Warehousing, and in particular third-party warehousing, plays an important role in the supply chain. It helps businesses manage a large amount of inventory, it ensures that cargo is kept safe and that products can be distributed at the most opportune time, and cargo is kept as close as possible to the end-user so that it’s on hand when needed. Third-party warehousing allows other companies to focus on their core business offering, rather than worry about the appropriate storage and distribution of their products.

What are the types of warehousing?

• Big companies that carry a lot of stock often use private warehousing to store their cargo. This means that the entire warehouse is used solely for that company and quite often the warehouse is owned by that company. However, a third-party expert could still be mandated to run the operations of the warehouse.
• A public warehouse gives clients a month-to-month or contract solution for either short or long-term storage. This is also often referred to as multi-principle warehouses.
• Automated warehousing makes use of specialized equipment (machines and robots) to process inventory. It cuts down on manual tasks to decrease inefficiencies and reduce the risk of human error.
• Fulfillment center warehousing means that orders are received, processed, and filled directly at the warehouse. Retailers often use this type of warehousing.
• Products that need to be distributed to retailers, wholesalers, or directly to consumers are kept at a distribution center.
• The temperature is controlled, and humidity levels are kept at optimum levels in climate-controlled warehousing. There are two types:
  • Ambient storage – for cargo that does not require any kind of temperature control, but that can remain at room temperature
  • Cold storage – for perishable items (medicine, plants, etc.) or fresh food.
• A bonded warehouse is used for imported goods so that tax duties can be deferred until the cargo is removed from the bond store.

What is the warehouse process?

The warehouse process consists of 5 phases:

Receiving – when a warehouse receives cargo to replenish stocked inventory. Note, the warehouse needs to be given notice of a shipment’s arrival and receive accurately completed documentation upon arrival. The receiving process includes checking inventory, counting the cargo (crates and boxes) to ensure it matches the delivery note, inspection to see if any cargo has been damaged, and receiving and completing documentation.

Put away – when cargo moves from the dock to either a permanent storage location, replenishment location, or to the pick area at the warehouse, it is called put away.

Storage – there are different forms of warehouse storage. Pallet racking is most commonly used for cargo that is delivered and stored in boxes. The weight of the cargo is a big consideration with pallet racking, and weight limits must be followed. If cargo sits on static shelves this is called shelving, it cannot be retrieved by a forklift. This form of storage is ideal if you want to access your cargo quickly and easily. One way to create extra storage space in a warehouse is to construct a second floor (mezzanine floor) above existing aisles. The warehousing team can then pick, pack, check, and move stock. Multi-tier racking is used to create multiple tiers in the warehouse’s racking system and to use all of the vertical space in the warehouse.

Packing – refers to cargo being removed from where it is in storage and packed for shipping.

Shipping – the final phase of the warehouse process and includes loading the correct cargo, delivering it to the right customer, and using the right mode of transport to ensure it is delivered on time.

Additional warehouse services

Sorting cargo either to organize it for storage or to sort it for loading and delivery.

Repackaging and relabeling occur if cargo packaging was damaged and to prepare it for final delivery.

Drumming includes storing hazardous or non-hazardous cargo in drums of varying sizes.

Inventory management is the process of keeping track of how much stock is held in storage at a warehouse, and what the value of that stock is.

Assembly means collecting various components at a warehouse to assemble them into a single item.

Pick and pack is used to pull individual items that are in storage and pack them for shipping.

Embellishment/customization occurs when stock is consolidated or altered for promotional purposes.

What are the different types of cargo that go into warehouses?

General cargo is classified as all products and goods that do not need special requirements, types of storage, or transportation.

Hazardous cargo constitutes flammable liquid and chemicals. It is most likely stored in a specially designated area for additional safety and preventing contamination.

Pharmaceutical cargo often requires cold-storage, systems to ensure that medicines are circulated and an intricate pick and pack system.

Bulk storage is for equipment and supplies stored in a warehouse in large quantities. The original container it was transported in is usually used (e.g. petroleum products in tanks).

Project cargo includes cargo that cannot fit into a 20’, 40’, or open-top container. It is usually big and bulky and would require special warehousing services and handling equipment.

It is worth noting, the shocks felt during the ongoing Covid-19 disruptions are likely to move supply chains from the recent trends of lean inventory holding to more robust and resilient supply chains, which is likely to include greater warehousing stockholding across many supply chains.