CentrePort Canada Canada s First Tri-Modal Inland Port and Foreign Trade Zone
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1 CentrePort Canada Canada s First Tri-Modal Inland Port and Foreign Trade Zone Diane Gray, President and CEO CentrePort Canada Inc. June
2 Key Trends to Capitalize On 2 Augment existing relationships (like NAFTA) to enhance global competitiveness. Seek opportunities for investment attraction by capitalizing on new markets Invest in strategic infrastructure to enhance competitiveness of your region and to capitalize on changing supply chain trends.
3 A Unique Partnership 3 U.S. trade with NAFTA partners was $289 billion in It has the potential to exceed $1 trillion in Canada and Mexico are the largest exports markets for the U.S. They account for 32% of U.S. exports and 27% of imports. Canada is the largest export market for 35 US States. Trade in the region is facilitated by critical shared gateways, like the Mid- Continent Trade and Transportation Corridor and the Can-Amex Corridor as well as through integrated supply chains. As one in five jobs are linked to international trade, agreements like NAFTA provide our region with significant competitive advantages.
4 Relevant Issues to be Addressed 4 Despite the close relationship, issues still remain that impact business: Threats of enhanced protectionism Deteriorating infrastructure and congestion along key gateways Insufficient coordination among governments - legitimate people, goods and services being delayed at border crossings Border inefficiencies cost the Canadian economy at least $16 billion per year (Perimeter Security and Economic Competitiveness Action Plan In Brief). The Beyond the Border Action Plan (released by Prime Minister Harper and President Obama on December 7, 2011) aims to enhance perimeter security and economic competitiveness by collaborating to address threats early; promote trade, economic growth, and jobs; strengthen cross-border law enforcement; and protect shared critical infrastructure.
5 Global Trade Continues to Grow 5 World trade has risen 730% per cent over the last 30 years, from $2.4 trillion to $20 trillion. Germany, the USA, China, Japan and France are the top five exporters and importers and account for 34% of global trade. By 2050, the combined size of the seven largest developing economies will grow to 150% of the size of the G7 countries. The Asia-Pacific is home to more than half the world s population and 4 of the world s 10 largest economies. Economic growth in the Asia-Pacific was 9% per year between , compared with 4% globally; and economic output is greater than the US and EU combined. 2/3 of all Canadian exports to the Asia-Pacific are from Western Canada.
6 Growing Trade has Created Congestion 6 The U.S. Highway Administration estimates that freight movements across all modes will increase 61% between 2010 and The U.S. Department of Transportation estimates many freight railways already exceed theoretical capacity and are congested. Capacity must rise by nearly 90% to meet forecast demand by 2035 (The Economist - July 2010). Intermodal rail tonnage is expected to be the fastest growing mode for transporting freight tonnage in the U.S. The Cost of Urban Traffic Congestion in Canada (Transport Canada - March 2006). Total cost of congestion in 9 Canadian urban areas wasted time, fuel, and GHG emissions $2.3 billion to $3.7 billion.
7 Cost of Congestion 7 Congestion and Truck Delays, 2010 (Urban Mobility Report Texas Transportation Institute) Truck Congestion Cost ($ million) Total Congestion Cost ($ million) Truck Delay (1,000 hrs) Total Delay (1,000 hrs) Los Angeles-Long Beach-Santa Ana New York-Newark Chicago $2,254 $10,999 30, ,449 $2,218 $9,794 30, ,564 $2,317 $8,206 31, ,122 Seattle $603 $1,905 6,296 87,919 Minneapolis-St. $300 $ ,073 78,483 18% Paul of vehicle miles travelled (VMT) in the U.S. are on roads with insufficient capacity for current traffic levels. This is expected to grow to 24% by 2020 and 36% by 2040 (American Society of Civil Engineers).
8 Why Invest in Infrastructure 8 Adequately investing in infrastructure now, could: - Improve productively and encourage growth of high paying jobs. o By 2040, maintained/ new service and manufacturing jobs would pay on average 28% more in the U.S. - Economic gains higher productivity levels and lower costs. o Enhance reliability (i.e. just-in-time deliveries). - Save future generations from shouldering the burden. o o Lower maintenance costs by alleviating pressures on road infrastructure. Decrease environmental and safety costs. - Keep key transportation corridors and ports competitive by halting growing congestion trends. Cumulative Costs of Deficient/ Deteriorating Surface Infrastructure (American Society of Civil Engineers) 2010 $130,000,000, $912,000,000, $2,972,000,000,000
9 9 One Solution: Develop Logistics Hubs to Attract Future Growth Advantages of Using an Inland Port
10 Logistics Hubs - Supporting Economic Growth for the Future 10 Transformational to the Economy: More than distribution; opportunity to attract value-added manufacturing and assembly facilities (manufacturing in Singapore is now over 26% of GDP); Creates balance in imports / exports (important for competitive freight rate environment); Supports diversification of market opportunities for business.
11 11 CentrePort: Canada s Centre for Global Trade CentrePort Canada is a business, logistics and development facilitator and an investment promotion and marketing agency. CentrePort Canada is a 20,000 acre trimodal inland port and is Canada s only Foreign Trade Zone. We offer a one-stop shop for business and development decisions.
12 At the Hub of Key Trade Gateways 12 CentrePort Canada is connected to important global markets: Asia Pacific Gateway Trans Canada Corridor Northwest Corridor NAFTA Gateway Mid-Continent Corridor Eastern USA Seaboard Mexico Quebec-Ontario Gateway Trans Canada Corridor Windsor/Detroit Atlantic Gateway Halifax Port Arctic Gateway Air Polar Routes Marine Polar Routes
13 24 Hour Trans-shipment Distribution Coverage from Winnipeg 13 A Time Efficient and Cost Effective Distribution Model
14 Tri-Modal Logistics 14 CentrePort is served by CN, CP and BNSF. Planning has begun to develop an on-site common use rail facility to enhance rail access. CentrePort is a significant trucking centre. $212.5 million in federalprovincial funding has been committed to build CentrePort Canada Way. Construction expected to be complete in James Armstrong Richardson International Airport is #1 in Canada for dedicated freighter aircraft movements.
15 Facilitating Value-Added Investment 15 Single window access to federal FTZ programs. Supports the import, storing and re-exporting of goods without paying duties and taxes until point of sale. Provides companies with cash-flow management support. Keep overall business costs competitive. Fast-track land and investment approvals Use Tax Increment Financing to support infrastructure needs by capturing incremental property and education taxes.
16 16 Repatriation of Manufacturing Jobs to North America 37% of U.S. manufacturing executives with sales of $1 billion are planning/ actively considering repatriating jobs to the U.S. (Boston Consulting Group). Reasons for repatriating: Increasing production costs in Asia Rising transportation costs Supply chain disruption risks Access to highly educated and skilled labour force Proximity to world s largest market Well-established and comprehensive transportation network
17 What the Global Recession Has Taught Us 17 If the financial crisis and global recession has taught business and governments anything, it is that the world is now more interconnected than before. Global trade is alive and growing. In an intensely competitive global economy we have to lay the groundwork and the infrastructure to attract investment, which creates jobs. Differentiation, predictability, and efficiency are the key buzzwords for logistics and business investment decisions. All of these have consequences for North America, policy-makers and the future of our interconnected transportation infrastructure.
18 18 CentrePort Canada: Canada s Centre for Global Trade Contact: Diane Gray Diane.Gray@CentrePortCanada.ca
November 25, Diane Gray President and CEO CentrePort Canada
1 Why CentrePort Canada November 25, 2010 Diane Gray President and CEO CentrePort Canada Manitoba s Diversified, Strong Economy 2 Growth is based across sectors, including: Aerospace, Information & Telecommunications,
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