Nanaimo is at a turning point. As one of Vancouver Island’s key economic hubs, the city is experiencing both the challenges and opportunities that come with growth. From increasing industrial demand to critical infrastructure upgrades, the region’s supply chain is evolving. With strategic investments in transportation, warehousing, and industrial land, Nanaimo is well-positioned to become a logistics powerhouse—if the right steps are taken.
A Growing Demand for Industrial Land
Industrial real estate in Nanaimo is becoming scarce. In Q3 2023, the city’s industrial vacancy rate dropped to 0.71%, down from 2.42% a year earlier, driving rental rates up by over 30% to $20.86 per square foot. This reflects a strong demand for space, but also raises concerns about future availability.
One significant development addressing this is the $2 billion Sandstone project, which will add 3 million square feet of industrial land over the next two decades. Projects like this will be essential to ensuring businesses have room to grow, reducing dependence on the mainland.
Nanaimo’s Logistics Sector: Poised for Expansion
As a central hub for Vancouver Island, Nanaimo plays a vital role in regional trade. The Port of Nanaimo handled over 3.8 million metric tonnes of cargo in 2023, including 1.49 million metric tonnes of logs and 1.32 million metric tonnes of forest products. These numbers underline the city’s importance in B.C.’s resource economy.
A key project for the future is the Duke Point Terminal expansion. This major infrastructure upgrade will significantly increase container capacity, attracting new investment and strengthening Nanaimo’s role in global supply chains.
Recognizing the city’s growing role in logistics, Nanaimo Prosperity Corporation has made expanding the transportation and warehousing sector a priority. By improving infrastructure and fostering business collaboration, Nanaimo can cement itself as a key player in supply chain efficiency on Vancouver Island.
Infrastructure Challenges That Need Addressing
While Nanaimo is expanding its logistics capabilities, infrastructure challenges remain. The Malahat Corridor and Highway 4 are crucial supply routes, but their aging infrastructure and lack of alternative routes create bottlenecks. Extreme weather events have also disrupted these roads in recent years, exposing vulnerabilities in Vancouver Island’s supply chain.
Another underutilized asset is the Island Rail Corridor. Though largely inactive, this network could provide a sustainable, cost-effective alternative for freight transport. Nanaimo’s Wellcox Yard remains a key transloading hub, but revitalizing rail infrastructure would reduce congestion on highways and lower transportation costs.
A Shift Toward Value-Added Industry
Nanaimo’s economy has long been tied to forestry, but the industry is shifting toward value-added processing rather than raw log exports. Investing in manufacturing, logistics, and technology-driven supply chains could reduce dependence on outside suppliers and create more sustainable economic growth.
This transition is already underway, but more industrial land, workforce training, and infrastructure investments will be needed to support it.
The Future of Nanaimo’s Supply Chain
Nanaimo is at a moment of opportunity. The region’s growing logistics sector, upcoming infrastructure projects, and increasing industrial demand highlight its potential. But to fully capitalize on these strengths, targeted investments in transportation, warehousing, and local manufacturing will be essential.
By prioritizing infrastructure upgrades, fostering collaboration, and embracing innovation, Nanaimo can establish itself as Vancouver Island’s supply chain leader—creating economic resilience and new opportunities for business, industry, and residents alike. ■
Full Study: VIEA Supply Chain Regional Supply Chain Study