DMG Freight Services provide a range of warehousing and logistics services for customers in Essex and the UK.
See below for an outline of the charges you can expect when outsourcing your warehousing
If you are thinking about taking the next step in business and outsourcing your warehousing then the costs of these services will probably be in the forefront of your mind. Warehousing costs vary from warehouse to warehouse however there are usually four broad categories of warehousing costs which we have explained below.
Receipt, Handling and Despatch
1, handling (often RH&D for receipt, handling and despatch) refers to any expenditure on moving the goods into or out of the warehouse. Most of the cost is human labour, including receiving, storing and loading the goods for delivery etc. Secondary to labour is the equipment cost, depreciation and energy/fuel. The price for RH&D is usually charged as a pallet price in and out. For example £1.70 per pallet in and £1.70 per pallet out.
If a logistics company charges for order picking or pick-and-pack, this is usually a separate cost which is charged per pick or per carton picked depending on the warehouse. This also falls under handling as well however is normally a separate cost.
2, storage is the cost incurred as the goods rest in the facility. This is usually a weekly cost similar to ‘rent’ for your goods. It is often charged either per pallet per week (pallet storage cost) or per square foot of footprint.
3, operations administration is the cost of keeping the facility open. Overheads, really. Line supervision, clerical support, IT, insurance, office supplies, even taxes all fall under operational expenses.
4, general administrative expenses are often not associated with that particular warehouse or facility in particular, but represent the expenses of the larger organisation. How these expenses are allocated to each facility, and to each customer is up to the company, and can be a bit obscure.
Storage and handling costs are the most susceptible to reduction through increases in productivity. Here at DMG Freight Services in Essex, we sit down with our customers to gauge the amount of storage needed and movement of the goods to provide a competitive quote for all our customers. If you would like to discuss your requirements for warehousing and logistics in more detail, please contact us on 01279 452 468.
The recent trend is to rely more and more on automation, so the depreciation of the value of the automated systems is slowly replacing labour as one of the largest expenses, but has not yet surpassed it in many facilities.
Most of these activities could be done in-house, but unless you have a very large operation, you probably don’t have enough product volume to operate an in-house fulfilment department nearly as efficiently as most fulfilment houses. The economy of scale still rules, and being one customer of an established fulfilment and logistics company is generally less expensive and more efficient that setting up your own facility.