What does one pallet position actually cost you per week? Fill in your floor space, rent, the running costs around it and how many pallet positions you have, and you get the number 3PLs quote their customers and most manufacturers have never worked out.
The area you pay for, from the lease, including aisles, docks and offices inside the same shell.
From your lease. If you own the building, use what you could rent it out for; that is what holding it really costs.
Energy, service charges, insurance, racking and truck leases, maintenance and cleaning. Not picking labour: this is the cost of standing still, not of moving goods.
Total pallet places in the racking, all levels counted, plus marked bulk floor positions. Not how many are full today.
How full the racking is on an average day. Most warehouses run at 80 to 90 per cent; above 95 you lose more time shuffling than you save in space.
1.35
Cost per pallet position per week
The rate to compare against a 3PL quote.
Same cost shared over the positions that are actually filled.
What one position costs you over twelve months.
Rent plus running costs together, per square metre.
Everything the building costs you before a single item is picked.
A one-page summary with your figures, the method and what the answer means.
Every empty position is paid for anyway. Getting stock into the right places raises occupancy without touching the lease.
Work out what better use of space savesIn plain terms: add up everything the building costs you in a year, rent plus the running costs that come with it, and share that over the pallet positions you have. Divide by 52 and you have a weekly rate you can quote or compare. The second figure corrects for the fact that empty positions still cost money.
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You pay for the whole building whether the rack is full or not. That is why the cost per stored pallet is higher than the cost per position, and why raising occupancy by ten points lowers your real rate without touching the lease.
A 3PL rate usually includes storage only, with handling billed separately per pallet in and out. Compare their storage rate with the first figure here, and their handling rate with your cost per order line.
No. Keep storage and handling apart, or you cannot compare with a 3PL, who bills them separately. Use the cost per order line calculator for the handling side.
Use the market rent for a comparable building. Treating an owned building as free hides the cost of the space and makes every stock decision look cheaper than it is.
Loading metres, floor area, volume and trailers needed, from your own pallet sizes and stacking height.
Volumetric weight calculatorDimensional weight, real weight and the chargeable weight your carrier actually bills.
Warehouse space calculatorSquare metres for a given number of pallet positions, including aisles and support space.
Loading metres, stock levels and order points are only as good as the stock data behind them. That is what a warehouse management system keeps accurate, every movement, without anyone maintaining a spreadsheet.