The logistics industry in Canada is growing at an impressive rate, with 2023 poised to bring in new macro trends that will impact the third-party logistics (3PL) industry. The need for efficient distribution networks to meet the demands of e-commerce has led to the rise of omnichannel distribution, and 3PL providers are developing technology platforms for real-time visibility and inventory management.
In response to the emphasis on sustainability, 3PL providers in Canada are focusing on implementing sustainable practices in their operations. Advancements in technology such as AI, blockchain, and IoT are being adopted to improve supply chain visibility and efficiency, while automation technologies are helping reduce labor costs and increase productivity. The shift towards nearshoring is also likely to continue in 2023, with an increase in demand for services that support domestic supply chains. This blog will explore these trends and what they mean for the future of 3PL in Canada.
Table of Contents
5 Third Party Logistics Trends in Canada in 2023
1. E-commerce and Omnichannel Distribution
The growth of e-commerce in Canada has been one of the biggest drivers of the 3PL market. With more and more consumers turning to online shopping, businesses must optimize their distribution networks to meet demands. This has led to the rise of omnichannel distribution; where companies use multiple channels to fulfill orders, such as online marketplaces, brick-and-mortar stores, and distribution centers.
To support these complex networks, 3PL providers are developing sophisticated technology platforms that allow for real-time visibility and inventory management. In addition, the use of value-added services, such as order fulfillment and delivery times, has become increasingly important for e-commerce businesses looking to gain a competitive advantage in the Canadian market. 3PL companies can provide these services to help businesses improve their customer satisfaction and increase their revenue.
2. Emphasis on Sustainability
Sustainability is becoming an increasingly important consideration for businesses and consumers alike. In response, many 3PL providers in Canada are focusing on implementing sustainable practices in their operations. The use of electric vehicles is one of the most effective ways to reduce carbon emissions and transportation costs. Additionally, companies are adopting sustainable practices such as green packaging, reducing the amount of touches a package can go through, and implementing reverse logistics. These practices not only reduce a company’s environmental impact but can also lead to cost savings and improved customer satisfaction.
3. Advancements in Technology
In 2023, we can expect to see more companies implementing technologies such as artificial intelligence (AI), blockchain, and the Internet of Things (IoT) to improve supply chain visibility and efficiency. These technologies can help reduce costs, improve operational performance, and enhance the overall customer experience. With the use of big data, 3PL providers can analyze customer behavior and demand patterns to better forecast inventory needs and optimize their logistics operations. Furthermore, real-time tracking of inventory and shipments through the use of IoT sensors can improve transparency and efficiency in the supply chain.
4. Increased Adoption of Automation
Automation has been a key trend in the logistics industry for several years, and in 2023, we expect to see even more widespread adoption. With the rise of e-commerce, businesses are under increasing pressure to fulfill orders quickly and accurately.
Automation technologies such as robotics, drones, and automated storage and retrieval systems (AS/RS) can help companies achieve these goals. Additionally, automation can help reduce labor costs and increase productivity, making it an attractive option for many 3PL providers. Real-time visibility of inventory through automated systems can also improve inventory management and minimize errors.
5. Shift to Nearshoring
As a result of the disruptions caused by the COVID-19 pandemic, many companies are re-evaluating their supply chain strategies. This has led to a trend towards nearshoring or bringing production closer to home. This shift is likely to continue in 2023, which means that 3PL providers in Canada may see an increase in demand for services that support domestic supply chains.
3PL companies with a large warehouse and distribution space in the Greater Toronto Area (GTA) can offer businesses a better choice for cost-effective transportation services and distribution costs. Furthermore, a qualified team of industry experts can assist businesses in developing their core competencies in supply chain management and product development, providing additional services and benefits to their customer base.
Conclusion: Third Party Logistics Canada
The logistics industry in Canada is undergoing a significant transformation with new trends that require 3PL providers to be adaptable and innovative to meet the changing needs of their clients. The growing importance of sustainability, technology, and automation is expected to continue shaping the industry in the coming years.
The adoption of new technologies can help 3PL providers increase efficiency, reduce costs, and enhance customer experience. Furthermore, the shift towards nearshoring will have an impact on the logistics industry in Canada, and 3PL providers can position themselves for success by supporting this trend. The future of the logistics industry in Canada is promising and offers significant opportunities for growth and development.
Sources
- “The Future of Canadian Logistics and Third-Party Logistics (3PL) Services.” Global Trade Magazine, 17 Aug. 2021, https://globaltrademag.com/the-future-of-canadian-logistics-and-third-party-logistics-3pl-services/.
- “5 Trends Shaping the Future of Canadian Logistics.” UPS Compass, 11 Oct. 2021, https://compass.ups.com/5-trends-shaping-future-canadian-logistics/.
- “3PL Industry Trends to Watch in 2023.” Cerasis, 3 Jan. 2023, https://cerasis.com/3pl-industry-trends-to-watch-in-2023/.
- “Canadian Logistics Overview,” TIACA.
- “2023 Logistics Industry Outlook: Key Trends and Predictions,” Armstrong & Associates.
- “Third-Party Logistics Market in Canada – Growth, Trends, and Forecasts (2020-2025),” Mordor Intelligence.
