Public warehouse

From CEOpedia | Management online

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 receiving 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 accounting services[2].

Example of Public warehouse

Public warehouses come in a variety of forms and sizes, ranging from large warehouses that can store and distribute a wide range of goods to smaller facilities that offer more specialized services. Some of the most common types of public warehouses include:

  • Refrigerated warehouses: These warehouses provide a temperature-controlled environment, allowing companies to store and distribute perishable goods.
  • Bonded warehouses: These warehouses are specifically designed for the storage of goods subject to customs duties, allowing companies to store goods without paying taxes until they are ready to be shipped.
  • Cross-docking facilities: These warehouses are designed to facilitate the transfer of goods between multiple carriers quickly, allowing companies to reduce transportation costs and improve efficiency.
  • Specialized warehouses: These warehouses are designed to store and distribute specific types of goods, such as hazardous materials or pharmaceuticals.

Public warehouses provide companies with a cost-effective way to store and distribute their goods, as well as to manage their supply chains more efficiently. By taking advantage of these services, companies can reduce costs, improve customer service, and ensure that their goods are securely and reliably stored and transported.

When to use Public warehouse

Public warehouses can be an effective solution for businesses that need to store and distribute goods but don't have the resources or capacity to do it themselves. Public warehouses offer a wide range of services, including inventory management, order fulfillment, warehousing, and transportation. Companies that use public warehouses benefit from cost savings, improved customer service, and access to a wide range of storage and distribution options.

Advantages of public warehousing

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.

  • Cost Savings: Public warehouses offer cost savings to companies by providing lower storage and shipping costs. Companies can also benefit from bulk discounts and other cost-saving measures.
  • Flexibility: Public warehouses offer more flexibility than traditional warehouses. Companies can store goods for short-term or long-term periods, allowing them to better manage their supply chain operations.
  • Improved Customer Service: Public warehouses can help companies improve their customer service by providing faster order fulfillment and better inventory management.
  • Scalability: Public warehouses are scalable, allowing companies to adjust their storage and distribution needs as their business grows.
  • Security: Public warehouses provide a secure environment for companies to store their goods.

Disdvantages of public warehousing

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].

  • Space limitations: Public warehouses often have limited space for storage, which could be a problem for companies with large inventories.
  • Security concerns: Public warehouses may not have the same level of security as a company's own warehouse, making it important for companies to ensure their goods are secure.
  • Cost: Public warehouses may be more expensive than storing goods in a company's own warehouse.
  • Loss or damage: Public warehouses may not be able to protect goods from loss or damage as well as a company's own warehouse.

Other approaches related to Public warehouse

  • Automated Storage and Retrieval Systems (AS/RS): Automated storage and retrieval systems (AS/RS) are computer-controlled systems used to store and retrieve products from a warehouse. They are an efficient and cost-effective way to manage inventory and ensure that products are available when they are needed. AS/RS systems also help to reduce labor costs by automating the storage and retrieval process.
  • Warehousing Software: Warehousing software is a computer-based system that is used to manage inventory, order fulfillment, and the tracking of inventory. This software helps companies keep track of their inventory and manage their supply chain operations. It can also be used to generate reports and track customer orders.
  • Cold Storage: Cold storage is a type of warehouse that is used to store perishable items, such as food and pharmaceuticals. Cold storage warehouses are typically kept at a temperature below freezing, and they are equipped with cooling systems to ensure that the products remain safe and at the proper temperature. Cold storage warehouses are an essential part of many supply chains, as they help companies keep their products safe and fresh for longer periods of time.

In summary, public warehouses provide businesses with a range of services and benefits, from inventory control and order fulfillment to cost savings and improved customer service. Other approaches related to public warehouses include automated storage and retrieval systems, warehousing software, and cold storage warehouses. These solutions help companies manage their supply chains and keep their products safe and fresh for longer periods of time.

Footnotes

  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


Public warehouse — recommended articles
Outbound logistics — Container depot — Break bulk cargo — Inventory in transit — Internal transport system — Door to door service — Transloading — Accessorial charges — Types of transport

References

Author: Weronika Kmiecik

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