kilometres system of Saskatchewan provincial highways, there are 7,000 

kilometres of primary paved highways. Saskatchewan is accessed by the Yellowhead Highway and Trans- 

Canada Highway #1 and directly connects to the U.S. border along numerous highways including #6, #9 

and #39 which run north to south. The province is also centrally linked to the CANAMEX transportation 

corridor and NAFTA Superhighway connecting Canada, the U.S. and Mexico. These highways essentially 

provide for the inter-regional, inter-provincial and international movement of goods and people. 


January 2007 


Rail – CN and CPR main lines run double-stack rail service through Saskatchewan, linking the province to 

Vancouver, Toronto, Montreal, Chicago and other key consumption zones in the U.S. Saskatchewan is the 

Canadian terminus of the CPR/Soo Line, which is a direct corridor to Chicago and the U.S. northeast. In 

addition, the OmniTRAX short line provides direct access to the Port of Churchill from Saskatchewan, and 

provides efficient access to all North American points through the CN railway system. CPR’s high-speed 

refuelling facility is located in Moose Jaw, Saskatchewan. This is the largest main line fuel facility on CPR’s 

North American network and the only major refuelling centre between Vancouver and Chapleau, Ontario 

and Glennwood, Minnesota. 

Figure 3-1. Saskatchewan Transportation Network 


Trade - Saskatchewan is a trade-dependent province with nearly 40 percent of its annual GDP ($42.5 

billion) attributed to trade activities. Total world trade from Saskatchewan has risen by 102 percent over the 

last decade. In 2005, Saskatchewan experienced a 13.8 percent increase in international exports and an 

8.2 percent increase in manufacturing shipments. Total exports were equal to 70 percent of the province’s 

GDP. The U.S. is Saskatchewan’s largest trading partner. $9.5 billion worth of goods were shipped to the 

U.S. in 2005, an increase of $1.5 billion over the previous year (Saskatchewan Bureau of Statistics). 

The largest product volumes that move through Saskatchewan are oil and natural gas, minerals, and 

forestry and agriculture products. 

• Saskatchewan currently accounts for nearly one-third of the energy produced in Canada. 

• Saskatchewan is the largest producer of potash in the world, providing nearly one-half of the total 

global demand. In 2005, the province supplied 17 million tonnes of potassium chloride (potash) for use 

as fertilizer, including 9.5 million tonnes as export product. The proportion of shipments directed west, 


January 2007 


south, and eastbound were 36, 56, and 8 percent of the total respectively. Potash export shipments 

are projected to increase an average of 2.1 percent annually to 21 million tonnes by 2015. 

• Saskatchewan supplies 30 percent of the world’s output of uranium and is the only jurisdiction that 

produces uranium in Canada. 

• Canada is the largest lentil exporter in the world, and Saskatchewan produces 95 percent of Canada’s 

total production. 

Labour force – In 2005, Saskatchewan had a total labour force of 509,400. Overall, average employment 

in manufacturing grew by 1,500 jobs in 2005 while employment in transportation and warehousing 

expanded in 2005 by 1,900 jobs. Saskatchewan had the third lowest unemployment rate in the country, 

averaging 5.1 percent for 2005. The province’s workforce is one of the best educated in the country with 

approximately 60 percent of employees having some post-secondary education. Wage rates are also more 

competitive than British Columbia and Alberta. 

Technology – In the past decade, Saskatchewan has partnered with industry and others to establish 

technology transfer centres to assist in research and the commercialization of new technology. 

• Saskatchewan is home to two of the most successful intelligent systems transportation engineering, IT 

and design companies in Canada - International Road Dynamics and Massload Technologies 

Corporation. These firms offer expertise on Smart Work Zones, transponder technology, RFID 

technologies applied to transportation logistics, and weigh-in-motion systems to clients worldwide. 

• Saskatchewan has several strong IT companies with software development focus and/or experience in 

logistics, transportation and supply chain management, and project management including Axon 

Development Corporation, Clevor Technologies, Integrated Designs, Numa Technologies, and 

Technology Management Corporation. 

• Brandt Industries Ltd. is headquartered in Regina. The company developed the globally unique 

RoadRailer® technology. 

• Radiation Safety Institute of Canada - with national expertise in radiation inspections, measurements 

and related radiation data storage - is located in Saskatoon. 

• SED Systems, a division of Calian Ltd., is located in Saskatoon. The firm has 35 years experience in 

satellite test and control systems and other integrated communications processes. 

• Saskatchewan has many research and logistics firms that emphasize supply chain management such 

as LMS Logistics, Ghost Transportation Services, and Yanke Container Port Centre. 

• Saskatoon’s Innovation Place is one of North America’s most advanced research parks for 

bioresources, pharmaceuticals and the environment. 

• The Regina Research Park is one of Canada’s newest research parks specializing in petroleum, 

information technology and environmental sciences. 

• Both Saskatoon and Regina are part of TR Labs, the largest IT and Telecomm Research Consortium of 

industry and government sponsors in Canada. TR Labs has research focus on micro devices, digital 

media, wireless and networks technology. The SaskTel Research lab is also an active member of this 

consortium. 

• Saskatchewan has SR Net, an extremely high-powered research bandwidth and networking 

consortium, and is plugged into a powerful distributed grid computing network. 


January 2007 


Investment - In 2005, over $7.8 billion in new capital investment poured into Saskatchewan projects, up by 

4.6 percent from the level in 2004. More than 75 percent of that investment came from the private sector to 

expand, modernize and build new facilities in the province. For 2006, new capital spending in 

Saskatchewan is expected to reach $8.3 billion (Saskatchewan Industry and Resources). 

Business taxes - In April 2006, the Government of Saskatchewan approved the largest business tax cuts 

in the province’s history – making Saskatchewan one of the most tax-competitive jurisdictions in Canada. 

Saskatchewan decreased its Corporate Income Tax rate from 17 percent to 14 percent as of July 2006 and 

will decrease it further to 12 percent by July 2008. The package will also eliminate corporate capital tax for 

new capital investment and reduce the corporate income tax rate to five percent by July 2008 

(Saskatchewan 2006 Budget). 

Competitive advantage - In 2006, the international consulting firm KPMG released the latest edition of 

Competitive Alternatives: A Guide to International Business Costs. This report compares the cost of doing 

business in 128 cities in nine countries (France, Germany, Italy, the Netherlands, the United Kingdom, 

Japan, Singapore, the United States and Canada). The survey included four Saskatchewan cities: 

Saskatoon, Regina, Prince Albert and Moose Jaw. In a comparison of 98 North American cities, Moose 

Jaw placed fifth, Prince Albert sixth, Saskatoon 21st, and Regina 28th based on input costs for labour, 

taxation, facilities (land, construction, leasing rates), transportation, utilities, depreciation, and financing 

(interest costs). Saskatoon was also ranked the lowest-cost jurisdiction among the 21 featured cities from 

the North American Midwest (KPMG, 2006). 

Challenges 

Cabotage restrictions – Existing cabotage regulations on containers in Canada restricts the movement of 

international containers loaded with domestic cargo to a single internal move without having to pay 

Canadian import duty and taxes on the container itself. This “one move” must be in the direction of or to the 

location where export cargo will be loaded into the container. “The one move requirement in Canada does 

not allow for triangular or quadrangular strategies that could reduce costs significantly. The inability to redivert 

containers in order to take advantage of market variations inhibits the ability of steamship companies 

to offer competitive rates. As a result, shippers in Canada, particularly rural or remotely located shippers, 

have difficulty accessing intermodal equipment and are thus limited in their flexibility to choose alternative 

modes and routes. Furthermore, empty repositioning costs are frequently passed on to shippers, reducing 

their competitiveness in export markets” (Vido et al., 2001). 

The Transport Institute at the University of Manitoba performed an assessment of the impact that container 

cabotage regulations have on Canadian operations and determined that the policy causes containers to 

accumulate in certain areas of the country, takes up rail capacity, burns fuel and increases costs to 

shippers when carriers charge for empty repositioning moves. “These policies may have been designed to 

reduce cabotage and protect domestic Canadian container carriers, but at considerable cost to the 

Canadian importer / exporter community” (Vido et al., 2001). 


January 2007 


Railway revenue cap - In 2000, the Government of Canada established the ceiling on maximum revenue 

to be derived from the movement of grain from Prairie origins to terminals at Vancouver, Prince Rupert, 

Thunder Bay and Churchill. According to Dr. Barry E. Prentice, Professor of Supply Chain Management at 

the University of Manitoba, containerized grain costs the railways more to move than bulk, consequently, 

every container of grain carried imposes a financial penalty on the railways. 

Stable rail rates - Intermodal rail rates are one of the largest components of the origin to destination 

transportation expenses. Consequently, moderate changes in rail rates can have a potentially significant 

effect on total logistics costs and Saskatchewan’s competitive positioning. 

Supporting infrastructure – There are concerns about the current state of the infrastructure system within 

the region. Saskatchewan’s future viability as a centre of international trade and its economic growth are 

dependent on an efficient rail and road system that connects to the key trade corridors. For fiscal year 

2007, Saskatchewan Department of Highways and Transportation allocated $400 million, the largest 

budget in the department's history by $90 million, in order to advance the province's long-term 

transportation strategy. 

Education and training - Education and training are critical to provide the necessary knowledge, skills 

and understanding of technologies to be competitive in international trade. The University of 

Saskatchewan, College of Engineering has strong expertise in Intelligent Transport Systems engineering, 

and has spun off other companies in scientific pavement design as well as intelligent systems. The 

University also has a Transportation Research Centre funded by Transport Canada, with recent emphasis 

on related IT applications. However, there may be a need to offer additional training in the areas of trade 

procedures to individuals in order to increase the number of qualified work force. 

Logistics - More and more companies are relying on outsourcing manufacturing, ordering raw materials 

from overseas locations and turning to freight forwarders or logistics firms to assist them in making their 

supply chains more efficient. Developing strategies to serve the current and future needs of companies that 

desire successful international endeavours will be essential for the province’s success. 


January 2007 


CISCOR Smart Inland Port Network – Bringing It All Together 

In determining if inland port facilities are viable in Saskatchewan, it is important to understand what an 

inland port is and what elements it encompasses. Leitner and Harrison define inland ports as “a site located 

away from traditional land, air and coastal borders containing a set of transportation assets (normally 

multimodal) and with the ability to allow international trade to be processed and altered by value-added 

services at the site as goods move through the supply chain.” This work further explains that inland ports 

can be sites where congested ports are relieved, a wide variety of services are provided at one location and 

trade processing occurs away from national borders (Leitner and Harrison, 2001). 

In a study of shipper preferences for North American inland port development, Walter and Poist defined an 

inland port as an “intermodal port that would facilitate international and domestic commerce; it would 

support export and import opportunities by consolidating at a single source all services related to trade, 

licensing, loading, storage, light assembly and bonding.” These definitions help set a framework to 

understand how the development of an inland port in Saskatchewan could change the distribution structure 

in the Canadian supply chain, increasing efficient trade flows and diversifying traditional port functions. 

Saskatchewan’s inland port is a proactive initiative to capture the growing trend of expedited cargo 

movement through marine terminals and onto rails. The predicted rise of trade by 300 to 400 percent in the 

next 20 years will be accompanied by restructured supply chains to integrate landside connections and 

transfer freight collection and distribution functions to inland terminals. Ports will strive to prevent additional 

congestion of limited seaport areas and lines will concentrate their non-local cargo onto express rail 

services at the closest ports to Asia and/or Europe. These ports will develop efficient direct-to-rail 

operations, shuttling the cargo to an inland port. The service is expected to generate faster door-to-door 

transits for shippers. The days removed from the supply chain would result in lower logistics costs and 

greater supply chain flexibility, including the ability to offset delays elsewhere. The additional efficiency in 

the door-to-door supply chain could translate into incremental savings in logistics costs (inventory carrying 

costs, fewer stock-outs, etc.) (Containerization International, 2004). 

The fundamental issue with shuttling containers to an inland terminal is the additional cost of handling. 

However, there are balancing cost benefits associated with inland development such as reduced inland 

location and labour costs, consolidated rail traffic, reused empty backhauls and value-added services. For 

instance, 20-foot and 40-foot standard marine containers can be loaded into 53-foot domestic boxes. The 

consolidation of cargo into fewer double-stack trains hauling domestic containers can decrease transport 

costs for shippers and reduce outbound traffic on rail lines by approximately 45 percent. Another 

alternative is to load cargo into RoadRailer ® trailers that can be pulled directly behind other freight 

equipment without the use of trailer flatcars. RoadRailer ® is a highway trailer, or semi-trailer, that is 

specially-equipped for use in railroad intermodal service. 

Back-haul empty international containers can be intercepted and loaded with international export cargo 

from the Saskatchewan region and hauled by rail to the port of export. Current CN and CPR operations 

involve hauling a train of hopper cars filled with bulk cargo often followed by hauling a train of empty 

containers on the main line. By consolidating bulk cargo into empty containers cars, the same commodities 

can be moved using fewer resources, thereby improving asset utilization. In addition, this would further 

increase the capacity of the rail lines, leaving additional track capacity for other railcars. Essentially, more 


January 2007 


containerization of bulk products would reduce the number of eastbound trains of empty hopper cars 

returning to the prairies and the number of westbound trains filled with empty containers. 

For each additional million tonnes of grain that is containerized, the capacity of the rail could be increased 

by 70 to 250 trains in each direction by eliminating empty container and empty hopper cars, according to 

Dr. Fung, Canada Foundation for Innovation member and chief executive officer of the ACDEG Group. A 

million tonnes of grain is the equivalent of approximately 50,000 TEUs on a 100-car double-stacked train. 

Dr. Fung believes the overall unit operational cost savings in grain handling and transportation would be 

between 30 and 50 percent. Currently, a large percent of bulk products that are being containerized are 

moved to port and then transloaded into containers at the port. This has resulted in virtually no 

improvement on overall hopper cycle times and velocity. 

Overall, Saskatchewan’s inland port concept serves a role in larger logistics system - “the physical design, 

business processes, and operational characteristics that increase the velocity of cargo moving through 

ports or terminals compared to current practices.” This has been defined by the U.S. Maritime 

Administration’s Office of Intermodal Development as an agile port system. 

Agile Port System 

The agile port system (APS) proposes the use of just-in-time fulfillment processes combined with the 

capabilities of an inland port to increase cargo velocity. There are numerous variations of the APS, but the 

general concept consists of marine terminals, inland intermodal facilities, and a dedicated freight corridor 

that connects the waterside with the inland facilities. The goal of the APS concept is to increase throughput 

capacities of marine terminals by moving the cargo storage and sorting components to an inland location 

where land development costs are less expensive and traffic congestion is reduced. 

The APS is a concept that can be expanded and applied to many different regional configurations. For 

example, in Southern California, North America’s largest cargo importer, marine terminals can be 

considered to be the aggregate of both the LA/LB complexes. Sorting, customs, and security activities 

could be transferred from waterside locations to “remote port sites” in regional high desert areas. As 

projected figures show increases of triple the current container volumes by the year 2020, this industry 

must look to innovative transportation systems like the APS. This will require the cooperative backing from 

industry and public participants including port operators, short and long haul railroads, truckers and regional 

government entities (TranSystems, 2003). 

Logistic Management System 

Integrated logistic centres have become another facet of inland port development. These hubs often serve 

as a collaborative effort between multiple players without geographical alignment. Intelligent information 

transfer between these parties has become the way to lessen overcapacities in ports and terminals by 

aligning agencies and logistics suppliers on a common platform. While there are various types of logistic 

centres, Kansas City’s SmartPort has become the preferred model to follow for streamlining cargo 

processing through information assimilation. 


January 2007 


SmartPort - A not-for-profit economic development organization created to increase international trade 

among Kansas City businesses by operating a trade processing centre that works in concert with traditional 

border ports of entry. Kansas City (KC) SmartPort is a virtual inland port and area-wide business initiative 

that is working to increase trade within the region by promoting the entire international commerce 

infrastructure in the Greater Kansas City area (KC SmartPort). 

SmartPort has three goals in its mission: 

• To grow the area’s transportation industry by attracting businesses with significant transportation and 

logistics elements. 

• To make it cheaper, faster, more efficient, and secure for companies to move their goods. 

• To improve access to international markets for all businesses. 

The premise behind the SmartPort program is to capitalize on all rail transport from ports in Mexico to the 

U.S. and from Canada to the U.S. and vice versa. U.S., Mexican and Canadian Customs are located in 

Kansas City to allow for expeditious cargo transport within all transport points. The SmartPort concept 

relieves stress on major American ports responsible for a bulk of Asian imports by rerouting the vessels to 

different ports of entry. 

Inland Port Services 

Canada has the opportunity to offers shippers and carriers sophisticated landside logistics operations and 

facilities to efficiently transfer cargo to inland North American destinations. Traditional inland transportation 

services are being restructured to integrate landside connections and transfer freight collection and 

distribution functions to inland terminals. Value-added supply chain management services have become a 

significant dimension to inland port performance and competitiveness. Inland ports that operate as a 

logistics centre for the flow of cargo can ensure that shipments are executed efficiently, economically, on 

time, and according to each customer’s logistics strategy. 

The seamless and timely clearance of international shipments between Canada and the U.S. can be 

achieved through the integration of leading-edge information and security technology services for the 

exchange of transportation and trade data. It is recommended that the Canadian Intelligent Super Corridor 

Smart Port offer the following supporting services and facilities: a free trade zone, distribution warehouses, 

customs clearance, transload operations, empty container management and advanced logistics centre 

employing state-of-the-art trade information systems. 

Foreign Trade Zones (FTZ) and Export Distribution Centres (EDC) - FTZs are customs-approved areas 

in which foreign goods can be stored, duty- and tax-free, prior to onward shipment to another economy. 

Until six years ago, Canada did not make provisions available for FTZ capabilities. The EDC program, part 

of Canada’s Budget Plan 2000, provided firms with the opportunity to operate EDC's in Canada and to 

provide a flexible tax- and duty-free environment to the U.S. and world markets. 

Firms operating within an EDC are able to purchase Canadian goods on a tax-free basis and import foreign 

goods on a tax- and duty-free basis if the goods are primarily intended for export/re-export. EDCs enhance 

cash flow by deferring Customs duties until the merchandise leaves the premises and enters Canadian 

Customs territory. If the imported goods are re-exported from the EDC, the importer does not pay Customs 

duties. In the case of manufacturing or assembly in the zone, the importer may choose to pay duty on the 


January 2007 


components or the finished product. If the duty on the finished product is less than those of the 

components, the importer can lower costs by manufacturing in the zone. Another common EDC function is 

to store merchandise until an import quota has either expired or been renewed to allow additional entries. 

Value-added opportunities are provided for, as long as the goods are not manufactured or substantially 

changed in the EDC environment. For functional purposes, EDCs are typically warehouse operations, but 

may, in some instances, comprise entire manufacturing and assembly plants. While the most commonly 

associated zone function may be storage, merchandise in the zone may also be tested, sampled, 

repackaged, repaired, mixed, cleansed, manufactured, destroyed or processed. The EDC also offers the 

opportunity to physically display products, as well as to offer potential buyers the opportunity to test/sample 

products on the zone premises. 

Unlike U.S. FTZs, firms in Canada can choose where to locate their EDC operations and are not confined 

to a pre-defined and limited piece of land. EDCs allow exporters to avoid the U.S. inverted tariff and enjoy 

the benefits of U.S. FTZs without having to enter the high-cost U.S. environment. Up-front financing 

requirements are eliminated through lowered bonding requirements (from 100 percent of duties and taxes 

payable to 0 percent for low risk goods and 60 percent for high-risk goods). 

Canadian distributors primarily exporting to the U.S. and other foreign markets (firms deriving 90 percent or 

more of their revenues from exports) should consider establishing operations within an EDC. 

Likewise, an EDC program certificate would benefit firms that transport goods in bulk and then undertake 

repackaging, labelling, product customisation, pick and pack operations, or other value-added activities that 

fall short of manufacturing just prior to delivery to the customer. Essentially, any firm that is primarily 

involved in export distribution of goods would benefit from EDC operations. 

The FTZ functions of storage and further processing of materials could provide direct benefits to an inland 

port in Saskatchewan. While NAFTA has marginalized some of the benefits of FTZs for products 

originating in the U.S. and Mexico, the prolific presence of FTZs near both borders substantiates the 

continued benefits offered by these programs. Firms can take advantage of Canada's geographic location 

to access the U.S., Mexican and world markets. 

Distribution Hub – A distribution centre is a collection of warehouses, or other specialized or refrigerated 

buildings, stocked with products to be re-distributed to retailers or wholesalers. Some regions propose the 

purposeful development of distribution districts or “freight villages” or “gateways,” supported by design, 

management and zoning policies that provide for goods movement. Since Canada’s Customs and Revenue 

Agency Act (CCRA) previously allowed limited FTZ-like operations, Canada generally was not viewed as 

an attractive location for modern North American distribution centres - despite its geographic and operating 

cost advantages. With the establishment of the EDC program and various significant CCRA streamlining 

initiatives such as “single window” licensing and improved (i.e., reduced or eliminated) security 

requirements, distribution centres can be a viable component of an inland port in Canada. Since 

distribution centres require a lot of space, costs associated with real estate are an important aspect of the 

fixed costs of a distribution centre operation. In addition, incentives offered by central and local 

governments often play a key role in locating distribution centres. 


January 2007 


The location of distribution centres can be used to leverage other businesses to locate or serve the region. 

For example, the location of distribution centres has become a key factor in attracting steamship line 

service at the port cities in which the centres are served. With increased vessel service driven by the 

distribution centre location, other importers and exporters in the region will benefit with increased frequency 

of service. The Georgia Port Authority is a successful example of the advancement of the distribution 

centre model. The port aggressively marketed shippers, offering economic incentives for them to locate 

distribution centres in the less-congested areas near the port. Since 1997, 12 companies have built new 

facilities containing more than 9 million square feet of warehousing and 16 shipping lines call at the port 

from Asia every week - compared with four or five in 1990. 

The development of warehousing/distribution complexes and cargo processing facilities at the inland port in 

Saskatchewan can create a national distribution hub, where major retailers/importers route large portions of 

their cargoes. An educated work force and lower than average operating and living costs offered by the 

region should ultimately drive considerations for manufacturing by companies with distribution activities. 

Customs Clearance – One barrier to more efficient movement of containerized cargo destined for the U.S. 

is the need to clear customs at the U.S. port of entry. Potential delays add to the cost and uncertainty for 

shippers trying to serve customers in a highly competitive market. An inland port of pre-clearance would 

smooth the customs process, thus reducing the cost and time of shipments. The facility could serve as an 

international port of entry, arranging for imports to be transported “In-bond” from the coast for customs 

clearance upon arrival, or provide “in-bond” warehousing and storage until the goods are needed. “Inbond” 

freight is an import or export shipment that has not yet been cleared by Canadian customs officials, 

but has physically entered Canada with the approval of Canada Customs. Container shipments could be 

tracked using intelligent transportation systems, including global positioning systems or radio frequency 

identification systems, and monitored throughout the supply chain. 

If a pre-clearance system for transborder cargo could be put in place at a Canadian inland port, similar to 

those already operating in Canadian airports, it would be a key driver in making Saskatchewan the nation’s 

premier logistics and distribution centre. Through the development and implementation of such a facility, it 

will be possible to: 

• Coordinate with Mexican, Canadian, and U.S. Customs officials for pre-clearance for border crossings. 

• Pre-weigh and apply anticipated fees to avoid border delays and unnecessary fines. 

• Offer import inspections and export certification services. 

• Streamline shipments from Asia and cut the time and labour costs associated with shipping through 

congested U.S. ports on the West Coast. 

• Utilize current technological innovations to maximize the cost/benefit for interstate truck travel and 

intermodal rail movements. 

Transload and Consolidation – Shippers have increased their use of transload strategies due to the 

gains in supply chain efficiency. The initial motivation behind transloading was the cost savings from 

transferring cargo out of international containers into larger domestic containers. This basic transfer 

operation, for example, from five 40-foot international containers into three 53-foot domestic containers - 

generates savings in domestic and crossborder transport costs. In recent years, the basic transload 

operation has evolved into a more complex set of cargo manipulation strategies (mix-and-match, merge-intransit, 

etc.) that improve supply chain efficiency. 


January 2007 


The ability to manipulate the freight creates value to the shippers instead of the basic transload operation. 

On the export side, the basic transload operation is more typical due to the homogeneous nature and lower 

value of the commodities. Types of activities and benefits for shippers of imported cargo include: 

• Combining cargo from different origins at the inland port. 

• Mixing international cargo with domestic freight. 

• Creating specific loads for direct delivery to individual stores or customers, thus avoiding re-handling of 

cargo. 

• Delaying the inventory placement decision, allowing companies to respond to changes in customer 

demand at the store level, which lowers inventories and other logistics costs (stock outs, etc.). 

Shippers and their service providers seek out locations that already have transload capabilities or an 

environment suitable for new transload operations. Requirements include land, domestic equipment 

availability, rail connections, and labour. The total U.S. West Coast transload market amounts to as much 

as 15 percent of total eastbound trans-Pacific trade. Surveys of shippers show that continued growth in the 

use of transload operations is expected, and that shippers are interested in alternatives to the L.A. Basin to 

reduce the risk associated with relying on a single port of entry (TranSystems, 2003). 

Empty Container Management – Efficient management of empty containers is a global issue, influenced 

by international trade patterns and mostly dictated by ocean carriers’ interests. Typically, carriers want to 

minimize costs related to empty containers given that their primary concern is the transportation of loaded 

containers. The goal is to reduce empty movements in order to minimize total transport costs, while 

satisfying shipper’s demands for timely availability of empty containers. 

The two primary methods for rationalizing empty container flows are by using low-priority manifest trains to 

reposition empties inland to be loaded with export cargo or by filling backhaul empties with loads. The 

profitability of most container operations is highly dependant on using backhaul cargo to fill returning empty 

containers. 

Logistics and cargo consolidation provides an opportunity to effectively utilize the empty container capacity, 

to the extent that these containers could be organized at an inland port and tapped with Canadian exported 

products without the need for container repositioning. Empty container management at an inland port in 

Saskatchewan would reduce the total costs of moving cargo by rail between the prairies and the coastal 

ports, and improve container supply in Saskatchewan. 

Logistics Centre – Logistics is defined as “the process of planning, implementing and controlling the 

efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related 

information from point of origin to point of consumption for the purpose of conforming to customers’ 

requirements” by the American Council of Logistics Management. Logistics is essentially concerned with 

the flow of materials, information and services along the vertical and horizontal supply chain that seeks to 

coordinate the flows (Panayides, 2006). 


January 2007 


Industrial trends toward just-in-time manufacturing, time definite deliveries and door-to-door transportation 

has created a specialized need for “control agents”, who ensure that shipments from many suppliers are 

executed efficiently, economically, on-time, and according to each customer’s logistics strategy. The 

primary goal of an inland port is to provide seamless flows for cargo traded among the North American 

markets. Through physical distribution management and advanced electronic commerce technology, port 

staff can serve as logistics agents. Services could include: 

• Arranging for transport and handling services at a favourable cost for the shipper. 

• Processing in-bond cargo and customs documentation for expedited border clearance. 

• Inventory management by tracking shipments in real time and at any location along the supply chain. 

• Alerting shippers to specific conditions or requirements of the destination country. 

• Providing a centralized source of information on transportation for both shippers and transportation 

providers. 

The ability of Canadian firms and industries to adapt to evolving value-chains and to enhance global supply 

network activities through logistics management will be essential to their future competitiveness and longterm 

economic viability. The provision of these services at an inland port would support shippers and 

transport service providers’ goal to achieve supply chain excellence. Without the burden of existing 

infrastructure, an inland port in Saskatchewan can embed information technology into the design to achieve 

increased productivity and provide faster cargo turnaround. Older, more established inland port 

infrastructure cannot as readily take advantage of these technologies and productivity enhancements since 

they must invest in upgrades to existing infrastructure. 

Inland port facilities in Saskatchewan will also have the opportunity to offer services that are tailored to the 

products handled. The inland facility could provide additional value-added services directly related to 

container storage, food processing and cargo security. 

Container Depots: A container depot stores surplus containers, provides container maintenance and 

repair services, and serves as a supply point for empty containers. 

Food Processing: The techniques and methods used to convert raw agricultural ingredients into finished, 

consumer-ready products require the application of labour, machinery, energy, and management. The 

process employs handling, manufacturing, and packaging techniques to add economic value to raw 

commodities harvested from the farm or the sea. Given the flow of agricultural products transported through 

the Saskatchewan region, food processing is a likely prospect for industry growth around an inland port. 

Secure Trade Processing Centres: Inland ports provide essential trade processing services such as 

customs clearances that require security functions. Security procedures can be performed independently of 

conventional port containerized operations ensuring efficient processing and minimizing disruption to the 

flow of containers at the port of entry. 


January 2007 


Benefits to Carriers, Ports, Shippers and Government 

In order for the inland port to be successful, it must benefit a disparate group of stakeholders. This group 

includes the commercial rail carriers and shipping lines, the national ports and private port operators, the 

beneficial cargo owners, both import and export, plus the national government of Canada. In order to do 

so, it must have the following attributes: 

Financially Sustainable: Development and operation of the inland port must be financially sustainable for 

the investors, the operators and local service providers in order to ensure that a long-term commercial 

operation is maintained for the benefit of all of the stakeholders. Therefore, the inland port must first 

financially benefit its investors, owners and operators. 

Commercially Attractive: The inland port must be commercially attractive to the rail carriers by lowering 

their operating costs, providing higher rail car utilization and increasing their cargo volume. Without these 

benefits, the rail carriers will have little incentive to “stop a train” in Saskatchewan. 

Supply Chain Management: The inland port must function as a technology centre for shipping lines and 

other carriers to manage cargo movement from the ship to the market, as well as the return of empties and 

backhaul cargo. Shipping lines will expect information technology systems that will enhance in-transit 

visibility, reduce demurrage and delays, and increase backhaul revenue cargo. 

Seaport Extension: The inland port must be a service extension of the seaports so that north-western and 

north-eastern Canadian ports can offer extended service to the Canadian heartland and U.S. Midwestern 

states. It also must increase the market reach and profitability of the private terminal operators at those 

ports. 

Shipping Options: The inland port must offer new shipping options to the cargo owners, either by 

providing a cheap and convenient transloading centre for cargo arriving through Pacific Northwest 

gateways, or by offering a new service, such as containerized export of agricultural products. 

Economic Development: Finally development of the inland port must provide economic development 

benefits to the Province of Saskatchewan and the Nation of Canada as a whole. Local and national 

resources will be required to foster the inland port and some of the resulting benefits must accrue to the 

government stakeholders. 

Taken together, these goals define the benefits to be expected from the inland port. However, realization of 

these benefits is only possible if they are distributed equally among the stakeholders. For the developers 

and local business owners, a financially sustainable port will be expected to have benefits as follows: 

• A reasonable and secure return on investment. This return should be on the order of 18 to 25 percent 

for short-term equity and 12 to 18 percent for a long-term stake. 

• Management and operating fees amounting to six to eight percent of total revenues. 

• Creation of new business opportunities that are based on value added to cargoes transiting 

Saskatchewan. These opportunities could include branding and repackaging, freight and logistics 

services, and opening new export markets driven by the availability of intermodal service to the ports. 


January 2007 


The rail carriers will be looking for some specific benefits to either; terminate, dispatch, or otherwise stop a 

train in Saskatchewan. These benefits must be substantial in order to provide sufficient incentive to change 

what is currently a successful rail connection to the U.S. Some benefits to the railroads should include: 

• Potential capture of at least 130,000 TEU per year of import cargo from Asia that are seeking 

alternative routes into the heartland of North America, which will increase over time. 

• Potential capture of at least 130,000 TEU per year of export cargo that is seeking routes primarily to 

the Asia Pacific markets, which will increase over time. 

• The ability to fill westbound containers and westbound intermodal cars with revenue cargo that would 

otherwise be returned empty, thereby increasing capacity due to better asset utilization and fewer nonproductive 

moves. 

• More frequent service and timely service for short-haul customers, low-volume destinations and U.S. 

destinations that are west of the existing U.S. rail hubs. 

• “Truckaway” options from an eastern hub point to the U.S. as opposed to bringing trucks all the way to 

Vancouver. 

• New services to offer local, NAFTA and international customers. 

Shipping lines operate on a very close margin, and often the percentage of backhaul cargo determines the 

profitability of a liner service. At the same time, shippers have the choice of several competing trans-Pacific 

options and look for the best value in terms of cost, velocity and level of service. The CISCOR Smart 

Inland Port Network will advantage the shipping lines in this regard with the following logistics benefits: 

• Automate customs clearance to reduce cargo dwell and allow “blue lane” border crossing. 

• Consolidate value-added data services and foster a cadre of supply chain data management 

professionals into a single logistics information hub to serve the Canadian Intelligent Super Corridor. 

• Enhance cargo velocity through the management of in-transit data communication. 

• Attract backhaul revenue cargo through the intelligent management of empty container deployment and 

positioning. 

If the CISCOR Smart Inland Port Network is to be a success, it must function as an adjunct and extension 

of the Pacific Northwest ports. Port and carrier involvement as a stakeholder can be expected to result in 

the following benefits: 

• Faster cargo velocity for containers, which will be stored, sorted or transloaded in Saskatchewan. This 

will help increase the throughput of existing seaport facilities. 

• Recovery of vital seaport land areas to serve essential port functions and reduce the need for 

additional local infrastructure. 

• Opportunity to provide additional shipping “products” to carriers and cargo owners. 

• Movement of various container handling and processing activities, such as container stuffing and 

stripping, empty storage, and customs inspection away from the congested port zones. 

• Competitive advantage over rival ports through effective landside transportation management. The 

effect of increased services and a reduction in transportation costs influences the price of the output 

and thus the attractiveness of a port, further boosting cargo concentration. 

• A more central role in the international logistics system through synchronization of the seaport-inland 

port system in the transport chain. 


January 2007 


Ultimately, the shipper will become the “customer” of the inland port and will look for specific economic and 

logistics benefits to be derived from either transloading imports or stuffing exports in Saskatchewan. These 

benefits will be directly due to favourable location, low cost labour and available land. The type of benefits 

that will attract shippers include: 

• Door-to-door transit time that is competitive with current practice and other inland destinations. 

• Favourable contract pricing agreements with the ports, the railroads and the inland terminal operator. 

• Transload efficiencies allowing the consolidation of three 40-foot international containers into two larger 

capacity domestic containers. 

• Added-value services such as labelling, packaging, or minor assembly prior to importing into the U.S. 

or overseas. 

• Cost-effective source loading of export products, as opposed to containerizing at the port. 

• Reduced loss due to bulk rail loading and handling at the port, either to load containers or for export in 

bulk carriers. 

• Export products requiring “identity preservation” that is attained by packaging or containerizing in 

Saskatchewan without admixture of products originating elsewhere. 

• Proximity to empty containers to be used for shipping outbound production intermodally. 

• Enhanced logistics options that increase efficiency and productivity of existing rail infrastructure assets. 

The Canadian Government and the Province of Saskatchewan are working to enhance economic growth of 

the region and to expand the types of jobs available to residents. Some of these enhancements would be 

driven by intercepting rail cargo locally and providing opportunity to add value to commodities that 

otherwise would be just passing through. The province would expect to see the following local benefit due 

to development of the inland port: 

• Growth and development of local business opportunities brought on by the presence of a nearby cargo 

centre. This could include commercial warehousing and distribution, equipment maintenance services, 

haulage services and ancillary logistics services such as freight brokerages and insurance. A local 

multiplier of 1.5 to 2.5 can be assumed for wages paid and spent on local goods and services. 

• Diversification of the economy into other industries than agriculture and mining in order to avoid the 

cyclic down-turns that occur in most commodity driven industries. 

• Increased local tax revenues due to new payroll and business receipts. 

• Improvements in air quality and noise alleviation through better utilization of road capacity and less 

damage to road infrastructure caused by a reduction in trucks and congestion delay. 

These benefits are contingent on creating a coordinated inland port system that will fulfill the needs of all of 

the stakeholders and develop a large enough cargo base to sustain a critical mass of operation. The 

concentration of cargo flows opens possibilities to economies of scale in inland transportation through 

increases in transportation services, reduced inventory costs and improved performance. Shipment volume 

is the key to the viability of an inland port, its attractiveness to the stakeholders and its potential benefits in 

cost, efficiency, accessibility, service and reliability. 


January 2007 


Case Studies 

In determining the feasibility of inland port facilities in the province of Saskatchewan, other terminals were 

researched to catalogue similarities to Saskatchewan in location, economics, relationship with railroad, 

facility design function and other representative factors. The identification of various sites in Canada and 

the U.S. gave planners a broad view of potential inland port models and the elements that create these 

sites. Several sources were used to gather information on inland port sites including internet resources, 

trade and academic journals, and electronic mail. The selected inland ports serve as connection 

opportunities to enhance the integration of the transportation system across the Canadian Intelligent Super 

Corridor, as well as with the North America Super Corridor Coalition (NASCO). A central inland hub in 

Saskatchewan would compliment the existing facilities in the development of a representative North 

American transportation and trade network. 

Winnipeg, Manitoba 

Winnipeg is a city in western Canada centrally located on the main line of CN and CPR. It has three rail 

links to the U.S. Both railway companies maintain extensive and modern rail yards that handle more than 

5,000 cars per day and intermodal facilities that process more than 85,000 containers per year - CP 

35,000, CN 50,000. Roughly three million tons of commodities are shipped southbound from Manitoba into 

the U.S. by rail, representing a value of some $1.2 billion. Rail accounted for 17 percent of the total value of 

Manitoba exports to the U.S. in 2003. All of CN’s traffic going both east-west and north-south passes 

through Winnipeg. BNSF has terminal facilities in Winnipeg with direct connections to three-quarters of the 

U.S. service into Mexico. CN and its U.S. rail division, the Grand Trunk Corporation, have some 29,000 

miles of track, stretching coast to coast in Canada and the U.S. As a result of the alliance, services have 

linked Manitoba and other points in Canada with U.S. Midwest markets (Detroit, Chicago, Kansas City and 

St. Louis) as well as Southern markets in Texas. The alliance has also created rail connectivity and given 

access to both Mexican and Canadian shippers via Mexico’s largest rail system, Grupo TFM. 4 

Winnipeg’s Role in NASCO 

The NASCO and its sub-committee, North American Inland Port Network (NAIPN), advocate the interest of 

inland ports along the International Mid-Continent Trade and Transportation Corridor (IMCTTC). NASCO 

has been tasked with developing an active inland port network along the corridor to specifically alleviate 

congestion at maritime ports and the nation’s borders. The NAIPN envisions an integrated, efficient and 

secure network of inland ports specializing in the transportation of containerized cargo in North America. 

The main guiding principal of the NAIPN is to develop logistics systems that enhance global security, but at 

the same time do not impede the cost-effective and efficient flow of goods. NASCO has received $2.25 

million in Congressional earmarks to be administered by the United States Department of Transportation 

(USDOT) for the development of technology integration and tracking project. The project will have a team 

approach, using members of NASCO as the primary participants in the project, to the extent possible. 

NASCO believes the deployment of a modern information system will reduce the cost, improve the 

efficiency, reduce trade-related congestion, and enhance security of cross-border and corridor information, 

trade and traffic. 5 Winnipeg is the northernmost tip of this transportation corridor and serves as a cargo 

transfer point for the region. 6 

4 

http://www.nascocorridor.com/naipn/pages/win_facilities.html#rail 

5 

http://www.nascocorridor.com/pages/about/about.htm 

6 

SCAG Inland Port Case Studies Appendix. 


January 2007 


Figure 5-1: North America Super Corridor Coalition 

Source: North America Super Corridor Coalition website, www.nascocorridor.com 

Figure 5-1 illustrates the relationship between the U.S., Mexico and Canada via inland intermodal 

terminals. Along the corridor, Winnipeg, Kansas City and San Antonio are three of the most important hubs 

for NAFTA and bulk cargos. 

Manitoba’s container traffic has expanded considerably since the 1980s, when it grew at an average rate of 

four to five percent per year. Average annual marine container import and export volumes increased by 

more than 10 percent per annum in recent years. This trend is expected to continue during the next 

decade. Vancouver accounts for 60 percent of the province’s marine container traffic (in terms of total 

volumes shipped). The eastern ports of Montreal and Halifax represent 33 percent of container traffic. 

Southern container traffic remains negligible at less than two percent. 7 

Challenges 

Manitoba shippers of containerized goods face several logistical disadvantages that impede their ability to 

penetrate overseas export markets. Currently, they must request a container from a steamship line (or 

freight forwarder), a process that often takes up to three days. This delay frustrates shippers because 

empty containers from eastern Canada regularly pass through Manitoba en route to the west at the same 

time as shippers pay to reposition containers back to the Prairies. These time and cost penalties render 

many shippers uncompetitive in certain markets, especially at times when buyers are extremely price 

sensitive. 

7 

http://umanitoba.ca/faculties/management/ti/media/mioss_Nov2.pdf 


January 2007 


The Manitoba market is fragmented comprised of smaller shippers using a variety of service providers and 

operating from several locations, making it difficult for marine carriers to keep track of their containers. 

Ocean carriers face high charges for storing containers at rail terminals, reducing the railways to mere 

drayage operators. Similarly, the railways are focused on economies of size and bottom-line issues and are 

concerned about their ability to control the system (Prentice et al., 1998). 

CN Edmonton Grain Distribution Centre 

In November 2006, CN opened a new grain stuffing and distribution centre in Edmonton, Alberta. The 

facility is designed to give specialty crop growers on the western prairies easier and more cost effective 

access to ship their high-value grains and oilseeds in containers to overseas customers. CN invested $4 

million in the facility, which is expected to handle 20,000 containers per year. The facility is located in CN’s 

Dunvegan Yard in northwest Edmonton, just north of the Yellowhead Highway, providing truck access and 

connections to CN's local handling and intermodal yards (CN). 

Figure 5-2: CN Grain Facilities and Areas of Production 

Source: CN website, www.cn.ca, revised by TranSystems 

Previously, western prairie farmers had to first load their high-value crops into covered hopper cars and 

send the cars to Vancouver, where they are emptied and the grain transferred into containers. The stuffed 

containers are then trucked to dockside, for loading onto ships. Now, these grains, grain products and 

oilseeds can be transferred from the farm truck directly into containers at the new Edmonton facility, 

removing a step in the logistics chain for many shippers. Farmers from outside the Edmonton region will 

have the option to move their products by railcar to Edmonton and transfer the grain at the new facility. 

"This will make the prairie supply chain more competitive in world markets," said Peter Marshall, CN Senior 

Vice-President, Western Region. "Eliminating an initial hopper car movement will lower many shippers' 

costs. But even if the product comes into Edmonton by rail, farmers will benefit by stuffing the containers in 


January 2007 


Edmonton instead of Vancouver. There are better rail connections and less congestion here, in addition to 

eliminating the need to truck product through Vancouver." 

Most western Canadian grain moves from the prairies in bulk hopper cars. Increasing percentages of 

higher-value, human consumption specialty crops, such as lentils, beans and peas, as well as processed 

grain products such as malt and alfalfa pellets, are now moving overseas in containers. Grain shippers 

prefer using the containers for their higher-value products because this allows them to segregate their 

product from lower-value bulk grains, thereby ensuring they receive higher prices. Shippers are also able to 

meet customer requirements for strict product identification, which is especially important for human foods, 

and helps to capture higher prices. 

"While the vast majority of grain shipments will continue to be in bulk hopper cars, this new facility gives the 

industry more shipping choices and competitive options for certain crops and grain products. Shippers will 

also be able to use our CN WorldWide freight forwarding services to obtain one single rate quote to cover 

the entire move, from the home farm to the final market in Asia. All this will allow prairie farmers to capture 

new and higher-return markets,” said James Foote, CN Executive Vice-President, Sales and Marketing. 

CN manages the flow of grain and grain products from railcar or truck to containers, then moves them by 

rail directly to West coast ports. Daily rail service from Edmonton to the Port of Vancouver is available, and 

will be available to the Port of Prince Rupert in 2007. Features of the facility include: 

• Transloading from railcars or trucks. 

• Ten railcar spots. 

• Inland grain stuffing for identity preservation. 

• Ability to load specialized commodities in fully-lined containers (container staging). 

• Container cleaning and liner insertion services. 

• Enclosed load transfer system, ensuring production integrity. 

• On-site container lift to minimize carrier delays. 

• Two tilt tables with integrated scales to facilitate loading 20-foot and 40-foot containers. 

• Dual loading platform capable of accommodating 20-foot and 40-foot containers. 

• Computerized loading system to achieve desired shipping weights. 

• On-site sampling, testing and grading services provided by Surveilliance Generale Superintendente 

(SGS) India Ltd. 

• Fully computerized inventory management system. 

Kamloops Intermodal Container Facility 

Kamloops offers an opportunity for an intermodal facility because of its central location to British Columbia’s 

saw mills, pulp mills and other value added wood products, and because it is proximal to the fruit producers 

in the Okanagan. CN and CPR main rail lines and the Trans-Canada Highway all run through Kamloops. 

Kamloops’ highway and rail network currently provides access and intermodal linkages for the 

transportation of lumber, pulp, and finished goods to both domestic and international markets. This mixeduse 

facility would include lumber reload from truck-to-rail car for North American markets, and put lumber 

into containers for export markets through the ports of Vancouver and Prince Rupert. 


January 2007 


An intermodal container facility in Kamloops would: 

• Reduce the numbers of heavy transport trucks on the Trans-Canada Highway traveling between the 

Rockies and the Lower Mainland, resulting in significant savings in highway maintenance and 

rehabilitation costs. 

• Provide another option for shippers to transport export products to port. 

• Increase capacity and efficiency of the Vancouver Port. 

• Reduce shipping costs for local manufacturing companies for both commodity and export products. 

• Be a unique selling point for attracting manufacturing companies to Kamloops. 

• Create jobs in the region as a result of expanding the freight, intermodal and distribution industries in 

Kamloops. 

• Attract investment in the transportation infrastructure of Kamloops from railways, private industry and 

senior levels of government. 

Challenges 

While there are definite advantages, there are also a number of challenges in establishing an intermodal 

container facility in Kamloops. The potential challenges are: 

• Rail Cooperation and Buy-in: To encourage intermodal trains to stop in Kamloops to pick up containers 

cars and drop off empty containers, Kamloops must present a business case to the railways proving 

that the extra time and costs of providing this switching service will be recovered through increased 

business. 

• Access to Empty Containers: Container owners will have to be matched with container customers so 

the facility can access the right containers from the right shipping lines. 

• Logistic Challenges: Virtually all lumber mills in British Columbia send their products destined for export 

by truck to Vancouver because: 

o Trucks have quick response times. 

o Truck rates are more competitive than rail rates because of backhaul opportunity. 

o The large warehousing infrastructure associated with container stuffing facilities in the Lower 

Mainland allows for plenty of storage for all product lines and the ability to consolidate customer 

orders to their specifications. 

• Local Industry Stakeholders: To get enough volume for the intermodal container facility in Kamloops to 

meet the business case requirements of the railways, the facility will most likely have to be multi-use 

and serve lumber, pulp, and other value-added commodities. The facility should provide a number of 

customer specific services including container stuffing, reloading, cross-docking, warehousing, storage 

of empties and consolidation. 

It is important to garner and retain support for this facility from all local industry and manufacturers, as well 

as key customers, such as Weyerhaeuser, Tolko, Mercer, and Arrow (Satwinder and Nova, 2006). 


January 2007 


Northern Plains Commerce Centre 

The Northern Plains Commerce Centre (NPCC) is being built on the Northern Plains in Bismarck, North 

Dakota. Highway, rail, ocean and air shippers will use the 243-acre NPCC as their gateway to the world. 

The NPCC, located adjacent to airport property, will have airfreight, rail and highway service, warehousing 

and transloading facilities. Highway shipments have easy access to the facilities from Interstate 94 

(Fahrenwald, 2006). 

Figure 5-3: Northern Plains Commerce Centre Conceptual Drawing 

Dakota, Missouri Valley & Western Railroad (DMVW), an independent shortline with more than 500 miles in 

connections from central North Dakota to the southeastern half of the state, will provide switching 

operations for NPCC. DMVW has rails connecting it to BNSF, CP and North Dakota's eastern shortline, and 

Red River Valley & Western (RRVW). Rail service will be provided by long-haul carrier BNSF via a direct 

connection with DMVW. 

Client Potential 

Clients are beginning to show interest in the potential of the NPCC. Bobcat (an Ingersoll-Rand-owned 

company) one of the prime initial clients is building a $9.5 million, 100,000-square-foot manufacturing 

support centre on the NPCC property. Plans are to connect Bobcat's NPCC facility directly with its Gwinner 

manufacturing plant using DMVW and RRVW. By combining with BNSF, Bobcat can reliably deliver its 

products to the West Coast in a four-day time period, giving the company access to the Pacific Rim and its 

largest consumer base. DMVW will handle an estimated 3,000 freight cars a year for Bobcat (Weixel, 

2005). United Pulse Canada, a leader in the pulse industry, has contracted with NPCC to construct a 

90,000-square-foot facility. The facility will process lentils, peas and durum wheat at a rate of 150,000 

metric tons annually (Fahrenwald, 2006). 


January 2007 


Minnesota North Star Rail Intermodal LLC 

The U.S. bulk grain export system works efficiently for commoditized products, but does not service 

international customers who demand shipments of quality-controlled, market-specific food or feed grain 

products or unitized shipments of smaller quantities meeting just-in-time inventory requirements. 

Minnesota farmers, processors and ethanol producers must truck their products to the Minneapolis/St. Paul 

intermodal hub, where it must be transloaded into containers and shipped to international markets. This 

high-cost, inefficient process reduces farmers’ ability to realize the higher margins typically provided by 

these markets. Rising fuel costs, driver shortages and inadequate container supply also exclude highway 

container transportation as an effective transportation mode. Given these challenges, the Minnesota 

legislature assigned the state’s commissioner of agriculture, in consultation with the commissioner of 

transportation, the task of conducting “an economic impact study of a rail container load-out facility located 

in the west-central area of Minnesota in 2005.” 

The results of the study led to the recommendation and development of North Star Rail Intermodal. The 

project essentially provides container-based intermodal grain transportation services from western 

Minnesota and eastern regions of North and South Dakota to international ports in Asia, Europe and Latin 

America. The company utilizes RailRunner intermodal technology to offer competitive, regularly 

scheduled shipping services to ethanol producers, to growers and processors of identity preserved foodgrade 

soybeans and wheat products, and to other value-added soybean feed and specialized grains. 

The RailRunner intermodal (truck and train) system allows farmers, processors and ethanol producers to 

plug into the international container shipping system right at the farm, the elevator or the ethanol plant. 

Product can be loaded into containers at the North Star terminal from either hopper trucks or railcars, or 

can directly be loaded into containers at the elevator or processing plant. Once loaded, using RailRunner's 

Terminal Anywhere technology, containers are shifted to rail without the need for lengthy highway 

transport, keeping the products in the original containers until they reach their ultimate destination. 

The North Star Rail Intermodal Solution 

The North Star service, available in early 2007, will offer regularly-scheduled, reliable intermodal service to 

Upper Great Plains farmers, growers and processors at per-ton prices competitive with bulk grain shipping. 

The new system will enable producers to lower their shipping costs, while preserving the increased value of 

specialized agricultural products because they are sealed into containers, rather than being mixed together 

in bulk with lower-value products. The service will enable shippers to: 

• Move large amounts of Distiller’s Dried Grains with Solubles (DDGS) in containers, rather than in 

traditional hopper cars. Containers carrying this byproduct of ethanol production – a feed for cattle, 

hogs and poultry – are much easier to unload and clean, dramatically reducing the transport cost. 

• Sell identity-preserved (IP) grains and grain products. By moving from the farm or elevator in 

containers and not being aggregated with other products, these grains and grain products can retain 

their unique pedigree – of type, nutritional or chemical characteristics, and growing methods – and their 

higher market values. 

• Sell other value-added agriproducts. High-quality produce of various sorts can be sold at higher prices 

if it is not mixed in with other, lesser grades in transport, but rather is shipped in containers. 


January 2007 


The system will link to the Canadian Pacific Railway in Minneapolis and, thereby, to international markets 

through Vancouver, BC, and Montreal, QC. North Star has partnered with Hapag-Lloyd Container Lines to 

manage the delivery of the containers to their ultimate destinations (North Star Intermodal). 

Inland International Port of Dallas (IIPOD) 

The Dallas area is located at a crossroads of international trade - the NAFTA highway that connects 

Canada, the U.S., and Mexico runs directly through the southern sector of Dallas County. Since the 

implementation of the NAFTA in 1994, trade with Canada and Mexico has significantly increased. In 

addition, the Dallas area receives a significant amount of east-west trade that originates in Asia, and 

specifically China, which is the third largest trading partner of the U.S. The Asian trade primarily arrives to 

Dallas via rail shipments from the LA/LB ports on the West Coast through Arizona, New Mexico, and Texas 

to inland destinations. 

Figure 5-4: River of Trade Corridor 

The Dallas region is home to foreign 

trade zone acreage, intermodal facilities 

and two reliever airports with future 

expansion capabilities. Dallas is also an 

inland distribution centre for Asian trade 

that travels through the Panama Canal 

and the Port of Houston. The Port of 

Houston is the sixth largest port in the 

world, ranks first in the U.S. in foreign 

tonnage and second in total tonnage. 

The movement of international trade to 

and from the port is facilitated by the 

five interstates. The area is also served 

by BNSF, Kansas City Southern (KCS), 

and Union Pacific (UP) rail lines. The 

port authority is expecting tremendous 

Source: Dean International Inc. 

annual increases for the foreseeable 

future in the number of containers handled by the port and is concerned about increasing congestion on rail 

and surface transportation systems serving the port. 

The City of Dallas and the Port of Houston want to preserve and enhance existing infrastructure in the area 

that serves as a crossroads for trade. In the fall of 2004, the City of Dallas embraced a strategic plan to 

further develop and enhance international trade flows through the southern sector of Dallas County. This 

plan, the Dallas NAFTA Trade Corridor project, consists of several public policy initiatives specifically 

designed to foster economic growth and create jobs in the southern Dallas area. The Dallas NAFTA Trade 

Corridor consists of an Agile Port System, a Linear/Foreign/Free Trade Zone, an Inland Port of Pre- 

Clearance and a Cargo Airport and by expanding the River of Trade Corridor Coalition. 

The Agile Port system is strongly supported by the U.S. Maritime Administration as a means of quickly and 

efficiently moving trade cargo from a seaport to an inland port. In April 2005, the U.S. Maritime 

Administration, City of Dallas, and Port of Houston Authority signed an historic Memorandum of 

Understanding agreeing to partner for the development and the implementation of the Dallas Agile Port 


January 2007 


System. The City of Dallas has also signed agreements with four Mexican ports (Guaymas, Lázaro- 

Cárdenas, Manzanillo and Topolobampo) and the Panama Canal to explore and utilize Dallas as an inland 

port. 

The inland port would be a distribution center for shipping containers coming from or going to foreign 

countries. The containers would be moved using state of the art technology so that they could easily be 

processed to meet on-demand shipping requirements. It would be served by trucking, high-speed rail and 

possibly a new cargo airport similar to Alliance Airport in north Fort Worth. The inland port would also ease 

congestion at the Port of Houston. 

The purpose of the linear/foreign trade zone is to create a comprehensive and competitive tax treaty of 

incentives for domestic and global business relocation to the Dallas NAFTA Trade Corridor Impact Zone. 

Additional goals would include: 

• Facilitating a coordinated, linear/foreign tax package for pre-qualified businesses. 

• Identifying and expediting the relocation process and eliminating the “red tape” associated with typical 

business relocation. 

• Maximizing Dallas NAFTA Trade Corridor assets and offering businesses low-cost trade opportunities. 

• Establishing a uniquely simplified tax package and set a national precedent for Dallas area commerce. 

• Harmonization of ad valorem taxes. This component will facilitate the cooperation of the Southern 

Sector municipalities and Dallas County in attracting business and jobs to the area. 

When completed, the project will include the inland port facility to process goods arriving via truck or train 

from deep-water ports of Mexico, RFID and other technology to facilitate information exchange between 

modes of transportation, customs facilities for Mexico and Canada to eliminate border clearance wait-times, 

FTZ and Linear Trade Zones for beneficial tax and customs treatment and a cargo airport (Dallas NAFTA 

Trade Corridor). 


Market Assessment 

January 2007 


The viability of a smart inland port system proposed for Saskatchewan is dependent, in part, on the volume 

of freight which it would attract. The amount of potential traffic for a facility provides: (1) a measure of the 

benefit of such a facility - a larger amount of potential traffic means larger total savings in logistics costs for 

regional manufacturers and specialty agricultural producers, and (2) an indicator of whether a new facility 

would generate enough business to become a profitable and viable venture, and (3) an indicator of the 

quality of service and level of rates that might be charged for such a facility, as railroads are able to 

produce higher quality intermodal services at lower costs with larger shipment volumes. Since fixed capital 

costs associated with development can be spread more thinly, resultant costs to users will be lower. 

Demand for inland port structures in Saskatchewan would primarily originate from Canadian and U.S. 

intermodal markets. One difficulty in estimating potential traffic is that the amount of traffic depends on 

rates and service levels, and these are unknown for a new facility. In order to identify flows between the 

Saskatchewan region and other global partners, it was necessary to look at freight flows to and from 

provinces that contain major ports (British Columbia, Quebec, etc.). Shipper preferences, trade lanes and 

inland region combinations were assessed to determine the focused target market base. Based on trade 

statistics, industry knowledge and other quantitative analyses, it was determined that the analysis should 

focus on the trans-Pacific and NAFTA market as these lanes present the greatest opportunity, from both a 

volume and future growth perspective. 

The international container market moving through the West Coast of Canada, both historically and 

forecast, provide the boundaries for the sizing of the potential inland port in Saskatchewan. This 

opportunity would require the cooperation of carriers and the railroads, as they control the assets moving 

east–west through Canada. The carriers are typically responsible, usually contractually, for moving the 

containers back to the origin rail ramp, reducing the necessity for the railroad to move rail cars empty. This 

generates large “empty repositioning” costs for the ocean carriers, and they are continuously looking for 

opportunities to defray these expenses with export cargoes or domestic cargoes moving back to the same 

origin point. In general, shippers are interested in cost and transit time; offering an alternative transport 

option that generates cost savings to shippers would elicit their attention. 

This section details forecasts of containerized cargo over 10 years to estimate potential import intermodal 

freight traffic that may be captured by the proposed inland port. In addition to the actual estimated volumes 

of containerized freight, the potential containerization of bulk products is forecasted as export traffic. This 

data combines international and domestic freight and therefore certain assumptions had to be made about 

the share of traffic that is international trade. The results of the analysis are based on an aggressive 

approach that does not take into account any competition the proposed North American inland port in 

Saskatchewan may have from other inland ports. 

The findings of the market assessment indicate that there is a viable market for an inland port in 

Saskatchewan. However, the proposed port’s success will be depend on its ability to provide an efficient 

and cost competitive option to shippers moving freight into the target North American regions. 


January 2007 


West Coast Trade Growth 

Growth in the West Coast Canada container trade has been very strong, as shown in Table 6-1, which 

presents annual loaded container volumes, expressed in TEUs, from 1995 through 2005. The principal 

driver of this growth has been the extraordinary increase in North America demand for imports and rapid 

migration of import sourcing to Asia, particularly China. This strong trend in North America demand for 

imports has two distinct phases: 

• From 1995 to 2000, real GDP growth in North America was well above average and this was amplified 

by an equities-driven wealth effect. These led to a dramatic increase in the demand for consumer 

goods along with a rapid increase in penetration of imports into domestic consumption. 

• After a brief recession in 2001, a sharp reduction of interest rates engineered by the monetary 

authorities led to a housing boom and demand for housing-related good, which are increasingly 

imported from Asia. In addition, a housing-driven wealth effect further drove up demand for a broad 

range of importer consumer products. 

The import boom in North America contributed to accelerating growth in the Asia economies, particularly 

China, which in turn led to growth in North America exports to Asia. 

For export loaded containers, the compound average growth rate (CAGR) from 1995–2005 is 12.4 percent. 

Year-to-year growth of exports has been volatile, however, ranging from negative growth (2000–2001; 

2004–2005) to over 30 percent growth (1998–1999). Import growth has been higher (CAGR = 20.4 

percent) and steadier, although it has been somewhat slower since 2002. 

Table 6-1: West Coast Canada Loaded Container Trade (TEU) ¹ 

Year Export TEU Import TEU 

1995 A 262,860 163,977 

1996 A 319,589 204,450 

1997 A 366,627 258,639 

1998 A 403,249 329,690 

1999 A 530,955 398,281 

2000 A 584,015 493,089 

2001 A 563,396 518,766 

2002 A 644,693 734,632 

2003 A 739,079 836,897 

2004 A 848,331 938,944 

2005 A 842,374 1,050,386 

10 Year CAGR 12.4% 20.4% 

¹ Fraser River volumes are unavailable before 1996, although volumes are negligible 

Source: Port websites, TranSystems’ estimates 

The forecast of container volume for the inbound and outbound international trade for the West Coast of 

Canada was generated through an econometric model, utilizing 10 years of historical trade moving through 

Vancouver and Fraser River. This model takes into consideration the past trends that potentially favour the 

Canadian gateways for cargo destined for the US as well. 


January 2007 


Projected container volumes traveling through the West Coast ports of Canada display healthy growth rates 

as shown in Table 6-2, although slower than those experienced in the past ten years. As noted earlier, for 

both exports and imports, growth has already slowed down in recent years. In the case of exports, world 

demand remains strong, but export growth is expected to continue to slow down due to gradual 

strengthening of the Canadian dollar. In the case of imports, the projected slowdown in growth is due to 

reduced scope for import penetration from Asia into North America. 

Table 6-2: West Coast Canada Loaded Container Trade Forecast (TEU) 

Year Export TEU Import TEU 

2005 A 842,374 1,050,386 

2006 F 910,929 1,172,639 

2007 F 976,537 1,298,020 

2008 F 1,041,991 1,427,724 

2009 F 1,108,725 1,562,694 

2010 F 1,174,611 1,701,724 

2011 F 1,239,260 1,846,245 

2012 F 1,302902 1,995,855 

2013 F 1,365,861 2,148,004 

2014 F 1,428,795 2,300,797 

2015 F 1,491,832 2,454,093 

10 Year CAGR 5.9% 8.9% 


Canadian Trans-Pacific Trade Flows 

The inbound cargo traveling through the Vancouver gateway, approximately 95 percent from Asia, is 

primarily destined for Eastern Canada, Figure 6-1, approximately 60 percent or almost 500,000 TEUs. 

Currently, only 130,000 TEUs of cargo return to the Port of Vancouver from Eastern Canada, Figure 6-2. 

This imbalance very clearly reflects the current environment on the trans-Pacific trade with many containers 

moving back to Asia empty. These empties are likely moving via intermodal rail from Eastern Canada to 

Vancouver for transport back to Asia, at the expense of the shipping line. 

Figure 6-1: Vancouver Imports 

Destination of Vancouver Import TEU: 

YTD Sept 06 - 833,442 

Figure 6-2: Vancouver Exports 

Origin of Vancouver Export TEU: 

YTD Sept 06 - 565,455 

United States 

6% 

Prairies 

7% 

British 

Columbia 

28% 

Canada Other 

0% 

Eastern 

Canada 

59% 

Eastern 

Canada 

23% 

Canada Other 

0% 

Prairies 

13% 

United States 

3% 

British 

Columbia 

61% 

Source: Port of Vancouver 



January 2007 


The great majority of the intermodal traffi c is traveling from east to west, although given that there are only 

two regions for Canada as defined by IANA, as shown in Figure 6-3, it is difficult to ascertain what may be 

shorter-haul movements. The specific container volumes moving are displayed in Table 6-3. 

Figure 6-3: Canada as Defined by IANA 

YUKON 

Whitehorse 

Whitehorse 

NORTHWEST 

TERRITORY 

Great Slave 

Lake 

Great Bear 

Lake 

Yellowknife 

NUNAVUT 

Lake 

Athabasca 

Hudson 

Bay 

NEWFOUNDLAND 

NEWFOUNDLAND 

St. John's 

BRITISH 

COLUMBIA 

ALBERTA 

Edmonton 

Edmonton 

MANITOBA 

SASKATCHEWAN 

SASKATCHEWAN 

Lake 

Winnipegosis 

Regina 

Regina 

Winnipeg 

Winnipeg 

Lake 

Winnipeg 

Lake 

Nipigon 

ONTARIO 

QUEBEC 

Quebec 

Gulf of 

St. Lawrence 

NEW 

BRUNSWICK 

NOVA 

Fredericton 

SCOTIA 

Halifax 

Western Canada 

Eastern Canada 

Lake 

Superior 

Lake 

Michigan 

Lake 

Huron 

Toronto 

Lake 

Erie 

Ottawa 

Lake 

Ontario 

Table 6-3: 2005 Canada Intermodal Container Volumes 

Intermodal Origin Region 

Intermodal Destination Region WC Canada EC Canada 

WC Canada 197,486 525,179 

EC Canada 558,583 NA 

Other 73,441 NA 

Total 829,510 NA 

Source: IANA 

The container volumes moving from Eastern Canada to Western Canada most likely include some empty 

containers that carriers are paying the railroads to reposition back to the port for shipping back to Asia. 1 

1 

Volumes reported by IANA include all units that are “revenue-producing” for the railroad, whether empty or full. 


January 2007 


Smart Inland Port Network Potential Market and Prospective Throughput 

The following discussion looks at market size for an inland port and a review of transit and cost challenges 

facing an inland port. The numbers on volume and cost should be viewed as providing guidance with the 

need for further detailed analysis on the cargo diversion, cost and service viability of an inland port. The 

focus of discussion here are the two primary market components, which would likely drive the viability of an 

inland port: 

• Inbound traffic from Asia moving through Vancouver and the future container terminal at Prince Rupert 

destined for markets in Eastern Canada and the U.S. Midwest (Chicago, etc.). 

• Outbound traffic from Saskatchewan that is today shipped by bulk rail to ports and containerized at the 

ports. 

Import market 

There is currently an estimated 720,000 TEUs moving to eastern regions of Canada and the U.S. Midwest 

through the Port of Vancouver. This estimate is derived from the earlier analysis of traffic through the Port 

of Vancouver, which showed that Eastern Canada and the U.S. Midwest accounted for 65 percent of 

Vancouver’s inbound container traffic. 

The incentive to stop some of this cargo at an inland port in Saskatchewan would be driven by: 

• The benefits of more rapid rail loading of containers at the Port of Vancouver. Containers would no 

longer have to be sorted by final destination in Vancouver (that is, building destination specific trains) 

and instead shipments are allocated to their final destination at the inland port. This would improve the 

throughput productivity of the marine terminals and rail yards in Vancouver. 

• The provision of transloading and added-value services that provide supply chain benefits to shippers. 

The basic transload operation involves transferring roughly three 40-foot international containers into 

two larger capacity domestic containers or trailers thus providing lower onward transport costs for the 

shipper. In addition, added-value ser vices such as labelling, packaging, and mix and match, would 

provide ad ditional value to the shipper. 

• The container shipping lines achieving lower re-positioning costs (the cost of returning the container to 

Asia) through reduced cycle times and the greater opportunities to capture an export shipment back to 

Asia. 

• Domestic truckers/intermodal service providers securing eastb ound shipments Eastern Canada and 

the U.S. Midwest, which enhances utilization of domestic trailers and intermodal containers. 

A number of important requirements are needed to ensure benefits are realized. These include: 

• The availability of low cost labour and land to support the transload and added-value activities provided 

at the inland port, 

• Sufficient domestic equipment to support the transload operation, 

• Information systems that ensure tracking of containers and shipments, 

• Proximity to the intermodal rail yard to minimize dray costs between the terminal and transload facility, 

and 

• Sufficient cargo volumes to support full train service to/from the inland port. 


January 2007 


Export Market 

The availability of balanced export oriented cargo will be an important incentive for container shipping lines 

to consider use of an inland port. Natural resource and agricultural products currently dominate 

Saskatchewan exports. 

Saskatchewan in 2004, in terms of the value of exports, was a leading global exporter of: 

• potash (49% of global exports, 9,998,000 tonnes) 

• durum (25% of global exports, 1,751,180 tonnes) 

• canola (17% of global exports, 1,011,320 tonnes) 

• peas (24% of global exports, 801,310 tonnes) 

• oats (15% of global exports, 417,580 tonnes) 

• crude canola oil (13% of global exports, 680,381 tonnes) 

• lentils (26% of global exports, 219,360 tonnes) 

• flax (42% of global exports, 174,110 tonnes) 

• mustard (29% of global exports, 139,800 tonnes) 

• canary seed (55% of global exports, 121,200 tonnes) 

• cured pork bellies (15%, 32,381 tonnes) 

(Source: Western Economic Development Canada) 

Although the vast majority of Saskatchewan’s resource and agricultural commodity exports are currently 

shipped by bulk methods, there is a rapid trend to containerize these products upon the global stage. Due 

to the volume of exports from agriculture, forestry, potash, and a growing manufacturing sector, even a 

sma ll percentage of conversion to containerization would dramatically increase the backhaul opportunities 

for shippers. 

Export Analysis: Example - Pulse Crops 

Spearheading the containerization trend of agriculture exports are high-value specialty crops, such as 

pulses - dry peas, dry beans, lentils and chickpeas. At this point the container stuffing is mostly performed 

at the port of loading rather than at an inland point. The growing customer concerns of traceability and 

identity preservation of most products will drive increased demand of containerized shipments. 

Canada is the world’s largest 

producer and exporter of dry peas 

and close to two-thirds of Canada’s 

annual production is exported, and 

Saskatchewan is the principal 

growing region. The world’s three 

largest import markets are Spain, 

India and China. Canadian exports 

grew steadily until 2002 when 

severe drought sharply reduced 

production and exports. Since then, 

exports have steadily recovered 

and, at 2.5 million tonnes in 2005, 

0 MT 

00 

Figure 6-4: Pulses Exported Through Port of Vancouver 

2,000 

1,800 

1,600 

1,400 

1,200 

1,000 

800 

600 

400 

200 

0 

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 

Dry Peas Dry Beans (Incl. Chick Peas) Lentils Total 



January 2007 


established a new record. The long-term trend of export growth has been supported by increased world 

demand, notably from India, and recently from China. Exports to Asia are primarily for food consumption 

while shipments to Europe are nearly all for animal feed. 

Vancouver is the principal export gateway for pulses (dry peas, dry beans, chick peas and lentils) grown in 

Western Canada (the provinces of British Colombia, Alberta, Saskatchewan and Manitoba). The Port of 

Vancouver has handled 50 to 55 percent of Canadian exports of pulses over the past few years. 

Penetration is greatest in dry peas, where the largest and fastest growing export markets are in Asia and 

favour the use of Vancouver. Vancouver handled 1.73 million tonnes of pulses (dry peas, dry beans, chick 

peas and lentils) in 2005. Vancouver’s exports of pulses grew nearly fourfold between 1995 and 2005 

driv en by the expansion of Canada’s production and exports, notably shipments to markets in Asia. Annual 

export volume is volatile as it reflects the underlying annual crop sizes and yields. Export traffic through 

Vancouver reached a record 1.81 million tonnes in 2001 then fell back to under one million tonnes in 2003 

du e to poor crops, recovering to 1.73 million tonnes in 2005. Dry peas are the dominant commodity in the 

pulses group and accounted for 92 percent of Vancouver’s pulses throughput in 2005. 

The share of pulses exported in containers has fluctuated between 20 and 45 percent over the past decade 

(Figure 6-5). The volatility reflects factors such as relative pricing of the different transport modes, container 

equipment availability, foreign market characteristics, cargo lot sizes, and commodity characteristics. 

Exports of dry peas are mostly in bulk and exports of dry beans and lentils are primarily containerized. 

Figure 6-5: Transport Mode of Pulses Exported Through Port of Vancouver 

rts 

Expo 

Share of 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

95 96 97 98 99 00 01 02 03 04 05 

Bulk Share 

Containerized Share 


Pulses, the largest specialty crop group handled by the Port of Vancouver provides an example of the 

potential cargo that could be handled by an inland port. Representative container volumes are determined 

by: 

• Estimating Saskatchewan’s share of Canadian production of pulses and applying that share to 

throughput of containerized pulses at the Port of Vancouver. 

• The base potential market is determined by looking at container share of traffic in 2005. 

• A high potential market is determined by looking at the historical peak in container share. 


January 2007 


The use of containers in any year is heavily influenced by the relative cost of container shipping versus bulk 

carrier shipping. In years, when container shipping is cheap relative to bulk carrier shipping, then the 

container share tends to increase. Overall, there has been an increase in the penetration of containers due 

to the increased availability of empty containers for backhaul cargo to Asia, improved port infrastructure for 

containers in major importing markets, and increased shipments in smaller lots. 

Table 6-4: Existing Containerization of Saskatchewan Pulses for Potential Market at Inland Port 

Pulses Shipped Through Port of Vancouver in 2005 

Dry Peas Dry Beans/ Chick Peas Lentils Total 

Total MT 1,640,588 40,052 47,875 1,728,515 

Containerized MT 439,816 40,052 37,312 517,180 

Container Share 27% 100% 78% 30% 

Historical Peak Container Share 39% 100% 78% 

Potential Annual Market for CISCOR inland port (Based on 2005 Volumes) 

Dry Peas Dry Beans/ Chick Peas Lentils Total 

Estimated Saskatchewan Share of 

Production 

78% 30% 80% 

Base Containerized MT 343,056 12,016 29,850 384,922 

High Containerized MT if Peak Share 499,067 12,016 29,874 540,956 

Base TEU 1 17,153 601 1,492 19,246 

High TEU if Peak Share 

1 

24,953 601 133 25,687 

(1) MT converted to TEU assuming 20 MT per twenty-foot container. Due to their high density, the preference is to ship pulses 

in 20-foot containers. Access to a high-stress 20-foot container would allow around 25 MT to be loaded; the assumption 

here is a lower 20 MT so that the net weight does not exceed 22.7 MT (50,000 lbs), above which a railroad will apply a 

surcharge (based on policy of CN railroad). Other considerations are the local highway weight limitations, which can have 

an impact on MT loaded per container. 



January 2007 


Prospective Throughput 

A reasonable floor for the potential throughput of the inland port is the assumption that the shipping lines 

would seek to have a balanced flow – that is, a container stopped at the inland port must secure an export 

load. Prospective volumes are determined by conducting an analysis of current major exports from 

Saskatchewan and applied assumptions of containerized traffic conversion if suitable inland port facilities 

existed. 

Saskatchewan is a leading exporter of a broad range of agricultural and other commodities that are suitable 

to be containerized to some extent. By con verting bulk cargo to containers and source loading commodities 

at an inland port, excess empty container ca rs can be removed from the rail lines. This reduces the 

growing imbalance of trade and improves the efficiency of the cargo supply chain in North A merica. 

The following tables provide export statistics on a portion of Saskatchewan exports: major agricultural 

products, potash, and wood pulp. 

Table 6-5: Future Containerization of Saskatchewan Agricultural Commodity Exports to Asia in MT (2004-2005 Data) 

Wheat Durum Oats Barley Flax Canola Pulses Total 

SK Global Exports 1 3,595,020 1,751, 180 417 ,580 1,513,180 174,110 1,011,320 1,031,610 7,276,960 

Asian Market Share (%) 2 70% 20% 5 % 80% 5% 75% 85% 

67% 

Asian Exports 2,516,514 350,236 20,879 1,210,544 8,706 758,490 876, 869 4,865,369 

Container Share (%) 

3 

15% 15% 15% 15% 15% 15% 75% 29% 

TEU 4 18,874 2,627 157 9,079 65 5,689 32,883 69,373 

(1) Canada Grain Commission – Grain Delivered to Prairie Points 

(2) Canada Grain Commission – Canadian Grain Exports 

(3) Container share percentage derived from interviews with Saskatchewan shippers 

(4) MT converted to TEU assuming 20 MT per 20-foot container, assumes all commodities shipped in 20-foot containers.. 

Table 6-6: Future Containerization of Saskatchewan Agricultural Commodity Exports to NAFTA in MT (2004-2005 Data) 

Wheat Durum Oats Barley Flax Canola Pulses Total 

SK Global Exports 1 3,595,020 1,751,180 417,580 1,513,180 174,110 1,011,320 1,031,610 7,276,960 

NAFTA Market Share (%) 2 8% 15% 81% 15% 22% 17% 5% 18% 

NAFTA Exports 287,602 262,677 338,240 226,977 38,304 171,924 51,581 1,325,724 

Container Share (%) 3 15% 15% 15% 15% 15% 15% 75% 18% 

TEU 4 2,157 1,970 2,537 1,702 287 1,289 1,934 11,877 

(1) Canada Grain Commission – Grain Delivered to Prairie Points 



(4) MT converted to TEU assuming 20 MT per 20-foot container; assumes all commodities shipped in 20-foot containers. 


January 2007 


Table 6-7: Future Containerization of Saskatchewan Processed Agricultural Exports to Asia and Others in MT (2004- 

2005 Data) 

Wheat Flour Canola Meal Canola Oil Pork Total 

Saskatchewan Global Exports 1 113,840 447,784 680,381 32,381 1,274,386 

Asia Market Share (%) 1 13% 38% 3% 42% 17% 

Others Market Share (%) 1 27% 19% 26% 4% 23% 

Asia and Others Exports 45,536 255,237 197,310 14,895 512,979 

Container Share (%) 2 100% 100% 100% 100% 100% 

TEU 3 2,277 12,762 13,154 828 45,598 



(3) MT converted to TEU assuming 20MT per 20-foot container for wheat flour and canola meal; 15 MT per 20-foot for 

canola oil; and 18 MT per 40-foot container for pork. 

Table 6-8: Future Containerization of Saskatchewan Processed Agricultural Exports to NAFTA in MT (2004-2005 Data) 

Wheat Flour Canola Meal Canola Oil Pork Total 

Saskatchewan Global Exports 1 113,840 447,784 680,381 32,381 1,274,386 

NAFTA Market Share (%) 2 60% 43% 70% 55% 59% 

NAFTA Exports 68,304 192,547 476,267 17,810 754,927 

Container Share (%) 3 100% 100 % 100 % 100% 100% 

TEU 4 3 ,415 9,627 31,751 989 67,105 

(1) Canada Grain Commission – Grain De livered to Prairie Points 



(4) MT converted to TEU assuming 20MT per 20-foot container for wheat flour and canola meal; 15 MT per 20-foot for 

canola oil; and 18 MT per 40-foot container for pork. 

Table 6-9: Future Containerization of Saskatchewan Potash Exports to Asia and Others in MT (2004-2005 Data) 

2001 2002 2003 2004 2005 

Saskatchewan Global Exports 

1 

7,785,000 8,145,000 8,791,000 9,998,000 9,539,000 

Asia Potash Market Share (%) 2 37% 37% 30% 33% 33% 

Others Potash Market Share (%) 14 % 15% 12% 

14% 10% 

Asia and Others Exports 2,880,450 3,013,650 2,637, 300 3,299,340 3,147,870 

Container Share (%) 3 5% 

5% 5% 5% 5% 

TEU 4 8, 472 8,864 7,757 

9,704 9,258 

(1) Saskatchewan Bureau of Statistics 

(2) Industry Canada – Strategis Statistics 


(4) MT converted to TEU assuming 17MT per 20-foot container. 

Table 6-10: Future Containerization of Saskatchewan Potash Exports to NAFTA in MT (2004-2005 Data) 

2001 2002 2003 2004 2005 

Saskatchewan Global Exports 1 7,785,000 8,145,000 8,791,000 9,998,000 9,539,000 

NAFTA Potash Market Share (%) 2 49% 48% 58% 54% 57% 

NAFTA Potash Exports 3,814,650 3,909,600 5,098,780 5,398,920 5,437,230 


TEU 4 11,220 11,499 14,996 15,879 15,992 

(1) Saskatchewan Bureau of Statistics 



(4) MT converted to TEU assuming 17MT per 20-foot container. 


January 2007 


Table 6-11: Future Containerization of Saskatchewan Pulp Exports to Asia in MT (2004-2005 Data) 

2001 2002 2003 2004 2005 

Saskatchewan Global Exports 1 $ 427,326,479 $366,878,474 $ 401 ,011,390 $403,3 70,817 $402,531,577 

NAFTA Market Share (%) 1 70% 50% 54% 55% 58% 

NAFTA Exports $299,128,535 $183,439,237 $216,54 6,151 $221,8 53,949 $233,468,315 

$CDN per tonne ($CDN/MT) 2 $689 $7 73 $752 $806 $815 

NAFTA Exports (MT) 434,464 237,425 287,930 275,117 286,411 


TEU 4 4,345 2,374 2, 879 2,751 2,864 


(2) Bank of Montreal Commodity Price Report – Years 2001 to 2005 


(4) MT converted to TEU assuming 25 MT per 40-foot container. 

Table 6-12: Future Containerization of Saskatchewan Pulp Exports to NAFTA in MT (2004-2005 Data) 

2001 2002 2003 2004 2005 

Saskatchewan Global Exports 1 $42 7,326,479 $366 ,878,474 $401 ,011,390 $403 ,370,817 $4 02,531,577 

Asia Market Share (%) 1 18% 28% 23% 23% 22% 

Asia Exports 1 $76,918,766 $1 02 ,725,973 $92 ,232,620 $92 ,775,288 $88,556,947 

$CDN per tonne ($CDN/MT) 2 $689 $ 773 $ 752 $ 806 $815 

Asia Exports (MT) 111,719 132,958 122,637 115,049 108,639 


TEU 

4 

2,234 2,659 2,453 2,301 2,173 


(2) Bank of Montreal Commodity Price Report – Years 2001 to 2005 


(4) MT converted to TEU assuming 25 MT per 40-foot container. 

Table 6-13: Summary of Future Containerization 

of Saskatc hewan Exports to Asia (2004-2005 Data) 



Ag Processed Exports 512,979 100% 29, 020 


Pulp Exports 108,639 50% 2,173 


Table 6-14: Summary of Future Containerization of Saskatchewan Exports to NAFTA (2004-2005 Data) 





Pulp Exports 286,411 25% 2,864 



January 2007 


Table 6-15: Potential CISCOR Smart Inland Port Market 

TEU TEU - 30% TEU + 10% 

Asia Outbound 109,824 76,877 120, 

807 

Asia Inbound 1 109,824 76,877 120,807 

NAFTA Outbound 76,516 53,561 84,168 

NAFTA Inbound 1 76,516 53, 561 84,168 

Total Throughput 372,681 260,877 

409,949 

(1) Assumes shipping lines will seek to maintain a balanced flow with each exp ort load offset by an import load. 

The above analysis of major export commodities indicates a market potential of approximately 260,000 to 

410,000 TEUs for the inland port. There is considerable potential to capture more TEU per year 

(tran 

sloaded) of agricultural, forestry, prepared foods, potash, machinery products by other routes into the 

continental U.S, that are not considered within the analysis. The analysis also excludes additional 

commodity types, such as other livestock, that may be suitable for handling by the inland port. Additional 

volumes may be available originating through e ast coast ports but this is likely to be a very small market, 

one insufficient to support an inland port. 

A factor that may encourage shippin g lines to stop inbound containers at the inland port would be the ability 

to rapidly return empty containers to Asia for high revenue import loads. A f urther benefit is the ability to 

transload export-oriented products from across Canada and the north-east U.S. with intelligent capabilities 

for cus toms clearance. Therefore, the total potential throughput could be over 500,000 TEUs assuming 

the cost, transit and service conditions are in place to make the smart inland port a viable distribution, 

customs clearance, and transload facility. 

Success in capturing the above cargo flows will be determined by the efficiency and cost savings that 

shippers, shipping lines, railroads and others involved in the international trade process would secure by 

using an inland port. 


January 2007 


. Cost Analysis – A Business Case 

An important aspect of determining the feasibility of an inland port system in Saskatchewan is evaluating 

whether the port will be competitive with existing transportation options. An intermodal connection to the 

Midwest, specifically Chicago, would represent one of the best opportunities for a proposed CISCOR Smart 

Inland Port Network. In 2005, the Midwest region accou nted for 3.14 million container moves. Of those 

container moves, 67 percent originat ed in Asia. This cost analysis examines the current trucking and rail 

costs between the Port of Vancouver and Chicago. These costs are compared with the estimated costs for 

transporting goods through the inland port in Saskatchewan. 

Import Containerized Trade 

The cost estimates for both transportation options and future transport through Saskatchewan were 

developed using a few important assumptions. Intermodal rail and trucking costs to Chicago are 

determined using price quotes provided by both transportation companies and also firms that have goods 

transported through the port. All trucking costs are based on kilometres between pick-up and drop-off 

locations. A simplified analysis is presented below for freight moving from Vancouver to Chicago: 

Table 7-1. Estimated Cost Comparison of an International Container Transloaded at Inland Port vs. Direct Shipment 

Canadian Dollars Vancouver - 

Saskatchewan - 

Vancouver - 

Saskatchewan - 

Vancouver – 

Chicago 

Chicago 

Chicago 

Transport Mode Rail Rail & Truck Rail 

Cost per 40-ft Container 1 

Intermodal Rail $1,400 $1,400 $2,200 

Lift / Dray Cost $50 $50 

Inland Transload $350 $350 

Lift / Dray Cost $50 - 

Intermodal Rail 2 $800 - 

Truck 3 - $1,000 

Destination Local Dray 4 $120 - $175 

Total Cost per 40-ft Container $2,770 $2,800 $2,375 

(1) Rates exclude fuel surcharges 

(2) Assumes three 40-ft containers transloaded to two domestic containers and rate per domestic container is $1,200. 

(3) Assumes three 40-ft containers transloaded to two domestic trailers and rate per domestic trailer is $1,500. 

(4) Assumes three 40-ft containers transloaded to two domestic containers and local dray rate is $175. 

Shippers are increasingly selecting transportation services based on time-definite service and reliability, 

rather than mode or route. In order to become a viable alternative to door-to-door truck service or 

intermodal door-to-door truck-rail service, an inland port must integrate full service, time-definite freight 

transport. The inland port must also offer a package that ensures the shipper’s door-to-door transit time is 

competitive with current practice. 


January 2007 


Today, intermodal rail transit time from Vancouver to Chicago is five days and to Toronto is four days 1 . The 

shipper using the inland port would incur additional time, stopping the container and perform transloading 

(say one to three days). This time would have to be recovered elsewhere in the supply chain, for example 

through the ability to create direct delivery shipments from the inland port. 

The shipper would seek to recover the additional costs of transloading elsewhere in the supply chain, such 

as through the lower cost of moving goods in domestic equipment (approximately three 40-foot containers 

can be transloaded into two domestic container or trailers), reduce non-revenue moves by loading empty 

containers with local cargo and better management of inventory. There are a large number of variables 

that will drive cost competitiveness – labour cost, equipment availability, etc. One significant variable is the 

role of contract pricing in intermodal rail service. The major container shipping lines moving containers from 

Vancouver through to the Eastern markets likely do so under contracts with the railroads that have 

competitive prices determined by volume commitments. Such competitive pricing may or may not be 

available for volume container shipments moving to and from the inland port. 

Containerization of Export Bulk Products 

The global trend towards containerization of bulk commodities reflects the balancing of bulk and container 

shipping rates, shorter intermodal delivery times, and increased concerns about product quality and 

shipment safety. The ability of an inland port to source load containers will be determined by the cost of 

container processing at an inland point versus the cost of doing so at the Port of Vancouver, which occurs 

approximately 50 percent of the time. The decision on where to containerize bulk products is driven by cost 

and equipment availability issues. The basic analysis of transport costs indicates that source loading of 

containers is less than shipping product by rail hopper car to the port and then loading into containers at the 

port. 

Table 7-2: Shipper Transport Cost Analysis (Based on 20-foot Containers) 

Source Loaded at Points in Port Loaded, Origin 

Saskatchewan Saskatchewan 

Origin Dray $430 - 

Rail / Hopper Car - $3,550 

Rail / Container $1,100* $890** 

Destination Dray - $230 

Stuffing - $545 

Total per Container $1,530 $1,665 

Difference - +9% 

*Based on 90 MT per hopper car, the equivalent of four 20-foot containers at 22.5 MT per container. 

** Equivalent rate per container based on four container loads per hopper car. 

Source: “Container Measures Study: Issues and Discussion for Proposed Measures for the Grain 

Monitoring Program” June 2006, Government of Canada 

1 

CN’s domestic intermodal ramp-to-ramp service schedule on www.cn.ca. 


January 2007 


One challenge for the shipper who wants to source-load a container is the availability of equipment. 

Container shipping lines are often more interested in returning an empty container rapidly to Asia to pick up 

a higher revenue-paying import load than in securing a lower revenue export load. However, the operation 

of a central inland port, located at or near an intermodal rail facility may encourage increased availability of 

empty containers for export loads. 

The proposed terminal’s competitive position will be determined by its ability to offer comparable or superior 

facilities, services and costs relative to other North American inland ports. The economic analysis indicates 

that the proposed terminal may have cost (transport, terminal handling) and productivity advantages 

relative to existing inland gateways. 

The development of a new inland port can be made “future ready”, integrating state-of-the-art equipment 

and technological advancement that increases productivity. Older, more established port infrastructure 

cannot as readily take advantage of new port technologies and productivity enhancements since they must 

invest in upgrades to older facilities. In combination with competitive pricing and service from the CN and 

CPR, this should enable the proposed terminal to compete in the targeted markets for both incremental 

growth and the potential diversion of traffic from other Canadian inland centres. 


Business Case Conclusion and Recommendations 

As demonstrated in this paper, recent global trade trends and empirical evidence underline a new phase of 

port development that incorporates inland port integration. Shipping companies are increasing ship sizes 

and transporting more goods to global market consumption centres as a means to achieve economies of 

scale. The larger vessels which exceed the dimensions of the Panama Canal require ever-increasing 

marine terminal capacity and seamless landside access connectivity. In the highly competitive and 

evolving environment of transportation logistics, strategies to link seaports more closely to inland 

operations and invest in landside network improvements may become imperative if ports want to retain or 

increase their market share in the future. The shipping community will only then fully benefit from the 

synergies of a total transport and logistics chain. 

The continuing significant growth in global containerized trade, particularly in the Asian trades and the 

concentration of intermodal Asian cargoes on express rail transfer services, will give Canadian ports and 

their associated rail land-bridge services a substantial advantage in transit time and cost over other 

competing North American ports and services. This study has identified a viable opportunity to develop a 

smart inland port in Saskatchewan given that certain critical conditions can be met: 

• A critical mass of cargo, both inbound imports for distribution and outbound exports must be developed 

in Saskatchewan. This includes transload and distribution of imported products for the North American 

market, as well as loading empty containers with local and transloaded products for export.. 

• Sufficient rail car volume must be take place at the smart inland port to justify dedicated unit trains to 

and from the Pacific Northwest. 

• The inland port must offer compelling value-added logistics services to engage the shipping community 

and create a distinct intelligent competitive advantage over “business as usual” cargo distribution 

modes. 

• The economics of the inland port must be attractive to operators, investors and shipping interests. 

When these conditions are met, the CISCOR Smart Inland Port Network in Saskatchewan will be a viable 

part of the Canadian intermodal network and will result in significant competitive advantages and benefits: 

• Development of a state-of-the art, competitive, secure and sustainable national gateway. 

• Enhancement and fulfillment of Canada’s emerging national intermodal land bridge (CISCOR). 

• Integration of leading-edge information technology services for transport providers to achieve supply 

chain excellence, allowing maximum control of end to-end shipments. 

• Creation of a free-trade zone to attract manufacturing for re-export. 

• Stimulation of additional Asian import and export opportunities for Canada and North and Midwest U.S. 

• Establishment of trade through consolidation and containerization of import and export cargo at 

warehousing and logistics centres at the inland port. 

• Establishment of unique Greenfield facilities made “future ready”, integrating state-of-the-art equipment 

and technological advancement tailored to meet port and intermodal challenges of today and tomorrow.

January 2007 


To realize the promise of the initiative to develop a Smart Inland Port Network in Saskatchewan that serves 

as the nucleus to the Canadian Intelligent Super Corridor, the following feasibility steps outlined below 

should be undertaken: 

Initiate legislative reform – Regulatory reform of cabotage restrictions and the Railway Revenue Cap 

under the Canada Transportation Act (CTA) has the potential to reduce freight rates, improve shipper 

performance, increase rail capacity and reduce empty mile ratios for carriers. A detailed and independent 

study of potential benefits and risks of cabotage liberalization and CTA revisions should be performed prior 

to the development of a legislative reform proposal. 

Perform detailed market assessment and development study – As with any development project, the 

financial viability will hinge on physical and market factors. These include carrier preferences, CN and CPR 

train operations, and penetration of inland markets at competitive rates. 

Verify the capital construction and equipment costs – A challenge to be faced in any port/intermodal 

development is the initial capital construction and equipment costs and the time lag between initiation of 

construction and inception of operations and generation of revenue from the project. Therefore, a crucial 

next step will be to complete a detailed terminal conceptual plan and recommended equipment layout in 

order to provide a defensible, flexible yet expandable terminal plan with a realistic capital cost estimate and 

a time dependent budget draw down schedule for initiation of the terminal operations. 

Quantify the operational costs and projected returns – To build an inland port in Saskatchewan on a 

sound economic basis, the gross operating revenues and operating costs must be quantified. These 

revenues and costs, as applied to the projected cargo demand will define the expected return on the project 

capital invested. 

Build a comprehensive financial model – Given a solid, time-dependent schedule of costs and projected 

reve 

nues, an evaluation of the base case financial model for this project will quantify the internal rate of 

return for the capital investment, the ability of the project to carry debt, as well as the total present value for 

each phase of construction. 

The compelling factors outlined in this study show significant promise for the development of a state-of-the- 

network. The advancement of the inland port concept that builds on Canada’s strengths and leverages its 

art inland port facilities in Saskatchewan to serve as the centre of the expanding North American trade 

investment in roadway, rail, and intermodal infrastructure will ultimately stimulate growth in various 

provincial industries and benefit the national economy. 


Page CR-2

January 2007 


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Notes 


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