Selecting a Warehouse 101
By Daniel Richardson
Choosing a warehouse should be a strategic decision. The main reason for using a warehouse is to easily, yet efficiently, transport products from the point of origin to its destination without affecting product quality while conserving cost. Consider whether you require a specific location, or type of warehouse that is based on the product you are storing or the size of your project.
Each industry has standard requirements needed for warehousing, such as Retail or Hospitality. This could mean the difference between selecting a warehouse filled with racks to utilize the most space for Hospitality, or a vaulted warehouse for household goods.
Along with pricing, these are some other features to consider when selecting a warehouse:
- Layout
- Size
- Capacity
- Truck access
- Warehouse Management Systems (WMS)
- Carrier access
- General location
- Equipment – forklift, scales, carpet pole etc
- Temperature Control
The size and layout of the warehouse are factors when determining the turnaround time on inbound receiving and outbound handling, especially if your purpose for warehousing is trans-loading and high volume distribution. Questions to ask include:
- How many dock doors does the warehouse have?
- What management system are they using to manage the inbound and outbound traffic?
- Can they handle inspection, storage, dispatch, inventory, packaging, labeling, and reporting?
These are operational procedures that should cater to your industry requirements. Some industries may need to search for warehouses with more advanced robotics or a sorting, conveyor belt system to minimize human error when loading the trucks.
Years of experience and number of employees should also be considered when selecting a warehouse. If high-value commodities are being stored, choose a warehouse with full time employees instead of seasonal staff hired only to supply a demand. This can reduce the amount of thefts that plague companies dealing with electronics such as TV’s, and cameras. Other points to consider are:
- Is the warehouse insured and for how much?
- How many containers per week or month can be ship through this facility?
- What kind of security and fire suppression do they have?
- Do they have an established claim process?
- Is there secure trailer storage?
When soliciting a bid for warehousing, it is best to know how much square footage you will need and for how long. This can be the difference between negotiating a favorable price for the contracted time, and loosing it later with a change order from the warehouse when you exceed the scope in duration. Always confirm if the warehouse is billing in hundred-weight or bysquare feet. Depending on the commodity shipped to your warehouse, it can be beneficial to use one over the other. Hundred weight billing is more transparent and allows for checks and balances to confirm accurate billing. Square footage billing can be the preferred choice for industries dealing with a type of product that has excessive weight, but doesn’t take up a lot of space in the warehouse- such as stone countertops.
Finally, consider the outbound handling of your merchandise from the warehouse. Having an estimate on how much product you will be releasing per delivery can help determine whether to choose flat rate vs. cube rate; or hundred rate delivery charges. If deliveries may vary from one skid to a truckload, then hundred weight deliveries would be the best option. When using a flat rate, it will cost the same to deliver one box as it would to deliver a full truckload.
Knowledge and understanding of the terms for inventory, storage, and delivery empowers the customerto ask theright questions and effectivelycompare rates to select a warehouse that completely fits their needs.