Warehousing offers innovative and strategic answers for a business’ requirement. When deciding to start warehousing operations, decision-makers, in all likelihood, consider all the factors when choosing between a private and a public warehouse. These factors include fixed and variable costs, flexibility to scale, expertise, etc.
Public and private warehousing have their own features and advantages, however, public warehousing has the ability to provide significant value.
What is Public Warehousing?
A public warehouse, commonly known as third-party (3PL) warehouse, is commercial inventory space owned by a third-party business, and rented to other companies for storage and distribution. These are third-party warehouses or warehouse facilities owned or operated by a third party, that have the expertise in warehousing, inventory management and distribution. Whereas private warehousing is owned / leased and operated by the company itself. Private warehousing requires companies to buy / lease warehouse space, hire operations personnel, get their own warehouse equipment and machines, build their own system and more.
Therefore, public warehouses offer many benefits as compared to private ones.
Benefits Offered by Public Warehousing
Private warehousing comes with a bigger costs than public warehousing; due to the fact they require a huge preliminary funding to pay all operational expenses, such as procuring, maintaining, and building the system, infrastructure and personnel. Further,private warehouses will also incur tax related expenses.
Also public warehousing offers all the vital machines, equipments and infrastructure needed, this allows you to save on the capital costs.
When you employ public warehousing, your business needs are handled by domain experts who recognize the complexities of logistics, inventory management, distribution, and other required variables. Third party warehousing could be a huge benefit ofr start-ups and SMEs who don’t have the capital, inventory and experience to build their private warehousing operations..
Expertise and Experience:
When you opt for public warehousing, you not only choose their facility, but also their staff, who are specialists in their domain and are aware of all the compliances. This will add to your confidence and at the same time give you the ability to hold them accountable for your warehousing operations.
There will come a time when your current warehouse may not be suitable or big enough for your existing operation scale. In such a case, you will be responsible purchasing and selling warehouse space and its setup. But, with public warehousing, you can easily scale up when there is a change in demand or when business expands and scale down when there is a need for downsizing.
Value Added Services:
Third party warehousing offers many value added services that otherwise may not be available to you with your own warehousing operations. A warehouse service provider like ProConnect Integrated Logistics offers additional services like –
- Dedicated account manager or a single point of contact to manage all your needs
- Kitting, assembling, installation services
- Cross-docking operations
- Multi-modal or inter-modal transportation services
- Shipping and clearance services
- System integrated capabilities like WMS and TMS
- Timely stock reports
While third party warehousing or public warehousing have many advantages, it is not like private warehousing doesn’t have much to offer. Private or owned warehousing have advantages too. You will have the entire warehouse used only for your company, as opposed to public warehouses, where you will be sharing space, infrastructure, and personnel with other businesses. Owned warehousing offers more operational control, more flexibility in command and your preferred working hours. If you have product volumes and movements that require a space of a decent size warehouse, and are ready to invest in the capital, owned warehousing could be a good choice for you.
However, many SMEs and even some of the large scale businesses prefer outsourcing their warehousing, fulfillment and distribution to a third-party logistics warehouse like ProConnect Integrated Logistics. If you are also evaluating the option of public warehouse for your business, then one of our previous articles can guide you further on top things to consider when choosing a warehouse partner.
Warehousing with ProConnect Integrated Logistics
ProConnect Integrated Logistics has the experience, expertise and infrastructure to cater to warehousing operations of all industries. Our technology integrated systems and software give you inventory and stock movement reports, and visibility into the market trends. We understand your need and take your requirements seriously. We have operations in 650,000+ sq.ft warehouse space in freezones and mainland in UAE and KSA, and cater to multiple industries with their needs.
If you are looking for a 3PL that can understand your business and provide solutions that match your requirement, then reach out to us with the details and we’d be happy to offer you the best of our services. Not just warehousing, we also offer shipping, custom clearance, consolidation and de-consolidation, fulfillment and distribution services.