How Does Storage Pricing Work in a 3PL Warehouse?
Written by: Mark Hughes, VP of Domestic Operations, Brown Distribution Centers
There are various storage pricing methods in 3PL warehousing. Terms such as initial storage, recurring storage, half-month/full-month charges, and others are commonly used.
Pricing Structures for 3PL Pricing
Initial storage/Recurring storage- Initial storage fees are incurred upon receipt of goods at the warehouse. This means that storage charges begin as soon as the goods arrive. Recurring storage fees are applied at the beginning of the following month and cover the storage costs for all products held in the warehouse for that calendar month. If the goods remain in storage the following month, recurring storage fees are charged again.
Free time/Anniversary billing—Some warehouses offer a grace period before charging for storage. After that, initial fees apply, and additional charges may occur if goods stay beyond the anniversary date, billed daily, weekly, or monthly.
Half-month/Full-month—Products arriving in the first half of the month incur full-month storage fees, while those arriving in the second half are charged half the month. Storage is billed again on the 1st of the following month.
Weight storage- In some cases, warehouses charge based on product weight, typically per short or metric tons.
Price per square foot—Some clients prefer to rent a specific amount of space to ensure they have dedicated space for their products. In this scenario, the 3PL warehouse charges the client "X" per square foot and reserves that designated space for the client's goods.
Cubic foot storage—This storage pricing model is similar to square footage billing, but charges are calculated per cubic foot instead of square footage.
Bonded storage- This applies to goods stored under customs control. Pricing includes storage space, handling, security, and other additional services, with rates varying by product type and storage duration.
Factors Affecting 3PL Warehouse Pricing
Storage Fees
Handling and Labor Costs
Location
Types of Goods Being Stored
Technology and Automation
Demand Fluctuations
Do you have more questions about the specific costs of 3PL warehousing? Check out our Pricing Page for a closer look at the different costs of 3PL warehousing services.
Overall, storage pricing in a 3PL warehouse encompasses a variety of methods tailored to meet client's diverse needs and the nature of their goods. Each pricing structure offers advantages and considerations, allowing clients to choose the most suitable option based on product type, storage duration, and budgetary constraints. The flexibility and range of pricing strategies in 3PL warehousing contribute to efficient and cost-effective storage solutions for businesses across various industries.