Public warehouse

Public warehouse
Primary topic
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Methods and techniques

Public warehouse is a company which offers others storage and safe-keeping for goods in any quantity, both for long and short periods of time. The warehousekeeper has storage space and equipment but does not own stored goods. Public warehouse services are usually offered on a short-term basis. Renting a warehouse is an alternative to building your own warehouse and also a permanent feature in the logistics system of many companies. The user of the public warehouse has access not only to the storage space, but also to qualified staff and technology provided by the warehouse owner. Public warehouses usually store a range of products such as:

  • foodstuffs
  • hazardous material
  • bulk.

These warehouses attract a certain type of customers, for example grocery stores, which need a service that makes it easier to distribute the product while minimising waste. Public storage is particularly useful for small companies, markets that have not enough goods to dedicate the entire warehouse space to them. Public warehousing also offers transport, loading operations and shipment of goods. Modern public warehouses are able to offer many facilities, communication connections and manpower to help their consumers in local sales and distribution[1]. Certain public warehouses companies offer the arrangements and variety of services for the lease of storage space. For an appropriate fee, the renting company may receive services such as clerical operations, which include direct electronic linkages for reciving orders as well as shipment instructions and full handing services composed of tagging, marking, inspection and repacking. You can also use local transport management which includes dispatching and traffic acounting services[2].

Advantages and disavantages of public warehousing[edit]

Because of its flexibility and adaptability to dynamic market conditions public warehousing becomes an increasingly common option for modern logistics systems. One of the biggest advantages of such a solution is the lack of the need to engage capital for investments in buildings, land or trained staff. In addition, public warehousing prevents the possibility of obscolence of technology and material handling equipment. Another important aspect is that there is no risk when renting a public warehouse. Physical market movement is not a problem, because the user does not own a facility so he is not attached to a specific location. Flexibility of public warehouses is mainly useful when transport costs are not fixed, as well as in conditions of changing marketplace needs and not specified demand. Thanks to the use of public warehousing, the manager can change locations and volumes of storage until a satisfying balance is achieved.

However, choosing a public warehouse has a few weaknesses. Sometimes there might be problems with the compatibility of computer systems between the renter of the warehouse and its owner. This can make effective communication difficult. Having your own warehouse usually means implementing it with an integrated computer system of the whole company. Another disadvantage of public warehousing may be the lack of available space during peak time (for example pre-Christmas period) when the number of people who want to rent a warehouse increases. The location of the warehouse may also be inconvenient for the leasholders when they have clients located in another area[3].

Footnotes[edit]

  1. Voortman B. (2004)., Global Logistics Management
  2. Kenneth B. (1997)., Practical Handbook of Warehousing
  3. Ross D. (2003)., Distribution Planning and Control: Managing in the Era of Supply Chain Management

References[edit]

Author: Weronika Kmiecik