In most cases, outsourcing your warehousing to a third-party logistics (3PL) company is a great way to cut costs while still receiving incredible service. A lot goes into getting an accurate cost estimate for your warehouse’s logistics and distribution needs. 3PL companies don’t typically offer an exact quote but rather a price range that may vary depending upon your unique needs and service choices.
Logistics companies consider a lot of different factors when putting together a warehouse management quote. These include many factors you may be aware of (i.e., the size of the warehouse and labor costs) and some you may not have considered (i.e., how well the provider understands your specific industry and the personalized service they provide). What does it cost to store your products and benefit from warehouse logistics services? More importantly, which elements influence that price? Let’s dig in!
Facility Size and Location
The size and location of the warehouse can be an essential factor in determining the amount you pay for logistics. The more space you need to store your inventory, the greater your costs will be. 3PL companies typically charge a set amount of rent per square footage. The rent cost covers the physical warehouse space, along with any associated utilities that are devoted to that space, like electricity, fuel, and other consumables.
The location of the facility itself can also impact your estimate. Facilities in large metropolitan areas may cost more than ones in rural areas. But, there are more factors to consider than solely the city or town where the warehouse is located. Location-related factors like proximity to highways, railways, and ports, accessibility to markets, governing regulations, and the availability of skilled labor can also affect costs. 3PL companies take all these factors into consideration when setting their prices.
The warehouse type and the facility’s services can also impact your cost estimate. There are several types of warehouses, and their differences are based on their primary function:
- Storage Warehouses: These warehouses store finished products until they’re sold. Manufacturers, distributors, wholesalers, and retailers often use them to house goods until they need to be transported elsewhere.
- Distribution Warehouses: These warehouses usually receive shipments from manufacturers or suppliers and then ship them out to customers using their own truck fleet or partner carriers. The goal is to create as few stops as possible along the way so that your product doesn’t spend too much time sitting around waiting at each step before getting shipped out again.
- Food Warehouses: These buildings are used by food producers who want to keep their products or ingredients fresh before shipping elsewhere. These warehouses require special equipment, advanced climate control, and safety certifications.
Variety of Services
The services provided by the 3PL company can also impact your cost. At Prism, we offer a variety of helpful services to provide comprehensive assistance to our clients. Our team will work with you to understand your unique needs and provide whatever services are necessary. Some of our warehouse logistics services include:
- Break bulk
- Display assembly
- Order picking and packing
- Inspection and testing
For our food and beverage clients, we offer the services above and a selection of industry-specific services. Click here for more information on our food logistics.
Labor costs can have an impact on the overall cost of warehousing, too. The type of warehouse and its location will influence labor costs. More challenging projects that require workers to undergo specialized training or have industry-specific skills may also increase these expenses. These costs will be factored into the base rate from the 3PL provider.
Customer Service and a Personal Touch
Intangible factors like excellent customer service can also impact your warehouse management quote. The best warehousing logistics services do not always come from big companies. Instead, many of them are offered by family-owned businesses that take pride in their customer service and strive to ensure each client has an excellent experience with them. These companies will work hard to understand your needs, so they can provide you with a custom solution that’s perfect for your business. This quality service allows them to add a personal touch to their offerings, catering their service to your specific requirements and ensuring that their services fit seamlessly into your workflow.
At PRISM Logistics, we’re a family-owned business with the same capabilities as the big guys. We’re able to provide top-quality service with a personal touch. Our team is committed to the success of your business, and we’ll do anything we can to help your company thrive.
Experience in Your Industry
Having experience working with other organizations in your industry is one of the most important factors when choosing a warehouse provider. The more advanced their expertise, the better they can handle your needs and provide you with an accurate quote for service. Specialized knowledge may increase the costs, but it also ensures they have the skills and tools necessary for success.
Specialized Equipment and Handling Requirements
If your products require unique equipment or handling standards for storage and processing, this will influence your warehouse management quote. For example, if your shipments contain perishable food items, you’ll need to use the right equipment and handling techniques to ensure they remain at a safe temperature. In any situation where there is something unique about how your shipments must be handled or treated (as with high-value items), these needs should be communicated clearly with the warehouse before they provide a quote for services.
Knowing what factors influence your warehouse logistics quote will help you better understand your estimate and ensure the services meet your business needs. Some of these factors include facility size and location, services offered, labor costs, customer service, and expertise in your industry. Keep in mind that it’s not always about finding the lowest price– it’s about finding the logistics service that provides the most value.
So, while it’s essential to be aware of the factors that may affect your logistics quote, don’t get too wrapped up in them. Instead, focus on choosing a third-party logistics provider that works for you and meets the needs of your business. To learn more about our services or request a cost estimate, contact us at PRISM Logistics today!