Goods must be stored conveniently during shipping to allow for an optimized distribution process. A warehouse serves this purpose by providing storage space for various types of goods, finished or raw. A public warehouse is a stand-alone commercial storage space offering storage and fulfillment services to businesses at a fee. Typically, most public warehouses will have unique service-level agreements (SLAs) with their customers. Warehousing charges vary depending on the type of goods being stored, and it’s common to find higher charges on slower-moving inventory and vice versa. You can check out the Fripp Warehousing site to learn more about the common services to expect from a public warehouse.
Private Vs. Public Warehousing
Public warehouse facilities are stand-alone businesses offering short or long-term storage services to other companies for specified periods. Pricing for their services primarily depends on the space the customer uses (they may include a range of additional services and amenities).
On the other hand, private or proprietary warehouses are owned and operated privately by a company for their specific warehousing needs. They are common with big retailers who store their goods in bulk. Private warehouses require significant investment from the owner to build the warehouse, manage its operations, and ensure regular maintenance.
The Impact of Public Warehousing in Today’s Marketplace
Warehousing has been continuously evolving, dating to the era of simple granaries. It has been significantly shaped since then by various technologies and world events. The 1970s saw the emergence and growth of Third Party Logistics companies (3PLs) offering various warehousing services for business entities. Many companies seeking to free up time and effort from their internal teams started outsourcing such operations. The entry of software as a service (Saas) technology in the 2000s ushered in the growth of the digital warehousing concept by introducing Warehouse Management Systems (WMS). Currently, AI and machine learning continue to define and optimize various warehouse operations.
The role of public warehousing is becoming ever more critical in the modern one-click shopping marketplace. Modern public warehouses now offer more than just storage services. Other valuable functions include shipping, inventory management, and physical inventory counts. Public warehouses are responsible for all the facility’s costs, such as employing warehouse staff and warehouse equipment. They then pass these costs to their clients according to their set rates.
How to Choose a Public Warehouse
Warehousing space is in high demand due to the ever-increasing number of potential businesses needing these services across various industries worldwide. There are an estimated 26 million eCommerce sites globally as of 2022, with a whopping 2 billion people opting for the convenience of online purchases and home deliveries for various goods and services. This has led to an increase in competition between public warehouse operators. For many small and medium enterprises (SMEs), identifying a public warehouse that best fits their warehousing needs can be challenging.
Public warehouses have varying capabilities, and it’s prudent for a business requiring their services first to understand their own specific needs. Below are some standard criteria companies may use to review particular public warehouses.
- Location – Location is often a crucial aspect for most businesses (though not all), depending on their needs. A warehouse location closer to a business’s customers can be an added advantage for greater delivery convenience. Proximity can also come in handy for companies moving large volumes of goods from their private warehouses to public warehouses.
- Technology – While most public warehousing facilities offer modern facilities and cutting-edge technology, their technological levels or compatibility vary greatly. It’s wise to evaluate their technologies and other warehouse solutions to confirm that they match your business’s needs before committing to work with them.
- Add-On Services – The high competition in the sector has seen warehouse operators include add-on services for a competitive edge. They include specialty storage (for sensitive goods), rail sliding (for clients utilizing rail), and various packing and assembly services.
- Expansion – if your company has plans to scale its operations, it would be a great idea to work with a potential public warehouse that’s able to scale along. Growth along the supply chain (this includes warehousing space requirements) is crucial for companies forecasting future growth in their total inventory consumption.
- Company Network – Many SMEs may not know their future warehousing needs as they search for public warehouses to work with. However, it’s always prudent to work with a public warehouse with a strong network with other warehouses at a national or global level. They may be able to provide other supply chain management services not available with other public warehouses.
Hopefully, this article has painted a clear picture of what public warehousing is, how it can help your business, and tips on choosing the most suitable one.