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Public Warehousing Versus Contract Warehousing

June 15, 2023
5 min read
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If you’re searching for a warehousing option to fit your business model, you may find yourself considering several options that all sound suspiciously similar. Public, contract, and 3PL warehousing are three storage facility options available to business owners today.

Which one is best for your business needs, and how can you budget for these warehousing services in today’s competitive market? Keep reading to learn more about these three options and find out which one best fits your business model. Then, contact the team at Amware to learn more.

Public Warehouses

The greatest benefit of public warehousing is the simplicity of the process. Also commonly known as “pallet-in, pallet-out” storage facilities, public warehouses charge based on the amount of product that moves in and out of the warehouse. Because of this, public warehousing is an excellent option for those looking for a cost-effective storage solution that can scale with the growth of your business.

Charges You Can Expect

  • Pallet-In Fee
  • Pallet-Out Fee
  • Per Pallet Monthly Storage Fee
  • Transaction and Document Fee
  • Account Management Fee

Contract Warehouses

Unlike public warehousing, which is usually priced based on the amount of product moving within and out of the warehouse, contract warehouses most often charge fees based on the timing and scale required by clients. For example, a client requiring abundant manpower to move fragile stored items can expect to pay more in a contract warehouse than a client requiring less.

Common Contract Warehouse Fee Structures

Within the contract warehousing business, there are several different fee structures most common to the industry, including:

  • Activity-Based Pricing: Similar to the fee structure of public warehousing – in this fee structure, you can expect to pay fees based on the key tasks required to warehouse your items, including processing, materials, manpower, and administrative fees.
  • Cost-Plus Pricing: In this fee structure, you can expect to pay for all direct costs associated with your account plus an additional percentage markup as part of your contract.
  • Alternate Pricing Structures: There are as many ways of calculating costs as there are warehouses. To better understand the pricing structure available at a contract warehouse, ask for a standard contract before signing.

3PL Warehousing

In addition to public and contract warehouses, you can also choose to get your warehousing services from a third-party logistics provider such as Amware. While still considered public warehousing, using a 3PL means you don’t have to worry about finding a warehouse, paying for administrative fees, and managing the day-to-day work. Instead, the third-party logistics company takes care of the entire operation, from shipping to receiving and warehousing. Utilizing a 3PL for warehousing services can add a ton of value to your products as ancillary pick and pack services, combined with truckload or LTL shipping, means better efficiency, which directly translates to increased profitability.

To learn more about Amware and 3PL warehousing options, contact our team today.

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