Where to start?
It makes sense to start by analyzing your supply chain and to discover where most of your product is flowing to. The key to a successful and efficient supply chain is to consider the following questions:
- Where is your port of entry?
- Where are your customers mainly located?
- Does your volume qualify you to have multiple locations?
Throughout this article, I will be referring to a consumer goods company shipping 40’ containers from Shenzhen (China) to Vancouver (Canada).
Analysis of the Canadian Consumer
The location of Canadian customers falls roughly in line with a provincial population map. With that in mind, it is generally safe to assume that 38.4% of Canadians are in Ontario, 23.6% in Quebec, 13.1% in British Columbia, 10.9% in Alberta, 3.6% in Manitoba, and 3.1% in Saskatchewan. These provinces make up almost 93% of the Canadian population. All other provinces are under 3% or less.
The interesting thing about the map below is that it does not give you an idea of where people live within the provinces. 90% of all Canadians live within 100km (62 miles) of the US border. So the map below may look daunting, but the vast majority of Canadians are actually very close by.
The greyed out area makes up 0.8% of the Canadian population – not including polar bears.
Considering the above information, we can see that the 4 most likely locations to consider in terms of sheer population size are Ontario, Quebec, British Columbia, and Alberta.
The two key distribution hubs are Ontario and British Columbia as most consumer products come through Vancouver’s port, and the majority of perishable and automotive shipments pass through Ontario by road or rail. Ontario and Quebec make up 62% of Canada’s population, and this number is growing every year. Most major companies distribute their products from either Ontario or Quebec because the largest cost is the end delivery either to distribution centre, store, or the customer’s home address. If 62% of your customers are in one area, it makes sense to warehouse your product in close proximity. Furthermore, 53% of Ontarians live in the Greater Toronto Area, or within 1 hour’s drive of Toronto.
Reducing Shipping Costs & Delivery Times
If product arrival is not time sensitive, it may be an option to utilize rail as a means to move product from Vancouver to Ontario or Quebec. Shipping by rail can save companies as much as 33% on shipping costs. However, if getting your product to your warehouse is a priority it makes sense to utilize air freight, or a reliable large carrier such as Challenger Motor Freight. Full truckload shipments from Vancouver to Toronto generally take 4-5 days of driving (weather dependent) for a single driver, and that time can be cut in half by team drivers.
Here’s an example to show why it often makes sense to warehouse your product in Ontario:
This is not to say never to warehouse product in Vancouver. If a customer has enough order volume in British Columbia or Alberta, it may make sense to warehouse some product there rather than sending it all the way to Ontario, only to ship it back out to West. That would be expensive and wasteful.
Reducing Shipping Costs & Delivery Times
If you’re shipping from China to Vancouver and have customers all across Canada, my recommendation is to warehouse some product in Vancouver area, and to move the rest to the Greater Toronto Area. This is a broad and general statement, but at the end of the day it usually holds true. The key is to look at where your shipments are entering Canada, and to analyse your order destinations within Canada. Keeping the distance and time short on the final delivery is very important.
Article by Ryan Bennett of Challenger Motor Freight
