The Pro’s and Con’s of Public Warehousing
Public Warehousing in St. Louis gives flexibility to adapt to changing market conditions
Public warehousing is more than just a place to temporarily park your company’s goods. Used properly, it’s an adjunct to both company-owned and contract warehouses that gives you flexibility to adapt to changing market conditions. Companies that don’t strategically leverage public warehouse space providers could end up spending money unnecessarily or having to carry too much space inventory on their own books.
PRO: Extreme Flexibility
When you use a public warehouse, a third party handles all of the details for you. All that you have to do is book a space where your goods will be delivered and handle having them taken out of the warehouse. Everything else is taken care of for you. Furthermore, most public warehouses are extremely scalable, so whether you need a small part of a rack today or tens of thousands of cubic feet of storage, many public warehouses can accommodate you. If your needs run high in summer and low in winter, public warehousing is also an excellent option.
Going hand in hand with flexibility is a pay-as-you-go model. In a public warehouse, you get billed for what you use — nothing more, nothing less. If you set up existing and contract warehouses to handle your company’s baseline needs and use public warehousing for the balance, you’re able to minimize costs by paying a lower rate for the space that you fully utilize while having the ability to pick up part-time as-needed space and pay for it only when you’re using it.
PRO: Having Multiple Locations
With public warehousing, you can open and close locations as you need them. While your company may always want to maintain centrally located spaces in places like St. Louis, you can open and shut them elsewhere as needed. For instance, if you have a large shipment come through the Port of Los Angeles, you could have it sent to a nearby public warehouse to get split up and sent to your company’s distribution centers elsewhere.
CON: Potentially High Costs
The drawback of a pay-as-you-go system is that you are usually paying a higher cost per cubic foot per time interval than you would with a more permanent warehousing solution. As such, if you overutilize public warehousing space, it could increase your costs rather than reducing them.
Public warehousing space is great when you can get it. Some operators operate on a first-come, first-served basis and if you haven’t reserved a space for your shipment needs, you could find yourself with no space to use. While this generally isn’t an issue, it can be in certain high-demand markets or at high-demand times of the year.
CON: Lack of Coordinated Service
When your company uses a public warehouse, it gets what it pays for. In many cases, that means that you aren’t getting access to the kind of strategic value that a 3PL company can provide. Public warehousing handles your deliveries but can’t coordinate service across the entire logistic chain.
If you need public warehousing to help handle deliveries and shipping needs or if your company would like to explore a more comprehensive solution like using contract space with added 3PL services, contact Clark Logistic Services. We offer well-located public and contract warehouses and can create a package to help streamline your company’s logistics operations.
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