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Oftentimes, companies are unfamiliar with how warehousing storage prices work – so one of the most frequent questions we get asked is “how do companies charge for warehousing”? In order to help companies understand the costs associated with storing products or goods in a warehouse we created this article. Our main focus for this article is to explain basic storage fees, including pallet storage pricing, cubic footage pricing, square footage pricing, and any associated in and out fees for basic warehousing services. For more comprehensive scenarios, including full-scale fulfillment services, please reference our in-depth articles on warehousing costs and fulfillment pricing.
There are a couple of ways different ways that companies charge for storage that you might encounter depending upon your unique situation. Most frequently, storage fees will fall under one of these three methods: Pallet storage fees, cubic footage fees, or square foot pricing. In 3PL warehouses, Pallet Storage Pricing is hands down the most common.
3PL warehouses typically charge storage fees once per month, although some companies prefer to bill out bi-monthly, weekly, or even daily. The standard methodology is to take an average count of the warehouse space utilized on the same day each month. However, some companies will calculate storage fees daily in order to more accurately capture the total storage space utilization throughout the month.
Below is a table that summarizes the most common ways warehousing companies charge for storage of products/goods, followed by an explanation of each methodology.
|Storage Method||Average Pricing|
|Pallet Pricing||$16.21 Per Pallet Per Month|
|Cubic Footage Pricing||$.50 Per Cubic Foot Per Month|
|Bin Storage Pricing||$3.18 Per Bin Per Month|
|Square Footage Pricing||$.91 Per Square Foot Per Month|
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One of the most popular ways by far that warehousing companies charge for storage is simply by the pallet. Typical pallet sizes are 48×40 and usually go about 4-6 feet high. This is how bulk product will be stored but if you do have pick and pack and fulfillment, then the warehouse might break some of this out in order to pick it more efficiently – therefore the overall number of pallets used in the warehouse would increase slightly in order to accommodate these “pick bins”. Pallets are oftentimes storage in pallet racking using a forklift, and as needed, are pulled from bulk storage bins and delivered to an area of the warehouse that is more accessible to picking individual orders. However, in some cases, pallets may also be stored on the floor. When stored on the floor, companies may attempt to stack the pallets 2-3 positions high in order to more productively utilize the floor space. This can only be done when the pallets are strong enough to sustain multiple levels of stacking.
When billing out using the pallet storage method, warehousing companies will total up the number of pallets at one time during the month – they will most likely literally have a person actually total the number of pallets but could also have it automated to calculate the pallets in the warehouse management system. Pallet storage fees are great for pallet scenarios but it becomes a little trickier for high pick scenarios where more pick bins are required. In these cases companies might be charged for more “air” under per pallet methodologies. Furthermore, pallets aren’t always the most ideal place to pick orders from in volume.
Typical pallet storage costs range from $6 per pallet per month to upwards of $15-20 per pallet per month or more.
In case where companies need sophisticated B2B or B2C shipping, including returns handling and processing, fulfillment pricing can get complicated. However, many businesses simply need pallet storage, with pallets being brought in from time and time and full pallets being shipped out as needed. In the industry, this is commonly referred to as “pallet in/pallet out” warehousing services. In addition to pallet storage fees per month, you will incur a pallet in and a pallet out fee each time a pallet is brought into or shipped out of the warehouse. These fees are usually the same for both the in and the out.
Typical pallet in and pallet out fees range from $4 to $8 per pallet per month.
When projecting costs, businesses oftentimes don’t know exactly how many pallet space they will need per month. Sometimes, when companies are moving to another 3PL fulfillment warehouse, they don’t even know how many pallets they currently occupy. An easy way to determine the pallet spaces needed in a warehouse is by estimating the number of cartons that will fit on a standard 40x40x48 inch pallet space. We’ve made the job easy by including the pallet space estimator below:
Now that you know the total number of pallet spaces needed, you can easily determine the total estimated storage fee per month using our pallet storage cost calculator below:
Another way warehouses charge for storage is by the cubic footage. When warehouses utilize cubic footage storage pricing methodologies, they will still typically store product in cartons or bins on pallets. One advantage to this method is that it allows for the automation of the calculation of total storage space being used. For example, a company would simply enter in the dimensions of each company’s items in their warehouse management system, and using a simple automated algorithm, the warehouse can calculate the total cubic footage under management by simply multiplying the total units by the unit cubic footage and summing all of the SKUs. Another benefit of this method is that it doesn’t overcharge you for “dead space”, which happens more with pallet storage.
However, this method requires a lot more management in terms of always updating the correct dimensions of each SKU in the system and may have higher associated costs for receiving product into inventory since so much more care and information is required. Cubic footage storage fees are more commonly used by fulfillment companies.
Typical cubic footage costs range from about $.35 to $.55 per cubic foot per month.
Another common alternative to pallet storage pricing (and oftentimes used in conjunction with cubic footage) is pricing per bin. A bin is a small storage space used most commonly for placing “pickable” items so that warehouse workers can easily pick from smaller bins rather than going to multiple pallet positions scattered throughout the warehouse to pick orders.
Typical bin storage pricing ranges from $3 to $6 per bin per month.
A third way that 3PL companies calculate storage fees are using square footage. This is far less common and is highly contingent upon the going rates in the specific market. This is more common for bulkier and non-standardized product that can’t fit into pallet spaces or racking. In this scenario, warehouses would charge the customer a set price per square foot. The warehouse may, contractually, require the customer to pay for a set amount of square footage, or the warehouse may only charge on actual space used – depending upon the individual agreement.
Typical square footage storage pricing ranges from $.60 to $1.00 per square foot per month.
Pricing and options for warehouse storage are significantly impacted by the required term of the agreement. In other words, the shorter the term for warehousing storage, the higher the rate you’ll pay for warehouse storage services. On the flip side of the coin, if you need warehouse storage for a long period of time, you’ll be able to negotiate a much better monthly rate.
The dynamics of the warehousing storage market have changed significantly over the last few years. Because e-commerce selling and online ordering have exploded in popularity, overall available warehouse storage space is lower than ever – and warehousing storage companies are being more particular about the deals they are taking on, oftentimes prioritizing fulfillment and shipping scenarios.
Short-term and temporary warehouse storage is defined by an agreement length of less than a year. Anything from a year and beyond will garner more competitive rates. But for short-term and temporary warehousing storage, there is still a spectrum of service with varying interest and price points that will result.
For warehouse storage projects that are extremely quick in term (such as a few days or a few weeks), options will be severely limited, as warehouses just do not have the time, space, or resources to help. Furthermore, they will not make much profit off a very quick project of this nature, so finding a warehouse storage solution for this short of a window will be challenging or impossible.
For warehouse storage projects that last from at least a few months to a year, there will be more options. However, in this case, the number of pallets being stored will be extremely important. For projects with less than 30-50 pallets minimum, temporary warehouse storage projects (even for a few months to a year term), will still be challenging to find a solution for. For 50+ pallet deals, warehousing storage options will be better, since there is more revenue to be made by the warehouse. In either case, linking up with the right type of company is important. Fulfillment centers will not be interested – you will have to find a proper warehousing storage company that focuses on storage and pallet deals.
The prospects of both finding a warehousing storage solution and getting more aggressive rates increase significantly when you need the storage for a period of a year or more AND the pallets being storage are over the minimum threshold of most warehouses. Most warehouses have minimums of at least 30-50 pallets.
For long-term warehousing storage deals of less than 20 pallets of month, it will be more difficult to find options. However, if you need other services, such as FBA Prep and labeling services, your options will be greater.
There are many other factors that can play a part in the actual storage charge. First, location is important. In areas where the cost of real estate is higher, the storage fees will be considerable higher. Second, costs can vary if the warehouse owns or leases the facility. In cases that a company has been around for quite some time and owns the building outright, more flexibility might be available to provide lower rates. Third, there are a number of special control requirements that can affect overall pricing. Examples of these factors are refrigerated or climate control storage or even special storage conditions, equipment, or licensing that costs the warehouse more in order to facilitate. In these cases, there will most likely be higher fees to cover the additional costs. Fourth, there may be additional costs to cover bonded warehousing or other insurance requirements. Finally, it’s important to understand that volume may impact overall pricing. In our latest survey, we found that 38.71% of all warehouses discount storage fees, and the average discount is 2-12% and usually requires in excess of 100 pallets stored per month. In cases where a customer will be occupying a large volume of space, they may be able to command a lower rate.
There are thousands of warehouse storage companies in the US and Canada, and it’s oftentimes quite difficult finding them online. If you search long enough, you might find them, but oftentimes you’ll come across lists of warehouses – most of which will not be the best fit for your company. Furthermore, you may also come across on demand warehousing options, which may have some solutions for your company. However, you will not be paying as low of a rate as if you went direct with the warehouse itself, and these on demand solutions will oftentimes have high monthly minimum dollar spend or pallet count requirements.
Alternatively, we’re happy to help match you with warehouse storage solutions. You don’t have to search online for “warehouse storage near me.” Instead, fill out our online form or navigate to the appropriate area below and get matched with the best options. We work with companies that offer flexible minimums, and your pricing isn’t affected by using our service. We get a small fee of $30 from the warehouses when we match you with them – so you pay nothing and there are no fees that impact the pricing they give you.
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Typically, public warehousing companies charge around $15-20 per pallet per month, $.50 per cubic foot per month, $3.18 per bin per month, or $.91 per square foot per month for storage services.
3PL warehouses typically charge pallet storage on a monthly basis.
The average dimensions of a single pallet in a warehouse are 40×48 inches by 4-6 feet in height.
Pallets are usually stored in pallet racking, although they me be stacked on the floor if possible.
Warehouses usually charge from $4-8 per pallet in, and $4-8 per pallet out for receiving inbound and pulling and preparing outbound pallets.
Some warehousing companies do offer price breaks for pallet storage, with the average discount ranging from 2-12% on pallet storage of greater than 100 pallets.
FREE storage is not common in the third party warehousing industry. However, in some cases where there are significant volumes of pallets being moved and/or there is a significant relationship that already exists, 3PLs may offer a few days of free storage.
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