If your business is growing and you’re thinking to go for warehousing options, the idea may seem a bit challenging. Warehouses are large facilities that need proper management and maintenance.
If you’re planning to build or rent a full warehouse for your business operation, then warehousing costs is something to give your attention to. If, however, you’re partnering with a third-party logistics company (3PL) to provide you with shared (or “public”) warehousing services, then your costs will only reflect the space and services you need. In this blog, we’ll examine 3PL warehouse costs and provide you with the information your 3PL company will ask you to provide accurate pricing.
Different Types of warehousing
If your operation is looking for a warehousing service, you have three options.
1. Build or rent a warehouse yourself and take full charge of it. This by far your most costly choice. With this option, you pay for the building, the staffing, the equipment, the warehouse management system, and other technologies. If your actual volumes don’t match your forecasts, you can be left paying a lot of money for resources you’re not using – or scrambling to add resources to keep up.
2. Use dedicated warehousing services of a 3PL. With this option, you hire a 3PL company to fully dedicate of its warehouses to your operation. Your 3PL can provide the staff, equipment, and systems required for your business operation – saving you considerable amounts of time and money and acquiring these yourself.
3. Use a shared warehousing service. Shared warehousing is the most common – and cost-effective – a type of warehousing. With this option, you utilize a 3PL warehouse and place your goods alongside several other companies and pay for only space and services you need.
Find your 3PL Warehouse Costs
If you decide to partner with a 3PL for either dedicated or shared warehousing, there are many key points that will affect your costs.
1. The first point you need to address in calculating warehouse costs is the location. As a rule, warehousing in large metropolitan areas is going to be far more expensive than it will be in rural areas.
2. The second point to consider is whether you need dedicated or shared warehousing services. The more costly of the two, dedicated warehousing is typically a good option for larger operations that have very consistent volumes.
Information your 3PL will need from you
You will need to provide your 3PL with detail about your business and goods so that they can determine the services and type of space needed in order to provide you with accurate pricing. The basic information that your 3PL will need from you for storing and handling the warehouse for you are mentioned below.
Storage information needed
• Average pallet dimensions (height, width, weight, depth)?
• Pallet characteristics (e.g., stackable or racking)
• Inventory turns per year
• Amount of shipments per year
• Estimated inventory volume
• Average inventory (in terms of number of pallets)
• Number of cases per pallet
• Product temperature requirements
• Hazardous material information
Handling information needed
• Number of orders processed per year (B2B and B2C)
• Average order size (pallets if B2B, pieces if B2C)
• Pick and pack facilities (for eCommerce fulfillment)
• The average number of inbound orders per day
• The average number of outbound shipments per day
• Percentage of cross-dock shipments
• Transportation requirements
• Intermodal and container details/requirements
Related: Advantages of Using Public Warehouse
Choose Tenaxx Logistics For Cost-Effective 3PL Service
If you’re looking for a 3PL for your warehousing operation, look no further than Tenaxx Logistics. We have the space, services, modern equipment, and commitment to customer satisfaction needed to make your transition to the world of warehousing a smooth one. To know more about our warehousing services, contact us today.