Management

Dedicated Warehousing vs. Shared Warehousing

What is the difference between dedicated warehousing and shared warehousing?

There is no doubt that warehousing has become a crucial requirement in business. This is true even when the business operation is only minimally connected to the need for warehousing.

It is no surprise that warehousing is dedicated or shared. The difference is that with dedicated warehousing, all of the expenses and daily operations are relegated to a single warehouse owner or lessee.

With shared warehousing, there may be a single owner who parcels out warehouse space to several different business owners.Image result for Dedicated Warehousing vs. Shared Warehousing

Dedicated Warehousing vs. Shared Warehousing


It should be supposed that the size of warehousing space needed might determine which choice is best, dedicated warehousing or shared warehousing. The choice depends on the volume of goods to be stored in the warehouse and also the volume of transportation from the various to shipping locations.

Fortunately, warehouses are built in warehousing terminals such as those found all along the East Coast of the U.S. In these places, there are acres and acres of warehouses that vary in size.

 

There are also dedicated warehousing companies in the Chicago area you can contact.


This makes this type of warehousing complex more amenable to shared warehousing. For example, shared warehousing in a warehouse 48,000 square feet can easily be shared. Whereas, an 8,000 square foot warehouse might not have sufficient space for sharing.

Other Issues of Dedicated Warehousing vs. Shared Warehousing

Some of the other issues of dedicated warehousing vs. shared warehousing include:


. Maximum contiguous square footage
. Available docks
. Grade level dock doors vs. dock high docks
. Loading door sizes
. Truck transport access for shipping and receiving
. Dedicated vs. shared driveway access
. Compatibility of storage goods with local and state compliance regulations

Businesses that rely on warehouses should define specific needs for warehouse space before settling on a choice between dedicated warehouse space and shared warehouse space.

This is especially important for business owners with frequent customer and vendor visits and for local municipal inspectors. This indicates the need for warehouse space that includes a reception area and office space in addition to storage space.

Daily Operations Determine Warehouse Requirements

In several large warehousing complexes, the daily operations may influence the choice between dedicated and shared warehousing. One example can be seen in Port Jersey in Jersey City, N.J. (http://www.panynj.gov/port/vehicle-shipping-processing.html).

In this terminal, automotive cargo are stored and then shipped and received by rail and truck and shipped from the port via freighter ships.

This terminal has a mix of dedicated and shared warehousing. Port Jersey also handles breakbulk and bulk cargo like edible oils, salt, juice and Belgian blocks for paving.

Expenses Help Determine Choice

The way to determine whether dedicated or shared warehousing is best is to consider the expenses involved in daily warehousing operations. These include:
. Labor
. Rental, leasing or ownership costs
. Technology and equipment required
. Utilities such as temperature controls or additional requirements for refrigeration
. Fulfillment costs of seasonal and cyclical business fluctuations

Dedicated warehousing works best when business growth is expected to exceed warehouse space requirements. Shared warehousing is best for convenient, cost-effective use of space when business growth is slower or more sedentary.

When each factor is considered, dedicated warehousing vs. shared warehousing issues become clearer.

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Carmen Brewster

Carmen Brewster

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