E-Commerce Logistics Race 2022: Canada vs the United States
Canada had an average transit time of 2.7 days in Q1 2022, while the US had an average of 3.5 days.
Canada’s first attempt success rate increased by 1.28% over peak season last year while that of the US only rose by 1.04%
The use of collection points in Q1 2022 was at 3.76% in the US and 8.45% in Canada.
A year has gone by in a blink of an eye and we are back with yet another installment in our "e-commerce logistics race" series.
This time, we are kicking it off by comparing the logistics performances of the two North American neighbors – Canada and the United States (US). From the growth of their delivery success rates during peak season 2021, to the use of collection points in Q1 2022, this article provides a comprehensive overview of e-commerce logistics in the US and Canada over the past year.
How did these two e-commerce markets fare against each other? Which country performed better during the latest peak season? Let’s find out!
#1 Canada Had a Shorter Transit Time Than the US in Q1 2022
In the first quarter of 2022, Canada had an average transit time of 2.7 days to its first delivery attempt, while the US had an average of 3.5 days. Similarly in peak season 2021, Canada (3.7 days) performed better than its neighbor (4.3 days) in terms of transit time. The good news, however, is that both countries saw an improvement in the logistics performance since Q1 2021, where they had an combined average of 3.7 days transit time. This is possibly attributable to the decline in e-commerce volumes throughout the region as more consumers return to brick-and-mortar stores to fulfill their shopping needs. With fewer orders to fulfill, logistics providers are more likely to adhere to the stipulated timeline and ship out their packages in a shorter period of time.
#2 First Attempt Success Rate in Canada Saw a Greater Improvement During Peak Season 2021 Than in the US
Making the first delivery attempt on time is crucial in e-commerce retail. A redelivery incurs additional costs for businesses and increases customer wait times, which can negatively affect customer satisfaction and retention rates.
According to our Q1 2022 data, the delivery success rate was at 97.8% in the US and 88% in Canada. Back in Q1 2021, the US figure stood at 96.5%, whereas Canada’s number was much lower at 85.9%. Having said that, Canada’s first attempt success rate increased by 1.28% over peak season while that of the US only rose by 1.04%. This could perhaps be associated with the fact that most, if not all, COVID-19 restrictions and lockdown measures in the US were lifted by peak season 2021, indicating that American consumers were less likely to be home to receive their parcels during that time. Meanwhile in Canada, the authorities took a slower approach to reopening society, even as they saw the number of cases dwindling down.
#3 More Canadian Shoppers Used Collection Points Compared to Their American Counterparts in Q1 2022
Based on our findings, Canadian shoppers appeared more keen towards alternative delivery methods as compared to their American counterparts. The share of parcels delivered to collection points, for instance, was only 2.9% in the US in Q1 2022, significantly lower than the 7.51% observed in Canada during the same period. Having said that, both countries saw a decrease in the usage of collection points over the year. In more specific terms, the use of collection points in Q1 2022 was at 3.76% in the US and 8.45% in Canada.
This is despite the multiple efforts of various logistics companies to increase the availability and accessibility of pick-up and drop-off (PUDO points) across the North America region. Recent developments by UPS and FedEx include hybrid access points via retail partnerships to allow collection of low volume shipments. While such locations do not offer full-service shipping support, they are still ideal for consolidating multiple e-commerce residential deliveries. Another example would be the partnership between PUDO Inc and Purolator, Canada’s largest integrated freight, package and logistics solutions provider, to facilitate PUDO services for local online shoppers.
What’s Next for E-Commerce?
In the wake of seismic shifts in online shopping and changing consumer expectations, it is hard to predict where the global e-commerce growth is headed. Nonetheless, we look forward to seeing how e-commerce logistics will play out in these two major economies as they return to the “new normal” over the rest of the year. To find out how countries in Europe performed in comparison to each other, check back for the rest of the e-commerce logistics race series!
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