It’s an unprecedented time for the warehousing industry. Demand is up, which means space is very limited. That has had a tightening effect in the market.
“Companies are hesitant to invest in and build warehousing infrastructure, so instead they’re leasing and signing long-term contracts,” says Brad Mullins, COO at AMWARE Companies. “This has led to manufacturers and distributors paying a premium for warehousing space.”
Given that prices are rising, it’s important that manufacturers and distributors get what they need from their warehousing and logistics service provider.
Smart Business spoke with Mullins about what to look for when shopping for a warehousing and logistics provider.
What should be the primary concerns when exploring warehouse space?
Many clients are asking the warehouse and logistics provider to pick and ship product orders to their customers. They want their partner to have a strong warehouse management system to manage orders so they can be confident orders are being sent out correctly. It’s ideal if the provider’s inventory management system integrates with the client’s system. That allows clients to keep an eye on their inventory and know when products roll out to customers.
How the product is shipped is a factor when choosing a warehouse. For example, some products move across the country by railcar, so to load and unload those products securely a warehouse needs a rail spur as well as special equipment to load and unload products. Some warehouses are built to bring train cars inside or at least under cover so that they can be loaded and unloaded while keeping the products out of the elements.
Not every warehouse can accommodate every client. Sometimes, in general warehouse space, certain products can’t be kept near others, so clients need to be assured that a warehouse can effectively cordon certain products off. Other products require a temperature-controlled environment that can be regulated for temperature-sensitive items.
Generally, clients want dry warehouse space that’s secure, meaning the grounds are fenced off and there’s a security system in place, and that the warehouse has a proper fire suppression system installed. Whatever the need, it’s a must to inspect the facility before agreeing to store products in it.
What services should prospective clients consider as they choose a warehouse?
Many manufacturers and distributors aren’t experts on fulfillment or inventory management. Companies that have trouble managing those processes efficiently would benefit from partnering with a warehousing and logistics company that has that expertise.
Full-service third-party logistics providers can provide unloading, palletizing, shrink-wrapping, picking — all the services necessary to get a client’s product out to its customers safely and efficiently.
These services are performed as an extension of the client. The warehousing and logistics partner is working directly with its clients’ customers, making sure the product is wrapped correctly for delivery and that billing is accurate. On-time delivery and proper inventory management processes are necessary so clients can trust that products will be delivered to client customers on time and in excellent condition.
Everything the warehousing partner does on a client’s behalf represents the client, and that’s an important consideration when choosing between warehouse providers.
What’s the significance of building a strong relationship with the provider?
From both perspectives, a strong relationship is about good communication. A free and open exchange of information means each party knows what’s going on with the customers, products and inventory mix. Communicating effectively also means making expectations clear so that goals and objectives can be met.
What else should companies know as they search for partners in the distribution chain?
Choose a provider that has the experience to handle specific products correctly and in compliance with any applicable laws. If a product is warehoused in a way that conflicts with the applicable regulations, an inspector could shut down the warehouse, which means the products don’t ship and customers and clients alike are negatively affected.
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