Canadian Tire Corp. Ltd. Cl A stock rises Monday, outperforms market

Canadian Tire Corp. Ltd. Cl A stock rises Monday, outperforms market

Shares of Canadian Tire Corp. Ltd. Cl A CTC.A, +0.09% inched 0.09% higher to C$192.98 Monday, in what proved to be an otherwise all-around poor trading session for the Canadian market, with the S&P/TSX Composite Index GSPTSE, -0.24% falling 0.24% to 20,594.97. This was the stock’s second consecutive day of gains. Canadian Tire Corp. Ltd. Cl A closed C$20.87 below its 52-week high (C$213.85), which the company reached on May 13th. Trading volume of 221,808 shares eclipsed its 50-day average volume of 162,998.

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Canadian Tire buys part of a shipping port in move to upgrade its supply chain – RetailWire

Photos: Getty Images/NicolasMcComber; Ashcroft Terminal

Canadian Tire Corp. has purchased a 25 percent stake in Ashcroft Terminal Ltd., British Columbia’s largest inland port, to support the retailer’s supply chain flexibility and sustainability goals.

PSA International Pte Ltd., one of the world’s largest container port operators, will continue to operate and retain a majority interest in the 320-acre inland transload and storage terminal.

The $40 million investment is expected to help Canadian Tire lower carbon emissions by allowing the chain to shift volume from trucks to rail in Western Canada, as well as to stage more inventory in British Columbia rather than shipping it back and forth across the country.

Canada’s largest retailer also benefits from shorter lead times and long-term savings.

“The deal secures railway capacity against our future requirements, allowing us to work across a smaller number of partners,” said Greg Hicks, Canadian Tire’s CEO, last week on a quarterly call with analysts.

Working more closely with PSA also promises to improve fulfillment performance.

“We’ve spoken before about how our merchants work with our vendors to get enough product into the country to meet the demand at the right time,” said Mr. Hicks. ”Equally important to our sourcing capabilities is having goods available in the right geography. And that is dependent on our ability to transport goods around the country as effectively, efficiently and sustainably as possible, and our investment in Ashcroft is a step in making that happen.”

Canadian Tire makes the investment as pandemic-driven headwinds around transportation and supply availability forces the company to aggressively chase inventory as well as container, shipping and warehouse capacity.

Major U.S. retailers have made recent investments in fulfillment centers near ports.

Amazon.com announced plans in early August to open a more than one million-square-foot fulfillment center in Port St. Lucie, FL.

Walmart broke ground last December on a three-million-square-foot distribution center near South Carolina’s Port of Charleston.

Greg Smith, Walmart’s EVP of supply chain, said in a statement, “SC Ports’ proven track record of handling high-demand supply chain needs for the automotive industry gives us full confidence in their ability to meet our retail distribution and e-commerce needs.”

DISCUSSION QUESTIONS: What obvious and less obvious benefits do you see coming from Canadian Tire’s equity stake in Ashcroft Terminal and partnership with PSA International? Is forming stronger connections with ports becoming more critical to support retail supply chains?

Canadian Tire Corporation buys into Ashcroft Terminal

Canadian Tire Corporation is buying a 25% equity interest in PSA-operated Ashcroft Terminal, British Columbia’s largest inland port. Singapore terminal operator PSA will retain a majority interest of 60%, with the remaining 15% interest held by founding partner CrescentView Investments.

Ashcroft Terminal believes the partnership with Canadian Tire will allow it to further invest in infrastructure and capacity growth for the long-term. Ashcroft Terminal has become a hub to serve the needs of a broad range of industries and customers moving their products by rail. Canadian Tire should further diversify the customer base and enable Ashcroft Terminal to develop tailored solutions for retailers in North America while continuing to grow its service offerings to bulk customers.

“This investment will drive improvements in our network lead time and fulfillment performance, which are core to our domestic supply chain strategy, while reducing our carbon emissions by shifting volume from trucks to rail in Western Canada,” said Paul Draffin, chief supply chain officer, Canadian Tire Corporation. “Having strategic access to high-demand capacity will enable greater control over our end-to-end supply chain, which has become increasingly critical in a time where global supply chains have been completely disrupted and new resiliency is required.”

Ashcroft Terminal is the only major privately-owned industrial property in Canada where both Canadian National Railway and Canadian Pacific Railway run through, transporting import and export cargoes to and from the marine terminals in Vancouver, across Canada and other North American markets.

Commenting on the news via LinkedIn, Splash columnist Kris Kosmala mused: “A little, or a lot, of out of the circle thinking. Tire in the name, but home improvement in reality, Canadian retailer buys into key Canadian inland port ran by Singapore-based terminal operator PSA. And let’s not forget that Home Depot move, chartering their own vessel or two. Investing into inland terminal easily ups the ante. Would there be more of those ideas by retailers teaming up with terminal operators on significant logistics infrastructure plays?”