Freight transportation and delivery can require levels of warehousing at one point or another along their journey to their final drop-off location. The shipping containers and related materials and equipment can also require warehousing at various stages. When you need available warehousing in specific locations to achieve goals and experience business success, it’s important to know the impactful specifics of warehousing rates and costs. In this article, we’ll discuss what you need to know about warehousing rates, including the contributing factors of warehouse costs, how much warehouses cost, and how to decrease warehousing costs for success.
Cost of a Warehouse
When you participate in transportation and delivery activities, it’s important to know the specific details of warehousing and its associated costs. As an active participant in transportation and delivery activities, you likely need a degree of regular warehousing in or around related areas. Knowing specific details can help you make more informed decisions about your warehousing needs and options, as well as that of drayage and other types of intermodal transportation. The cost of a warehouse can also greatly affect your revenue and revenue potential, as these combined costs can significantly impact your budget and expenses.
When looking at the cost of a warehouse, you’re considering the various contributing factors. These contributing factors include the warehousing company you choose to work with, this company’s charge rates and pricing options, and the location of the warehouse. The location of the warehouse can affect transportation and delivery costs, as well as the costs of needed employees and other participants. The cost of a given warehouse can also depend largely on the square footage you need and associated operating costs.
Company Charge Rates
The cost of a warehouse depends on many fluctuating factors. One of the biggest factors that determines warehouse costs is the given rates of the warehousing company you choose to do business with. Different warehousing companies can have different rental rates. It can be helpful to do your research and shop around for comparable rates.
Available Pricing Options
Different warehousing companies can also have different available pricing options and deals they’re running. Specific times of the year may yield different pricing options from warehousing companies that you can take advantage of. There may also be different charge rates that match your unique needs more precisely, so you need not pay more for unnecessary space and related services.
Warehouse Location
Warehousing rates can also depend on the given location. These specific rates are often lower in areas outside of major cities and transportation hubs. While it may seem counterintuitive to choose a warehouse location further away from your major transportation and delivery activities, you may save an impactful amount of money in the long run, making it a worthwhile consideration.
Needed Square Footage
The amount of square footage you potentially need or have specifically calculated can affect a warehouse rental rate. These specific rental rates usually run at a set price per square foot a year. It’s important to know the amount of square footage you need in order to potentially avoid paying more than you have to.
Associated Operating Costs
Another contributing factor to your warehousing cost is associated operating costs. Associated operating costs include expenses not directly related to the freight or container housing, but rather the involved property insurance, property taxes, utility costs, and standard area maintenance costs.
How Much Do Warehouses Cost?
Once you know some of the top contributing factors to the cost of warehousing, you can better determine your available options and figure out how much your specific warehousing needs may cost your business. Warehousing spaces are usually rented out on either a monthly or yearly basis. In addition to being based on square footage, warehousing prices can also be based on the specific size of your given inventory. If you’re selling large inventory items, for example, you may be charged for the warehouse space, whereas if you’re selling smaller items, you may be able to pay by the precise number of items you seek to store.
Your warehouse rental rate is the cost for you to rent out the space itself. However, this price does not include any other additional items, such as taxes or utilities. If a warehouse landlord includes any utilities in the quoted cost for your space, it will be included in the additional occupancy expenses. Otherwise, these utilities are an added expense in addition to your warehouse rental rate and additional occupancy expenses. In figuring out how much rental space you need and thus your potential warehouse cost, you can begin by evaluating your precise storage needs. Do you have stackable palletized products? Are you storing various products in ranging shapes and sizes? This can determine the needed vertical and horizontal space.
Decreasing Your Warehousing Cost
After you consider the contributing factors to your warehousing costs, and some methods to effectively begin to calculate these costs based on the contributing factors, you can then consider how to decrease your warehousing cost. Warehousing is often an unavoidable aspect of freight transportation and delivery activities, making warehousing costs unavoidable. However, you can effectively decrease these costs and better maintain your available budget by reducing any excess inventory, improving your inventory flow, evaluating the current warehouse space, and improving your warehouse operation efficiency.
Reducing Excess Inventory
Understanding customer needs and producing or ordering based on demand can help you reduce excess inventory.
Improving Inventory Flow
Items with a set inventory location can move more logically and improve flows.
Evaluating Your Space
Determining whether consolidation is possible can help you maximize your space and save on space costs.
Improving Operations Efficiency
A warehouse positioning system can save time storing, searching for, and shipping, thus preventing errors and saving labor time.
What You Need to Know About Warehousing Rates With Heavy Weight Transport
There are several ways you can evaluate and decrease warehousing rates. With Heavy Weight Transport warehousing, you can save money and increase efficiency today.
