THE 3PL MARKET
STUDIES THAT SPEAK FROM ITSELF…
PERSPECTIVE ABOUT THE CANADIAN MARKET
The main request comes from the e-commerce community. In 2016, Canadians spent online more than 34 billion dollars, or 7% of total retail sales. In 2016, there was a 15% increase over the previous year according to Canada Post. In the same period, physical stores had a sales growth of only 2%.
Overall, Quebec and Canada follows the markets’ lead in relation to the use of 3PL. According to Jacques Roy of HEC in an interview published in the journal Les Affaires in 2017, Europe or the United States are clearly ahead. “In Europe, companies do not even think about it: Doing business with such companies [the 3PL] is a second nature,” says Mr. Roy. In May 2014, a study by Mr. Roy demonstrated this trend, as worldwide almost 49.5% of companies use an outsourcing service for the preparation of orders and even storage. In Canada, this percentage was significantly less significant, rather it is referred to as 26.5% of the firms that outnumbered these services.
Particularly consider that half of small businesses do not have a transactional site, they become a future market potential. The other half is too, because often they do it internally and if they want to increase their sales, they must consider the use of a 3PL to help them increase their distribution capacity.
For medium-sized businesses, the challenge is quite different. These companies must make a choice between investing considerable sums of money for the construction of new facilities or expanding their existing distributions and using a partnership with a company like Flex Logistique.
3PL QUEBEC PORTRAIT
According to a recent study by the CEFRIO, only 21% of logistic providers work in the e-commerce field. We are talking here about all the providers: 1PL, 2PL, 3PL and 4PL. In this same study, the concentration of 3PL companies in Canada is mainly in Ontario, with Quebec being behind the market for almost two years. From the 79% that aren’t working in the e-commerce market, “60% mention challenges related to the adaptation of their business for this type of context [e-commerce]” CEFRIO, October 2018.