There are several types of warehousing options for companies and individuals to consider. Having a variety of options to choose from makes it easier to find the warehousing situation that makes sense for you and your business. Today we’re going to take a look at contract warehousing.
Contract warehousing is the practice of outsourcing warehousing activities to a third-party logistics (3PL) company. This method of warehousing is characterized by the type of relationship between the warehouse company and client. Warehouses and clients agree to a specific warehousing contract, which typically includes services provided, length of contract, and fee structure. The contract might also include other factors determined by the two parties. Contract warehouse companies can provide a variety of convenient services, such as receiving, storing, and shipping goods. Other services can include packaging and even inventory management.
Contract warehousing is a popular alternative to public warehousing. While there is no right or wrong choice between these two options, companies should consider their overall needs before choosing one over the other. One factor that would influence this decision is how much you anticipate inventory to fluctuate. If you expect it to fluctuate a lot throughout the year, public warehousing might be a better option because you have more flexibility to rent out more space. If you don’t expect it to fluctuate much, you can usually get cheaper rates with contract warehousing.
The Benefits of Contract Warehousing
Why would companies choose to outsource their warehousing operations to a third party? There are several benefits that make this warehousing option appealing. Read about them below.
Efficiency
Contract warehousing is an extremely convenient option for companies who want to distribute products or goods more efficiently. It allows inventory to stay at a central location so that it can reach final destinations quickly.
Affordability
Contract warehousing can reduce costs by eliminating the need to own and staff a warehouse. Additionally, if a company needs to downsize for some reason, they won’t be left with the task of selling their warehouse.
Cross-Docking
Many contract warehouses offer additional services like cross-docking. Cross-docking can increase a company’s overall speed and productivity.
Finding a Contract Warehouse Company
If you think that contract warehousing makes sense for your company, there are a few things you’ll want to consider before signing the dotted line. Do you anticipate needing any special services, such as temperature-controlled storage or 24-hour access to inventory? Even if you don’t think you’ll need certain services, we recommend learning about all the services a warehousing company provides before choosing to use it.
When selecting a third-party warehouse service, take note of how their customer service is from the beginning. How they treat you as a non-client is often indicative of how they will treat you as a client. Are they easy to reach? Are they accommodating? Do they seem pleasant and professional to work with? These are just a few of the questions you should ask before deciding what company to use.
Contract Warehousing in Northern California
Modern Express offers contract warehousing services in Oakland, Santa Clara, Palo Alto, Morgan Hill, and other surrounding cities in Northern California. We tailor our warehousing solutions to meet your business’s unique storage needs. Contact our fast and friendly team any time of the day—seriously, we’re available 24/7—to learn more.