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Contract Warehousing FAQs

Wednesday, February 3rd, 2021

Contract warehousing is a solution that can save your company time, money, and resources. Initially used for mostly short-term periods, today’s contracts allow for longer terms of service, and the popularity of contract warehousing has steadily grown since the 1980s. But if you are unfamiliar with the practice, how do you know if it is right for you and your business? Read on to learn some of the most commonly asked questions about contract warehousing and the many benefits offered through this practice. 

What Is Contract Warehousing? 

Contract warehousing is precisely what it sounds like – outsourcing and engaging a third-party logistics company – known as a 3PL – to run warehouse operations for your organization through receiving, storage, shipping, and inventory management. Warehousing facilities also provide the following services:

  • Importing and exporting
  • Cross-docking
  • Packaging
  • Pallet reworking
  • Advanced logistics
  • Pick and pack order fulfillment
  • Transportation
  • Quality control
  • Value-added packaging

What Are the Benefits of Contract Warehousing? 

Contract warehousing offers many advantages, including flexible fee structures of fixed, costs-plus, or a combination of both. It is also less risky because if you ever find you do not need warehousing services any longer, you are not saddled trying to sell a warehouse you own.  

Reliability 

Contract warehousing takes the worry off you, so you are free to focus on your business’s other aspects that require attention, such as promotion and customer service. Contract warehousing costs provide your business with predictable expenditure regardless of whether your company is in a slow or busy season. Further, it allows for guaranteed service periods preventing you from unexpectedly losing your warehousing capabilities.  

Scalability 

When your business’s warehousing needs change, you are limited to space you currently have with private warehousing. On the other hand, contract warehousing allows for expansion and the easy addition of needed space. 

Centralized Location

Contract warehousing makes it easier to handle multiple customer territories through a centralized location, even if those customers are outside your business’s geographic location. This also decreases delivery times for your company’s goods. 

Affordability

Contract warehousing is attractive to business owners because of its lower costs. The absence of maintenance and construction costs allow for lower capital investments and the ability to transition your warehousing from private to contract immediately. Further, the prices are fixed, meaning they are predictable, and your business can budget for them in a more standardized way. 

Contract warehousing allows your company to reduce its assets while improving the capital turnover or assets to revenue ratio. 

Quality Control

A third-party warehousing company allows businesses to control their inventory and operations through electronic inventory monitoring and daily reporting. The use of RFID radio-frequency electromagnetic fields (RFID) streamlines transmitted data and reduces the likelihood of human error.

Contract warehouses are run by experienced staff and provide higher levels of quality assurance. Contract warehousing offers well-trained and knowledgeable employees who understand the industry and safety standards, including OSHA. 

Why Choose Contract Warehousing Over Private?

Private warehousing requires more day-to-day involvement in operations and inventory management, including logistics. They are billed monthly according to the square footage used, meaning even if you have not used all of your allowable space that month, you still pay for it. And, this is simply a means to store your inventory rather than move it. 

How Do I Get Started With Contract Warehousing? 

There is no question that contract warehousing helps businesses through more straightforward, more efficient processes and time management. And no one does contract warehousing better than CWI Logistics.  

Since 1966, we have been one of the leading logistics companies in Florida and the southeast US. Today, we’ve got 11 strategic locations, and we provide the best turnkey 3PL solutions in the southeast. At CWI Logistics, we are experts in warehousing and can offer you many storage options and moving your freight. We’ve operated in climate-controlled warehousing for over 50 years, so we are extremely knowledgeable and able to customize your warehousing solutions based on your needs. Call us today to discuss all of your freight storage and logistics needs. We’re here to help – from dock to dock and door to door.

Commercial Warehousing