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The Pros and Cons of Contract Warehousing

Friday, March 5th, 2021

When starting to consider if contract warehousing is the right move for your company, there are many advantages and disadvantages you will want to think about before coming to a decision. Outsourcing your warehousing can be smart for businesses to improve their efficiency and organization processes. Still, some common factors may impact whether or not it is the right choice for you. Read on to learn some of the main positives and perceived negatives of contract warehousing. 

Contract Warehousing Cons

For companies who worry contract warehousing is not the right decision, they typically cite one of the following reasons. 

Control

Many businesses who think it is better to forego contract warehousing cite having less control as the main reason for handling their warehousing needs themselves. They equate having their own warehouse as being able to manage their own processes more efficiently. And entering into a successful contract warehousing agreement requires trust. But that trust your business places in your 3PL, or third-party logistics company often provides better results than going at it alone. 

Needs

Businesses with particular requirements may not feel they can find a 3PL that will appropriately meet their warehousing needs. Searching for and vetting any possible warehouses does take time if you are unfamiliar with the industry or do not even know precisely what it is you want in your warehousing provider, which can make this reason seem legitimate. 

Contract Warehousing Pros

On the positive side, contract warehousing can increase your business’s efficiency and profitability through the following benefits. 

Experienced Staff

For the companies who say they would be giving up control if they were to handle their own warehousing, contract warehousing alleviates this concern. When you choose contract warehousing, your business is assured of receiving specialized employee training, appropriate equipment, and tracking and logistics services that provide more uniformity and controlled processes. No matter what industry your business is in, 3PL can handle your needs. 

Lower Capital Costs and Risks

Particularly for small businesses who may not be able to afford to invest the necessary capital or expansion costs to purchase their own warehouse for storage. Further, contract warehousing allows businesses to continue or improve their warehousing operations without taking the financial risk of owning their own distribution center or selling it when the business grows or scales down. 

Efficiency

Contract warehousing allows you to lower your operating and distribution costs while also streamlining your operations. By removing the burden of warehousing and logistics from you, you are free to focus on the other parts of your business that require your attention, such as marketing or sales. Contract warehousing provides standardized processes that simplify and improve your operations. 

Scalability

Contract warehousing allows you to grow along with your business to quickly and easily expand when you need to and similarly decrease your space if the need arises. Rather than you being stuck with a space that does not work for your business and needing to spell or buy up when your needs change, with contract warehousing, you do not have to waste excess space or make do with too little – a struggle that can be detrimental to your company and rob your focus of where it should be.

CWI Logistics Is Your Contract Warehousing Partner

You have brought your business where it is with your hard work and ability. When you partner with CWI Logistics for your warehousing needs, you are assured you have a 3PL that will work just as hard as you do so you can achieve success. 

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