IKEA has opened a distribution center near Toronto, its first in Canada operated by a third party, DHL Supply Chain.
The Swedish retailer officially opened the facility in Kleinburg, Ontario, on Sept. 19, but it has been gradually scaling operations for the past two months.
The 550,000-square-foot facility exclusively handles IKEA products destined for home deliveries. It takes capacity pressure off IKEA’s other Toronto area distribution center, in Mississauga, and positions the company to grow its e-commerce business in the region’s fast-growing northern suburbs.
“It’s bringing us closer to our customers,” said IKEA Canada spokesperson Kristin Newbigging.
Deliveries from Kleinburg potentially shave about 20 miles from those coming from Mississauga. The difference in time can be more dramatic, considering the notorious traffic on the Toronto area’s 400-series highways.
Kleinburg is already paying dividends for IKEA and its customers by virtue of its location and improved capacity.
“We’re already seeing decreases in lead times,” Newbigging said.
Apart from improving the efficiency of preparing orders, the shorter delivery distances also result in lower carbon emissions, Newbigging said.
Kleinburg marks IKEA’s fourth distribution center in Canada, including facilities in Montreal and Vancouver.
While Kleinburg is the first outsourced distribution center for IKEA Canada, its U.S. counterpart has successfully done it, also in partnership with DHL Supply Chain.
“We can learn from them in terms of logistics,” Newbigging said.
Kleinburg won’t handle large incoming shipments, which will remain the domain of other facilities in Canada and the United States.