How to Find the Best 3PL in Canada: Here Are What You Need To Know
Working with 3PL in Canada provides numerous advantages. Aside from savings that result from effective warehouse storage and fulfillment, 3PLs provide advanced procedures and established connections that are unique to the Canadian environment. The cost-effectiveness extends to warehousing, freight, and labour costs, making outsourcing a compelling case over in-house operations.
Leveraging the existing networks and processes of local warehousing providers proved invaluable for Canadian companies. The unique insights and established linkages result in significant cost reductions. US companies, on the other hand, stand to benefit from collaborating with Canadian 3PLs to reduce cross-border shipping problems and improve overall cost-efficiency.
Finding the best 3PL in Canada is critical for businesses that want to maximize productivity and customer satisfaction. In this article, let’s go on a journey to discover the key elements of finding the best 3PL in Canada for your business.
How to Find the Best 3PL in Canada
Understanding the Importance of 3PL Warehouses
Third-party logistics (3PL) companies play an important role in optimizing supply chain operations and providing businesses with a competitive advantage. As a company grows, the requirement for dependable third-party logistics services grows.
As trade grows, globalization takes hold, and the e-commerce business thrives, the sales opportunities for both Canadian and American businesses are expanding. In this volatile environment, the necessity for timely and correct order fulfillment and delivery becomes significant.
Navigating the Canadian fulfillment environment involves meeting the different needs of businesses, whether they are giants with enormous order volumes or smaller businesses. Below are some typical services 3PLs provide for various business sizes and types.
Traditional Warehousing & Storage: This model is ideal for storage-only needs and is effective in overstock situations due to its use of a flat pallet-in and pallet-out strategy.
Order Fulfillment Services: Order fulfillment services, which specialize in pick-and-pack operations, handle complicated retail needs, making them important in situations involving retail item picking and packing.
E-commerce 3PL Services: These services are designed to send orders directly to customers via e-commerce platforms, and they interface smoothly with online marketplaces, providing subscription fulfillment expertise.
Canada’s vast geography and diverse market present unique challenges and opportunities for businesses seeking 3PL solutions in Canada. The services provided by 3PLs in Canada are broad, catering to a wide range of business requirements. Understanding these services is essential for matching your needs to the capabilities of your chosen 3PL.
Key Factors to Consider When Looking for a 3PL in Canada
Location and Accessibility
The proximity of a 3PL partner to major transportation hubs and accessibility to significant markets are key considerations in determining its efficacy. These important factors depend on geography when determining the best warehouse location in Canada. It is critical for efficient logistics to provide strategic connections to ports, highways, and dense population centers.
Customer Feedback & Testimonials
Aside from geographical concerns, evaluating integral factors and gaining insights from real experiences is critical. It is important to screen 3PLs in Canada based on parameters such as customer retention rate, order accuracy rate, inventory accuracy rate, shipping accuracy rate, years in operation, number of clients, and yearly order volume.
To navigate Canada’s complex market, you must tailor your choice to your specific business needs. Real client feedback provides significant information into a 3PL provider’s strengths and potential weaknesses and provides you insights for decision-making.
Your e-commerce fulfillment provider should have a system and technology that works well with your technological stack. Many businesses use a fully digital platform today, and if your business operates across multiple eCommerce platforms, those connections are important for impeccable logistics across all channels.
In terms of technology, the e-commerce fulfillment provider you choose should have a well-designed system and infrastructure support to assist you with inventory management, order tracking, and returns, as well as fulfillment centers that can keep your goods close to customers to save time and money on delivery.
Scalability and Flexibility
Any businesses may face fluctuate in order volume and supply chain issues. When you outsource fulfillment services to a 3PL in Canada, your 3PL partner should be capable of staying up with your business’s needs.
Is its physical warehouse large enough to handle the quantity you might develop in the future? Is their technology capable of handling the increasing stock? Is there enough staff at the fulfillment facility to address your anticipated needs if your product becomes popular? Although these issues might appear distant, make sure your 3PL provider can assist you in meeting your objectives and can scale up with your company’s growth.
Important Information for Making Informed Decisions
Understanding the main data that shape Canada’s fulfillment services and warehousing market is vital for making informed decisions. The distribution of Canadian consumers corresponds to the distribution of provincial populations. Because of their proximity to key transportation lines, major hubs such as Ontario, Montreal, and Vancouver emerge as strategic sites.
Central Canada: Because of its large population base, cost reductions, and strategic proximity to major Canadian markets, Toronto emerges as the top choice for 3PLs in Central Canada. The Greater Toronto Area (GTA) stands out as the top market for 3PLs in Canada.
Western Canada: Vancouver shines as the preferred choice for 3PLs in Western Canada, demonstrating a sustained increase in product accessibility despite global supply chain issues. Its strategic location is especially beneficial for lowering inbound freight costs.
Eastern Canada: For 3PLs in Eastern Canada, Montreal stands out due to its large population base. Language considerations are important in this location, as a large section of the population speaks both French and English.
Population and Warehouses: Canada has 4,410 warehouses and a population of 40,097,761 on July 1, 2023.
Rates of Labour and Taxation: The average warehouse labour rate is $17.27 per hour. Corporate tax rates vary depending on factors such as federal tax abatement and small company deductions.
Rates of Sales Tax and Property Tax: The Harmonized Sales Tax (HST) is 15% in most provinces, except Ontario, which is 13%. Property tax rates vary by municipality but commonly range from 0.5% to 2.5%.
Pricing Dynamics of Fulfillment Costs
Fulfillment costs in Canada fluctuate based on location, company, and various fees. Anticipating costs, including setup fees, storage fees, receiving fees, pick & pack fees, shipping fees, returns fees, and miscellaneous fees, is essential for budgeting.
Considerations for Canadian Companies
The volume of orders handled has a direct impact on 3PL fulfillment costs. Higher volumes, in general, may result in economies of scale, potentially lowering expenses per order. Seasonal demand fluctuations also can influence fulfillment costs. Anticipate peak seasons and plan accordingly to efficiently manage higher volumes.
Transportation expenses are influenced by the distance traveled and the shipping zones served. Consider the geographical dispersion of your customer base and the locations of your 3PL warehouses.
When working with a 3PL in Canada, understanding customs and tariffs affects fulfillment costs for businesses that ship internationally.
Considerations for US Companies
Expansion into Canada requires careful consideration, particularly for US companies looking to expand their fulfillment base.
When transporting goods from a US-based fulfillment center to Canada, international shipping charges, customs fees, clearing fees, and import/export levies must be considered. Understanding these procedures helps for steady growth.
When deciding on Canada as an expansion hub, consider shipping prices, delivery times, and monthly order quantities. Working with a 3PL in Canada can help to streamline processes and increase cost-effectiveness.
In the dynamic world of logistics, finding the best 3PL in Canada requires careful consideration of location, technology, services offered, and operational nuance. Strategic decisions supported by comprehensive data and insights pave the path for effective and efficient fulfillment operations in Canada.
SPExpress is your strategic 3PL partner in Canada. We are ready to take your fulfillment game to new levels. Contact us today to learn how we can assist you with your warehousing and order fulfillment strategies.
At SPExpress, we offer services from order fulfillment to supply chain management services that include freight forwarding, transportation, warehousing, picking and packing, inventory and supply chain management, and order fulfillment. We work closely with our customers to ensure their 3PL needs are being met properly. Since we understand how valuable working with a reputable 3PL provider can be, and how it can help our customers to focus on growing their businesses.