Warehouse location choice modeling with supply chain and intra-firm interactions: A case study of the greater Golden horseshoe area of Canada

Logistics service facilities such as warehouses and distribution centers are integral components of supply chains, providing essential services including transportation, storage, and consolidation of goods. The strategic location choice of these facilities represents a critical decision firms make to optimize logistics operations and overall supply chain performance. As key nodes serving as both origins and destinations of shipments, logistics service facilities directly influence the efficiency and cost-effectiveness of supply chains. Moreover, their location decisions contribute disproportionately to freight traffic generation and associated negative externalities within regional transportation networks. This study aims to model warehouse location choice in the Greater Golden Horseshoe (GGH), Canada. The novel contribution of our research is to differentiate between single-establishment and multi-establishment firms in the location choice of warehouses to investigate intra-firm interactions. Intra-firm interactions are modeled through explanatory variables and a panel mixed logit model specification. The model incorporates intra- and inter-industry interactions and land use and transportation infrastructure characteristics as explanatory variables. We find that substantial intra-firm interactions for multi-establishment warehouses tend to minimize the distance to other establishments belonging to the same firm, while preferring to locate farther from other warehouses belonging to the same firm. We find clustering effects in GGH where warehouses prefer locations closer to each other. These findings provide insights for freight transportation planning and evidence-based policy making.