Fastfrate Group becomes anchor tenant at new CentrePort Canada Rail Park

CentrePort Canada, a sprawling 20,000-acre inland port and foreign trade zone on the outskirts of Winnipeg, has begun the next stage of its growth with the development of a rail park. On Aug. 1, Fastfrate announced it will be the first company to put down roots there, bringing all its operations under one roof in a 140,000 sq.-ft. facility that will house Fastfrate, Canada Drayage, ASL Distribution, and Challenger Motor Freight.

It’s a $55-million investment for Fastfrate Group and will serve as the template for future facilities, Manny Calandrino, president and CEO said during a groundbreaking ceremony at the site.

“What we are doing here is going to be the template for other cities across Canada,” he said.

The company recently expanded a Halifax facility, which will now accommodate Challenger, and Ottawa is on the list of locations to be reconstructed to bring all companies under one roof. It’s part of a broader strategy for the Fastfrate Group, which now offers a full menu of services after acquiring cross-border truckload fleet Challenger a little more than a year ago.

“Each division has its own sales teams that are making progress on cross-selling all of our companies,” Calandrino said in an interview with TruckNews.com at the event. “We have doubled our salespeople.”

The company is also setting up an initiative called Fastfrate University where all employees – from drivers to sales reps – will get the training they require on everything from driving, to cross-selling the company’s full suite of services.

Rapid growth

Fastfrate Group has been in growth mode, with revenues soaring from less than $100 million 20 years ago to $1 billion this year. The recent acquisition of Challenger will enable even further growth. Calandrino said the marriage has already brought about $12 million in new business to the Challenger division, which represents Fastfrate’s first foray into the truckload segment.

More importantly, it has opened up the U.S. market to Fastfrate, which until the acquisition didn’t have access to that market. Ron Tepper, executive chairman of Fastfrate Group, said the acquisition of Challenger has already exceeded his expectations.

“We own one of the best infrastructures in Canada, with no exposure to the U.S. customer. They have the U.S. customer, but no infrastructure in Canada,” Tepper told TruckNews.com.

Fastfrate Group is preparing a new offering that will see Challenger trucks bring full truckloads into Canada, where they’ll be broken down into smaller shipments for delivery to their final destinations by other companies within the Fastfrate Group.

The new facility in CentrePort Canada’s Rail Park will serve as Challenger’s Winnipeg base, including a shop that will service not only Challenger equipment, but also be open to neighboring trucking businesses. And in CentrePort, there are a lot of them.

The CentrePort concept

Carly Edmunson, president and CEO of CentrePort Canada, estimates about 80% of trucking companies in Manitoba have some connection to the CentrePort inland port. What separates the inland port from ordinary industrial parks is its immediate access to three transportation modes: trucking, rail, and air.

Asked how the consolidation of so many trucking companies into a small area benefits the industry, Edmunson said “CentrePort creates a brand around transportation and logistics that helps them to go out to market and generate business.”

It also attracts investment, she added, noting an expressway has been built through the project, ensuring that anyone located there can meet the international gold standard of being no more than five minutes away from access to 55 mph (90 km/h) highways.

It also offers opportunities for trucking firms to expand in a province where access to industrial land is difficult to find. “It allows companies to grow here, create jobs and add more capacity,” Edmunson said. “Rail Park is the crown jewel of CentrePort.”

The Rail Park itself sits on 665 acres in the municipality of Rosser, near the international airport. Fastfrate claimed the first 25 acres that will be developed there, but Edmunson said more companies have expressed interest and will be announced soon.

The right timing

The timing for Fastfrate Group to build at the Rail Park couldn’t be better, Tepper said. The company has been an exclusive partner with CP Rail since its formation 57 years ago. Now that CP has merged with Kansas City Southern to form CPKC, the region expects to benefit from much more north-south rail freight.

“Now, think about the opportunities when we get this going, with freight coming in from the Southern U.S. and Mexico,” Calandrino said. “I can just see growth. We expect to hire at least 150 people in the next 12 months.”

And with Yellow Corp., one of the largest U.S. LTL carriers ceasing operations, Fastfrate Group sees an opportunity to replicate its partnership with CP south of the border as well. The company is already looking for ideal sites adjacent to rail yards in cities such as Kansas City, Chicago, Dallas, Houston and Laredo, “to build that rail LTL service that doesn’t exist in the States,” Tepper explained.

Before the CPKC merger, Tepper said, it took several railways to serve those corridors and service wasn’t strong, pushing most LTL freight onto trucks in networks such as Yellow’s. Tepper believes there’s a more efficient way to move LTL those goods by making better use of rail.

“We think there’s a huge market for LTL by rail,” Tepper said, adding “it’s just a question of time” before Fastfrate makes a further push into the U.S.

Economic growth

It’s not just Fastfrate Group that’s excited about the CentrePort Rail Park and the economic opportunities it presents. Manitoba premier Heather Stefanson was also at the event and dubbed it “one of the most exciting things moving forward for our province.”

The province kicked in $40 million for wastewater infrastructure in the area and has promised $2.5 billion in highway infrastructure spending over the next five years.

“In the next 10 years, it is the PC government’s vision to strengthen Manitoba’s role as an international transportation hub linking east to west, north to south,” she said. “CentrePort’s inland port is a key part of this vision. The Rail Park project in particular builds on this advantage of Manitoba’s central geographic location and will play a critical role in growing Manitoba’s trade and investment domestically, across the continent and around the world.”

The facility

Fastfrate’s facility itself is expected to be up and running by the fall of 2024. Employees are eager to move into their new digs. ASL Distribution, the business unit focused on warehousing and last mile deliveries, will have 40,000 sq.-ft. of its own, about triple the size of its current Winnipeg location.

Fastfrate outgrew its current Winnipeg facility about a decade ago and will have more crossdocks to work with. And Challenger, of course, will have a Winnipeg home for the first time.

The company is also working on several more business acquisitions. Tepper said as a private company, Fastfrate hasn’t sought a lot of attention as it has grown its business. But expect that to change.

“We’re starting to poke our heads above the clouds,” he said. “We are in very good financial shape. We own all our own real estate, which gives us a lot of leverage. We have a great relationship with CPKC – but nobody knows us. It’s not a bad thing but we are coming out now more and will be more visible. We’re not finished.”