Public warehouse space is in high demand as companies continue to stockpile inventory and mitigate the risk posed by slow delivery from foreign manufacturers. While securing space remains a top priority, there are a couple of other major points to consider that customers often overlook.
As we’ve discussed in past articles, there are a couple of different options for warehousing. Choosing the right one is the first item you’ll want to consider.
- Public Warehouse – Can be rented monthly without a contract. It’s great for short-term warehousing and is usually very scalable as storage pricing is set as per square foot.
- Contract Warehouse – Some public warehouses will offer the option to sign a longer-term contract. Other warehouses are contract only. The advantage is lower cost for a fixed amount of time. Contracts may include other services such as pick and pack or scaling options at a lower price.
- Private Warehouse – This May be the lowest cost but will require a much longer-term commitment and much higher up-front costs. Tenants may be required to meet minimum standards and thresholds to maintain pricing.
Warehouse location is one that is often overlooked or sacrificed in favor of cost, but the location is one of the most important considerations when looking at warehousing options.
Location can indirectly impact the cost. Look at your client base and their locations. Which clients are moving the most product? Is it one or two distributors, or will you be shipping to end users directly? Understanding where 80% or more of your product is moving will help in choosing the best location for your warehouse.
Additionally, you’ll want to understand in advance what means of transportation your warehouse is able to offer. Do they have direct rail access, or will you have to pay drayage cost for short-distance moves between the warehouse and the rail yard? The same goes for water transport. In most cases, your warehouse isn’t going to have direct access to waterways, but knowing where the port is located in relation to your warehouse can definitely impact transportation costs.
Inventory Management and Forecasting
Over the years, we’ve acquired several clients who came to us because their current warehouse couldn’t handle their increased demand. Growth happens, client demands increase, and, in some cases, clients miss their forecasts. It’s part and parcel of working in a product-based business.
Knowing in advance that your warehouse will be able to accommodate your growth and increased demand in advance will save time and money. What happens if you require an additional five or ten thousand extra square feet of storage? What does that look like as far as capacity and pricing?
If yours is a business in growth mode, make sure to partner with a logistics partner who can grow with you.
Partner With a 3PL Who’s Been There
At Amware, we know what issues and considerations clients need to make because we’ve been there and seen it all. Our business has saved more than a few clients from making these mistakes over the years. We’ve also helped the ones who, unfortunately, experienced the pain of realizing their mistakes after the fact.
Amware is a full-service 3PL providing clients with both public and contract warehousing options as well as transportation services to move their products. Amware is located in Cleveland, Ohio, and is a day drive from over 80% of the country. With indoor rail siding and short access to the port of Cleveland and Cleveland Hopkins International Airport, Amware is ideally situated to serve a wide variety of logistics needs.
Contact Amware today to learn more, or download “The Secret Costs of Warehousing” and find out if you’re paying too much for your warehouse today.