There are no secrets to success. It is the result of preparation, determination, and in this particular case, innovation.
For the past two years, CP’s automotive strategy has been focused on attracting the right customers, in the right markets, and working with them to develop mutually beneficial solutions.
The opening of the new Vancouver Automotive Compound (VAC), is yet another prime example of how Automotive Sales and Marketing came up with a creative idea to attract new business and create capacity in an oversold market.
For decades, Vancouver’s Annacis Island has been the only auto compound in the area. Nestled along the Fraser River between the communities of New Westminster, Surrey, Delta and Richmond, Annacis Island is the epicentre for all vehicle distribution in British Columbia. The site mainly serves two purposes: it is the destination terminal for cars made in North America, and it receives inbound vehicles from South Korea and Japan.
Today, space on Annacis Island is limited, making it a transportation bottleneck for customers.
Vancouver Automotive Compound
Capacity Fast Facts
“Vancouver is Canada’s fastest growing automotive market and to capture new business, our team had to come up with a new game plan and propose a better solution to our customers,” said Jonathan Wahba, Vice-President Sales and Marketing, Intermodal and Automotive.
Taking a Closer Look
Understanding Vancouver’s capacity constraints, Sales and Marketing began to look inward, taking a closer look at our own footprint in the area, including any unused assets.
That’s when a vacant, 19-acre plot of land stood out. Located directly adjacent to our main line and in close proximity to our Vancouver Intermodal Facility, the property became the answer to the Annacis Island conundrum.
Several departments, including market strategy, real estate, legal, finance and industrial development, worked collaboratively to develop a business case to assess the economic viability of building a new automotive compound on this advantageous plot of land.
“We met with customers, prior to building the compound,” said Jordan Kajfasz, Assistant Vice-President Sales and Marketing International Intermodal/Automotive. “We told them our story, what our plans were for the new facility and asked if they would be interested in signing up as an anchor tenant. Ford Motor Company (Ford) was one of the first customers to express interest.”
We welcomed Ford’s new business in October 2018, and with buy-in from senior management and $15 million in approved capital, site construction began the same month.
The Vancouver Automotive Compound (VAC) was completed ahead of schedule and opened its doors for business on March 4, 2019. The new facility can handle 36 multi-level auto racks at a time and has nearly 1,200 stalls for vehicles. VAC is estimated to bring $30 million in revenues annually.
The compound’s strategic location also creates a backhaul loop in CP’s automotive supply chain, allowing for eastern Canadian car shipments to be quickly off-loaded and for rail equipment to be reloaded and shipped back east much faster.
“The majority of car manufacturing plants in Canada are located in southwest Ontario, and therefore there is a high demand for rail equipment in the Toronto market,” said Joseph Skinner, Director Automotive Sales. “Being able to use VAC as a quick landing spot, allows us to be more efficient in keeping our equipment loaded, which in turn helps us drive more business into major markets like Vancouver, Calgary, Edmonton, Toronto and Montreal.”
VAC celebrated its official grand opening on June 6. “Although still in the early stages of ramp-up, VAC is a meaningful driver for growth in 2019 and for years to come,” said Wahba. “I would like to congratulate everyone involved in making this project a success and look forward to growing our relationship with our new anchor tenant Ford.”