When you look at quotes from different warehousing service providers, you will see a plethora of different charges. Understanding them all can be a little complicated, so make sure your warehousing provider is upfront with you and can provide a full explanation of any charges you may be unable to understand. Abbreviations are used daily in warehousing and some of these abbreviations make it onto the quote sheets too. Lets face it, it’s much easier to type an abbreviation than a full explanation on each quotation and invoice, so if you’re getting plenty of letter thrown at you, here’s what to expect.
Storage and RH&D – What’s the difference?
Obviously, if your company is using your warehousing provider to store products, whether they are on pallets or loose cartons, then you’ll be looking at the very least at one charge for storage. Some warehousing companies charge by the carton, some by the weight and cube and some by the pallet. Some charge by the day, some by the month and some by the week. As long as you check your invoice against the charges originally provided to you by your provider, to make sure there are no errors, this one is simple.
The other charge that often comes up on warehousing invoices is RH&D, which may need some explanation. This stands for receipt, handling and dispatch, and covers the costs below:
When goods are delivered to your warehousing provider, they will need to be taken off the vehicle and placed in the correct bay in the warehouse for storage. There is paperwork involved in this too. Checking the load is very important, and time will need to be taken to check that the right items have been delivered and that there is no damage to the cartons or pallets. If there is, a damage report will need to be raised and you your warehousing provider should contact you. It is only right that your warehousing provider is compensated for the time it takes to ensure everything is ok before your goods are stored.
When goods are called off, and are due for dispatch, your warehousing provider will have to locate, check, prepare the paperwork and load them onto the vehicle. If your goods are on pallets, then it is much more likely that your RH&D costs are lower than they are if you deal with loose carton and want whole orders to be put together from separate loads.
At what point will I be invoiced for RH&D?
The time at which your warehousing provider will invoice you for RH&D depends entirely on the warehousing provider you’ve chosen. Some warehouses charge the whole RH&D on the inbound leg of the journey, whilst others charge both on intake and dispatch. You will usually incur a charge per carton or pallet in, and then one per carton or pallet out. Costs can vary so if you’re looking for a new provider, this is certainly something you’re going to want to consider at length.
How do I negotiate RH&D costs?
Some things to consider and speak to your warehousing service provider when looking at RH&D and pallet costs are how much movement you’re likely to need and how long your goods will be stored for. If your goods are constantly going in and out of warehousing, either to have processes completed on them, or for delivery and return, then your costs per pallet may be different than they would be for storage alone, and one movement in and out of your chosen warehouse. The best thing to do when contacting a new provider is to look at how much movement you’re likely to need and have them write this into your tariff so that you always know how much this is likely to cost you.
You may have a paper trail in your procedures that you work by, and may need your warehousing provider to take this into account too when coming up with your costing’s. If, for quality purposes you require extra paperwork completing, you may find your charges increase due to this, although some warehousing companies are happy to complete this within the cost of your services, as long as it isn’t too complicated. Again, you need to explain this to your provider and see if they can complete within your stated tariff, or if changes need to be made to your service plan. If you let them know exactly what you need, you’ll find the whole process runs more smoothly and your provider can ensure there are no extra costs for things they weren’t warned about.
Extra charges for RH&D
Of course, if you deal in ocean or airfreight, you may be charged extra for things like destuffing a container (taking all boxes or pallets out, sorting and storing, or unloading an airline PMC. When this sort of handling is required, you may pay a one of charge that includes this handling and the RH&D costs in and outbound, so negotiating a good rate for this is imperative.
So far, we have only talked about RH&D for pallets and boxes, but if you deal with hanging garments (GOH) this can incur a whole lot of extra charges, such as hanging and racking, disposal of any inserts into aircraft containers, and sorting into sizes/colours. Its imperative therefore that you choose a warehouse provider that can handle these sorts of loads and can offer good rates on this handling also.
The bottom line
Of course, if you’re receiving invoices from your current warehousing provider that do NOT state RH&D charges, do not assume you are not being charged for RH&D. The charge will be there, but may be built into your pallet charges, so it’s worth speaking to your provider to find out the breakdown, as you may want to negotiate a separate rate, particularly if you have many different stock lines that all have different handling requirements. One of the most important things with RH&D and your warehousing provider is that your provider is transparent when it comes to your charges. Knowing exactly what you are paying for makes good business sense so if your provider changes the subject, or refuses to give you a breakdown on the rates you’re currently paying, then it may be time to look elsewhere.