VANCOUVER — It’s been ten years since Amazon opened its first Canadian fulfillment centre, a massive warehouse in Mississauga, Ont. In the decade since, the company has focused on delivering more of its customers’ purchases as quickly as possible, and its physical footprint has expanded in a bid to keep up. Some time next year, the real estate that houses its Canadian distribution network will approach 20 million sq. ft.—the equivalent to almost four West Edmonton Malls, Canada’s largest shopping centre complete with a water park and zoo.
And while Amazon’s Canadian network was once made up nearly completely of giant warehouses, data compiled by The Logic and supply chain consulting firm MWPVL International shows that as it has grown it is increasingly made up of smaller outlets closer to more customers’ homes.
Amazon Logistics—the delivery network responsible for a customer’s order from checkout until a package’s arrival—“is growing super fast right now in Canada,” its senior operations manager Véronique Cantin said during a company event in September.
Talking Point
Amazon’s Canadian distribution network was once mostly made up of giant warehouses, but the company has increasingly focused on adding smaller delivery stations amid a rise in same-day and one-day deliveries in recent years, according to an analysis by The Logic.
An Amazon package makes several stops along the company’s complex distribution network. More than half of the items sold on its e-commerce platform are shipped from its giant fulfillment centres—the first of which opened in Canada in 2011—typically spanning hundreds of thousands of square feet. At some of these centres, robots perform some of the work. From fulfillment centres, packages travel to a sortation centre or delivery station. Workers at sortation centres sort and send packages to delivery stations. Those stations make up what’s known as the last mile of the e-commerce process, from which trucks transport packages to customers’ homes.
Amazon doesn’t offer much in-depth information on its Canadian operations, though some details have been revealed through press releases announcing location openings, as well as two reports on its economic impact in Canada. The Logic compiled data from Amazon’s public disclosures, as well as from MWPVL International, a company that tracks Amazon’s global distribution footprint, to understand the size of Amazon’s Canadian operations and how the composition of its distribution network has evolved. Amazon did not respond to The Logic’s request for comment on the makeup of its Canadian network.
Methodology
The Logic compiled data from Amazon’s press releases and other public disclosures. It also incorporated data from MWPVL International, a supply chain, logistics and distribution consulting firm, which tracks the global distribution networks of several companies, including Amazon. Where Amazon’s anticipated square footage for a centre did not align with MWPVL’s data, The Logic deferred to MWPVL. In one instance, there is no stated square footage for a delivery station as it is included in that of a fulfillment centre, and in another, a delivery station’s square footage is unknown. The Logic excluded from its analysis Amazon’s Whole Foods locations, as well as its tech hubs and corporate offices.
In 2011, the first year for which The Logic’s analysis included data, Amazon fulfillment centres spanned 501,700 sq. ft. in Canada. By the end of 2018, Amazon’s footprint topped four million sq. ft. Over the next two years, growth supercharged. Amazon added nearly 4.7 million sq. ft. in 2020—a roughly 68.5 per cent increase year over year. It opened or plans to open another roughly seven million sq. ft. this year—up about 61 per cent so far, pending any further announcements. It has already revealed plans to create nearly one million sq. ft. more distribution-network space in 2022. At some point next year, Amazon’s distribution network will total nearly 19.5 million sq. ft.
While the company rapidly expands its Canadian presence, in recent years it has focused most on bolstering last-mile capabilities by adding delivery stations—a similar pattern to that in the U.S. “Over the last three years, there are new delivery stations opening in all regions every month from coast to coast,” Cantin said at the event.
Amazon opened its first Canadian delivery stations in 2016, totalling nearly 214,000 sq. ft. By 2019, these had grown nearly 51 per cent to about 323,000 sq. ft. In 2020, however, Amazon added a staggering approximately 1.75 million sq. ft. in delivery stations across the country—jumping nearly 541 per cent. It added six in Ontario, with one each in Kitchener, Etobicoke, Whitby, Cambridge, Brampton and Vaughan. Alberta gained four, with two in Calgary and one each in Nisku and Edmonton. British Columbia’s Surrey welcomed one, as well. By the end of the year, the company boasted 16 in Canada across three provinces.
“In 2021, Amazon Logistics is projecting to grow from 15 to 35 stations across Canada, representing amazing year over year growth rate,” said Cantin. By The Logic’s analysis, Amazon will have 30 delivery stations, 19 fulfillment centres and four sortation centres by the end of 2021.
The company, which did not respond to a request for comment on the matter, said in a report issued Monday it now has 17 fulfillment centres, six sortation centres and 35 delivery stations across Canada.
This year, Amazon has so far announced another roughly 2.7 million sq. ft. of delivery stations—up roughly 133 per cent year over year. In addition to several in Ontario and B.C., that includes entering new provinces like Manitoba, Nova Scotia and Quebec.
Delivery centres now make up an increasing share of Amazon’s Canadian distribution network, which was once dominated by fulfillment centres. Until 2020, fulfillment centres accounted for at least 92 per cent of Amazon’s distribution network in Canada. That year, delivery stations accounted for nearly 18 per cent of the company’s distribution infrastructure, while fulfillment centres fell to just under 78 per cent. This year, delivery stations are on track to grow to about 39 per cent, with fulfillment centres dropping to just about 47 per cent.
In part to support its expanding distribution network, Amazon’s also been growing its local staff. The company’s headcount in the country has risen nearly 800 per cent in a little more than four years. In late October 2017, more than 4,400 people worked for Amazon in Canada, skyrocketing to more than 39,500 full- and part-time workers by Nov. 8, 2021, with plans to hire thousands more by 2023.
Amazon has continued its hiring frenzy in the country, hosting the first Canadian version of its annual career day event in September. The event focused on what it is like to work at the tech company, from some of the workers’ perspectives—though it didn’t address the workplace-safety issues plaguing its image.
In Canada, Amazon aims to add 1,800 corporate and tech employees by the end of this year, and over 15,000 full- and part-time positions this fall.
