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Quebec  + Canada + Cross Border News  + Industrial  | 
Photo of an interior of a WIPTEC warehouse.

Quebec Logistics Operators Looking to Capitalize on Amazon Warehouse Closures

Quebec’s logistics companies are preparing to seize new opportunities following Amazon’s decision to close all seven of its warehouses in the province, La Presse reported.

Martin Ball, president and CEO of WIPTEC, a company specializing in order fulfillment, sees Amazon’s decision as a chance for other logistics operators in Quebec to expand their operations.

“In the end, it’s going to be an opportunity for logistics in Quebec,” he told La Presse.

WIPTEC operates a 1.7-million-square-foot warehouse and distribution facility in Saint-Hubert, on Montreal’s South Shore.

Amazon plans to close the facilities in the coming weeks and lay off 1,700 permanent employees and 250 seasonal workers as part of a return to a supply-chain model that the company used in Quebec until 2020. The U.S.-based online-retail and logistics giant says that a review of its Quebec operations showed that a return to a delivery model supported by local businesses will allow the company to provide the same level of service and even more savings to customers in the long run.

Amazon has insisted that the decision is part of the return to the third-party delivery model and not linked to recent unionization efforts by employees at the company’s warehouse in Laval, Que.

For years, Amazon handled much of its distribution and fulfillment in Quebec through its own facilities. Now, with those centres shutting down, businesses will have to either send their inventory to Amazon warehouses outside the province or turn to local logistics specialists like WIPTEC.

“Businesses will prefer to keep their inventory in Quebec rather than in Ontario or the United States,” Ball told La Presse. “If clients with inventory at Amazon want to move it to WIPTEC, we believe we can gain market share.”

The Amazon facilities’ future remains to be determined as the company transitions to the former delivery model.

“The facilities in Quebec are leased and will remain in use over the coming months as we wind down operations,” an Amazon spokeswoman told Connect on Thursday via email. “As we complete this process, our team will work with relevant landlords – as they do any time we exit a leased facility – to determine what’s next for them.”

Another major player looking to benefit is Intelcom, a Montreal-based delivery and sorting company that has been a subcontractor for Amazon in Quebec since 2015. The company operates 95 sorting stations across Canada and has posted dozens of new job listings in recent days.

“We have a long-standing relationship with [Amazon], and we will continue to work closely to balance their delivery needs in Quebec,” Intelcom stated.

The closures affect sites in the Montreal borough of Lachine and the Greater Montreal Area cities Longueuil, Coteau-du-Lac, and Laval. The facilities include a fulfillment centre, two sorting centres, three delivery stations, and a warehouse and distribution centre specializing in large-goods shipments, such as furniture.

Smaller logistics companies are also hoping to get a piece of the market, La Presse reported. Jules Paquette, co-founder of OGALO, a delivery logistics startup, sees the situation as an opening for new ways of doing business.

“All those delivery partners that Amazon relies on—those drivers will find themselves empty-handed,” Paquette told La Presse. “They could become the foundation of a new local business model.

“We just need to find the glue to bring it all together.”

Jean-Luc Geha, associate director at HEC Montreal’s Sales Institute, also sees potential despite the job losses.

“Amazon took a large share of the market [with its warehouses],” Geha La Presse. “Now, we’re moving toward a large-scale subcontracting model. There should be opportunities for delivery and order-management companies.”

Pictured: Interior of a WIPTEC warehouse in Quebec.

Photo: WIPTEC

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About Monte Stewart

Monte Stewart serves as Content Director - Canada for Connect Commercial Real Estate. Based in Vancouver, British Columbia, Monte provides daily news coverage of major Canadian commercial real estate markets, including Vancouver, Toronto, Montreal and Calgary. He has written about the real estate sector for various media outlets and Avison Young since the early 2000s. In addition, he has covered sports, general news and business for several leading wire services and publications, including The Canadian Press, The Associated Press, The Calgary Herald, The Globe and Mail, Research Money, The Daily Oil Bulletin, Natural Gas World and The Toronto Star. Monte is active in his community as a youth basketball coach and raises funds for such charitable causes as Movember.

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