At first glance, public warehousing might seem pretty straightforward. Manufacturers, distributors, or end-user customers deliver pallets of inventory by truck or train to a warehouse. The warehouse personnel unload the freight, add it to inventory, and move it to a shelf where it will stay until someone needs it. Once that happens, warehouse personnel take the pallet off the shelf and move it on to another truck, which will deliver it to its final destination. All in all, pretty simple.
The “load it, store it, unload it, and ship it,” model may be the only thing many warehousing customers need, but that doesn’t mean it’s the only thing public warehouses offer. In fact, like most businesses, warehouses are always looking for ways to separate themselves from their competition and add value for their clients. Here are a couple of services you may want to consider when looking for a public warehouse:
As it relates to warehousing, freight handling is mostly labor. People are typically the ones loading and unloading pallets from trucks and trains. They manage inventory, label shipments, and shrink-wrap pallets. Because of the availability of this labor force, warehouses can and will often offer product and freight prep for their clients as an additional service.
For example, a garment distributor supplying uniforms to a private security company might have plain uniform shirts shipped from overseas directly to the warehouse. Warehouse personnel unload and stock the pallets as they would any other shipment, but these shirts aren’t yet ready to be delivered to the end-user. There are patches and labels that need to be applied before the finished product can be delivered.
The distributor could have had the garments shipped to their headquarters. They could have hired people to apply the labels and do the prep work. The problem is that their warehouse is already full of pallets from several other large clients. Breaking the shipment down and moving it back and forth will add too much cost and have them losing money on the order. The answer? Have the products prepped by the warehouse personnel, then shipped to the end-user directly from the warehouse as a finished product.
Common freight prep handled by warehouse personnel includes:
- Private labeling
- Bar Coding
- Mix-and-match product assembly
Third-Party Logistics (3PL) companies that offer warehousing in addition to freight transportation and logistics provide purchasing, sourcing, and warehouse managers a unique value in the supply chain.
A typical 3PL will offer freight transportation services such as Less than Truckload (LTL), Full Truckload (FTL), and Partial Truckload. They handle “goods in motion,” moving freight from one place to another by asset-based trucks or carrier-based brokerage services. These are the companies that send trucks to warehouses to pick up pallets of freight.
Purchasing and Sourcing Managers who partner with 3PL companies to move freight would be well served to learn about whether or not that 3PL offers warehousing services. While the manufacturer or distributor might not (generally) care where their products are warehoused, they can leverage a 3PL’s warehouse to add savings or profit to their prices. Here’s how:
- The manufacturer or distributor pays to have inventory warehoused and possibly prepped for delivery to their clients.
- The clients receiving the products are the ones who pay for shipping, not the manufacturer.
- The client books the shipment.
- The freight carrier drives to the warehouse, picks up the product, then turns around and drives it back to the customer.
- By warehousing the products with a 3PL, the potential exists to utilize the same 3PL that’s warehousing the products to deliver those products to the end-user directly from the warehouse, potentially saving a ton of money in freight expense.
- If the manufacturer or distributor ships to the same clients regularly, they can leverage the 3PL’s warehousing AND transportation services to provide more aggressive pricing to their end-user, or keep prices the same and add profit to their bottom line, adding value by including freight and shipping as part of the per-unit price to the end-user.
Depending on your business needs, it might make sense to investigate what your warehousing company is able to offer in the way of value-added services. Maybe they won’t offer any and are simply built to store pallets. That’s fine. It’s ultimately up to you to decide where and how to make your supply chain the most effective.