There are a plethora of warehousing options available to companies of all sizes. Some businesses choose to construct and maintain their own spaces while others choose leased space. One of the most popular options is the Contract Warehouse space. Some advantages include lower costs, lower capital investment, and guaranteed periods of service and reliability.
Contract Warehousing Defined
A Contract Warehouse handles the shipping, receiving, and storage of goods on a contract basis. This type of warehouse usually requires a client’s commitment to services for a particular period of time. The duration of time varies, often stated in years rather than months. The fee structure also varies based on transactions; it may be a fixed cost, cost-plus or a combination of both.
Lower Costs & Capital Investments
A company requires a large amount of capital to buy proper warehousing space. There are costs associated with renovating a building, purchasing equipment, and staffing the facility. With contract warehousing, the facility is already in place and divided into zones for a variety of goods. This can include temperature-controlled storage, dry storage, and general storage. The logistics company providing the space handles the employees, equipment and maintenance expenses. They are also responsible for most incidental expenses, which further reduces costs.
Locked-in Service Period
When you choose a Contract Warehouse space, you know that you will have access to it for a specified period of time. Whether you intend to use the space for a year or ten years, a contract protects your company from unexpected expenses. The contract will specify the annual or monthly cost, along with possible changes over the contract period. Additionally, there will be language that details the process for extending the contract period.
A Contract Warehouse provides extra services related to packaging and distribution. These are useful services businesses can use if expanding or experiencing increases in demand. With a Contract Warehouse, a business can trust the logistics providers to keep goods flowing to and from storage on time. Developing long-term relationships with reliable partners is important to a business’s longevity. Creating this requires both entities working together in an atmosphere of trust.
No matter how small or large your company is, choosing the right warehouse space to house your goods is of ultimate importance. Make a smart choice. Limit your expenses. Define a specific service period. Provide increased customer service through high levels of reliability. Contract warehouses are a common choice, but choosing Florida Warehousing And Storage is a no brainer! Give us a call or contact us for more information on how we can help you and your business!