Too often, companies assume they have no power to impact warehouse distribution rates from 3PLs and commercial warehouse providers.
Not true. You have the power to control and reduce your warehousing costs.
An analogy might be preparation of your yearly IRS tax return. If you keep poor records and have no knowledge of allowable deductions for health expenses, business travel, and the like, you may pay more than you should. In contrast, if you keep meticulous records and have a solid understanding of IRS allowances, you’re more likely to get that fat refund.
In warehouse pricing, as in tax accounting, knowledge can translate into significant savings.
How much savings? For a billion dollar company that spends $9 million a year on warehousing, a 15% reduction in these costs adds $1.3 million to company profit. For a smaller, $50 million dollar company, a 15% reduction in warehousing costs translates to about a $68,000 profit increase.
So how can you quickly get smart about warehouse pricing and how 3PLs determine their warehouse rates? Weber Logistics has developed a guide: Understanding Commercial Warehouse Pricing.
Check it out. It sounds awfully dry, but it’s actually not a bad read and it includes plenty of examples.