Nanaimo: M-B takes the water all the way

Mercedes-Benz will be the first European automaker to deliver vehicles to Canada's western provinces via an all-water route.

SSA Marine, a marine terminal management company in Seattle, is developing an auto terminal for the tiny Port of Nanaimo on Vancouver Island in British Columbia. A 60,000-square-foot former storage shed is being repurposed into a vehicle processing center.

The $10 million facility, supported by a grant from the Canadian government, is scheduled to open in January for biweekly deliveries.

Currently, Mercedes cars built in Germany and destined for British Columbia are offloaded in the eastern Port of Halifax and transported across the country by train. An ocean carrier, which Mercedes has yet to name, will make calls at the Port of Brunswick in Georgia to pick up SUVs made at the company's plant in Alabama, traverse the Panama Canal and stop at the Port of Lazaro Cardenas to load A-class sedans made in Mexico before heading north to Nanaimo, said Bill Kerrigan, vice president of logistics for SSA's auto division.

The new route will relieve overland capacity constraints and congestion, saving $20.5 million Canadian ($15.5 million) per year in transport costs as well as 7,700 tons of carbon emissions over the short term, according to the Nanaimo Port Authority. As volumes pick up, annual productivity gains are estimated to reach $54.4 million.

The business plan is unique because vehicles will be loaded on trucks and driven onto car ferries that operate daily to and from the mainland for delivery to dealerships in metro Vancouver and surrounding areas.

Kerrigan said the extra handling costs will be minimal because auto haulers, which already deliver about 25,000 vehicles to Vancouver Island annually, will welcome the return-haul revenue.

The 17-acre terminal will have an annual capacity of 25,000 vehicles, with 10,000 estimated to move through in the first two years.

An adjacent 10-acre parcel offers the opportunity to expand capacity to 50,000 vehicles, according to the port authority.