Canada 3PL Market Set to More Than Double from $23.1 Billion (2023) to $49.7 Billion by 2033

According to a recent report published by Allied Market Research, titled, "Canada 3PL by Type, and Mode of Transportation: Regional Opportunity Analysis and Industry Forecast, 2024-2033," The Canada 3PL market size was valued at $23.1 billion in 2023, and is projected to reach $49.7 billion by 2033, registering a CAGR of 8.4% from 2024 to 2033.

Third-party logistics (3PL) in a company's supply chain management is a third-party business used by manufacturers to provide fulfillment services and distribute the company's products. These services consist of warehousing, integrated operations, and transportation services, which can be scaled according to customer needs and market conditions. Logistics service providers are responsible for the delivery of goods from manufacturers to consumers. The 3PL market has witnessed significant growth over the years, owing to an increase in trading activities due to globalization and the development of the e-commerce industry

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For instance, in June 2023, FedEx collaborated with Canadian Ground and Express operations into a unified entity, aiming to streamline logistics processes and enhance service efficiency across Canada. Through this collaboration, FedEx aims to enhance operational efficiency and streamline service delivery, which aligns with the growing demand for integrated logistics solutions in Canada. This collaboration reinforces FedEx's aims to optimize its operational structure, which is expected to improve delivery speeds, reduce costs, and strengthen its position in the competitive Canada 3PL market.

The Canada 3PL market is poised for significant growth, driven by demand in e-commerce, retail, and manufacturing sectors. Key investment pockets include warehousing solutions, transportation services, and technology-driven logistics, such as AI-enabled route optimization and real-time tracking. As companies seek cost efficiencies and flexibility, the 3PL market is shifting toward specialized services, including cold storage for perishables and reverse logistics. Geographic hubs like Ontario and British Columbia stand out for investment due to their strategic locations and infrastructure. The growing adoption of 3PL in Canada reflects a robust outlook, especially for advanced logistics solutions and e-commerce support.

Adoption of IT solutions in third-party logistics service is essential for seamless and efficient flow of the entire supply chain. IT solutions add economic value to the supply chain. For timely delivery and tracing goods in supply chain, IT solution plays a vital role. Various software, such as radio-frequency identification (RFID), warehouse management system, electronic data interchange (EDI), and cloud computing, support 3PL service providers to enhance their real-time monitoring and tracking capabilities.

For instance, in March 2024, Archer Point, Inc., a Microsoft Dynamics ERP Solutions Partner and full-service provider of Dynamics 365 Business Central and LS Retail, partnered with Boltrics, a leading software provider for 3PL and cold chain logistics, to deliver a 3PL-specific solution to the Canada market. This partnership aims to empower companies to proactively address these issues. By leveraging cutting-edge technology, Archer Point and Boltrics will enable businesses to stay ahead of potential challenges in the evolving logistics landscape. Moreover, the surge in the adoption of IT solutions and software is significantly driving demand in Canada's third-party logistics (3PL) market. Advanced technologies enhance operational efficiency, improve inventory management, and streamline supply chain processes. As businesses increasingly rely on digital solutions, 3PL providers are crucial in delivering integrated logistics services and supporting growth. Therefore, an increase in adoption of IT solutions and software is anticipated to increase efficiency and ease the flow of supply chain, providing a remarkable growth opportunity for the key players operating in the market.

Canada witnessed increase in urbanization from the last several years, which, in turn, created the requirement for new or refurbished home to cater to the changing requirements of the Canadian citizens. Furthermore, home decor is benefiting from e-commerce growth, fueled by a shift toward online furniture and decor shopping. As demand surges, 3PL providers are innovating with multi-modal systems to streamline shipping, reduce costs, and enhance delivery times. For instance, in September 2024, FedEx Corporation partnered with Nimble, and its focus on advanced automation aligns well with the unique demands of the home decor sector in Canada 3PL.

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Home decor products often include fragile, bulky, or customized items, which require specialized handling, efficient packaging, and careful last-mile logistics. By leveraging Nimble's AI-driven technology within its extensive North American fulfillment network, FedEx can offer home decor brands a robust solution that enhances operational efficiency, minimizes lead times, and ensures timely deliveries. This technology-driven fulfillment model helps home decor businesses meet the rise in consumer expectations for rapid, reliable delivery while reducing logistics costs and boosting scalability in a growing e-commerce landscape. Moreover, trends such as same-day and two-day shipping are pushing providers to build stronger distribution networks and use data analytics to optimize inventory forecasting and reduce stockouts. Sustainability also influences growth, as consumers prefer brands using eco-friendly packaging and greener transport options. Canadian 3PL companies increasingly adopt sustainable practices, ensuring reduced emissions through optimized routing and the use of electric vehicles for last-mile delivery. Therefore, rise in demand for ecommerce of home decor are driving the growth of the Canada 3PL market.

Rise in health concern and shifting consumer sentiments toward health-related activities are anticipated to spur the demand for health & nutrition products across Canada. Third-party logistics is a crucial service as it enhances efficiency in the healthcare industry. As health-conscious consumers drive demand, 3PL providers are investing in temperature-controlled warehousing and advanced tracking solutions. For instance, in December 2021, the Nutrition International's collaboration with Canada's announcement of $152.3 million for global nutrition initiatives underscores the vital role of third-party logistics (3PL) in enhancing program delivery and outreach. By efficiently managing supply chain logistics, 3PL providers ensure the effective distribution of nutritional resources to vulnerable populations, such as women and children. Their expertise is crucial in overcoming logistical hurdles, particularly in the context of adapting to challenges posed by COVID19. This collaboration highlights the essential integration of logistics solutions with health initiatives to improve public health outcomes and community resilience.

Furthermore, the growing requirement for health promoting product offerings, increase in self-care product adoption, rise in penetration of digital advertisement activities, and escalating interest in the power of regimens & routines are anticipated to support the growth of beauty & cosmetics related product lines across Canada. Increasing demand and manufacturing activities for beauty & cosmetics related product offerings are expected to spur the demand for 3PL activities, thereby supporting the growth of the beauty & cosmetics segment in the Canada 3PL market. For instance, in August 2024, Stripes Beauty expanded into Canada through Hudson's Bay stores and TheBay.com highlights the vital role of third-party logistics (3PL) providers in ensuring the efficient distribution and availability of its products. By partnering with 3PL firms, Stripes Beauty can streamline its supply chain operations, enabling timely delivery and accessibility of its menopause solutions to a wider audience.

Key Findings Of The Study :

On the basis of type, the sport and recreation segment are anticipated to have a highest growth rate during the forecast period.

On the basis of mode of transportation, the railway segment is anticipated to exhibit a remarkable growth during the forecast period.

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The key players analyzed in this report are A.P. Moller-Maersk, Bolloré Group, C.H. Robinson Worldwide, Inc., FedEx, Kintetsu World Express, Inc, Nippon Express Holdings, Penske, Purolator Inc., Metro Supply Chain Inc. (Former SCI Group Inc.), and United Parcel Service of America, Inc. These companies have adopted strategies such as expansion, partnership, product launch, and others to improve their market positioning.

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