Michele Majidi
Researcher
Land-based logistics in Canada - statistics & facts
From the towering peaks of the Rocky Mountains to the seemingly endless plains, the logistics industry in Canada has overcome unique and sometimes extreme environmental challenges. As part of one of the largest economic regions in the world, Canada provides a vital beginning-to-end route for the North American logistics market. With the couriers and local services market in Canada increasing to a record 19.3 billion U.S. dollars in 2022, this globally recognized increase is testament to Canada's increasing development and investment in logistical infrastructure. Furthermore, seven of the world's leading 100 logistics companies are based in Canada, helping North America to maintain its leadership in hosting the world's top logistics firms. A suitable question to ask at this moment is, will Canada continue to be a key player in a logistical powerhouse, or will interest move further south or elsewhere across the world?
In 2022, American to Canadian imports totaled 67.4 billion U.S. dollars, an increase of around 22 percent compared to the previous year. Almost half of the import-export value came from the trucking industry thanks to the increase in road-based trade across the border. Railroad companies also provided a key freight delivery service, with companies such as BNSF, and Union Pacific providing key trade links between the United States and Canada. BNSF railway boasts a total rail network of 32,500 route miles, making up the vast majority of rail-based logistics operations in Canada, as well as the U.S. Canadian National Railway maintained the monopoly of internal rail-based trade, reporting an operating revenue of 12.54 billion U.S. dollars, the highest of the Canadian rail firms. Canada's proximity to the U.S. thus provides a vital link to North American trade and will, no doubt, continue to be a key area of the logistics market.
However, although the overall performance of the land-based logistics industry was strong in 2022, the GDP share of the transport and storage sector decreased, valued only 3.76 percent, a decrease of 0.72 percentage points compared to pre-pandemic levels. Although there was a slight increase in GDP share compared to 2021, the overall lessening value of the transport and storage sector is a decline that may take some time to reverse. One firm that may be crucial in breaking this decline in GDP share is Costco. Currently, the Seattle-based wholesale firm operates a total of 107 warehouses across the region, with the majority being situated in the state of Ontario. The continuing investment and maintenance of the high number of warehouses, as well as the decreasing general freight rates, may hint at this minor slump in GDP share being only a momentary decrease. Nevertheless, with the logistics industry projected to increase in South America, the gaze of investment could move south, presenting further challenges to the region.
Between 2023 and 2029, the Canadian courier, express and parcel (CEP) market, is set to increase by 5.8 percent, the largest increase of the entire sector. In fact, all areas of the logistics market in the region are set to increase. As of now, the future of Canada's land-based logistics industry looks secure, but only time will tell if the regional market continues to play an important part in the North American region.
The journey so far
In 2022, American to Canadian imports totaled 67.4 billion U.S. dollars, an increase of around 22 percent compared to the previous year. Almost half of the import-export value came from the trucking industry thanks to the increase in road-based trade across the border. Railroad companies also provided a key freight delivery service, with companies such as BNSF, and Union Pacific providing key trade links between the United States and Canada. BNSF railway boasts a total rail network of 32,500 route miles, making up the vast majority of rail-based logistics operations in Canada, as well as the U.S. Canadian National Railway maintained the monopoly of internal rail-based trade, reporting an operating revenue of 12.54 billion U.S. dollars, the highest of the Canadian rail firms. Canada's proximity to the U.S. thus provides a vital link to North American trade and will, no doubt, continue to be a key area of the logistics market.
However, although the overall performance of the land-based logistics industry was strong in 2022, the GDP share of the transport and storage sector decreased, valued only 3.76 percent, a decrease of 0.72 percentage points compared to pre-pandemic levels. Although there was a slight increase in GDP share compared to 2021, the overall lessening value of the transport and storage sector is a decline that may take some time to reverse. One firm that may be crucial in breaking this decline in GDP share is Costco. Currently, the Seattle-based wholesale firm operates a total of 107 warehouses across the region, with the majority being situated in the state of Ontario. The continuing investment and maintenance of the high number of warehouses, as well as the decreasing general freight rates, may hint at this minor slump in GDP share being only a momentary decrease. Nevertheless, with the logistics industry projected to increase in South America, the gaze of investment could move south, presenting further challenges to the region.
A bright future ahead?
Between 2023 and 2029, the Canadian courier, express and parcel (CEP) market, is set to increase by 5.8 percent, the largest increase of the entire sector. In fact, all areas of the logistics market in the region are set to increase. As of now, the future of Canada's land-based logistics industry looks secure, but only time will tell if the regional market continues to play an important part in the North American region.
