Amazon’s DCG4 distribution centre in southeast Calgary. Photo: Farkhod Fayzullaev

Freight sprawl’: The hidden costs of online shopping

Consumerism is driving a warehouse boom in Calgary.

Last year, Vanessa Acevedo worked part time as a driver for Amazon. Using her personal vehicle, a 2014 Ford Fiesta, five times per week she drove the 26 km of Stoney Trail (a.k.a. the ring road) between her home in Redstone, in Calgary’s far northeast, and Amazon’s distribution centre, DCG4, in the southeast.

Waiting for her shift to begin, Acevedo would sit in her vehicle outside the 157,067 sq. ft. distribution centre for about 10 or 15 minutes, alongside a dozen other drivers.

At start time, all drivers would queue up at the facility’s pick-up area and have their vehicles loaded with the parcels they’d be delivering across the city over the next two to four hours.

By the time the parcels assigned to Acevedo were loaded into her car, they had already travelled 30 km from Amazon’s fulfillment and sorting centres in Balzac, just north of Calgary, to the DCG4. And that’s just the last leg of the packages’ travels, as they could be coming from any of Amazon’s 14 fulfillment centres in Canada.

Upon loading her car, Acevedo would scan her parcels to find out where she’d be heading next. Sometimes her deliveries were concentrated in close proximity, but not always. The number and location of parcels assigned to each driver is determined by Amazon’s algorithm.

Occasionally, it would take her up to an hour to arrive at the address to drop off her first delivery. Over the six months she drove for Amazon, Acevedo delivered parcels as far as Chestermere, Airdrie and acreages in the deep south, beyond Calgary’s city limits.

Driving her Fiesta through the sprawling infrastructure that helps satisfy consumer wants in Calgary, Acevedo got to experience what for most Calgarians remains hidden in plain sight.

Calgary's role as a logistics hub

Given our city’s location and land availability, transportation and logistics—the industry that stores and distributes our consumer goods, including online purchases—is considered one of Calgary’s primary economic drivers and a key component to diversification.

Like Acevedo, in August 2021, 41,800 Calgarians worked in the transportation and warehousing sector. One year later, that number had risen to 55,700, and it’s expected to increase further over the next two decades as online shopping becomes ubiquitous and our city’s role as a regional distribution hub solidifies.

Every major retailer selling goods online has a location in Alberta — and Calgary.

Greg Kwong,

Executive VP and Regional Managing Director, CBRE

“Demand for industrial real estate [in Calgary] is distribution-based warehousing,” said Greg Kwong, executive vice-president and regional managing director at CBRE, a commercial real estate services and investment firm. “Every major retailer selling goods online has a location in Alberta—and Calgary.”

While this is good news for our city’s diversifying economy, the social and environmental impacts related to this infrastructure are rarely acknowledged. In 2021, transportation generated the largest share of GHG emissions in Calgary—just over 2% more than the second-largest emitter, residential buildings.

These emissions aren’t produced by Calgary commuters alone. The heavy duty trucks and vans bringing goods to consumers play a role, too.

“The big industrial-scale activities are still too much out of our consciousness for people to really wrap their heads around,” said Clarence Woudsma, an associate professor of planning at the University of Waterloo. “And at a very fundamental level, do people see their online shopping activity—consumerism—as being a key driver of all this industrial demand for space and activity?”

“There’s a disconnect between our behaviour and activity as citizens and consumers. People don’t necessarily make that equation.”

The big industrial-scale activities are still too much out of our consciousness for people to really wrap their heads around.

Clarence Woudsma,

Associate Professor of Planning, University of Waterloo

Growing pressures on natural areas

In 2019. Woudsma co-authored a paper that identified how logistics and freight played a role in Calgary’s sprawl.

Urban sprawl is one of the primary threats to our city’s wetlands. Urban wetlands serve important functions for Calgary’s ecosystems—from providing bird, fish and amphibian habitat to improving water quality and flood protection. But the integrity of our city’s riparian areas and wetlands is increasingly threatened by pressures from both residential and industrial development.

As so-called last-mile delivery serves consumers directly, the growing competition for industrial land to build warehouses and distribution centres closer to consumers threatens the integrity of environmentally sensitive areas.

Last year, environmental groups in Pickering, Ont. fought a mixed-use development on Duffins Creek, a wetland complex designated as “provincially significant,” that was expected to include Canada’s largest Amazon fulfillment centre. Ultimately, Amazon pulled out of the project, but development adjacent to the wetland continues to go ahead.

In Calgary, some are concerned about the integrity of a riparian area along Nose Creek, east of Nose Hill, and propose the creation of a new urban national park. “You can’t just sit back and let warehouses roll in and then lose all this,” said Andrew Yule, founder of Save Nose Creek, about the environmental significance of the creek’s riparian area.

The stretch of Nose Creek between Beddington Trail to Stoney Trail contains core wetlands and amphibian corridors—some of the few that remain within city limits, according to an analysis conducted by MRU’s Miistakis Institute in 2020. Bordered by industrial development on the east and residential development on the west, this ecosystem’s health is dwindling.

In 2017, Calgary’s Riparian Action Program recognized the importance of the Nose Creek watershed, and identified the threats this area faces. Existing roads and industrial development challenge water quality and flows, despite the existence of stormwater management infrastructure.

You can’t just sit back and let warehouses roll in and then lose all this.

Andrew Yule,

Founder, Save Nose Creek

Nevertheless, an important reason this riparian area is unlikely to receive the protections requested by Save Nose Creek is that industrial development was deemed an appropriate use when designated as such in 2006—and preserving large swaths of industrial land is a key component of our city’s growth strategy, as recommended by an industry report last year.

For Ward 3 Councillor Jasmine Mian, the onus of preserving environmentally significant areas is on land owners. During a September council meeting, she said council doesn’t have the decision-making power to “use large sums of public money to buy industrial land—which the city has a lot of stake and desire to maintain—to turn [them] into parks.”

The concept of 'freight sprawl'

Currently, there are about 7,000 hectares of land zoned for industrial use within our city’s boundaries, which represent about 9% of Calgary’s total land base—and about 15% of the city’s tax revenue.

This amount of land, however, is deemed insufficient to keep up with a growing demand for warehouse space, and a 2021 report commissioned by the city estimated that over 900 hectares of developable industrial land are needed to accommodate growth and remain competitive at a regional scale over the next 20 years.

“Calgary is centrally located,” Kwong said about our city’s regional significance. “And when you have a warehouse here and someone shops in Vancouver, or anywhere in Western Canada, they can deliver it within two days from Calgary.”

To expand our city’s offering of industrial land, in September 2021 council voted unanimously to begin annexing nearly 1,700 hectares from Rocky View County on the eastern edge of the city.

According to Miistakis Institute’s analysis, the land currently in process of annexation contains a core corridor used by frogs and salamanders, as well as the wetlands where these amphibians live. A city document presented to council in 2021 states that upon annexation, this land will be protected “through effective stormwater management concepts and preservation of environmentally sensitive lands.”

There’s a disconnect between our behaviour and activity as citizens and consumers.

Clarence Woudsma,

Associate Professor of Planning, University of Waterloo

The availability of distribution and fulfillment centres closer to consumers is a trend largely driven by e-commerce, Woudsma says, noting Amazon’s investment in million-square-foot fulfillment centres near all major markets.

“When we look at the concept of freight sprawl, part of the driver is not just cheaper land further from the city, but also the footprint right there—these modern facilities typically have tended to be larger than they were years ago.”

Amazon's dramatic Calgary expansion

Indeed, Amazon is currently building two new distribution centres in southeast Calgary. Their total area adds up to 3.8-million sq. ft., or the equivalent of eight Saddledomes.

That’s more than double the size of Amazon’s existing facilities in Calgary’s metropolitan area combined, which includes two fulfillment centres, two distribution centres, and one sorting facility.

“Local delivery centres might locate in a 20,000-sq. ft. industrial space that has three dock doors,” Woudsma explains. “And what they’ll do is they’ll bring in full 53-foot trailers packed with delivery orders for certain neighbourhoods and then load them in delivery vehicles, like the classic five ton or a minivan.”

To capitalize on the sector’s potential, Calgary’s industrial growth strategy encourages the expansion of our city’s industrial land inventory, as well as upgrades to the infrastructure required to support this growth, which include road widening, wastewater collection and treatment, as well as public transit servicing—and the city is already working on this.

In July, city admin recommended $231.5 million to support 250 hectares of industrial land, create 9,000 jobs and “increase regional competitiveness.” This includes road-widening projects at Peigan Trail and Airport Trail, a grade-separated interchange at Glenmore Trail and Barlow Trail, as well as extensions to bus rapid transit in the city’s southeast.

Moreover, to streamline the development process of industrial land and expand permitted uses to “solidify Calgary’s competitive advantage as a regional distribution hub,” amendments to the land-use bylaw were carried unanimously.

But playing catch-up in the face of accelerated growth and demand for e-commerce and related services isn’t necessarily the best course of action, Woudsma says.

“We need to try ways to work with firms to work towards more sustainable, resilient, adaptive type of outcomes.”

Ximena González is a freelance journalist who writes about urban affairs for The Sprawl. Her work has also appeared in The Globe and Mail, The Tyee and Jacobin.

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