Global logistics: UPS rolls out plans for new Calgary-based DC

Jeff Berman, Group News Editor -- Logistics Management, 11/21/2008

MISSISSAUGA, Ontario—UPS said this week it is opening up a $26 million, 150,000 square-foot distribution center at the Calgary International Airport in an effort to meet the rising needs of the economy in the Alberta province of Canada. The DC is expected to be up and running by October 2009.

The company said the facility will provide shippers with state-of-the-art technology to facilitate import, export and Canadian domestic shipments and will also allow UPS to double its package processing capability in the future. And it will house 157 trucks and service Calgary and surrounding locales, including Airdrie, High River, Bragg Creek, Cochrane, Strathmnore, Canmore, and Banff.

UPS presently has three DC facilities in the Calgary area, which have seen a 60 percent increase in volume orders since 2003 from the greater Calgary area from the retail, technology, and financial sectors. It expects the facility to ease the flow of parcels through the distribution process and maintain  a high level of customer service. UPS Canada spokesperson Steve Vitale said that on account of strong economic activity in the region in the last few years, UPS has “grown out” of these facilities, driving the need for something bigger.

Having the new DC at the Calgary International Airport is something that made perfect sense for UPS, said Vitale.

“We can fly planes directly into the airport and get there easily, which improves the process time for our air packages…and at the same time it is conveniently located at the cross roads of the Trans Canada Highway, which is also a perfect spot for ground movements.”

While UPS expects the new facility to double its package processing capability in the future, Vitale declined to disclose specific figures. But he said that the improvements for air package shipments will be quite noticeable. In the past, these shipments would have gone to one of its three DCs and from there be driven to the airport. But the new location will eliminate any congestion-related issues that may have previously arisen due to this set-up in getting packages on to aircraft headed to various global destinations.

A booming logistics landscape: UPS said that this new facility is another addition to Calgary’s transportation and logistics industry which the Calgary Economic Development Authority said has grown by 77 percent—twice the rate of the Canadian economy—and also doubled the size of its workforce to 40,700 in the last ten years. The new UPS facility will employ 415 employees, according to the company.

The new facility will have airside access in the Calgary International Airport’s YYC Global Logistics Parks, which is comprised of international trade and transportation hubs that move goods from local, regional, and international destinations, said UPS. It added the parks have more than doubled air cargo movement at the airport to 134,000 tons in 2007 from 66,000 tons in 1999.

“Calgary is clearly Alberta’s premier international gateway for cargo today and in the future, and this new facility will ensure current and new customers continue to receive expedient, reliable, and convenient service,” said Mike Tierney, president of UPS Canada, in a statement.