Businesses handle production and storage of their products in many different ways. There are businesses that would only start production based on the orders they receive from their customers. Doing this ensures that they do not waste resources on items that may not be sold right away. There are also businesses that stock up on their products, especially for the fast-moving items.
However, there will always be some times that production is running at an optimal rate, but the items are not being purchased as fast as predicted. These businesses would need to have a way to store the items that are waiting to be sold. Businesses that are already operating at larger scales have their own warehouses to store their unsold items.
For those businesses that have items to be sourced but do not own their own warehouses, they would need to outsource their warehousing needs. Logistics companies are known to offer this kind of service to any of their customers.
Importance Of Renting Warehouse Storage
For some customers, building or owning their own warehouses will not be very cost-efficient. Other than the costs that need to be considered to build one, people have to remember that warehouses need to be maintained regularly to ensure that the tools, equipment, machines, and other things used to operate a warehouse would run as smoothly as possible. This would be one of the main reasons why some businesses and individuals prefer to rent storage space from logistics companies. Below are more things you should know about renting warehouse storage:
By renting warehouse storage space from a logistics company, you will not have to spend on building and equipment.
o Owning your own warehouse can be taxing on your time and employees. Lots of time will be spent implementing a distribution system. Monetary wise, it will be a huge investment to purchase equipment and tools to set up any kind of system within the warehouse.
Some logistics companies offer storage services from their warehouses, which are charged based on the amount of space a customer’s freight will use per day.
o This is beneficial to both the logistics company and the customer since there are fewer tendencies for the charges or fees to bloat. The logistics company will be able to have additional funds to pay for the upkeep of its warehouse. There are many shipping transactions that would not involve the cargos from getting stored into the warehouse facility. For the logistics company, this would just mean that the warehouse will not be utilized properly. In addition, logistics companies would charge the customer on a monthly basis giving the business enough time to prepare to pay for the storage fees.
Items that are placed in storage may proceed to delivery at any given time.
o Businesses that may partner with logistics companies to store their products can actually hire their services to deliver the products to their customers as well. This would take less time since the items are already with the logistics company, and they can easily load and ship the items from their warehouse storage directly to the client’s address.
With logistics companies holding on to the product, they are tasked with ensuring that none of the items get damaged.
o Customers will have less concern since they are assured that their products in stock are secured and protected. The fact that the customer is paying for some space means that the logistics company is obligated to keep all the items protected from any source of destructive forces.
You can control how much you will be producing and putting into storage.
o By looking at the current status of the items remaining inside the warehouse, you will be able to determine whether you need to produce more or wait until most of the items have been purchased. This will be efficient for small to medium-sized companies.
Renting warehouse storage space from logistics companies may also be done by renting the whole warehouse to make it dedicated to your needs.
o With this option, you will be giving the logistics company instructions on how they would store and handle your items. This is a good option for long-term contracts with logistics companies. The customer will not worry about managing the staff and the maintenance of the property.
Cost To Rent Warehouse Storage Space
In relation to the cost of renting warehouse storage space, it would depend on the requirements from the customers on how much space will be used up by their items. Normally the cost is computed either per pallet or per cubic square foot of space being used by the customers’ items. On the other hand, for those who prefer to rent all of the space in a warehouse, the customer may get into a contractual agreement with the logistics company as more factors will be considered in the costs. To give you an idea, below are some of the average costs of warehouse rental in Ontario, Canada.
For renting a certain amount of space in a warehouse:
o If the items are packaged in individual boxes, the average monthly cost would be around CAD 0.90 per cubic square foot
o If the items are packaged in pallets, the average monthly cost would be CAD 1.40 per pallet
For renting a dedicated warehouse from a logistics company, the following costs will have to be considered:
o The floor area of the warehouse facility.
o The average monthly base rental in Ontario is CAD 0.80 per sq. ft.
o Average monthly operating expense is CAD 0.40 per sq. ft.
Partnering With a Logistics Company Is Cost-Efficient
Having the option to store items in a storage warehouse is advantageous to any business. Without troubling your business just to open your own warehouse, logistics companies will take care of all the operational side of the warehouse while you focus on the operational side of your business. This will make it efficient for both parties. If you are looking at options to store your products, you may contact Ontario Container Transport at 416 (905) 695 1501.
