3PL in Canada Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Canada Third Party Logistics (3PL) Market Analysis

The Canada 3PL Market size is estimated at USD 22.37 billion in 2025, and is expected to reach USD 27.98 billion by 2030, at a CAGR of 4.58% during the forecast period (2025-2030).

The Canadian third-party logistics landscape is experiencing significant transformation driven by the evolving retail and e-commerce sectors. The retail industry has witnessed substantial growth in online channels, with industry experts projecting that online channels are expected to reach more than 35% of retail sales over the next decade. This digital shift has prompted Canadian businesses to seek comprehensive third-party logistics solutions that can support fast and streamlined order fulfillment, warehousing services, and distribution services. The cross-border penetration rate for online shopping in Canada is nearly twice that of the United States, highlighting the unique dynamics of the Canadian market and its strong integration with international supply chain management.

The warehousing and logistics infrastructure sector is undergoing rapid expansion to meet growing demand. Currently, approximately 20% of new warehouse leasing can be attributed to e-commerce fulfillment, with industry estimates suggesting that e-commerce fulfillment generates three times the demand for warehouse and distribution space compared to traditional brick-and-mortar retail operations. Major logistics providers are actively expanding their infrastructure, as exemplified by SCI Logistics' recent launch of a 150,000-square-foot healthcare-dedicated facility in Mississauga, Ontario, equipped with state-of-the-art technology for storing temperature-sensitive products and automated order-to-kit operations.

The strategic geographical positioning of logistics operations continues to be a crucial factor in the Canadian 3PL market, with over 90% of the population residing near the US borders. This demographic distribution has led logistics companies to strategically position their fulfillment centers, warehouses, and distribution centers within proximity to major population centers to optimize delivery times and operational efficiency. In Canada, a single node for fulfillment and warehousing activity, typically in the Toronto area, is often sufficient to meet transit time expectations for e-commerce, while companies with significant West Coast operations often adopt a two-node model including Vancouver.

The industry is witnessing accelerated adoption of advanced technologies and automation solutions. Third-party logistics providers are increasingly implementing artificial intelligence, robotics, and automated storage and retrieval systems to enhance operational efficiency. According to industry surveys, 68% of Canadian transport and logistics companies acknowledge their technology is outdated, leading to increased investments in mobile-first strategies and digital transformation initiatives. Nearly 50% of companies that have implemented mobile-first strategies report reduced operational costs, demonstrating the tangible benefits of technological advancement in the sector. This trend underscores the importance of logistics management and integrated logistics in driving efficiency and competitiveness.

Canada Third Party Logistics (3PL) Market Trends

Growing E-commerce Activities and last mile delivery Requirements

The rapid expansion of e-commerce operations across Canada has created unprecedented demand for sophisticated third-party logistics services. Major retailers are establishing dedicated fulfillment centers to handle growing online orders, exemplified by Walmart Canada's partnership with SCI Logistics to develop a purpose-built distribution center spanning 450,000 square feet in Ontario. This trend is further reinforced by Oxford Properties Group's innovative development of Canada's first multi-level industrial property, adding 707,000 square feet of warehousing space specifically designed to support e-commerce operations and last mile delivery requirements.

The evolution of consumer shopping behaviors has prompted logistics providers to position their fulfillment centers and warehouses strategically within proximity to major population centers. With over 90% of Canada's population concentrated near US borders, 3PL companies are optimizing their distribution networks to meet rapid delivery expectations. This strategic positioning is particularly evident in Toronto, which has emerged as the most popular Canadian market for 3PL services due to its population base and proximity to other Eastern Canadian markets. The focus on last mile delivery has also led to the emergence of specialized services, with companies offering various delivery options including curbside, first room, and white glove services to meet diverse customer needs.

Automotive Industry Transformation and USMCA Implementation

The implementation of the US-Mexico-Canada Agreement (USMCA) has created significant opportunities for 3PL providers in the automotive sector. The agreement's mandate requiring 70% of steel and aluminum used in vehicle manufacturing to be sourced from North American suppliers has necessitated more complex logistics management solutions. This requirement, combined with the agreement's provisions for streamlined cross-border freight movement and the removal of restrictions from Mexican custom brokers, has increased the demand for sophisticated logistics solutions to manage the intricate supply chain networks.

The automotive industry's transformation is further evidenced by major developments in the logistics infrastructure, such as Porsche Canada's partnership with DB Schenker to establish a national parts distribution center in Ontario. This facility exemplifies the industry's focus on improving delivery efficiency, enabling overnight delivery capabilities throughout the country. The strategic placement of such facilities, particularly in Ontario which accounts for 100% of Canada's light vehicle production and hosts 400 parts manufacturers, demonstrates the crucial role of third-party logistics providers in supporting the automotive sector's evolution. The need for proximity between production facilities and assembly plants, driven by considerations of component weight, size, and fragility, has created additional opportunities for specialized logistics service provider services.

Technological Advancements in Logistics Operations

The Canadian logistics sector is experiencing a significant technological transformation, with 68% of transport and logistics companies acknowledging the need to upgrade their outdated technology systems. This recognition has led to increased investment in mobile-first strategies, with 80% of executives agreeing on the benefits of such approaches. The implementation of these strategies has demonstrated tangible benefits, with nearly 50% of companies reporting reduced operational costs after adopting mobile-first solutions for their logistics operations.

The integration of advanced technologies extends beyond mobile solutions to encompass artificial intelligence and automation systems. Companies like Otto Motors have developed autonomous AGVs specifically designed for material transport in distribution centers and warehouses, operating through sophisticated control systems that can integrate with existing ERP solutions. The adoption of blockchain technology for supply chain visibility, exemplified by companies like Chainvu, and the implementation of AI-powered freight marketplaces by firms such as FleetOps, demonstrate the industry's commitment to leveraging technology for improved efficiency and service delivery. These technological advancements are particularly crucial in managing the complex requirements of cross-border trade and meeting the increasing demands for real-time tracking and transparency in logistics operations.

Segment Analysis: By Services

Domestic Transportation Management Segment in Canada 3PL Market

The domestic transportation management segment continues to dominate the Canadian third-party logistics market, commanding approximately 66% market share in 2024. This segment's strong position is driven by the emergence of numerous e-commerce companies and increasing demand for domestic shipping services. According to industry surveys, almost 95% of shippers operating in Canada are looking to outsource their transportation management activities, with more than 50% of total logistics expenditures directed to outsourcing services. The segment's dominance is further reinforced by the fact that more than 75% of respondents utilize multiple 3PLs for their domestic transportation needs. Transport Canada's initiatives to increase zero-emission vehicles through incentive programs have also contributed to the segment's growth, as companies increasingly prioritize environmentally sustainable transportation management solutions.

Value-added Warehousing and Distribution Segment in Canada 3PL Market

The value-added warehousing and distribution segment is emerging as the fastest-growing segment in the Canadian 3PL market, with an expected growth rate of approximately 4.4% during 2024-2029. This growth is primarily driven by the increasing adoption of e-commerce, with online channels expected to reach more than 35% of retail sales over the next decade. Canadian businesses are actively seeking 3PL logistics solutions that can provide fast and streamlined order fulfillment services, warehousing services, and distribution services. The segment's growth is further supported by the strategic positioning of fulfillment centers near major population centers, particularly in the Toronto and Vancouver areas, to meet e-commerce omnichannel delivery expectations. The strong demand for industrial real estate space and limited new supply is driving up prices, with around 20% of new leasing attributed to e-commerce fulfillment.

Remaining Segments in Services

The international transportation management segment plays a crucial role in the Canadian 3PL market by facilitating cross-border trade and global commerce. This segment is particularly vital for managing customs clearance processes and international shipping requirements, especially in trade relations with the United States, Canada's largest trading partner. The segment's services are essential for companies engaged in cross-border e-commerce, providing expertise in customs brokerage and international shipping regulations. The segment benefits from Canada's strategic position in global trade and its strong international trade relationships, offering comprehensive solutions for businesses looking to expand their global reach.

Segment Analysis: By End User

Industrial and Aerospace Segment in Canada 3PL Market

The industrial and aerospace segment dominates the Canadian third-party logistics market, holding approximately 31% market share in 2024. This significant market position is supported by Canada's position as the world's fifth-largest aerospace market, with revenues exceeding USD 24 billion. The country's aerospace sector is predominantly civil-oriented (80%) with the remaining 20% focused on military applications. Montreal has established itself as the world's third-largest aerospace hub, following only Seattle and Toulouse. The segment's strength is further reinforced by Canada's robust industrial market, which began showing exceptional results since 2019. The scarcity of industrial products, particularly in key markets like Vancouver and Toronto, has led to single-digit vacancy rates across the country, driving demand for specialized logistics services.

Healthcare Segment in Canada 3PL Market

The healthcare segment is emerging as the fastest-growing sector in Canada's 3PL market, with an expected growth rate of approximately 13% during 2024-2029. This remarkable growth is driven by substantial investments in both public and private healthcare sectors. The segment's expansion is particularly influenced by advancements in technology, new regulations, and the increasing trend toward personalized medicine, all of which require sophisticated inventory management. The cold chain logistics used for pharmaceutical logistics in Canada need to be especially robust due to the country's vast territories and challenging weather conditions. The pharmaceutical industry's shift toward externalized R&D setups through partnerships and collaborations has created additional opportunities for 3PL providers, who are increasingly being relied upon for their expertise in managing complex healthcare supply chains.

Remaining Segments in End User Segmentation

The remaining segments in Canada's 3PL market include consumer & retail, technology, energy, and automotive sectors, each serving distinct market needs. The consumer & retail segment is driven by the growing e-commerce sector and changing consumer preferences. The technology segment benefits from Canada's position as a global tech hub and the increasing adoption of digital solutions. The energy segment plays a crucial role in supporting Canada's vast natural resources sector, particularly in oil and gas logistics. The automotive segment, while smaller, remains significant due to Canada's position as one of the world's top 10 producers of light vehicles and its integrated North American market presence.