Loblaw readies massive expansion to Cornwall distribution centre

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Loblaw is expanding an existing Shoppers Drug Mart regional distribution centre, operated by Matrix Logistics in Cornwall to 900,000 square feet

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When grocery and retail giant Loblaw announced in January that it would shutter warehousing operations in Ottawa and Laval while expanding them in Cornwall, many saw it as a corporate restructuring and jobs lost to automation.

But that simplistic narrative misses a powerful story of how Cornwall grew to become one of Eastern Canada’s major warehousing and distribution hubs. Municipal policy decisions, a strategic geographic location and other competitive advantages have helped to attract some of the country’s biggest corporations to this city of 50,000 residents. 

Loblaw’s Shoppers Drug Mart facility isn’t the only warehousing and distribution operation in Cornwall. In fact, multiple companies have set up shop over the past 20 years. These warehousing, distribution and head office operations collectively add up to about 5.5 million square feet (and growing). 

The heavyweight is Walmart Logistics, which first arrived in 1999. Today, it operates two Cornwall distribution centres, each 1.5 million square feet in size. (Compare that, for a moment, to Amazon’s one-million-square-foot fulfillment centre that commenced operations in Ottawa’s east end last summer.)

After Walmart took the leap, other brands took notice and decided to follow. Why? Walmart, Loblaw and tire distributor Benson Group did not respond to interview requests by press time, but others who service Cornwall’s warehousing and distribution sector did offer their thoughts on the subject.

“Once one settles in, it becomes a blueprint to others,” said Bob Gauthier, president of local trucking company Seaway Express.

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Walmart occupies some three million square feet of warehouse space in Cornwall spread across two distribution centres.

Competitive land costs

Back in the ’90s, Cornwall city council decided to actively promote the area’s largest advantage – “serviced commercial land that was shovel-ready and available for immediate development,” said Bob Peters, manager of Cornwall Economic Development. 

The city expanded the Cornwall Business Park, offering up the huge tracts of serviced land that distribution centres require. It also waved development charges. Even today, the average cost of land per acre in the park is low compared to major cities on the Windsor-Quebec City corridor.

Yves Poirier, president of local trucking company Minimax Express Transportation, travels frequently between Cornwall and Toronto, where comparable commercial land can cost as much as $2 million an acre.

“When I talk to real estate agents in Toronto and tell them they can get land here at $30,000 an acre serviced, they don’t believe me,” he said.

Land availability and cost is only part of the equation, added Peters. The City of Cornwall obtains its electrical power from Quebec Hydro, not Hydro One. Electricity costs as a result average 25 per cent lower than in other Ontario communities. 

Location is another major factor beyond such obvious advantages as Highway 401 access, the proximity of an international bridge into the U.S. or even the CN rail line that runs into the business park. Cornwall is ideally located for trucking fleets to make overnight runs to Toronto for freight, said Poirier, then have that freight reloaded on other trucks for delivery as far as Quebec City the next day.

Cornwall gained a further advantage in 2012 when Autoroute 30 opened up. This allowed trucks to bypass Montreal for points east without having to get stuck in traffic crossing the island.

There is also the simple fact that Quebec operates with rules and regulations that are unique to the province. Labour unions are also more widespread than in other parts of Canada. These factors can also influence where a major brand may decide to set up shop. Cornwall’s proximity to the Quebec border makes it the next best alternative for serving the province without actually being in Quebec.

Brands such as Walmart, Loblaw and Benson Group may be investing in Cornwall, but what does this really mean in terms of job creation? While Loblaw’s Shoppers facility in Cornwall will expand from 500,000 to 900,000 square feet, it will be equipped with the latest in automation technologies. There is no firm word yet as to how many new jobs will be created.

Walmart Logistics, however, which already employs about 2,000 people in Cornwall, said in mid-February it will hire an additional 150 staff by mid-year. According to the City of Cornwall, some 3,000 people are employed in the local sector overall, including in transportation.

Peters points out that the growth of Cornwall’s warehousing and distribution industry is the hub of an entire ecosystem that drives job and wealth creation for a host of satellite industries. In addition to trucking, there are technical support businesses, trailer rentals, commercial garages and pallet manufacturers. It is also no coincidence that the Cornwall campus of St. Lawrence College offers a one-year graduate certificate program in supply chain management to feed the demand for qualified workers.

“Cornwall’s position as one of the major hubs for supply chain activity in Canada is only going to get stronger,” Peters said.

Cornwall’s building boom

Walmart Logistics regional distribution centre: 1.5 million square feet

Walmart Logistics Harmony distribution centre: 1.5 million square feet

Shoppers Drug Mart regional distribution centre, operated by Matrix Logistics for Loblaw: 500,000 square feet. Currently undergoing a major expansion to 900,000 square feet and increase in height to 90 feet

Benson Group (tires) headquarters and distribution centre: 300,000 square feet

BTB REIT (formerly Cornwall Warehousing) warehousing: 400,000 square feet

United Auto Parts (UAP) regional distribution centre: 120,000 square feet

The Hercules Group (distributes equipment for securing, lifting and rigging applications) distribution centre: 100,000 square feet

Astro Storage and Warehousing: 40,000 square feet