March 11, 2019 —
As Canada’s ecommerce, retail and dropshipping channels grow, the complexity behind the logistics behind it grows as well. We spoke to members of our Canadian Operations and Transportation teams, and after partnering with some of the biggest retailers in Canada like Best Buy. Here are a few things to ask yourself when searching for third-party logistics proviers or 3PLs in Canada.
ECommerce Transit Time in Canada
In Canada, oftentimes a single node for fulfillment and warehousing activity is sufficient (typically in the Toronto area) to meet transit time expectations for ecommerce. Our Operations and Transportation teams when modeling locations for customers utilize a benchmark of 30%. If 30% of your shipments are going to the West Coast or Vancouver area, it may make sense to have a two node model using both a Toronto fulfillment center and a Vancouver fulfillment center areas. If your volume is less than 30% it may not be worth the effort and cost savings to warrant a two fulfillment center model.
Here is an example of the difference via ground shipping from a single node in the Toronto area vs. a dual node fulfillment model utilizing Toronto and Vancouver.
Single Fulfilment Center: Greater Toronto Area
With a single fulfillment center out of facility in Mississauga, ON, average transit time is 2.92 days and you can serve 83% of the Canadian population in 4 days via Canada Post Expedited (Ground).
Two Fulfillment Centers: Greater Toronto Area & Greater Vancouver Area
With two fulfillment centers using a 3PL in Mississauga, ON and Richmond, BC, average transit time is 2.11 days and you can serve 86% of the Canadian population in 3 days via Canada Post Expedited (Ground).
Your Customer Expectations
While ecommerce isn’t “new” in Canada, for a while a large portion of ecommerce shipments into Canada were coming from the U.S. This set the stage for consumers to be more accustomed to waiting for shipments. While the expectation is 2 or 3 days for major metro areas like Calgary, Toronto and Vancouver, some of the more rural provinces like the Northwest Territories, can average 7 to 8 days of transit time.
Canadian Parcel Carrier Preferences
The three main small package carriers within Canada are UPS, Canada Post and Purolator. Unlike other regions, our transportation team reports that more Canadian companies are looking for low cost providers on a lane by lane basis and aren’t necessarily tied to a single carrier. This provides a lot of flexibility in terms of carriers to use, but also presents a challenge for many shippers who are looking to realize discounts based on parcel volume. This is an area where a 3PL can definitely help in terms of giving customers access to cost-effective carrier options, while not having to worry about meeting volume thresholds for discounts.
While other areas such as account management, visibility, reporting and scalability are critical other factors noted by our Operations and Transportation teams being critical in the initial 3PL selection process, but those will vary based on business need.
To connect with our Canadian Team to ask a question or learn more about how we can support your omni-channel strategies fill out the form below.