It is a common fact that dealing with order fulfillment can eat up your time and money. That’s why many businesses find cooperation with 3PL fulfillment companies optimal. They can take care of details like storage, warehousing, and inventory management so companies can focus on scaling and developing new products.
Canada, with its robust infrastructure, business-friendly policies, and proximity to the United States (the world’s largest consumer market), has become an attractive hub for efficient order fulfillment solutions. Its 3PL market size is estimated at USD 21.39 billion in 2024 and is expected to reach USD 26.75 billion by 2029.
This rapid expansion solidifies Canada’s status as an attractive destination for both international and local eCommerce businesses seeking efficient order fulfillment solutions.
In this article, we’ll explore what makes Canada an ideal choice for outsourced order fulfillment, outline the key benefits of such cooperation, and spotlight the best warehouse locations in Canada to run your fulfillment operations.
The benefits of using Canadian fulfillment centers for order fulfillment
Canada is a strong part of the vast North American 3PL market. While the US 3PL market is the largest and is growing steadily, Canada is the fastest-growing market in the region. Despite being smaller, Canada’s market offers unique advantages that deserve attention.
#1 Сonnections to international markets
Above all, Canada is a strategic location that bridges North American and global markets. Its proximity to the U.S. ensures easy access to the world’s largest consumer market, while its well-established international trade connections and agreements enable businesses to operate both within North America and worldwide.
#2 Competitive prices
Another important factor is the country’s stable business environment and lower operating costs — which sometimes make Canada an attractive alternative to the US-contained operations.
For businesses that need to store more inventory without significantly increasing their expenses, these factors are often decisive. Especially in today’s landscape, when the amount of eCommerce orders increases extensively, just like the demand for efficient order fulfillment.
#3 Number of warehouses in Canada and available workforce
Except for competitive prices, there is a huge number of available warehouses in Canada (2,500+) and a skilled workforce (62k+ people) with years of expertise in logistics and order fulfillment.
#4 Strategic location & fast delivery
The average order processing time with Canadian 3PLs is 24-48 hours. And the majority of eCommerce orders can be fulfilled on the same day.
This is possible due to the strategic location of Canadian fulfillment companies. ShipTop warehouses, for example, have two distinct advantages:
- They are just one hour from the US border. So, for example, sometimes it’s easier to ship from Vancouver to Seattle than, say, from Seattle to Denver.
- They are also located within striking distance of major Canadian population centers.
This proximity contributes both to increased expectations for last-mile delivery and omnichannel shopping. It makes it easier to maintain the right inventory levels and fulfill orders quickly because of the optional locations.
#5 Technology adoption level
The automation of routine warehouse processes as well as inventory and order management is required to cope with the increasing volume of eCommerce orders we have today.
Canadian 3PL market and its providers and known for their adoption of technologies, such as robotics and AI-driven inventory management, contributing to faster and more accurate order fulfillment.
Top locations for warehouses in Canada
Each region in Canada has its specifics like transportation links, proximity to major cities, and different infrastructure (like Vancouver, which is ideal for international shipping).
Picking the right location for 3PL services can greatly improve efficiency and reduce costs. Take your time to find the perfect partner.
Below are four location recommendations for warehousing in Canada — and some reasons why we chose them for this list.
Fulfillment center in Toronto
As one of the largest urban centers, and industrial and logistics hubs, Toronto is the gate to a significant consumer base, thereby enabling faster delivery times and reduced shipping costs. Its well-developed infrastructure with highways, railways, and an international airport enables problem-free transportation and distribution of products either within the country or beyond. It’s one of the reasons why we placed one of our fulfillment centers in Toronto.
As of the first quarter of 2024, the city boasted about 822.5 million square feet of industrial and logistics space.
Fulfillment center in Vancouver
This city is ideal for reaching markets in Western Canada and the Pacific Northwest of the US. Its major roads allow truck deliveries to quickly reach Oregon, California, Idaho, and Montana.
Thanks to its location on the West Coast and The Port of Vancouver, it also serves as a vital gateway for international trade. The Port is the biggest and most diverse port in Canada, handles all sorts of cargo, and connects Canadian trade to over 170 countries, particularly in the Asia-Pacific region (it’s much cheaper for ocean freight to travel from Asia to Vancouver than to Toronto).
With a population of 2,683,000, Vancouver is the third-largest market in Canada, making it a key area for retailers. Warehousing costs in the city range from $15 to $30 per square foot, influenced by factors like location and security.
Fulfillment center in Montreal
Located close to the U.S. border and major highways, Montreal is perfect for serving Eastern Canada and the Northeastern US. The city boasts a population of 1,780,000, making it the second-largest market in Canada. The country’s second-largest port is located in Montreal, too, so it’s another great spot for international trade.
Warehousing costs in Montreal range from $10 to $25 per square foot, depending on factors such as location and amenities. There are approximately 344.2 million square feet of storage space available, which supports efficient logistics and rapid distribution.
Fulfillment center in Calgary
Known for efficient logistics and lower operational costs, Calgary is a great choice for warehousing in Canada. Located near major national highways like the Trans-Canada Highway, Calgary provides excellent connectivity for both domestic and international transportation.
Warehouse costs in Calgary are generally lower, typically between $8 and $18 per square foot. The city has a skilled workforce with reasonable wages, and modern warehouses in Canada often include advanced technology and strong security.
Checklist for finding the perfect warehousing services in Canada
The choice of a 3PL partner goes far beyond the selection of the city or warehouse; several key elements are needed to make sure everything runs smoothly. Here’s a checklist to help you out:
- Range of services: Beyond warehousing and order fulfillment, look for a 3PL offering additional capabilities like returns management, custom packaging, and advanced shipping options. If you sell through multiple channels (like online and in-store), choose a partner with omnichannel fulfillment capabilities to manage orders smoothly across all platforms.
- Cost: Make sure the provider offers fair prices for storing and shipping your products that allow you to be more competitive with your pricing. Rates for Canada fulfillment services can vary from $15 to $40 per pallet per month for storage; shipping costs typically start around $5 to $15 for small parcels, varying based on distance and service level.
- Technology capabilities: Pick a 3PL with strong tech capabilities to manage inventory and track the status of your orders in real time within and beyond Canada. The software they have in place should be easy-to-use and integrate easily with all your sales channels and existing systems.
- Scalability: Whether your business expands within or outside Canada, scalability is one of the most important features of 3PL. Make sure your partner can handle increases in your order volume without compromising service quality and adapt to seasonal changes in demand.
- Clear SLAs and defined performance metrics: Make sure SLAs are clear and outline specific targets for things like order accuracy, delivery times, and inventory management.
- Customer service: 3PL’s ability to provide timely updates on shipments, and solve problems efficiently is the key to your cooperation. They should quickly respond to questions and problems (preferably) through multiple channels of support, including phone, email, and potentially live chat.
Benefits of working with a Canadian 3PL for Canadian companies
Obviously, the first to benefit from working with Canadian 3PL providers are local retailers.
It won’t come as a surprise that the geography of Canada makes shipping across the country (i.e. along the east-west axis) expensive and time-consuming due to remote areas, and harsh weather conditions, especially in winter.
Hence, 3PLs in Canada are aware of both challenges and opportunities within the country and have established networks covering all provinces and territories (even the more remote areas) efficiently, ensuring efficient nationwide distribution.
As a bonus, if you partner with someone like ShipTop, you also get to leverage our extensive experience in cross-border logistics. We have established relationships with international carriers and distribution networks, and are well aware of customs paperwork, international shipping rules, and how to handle taxes and duties for different countries.
Benefits of working with a Canadian 3PL for international businesses
Canada’s geographical location makes it a well-known hub for international shipping. It provides access to both the Atlantic and Pacific Oceans and close ties with the U.S. through its excellent ports and transportation infrastructure, ensuring smooth movement of goods.
The majority of warehousing locations in Canada are close to major U.S. markets, enabling orders to be delivered to the US within 1-3 days. This allows brands to operate in both US and Canadian markets from a single inventory hub, avoiding the need to move or duplicate stock.
When you enter a new country, like Canada, either for domestic or international trade, it can be tricky to understand local rules and logistics. Having someone to guide you is important.
Reliable Canadian 3PL like ShipTop knows how things work and can navigate you to help avoid mistakes, prevent delays, and find the best and cheapest ways to move your products. On top of that, we can also facilitate the delivery due to our partnership with multiple reliable shipping services.
Leveraging Section 321 to lower costs
There’s another huge advantage that Canadian fulfillment centers can give to international companies, and it’s related to Section 321 of the US legislation. This provision permits shipments valued at $800 or less to enter the United States without incurring duties or taxes. For eСommerce businesses utilizing Canadian fulfillment centers, this is a huge potential cost saver.
Here’s how it works:
- A customer in the US places an order on an eCommerce site, and if the order value is $800 or less, it qualifies for Section 321.
- ShipTop fulfills the order and prepares it for shipment. We include specific documentation identifying it as a Section 321 shipment during the processing.
- When the package arrives at the border, customs identifies it as a Section 321 shipment. Thus, they process it swiftly — without imposing duties or taxes.
Learn more about our Section 321 fulfillment services here.
Key takeaways
Three factors are at play when considering Canada-based fulfillment for your business:
- The intrinsic value of locations
- The ability to leverage Section 321
- The ability to manage inventory properly for the customer.
ShipTop is a Canadian 3PL provider that offers a combination of all three. Besides the strategically chosen locations across Canada, we take pride in our inventory management facilitation driven by our tech — and we are experts in Section 321 intricacies.
Contact us at any time to find the perfect way of using all three of these benefits to save on logistics costs and improve your fulfillment services.
