Inbound Logistics Roadblocks and How to Overcome Them
Warehousing can be one of the most beneficial things that you do for your company since you installed that shiny, new TMS!
A lot of companies are still struggling with how best to manage all of that inventory. About half of them are learning that freeing up some real estate space is not as easy as it sounds. The most obvious solution is a solid warehousing system.
It can be more cost-effective than most might believe, and on top of that, it can improve your overall shipping process.
So, if you have been considering the possible benefits of warehousing, you are in luck. In this blog post, we look into the top three benefits of warehousing!
Key Benefits of Warehousing
Allows for more consistent production
For companies who mass-produce their own goods, having ample warehousing space to store all of their raw materials is not only important, it is vital.
Production on a large scale requires an equally large space for completed goods as well. By making use of large warehouse space, manufacturers can:
- Produce goods ahead of time
- Plan production of seasonal goods more effectively
- Maintain steady production schedules year-round
Storage
Having the ability to move these surplus goods into a warehouse and get it off of the distribution center floors is crucial for any company that plans to scale its business at some point in the future. And for businesses that are not based around on-demand production, it is even more vital.
Every foot of space that a company owns is a valuable piece of real estate. And there is no more valuable real estate in the logistics industry than warehouse space that supports value-added warehousing capabilities.
Minimizes the risk of damaged goods
Warehousing your goods is a great way to ensure that they stay safe and well out of harm's way.
When companies are shipping goods from one warehouse to the next, the chances of damaged goods go up drastically. The process usually involves the shipment of goods from the company to a distribution center to await delivery. That is a lot of moving around, not to mention that goods may sit in a distribution center for days before being shipped. All this does is increase the odds of damaged or lost goods.
By having enough space to hold goods until they are ready to be shipped, companies can:
- Minimize the chance that their customers end up with damaged goods
- Reduce handling and transfer touchpoints
- Maintain better control over inventory conditions
What types of warehouses are available?
Public warehouse
Public warehouses, sometimes called duty-paid warehouses, are storage spaces that are rented out to the general public. These establishments could be owned by an individual, but more often than not, they are owned by large corporations. Either way, all public warehouses must be fully licensed in accordance with, and adhere to all federal rules and regulations under the United States Warehouse Act (USWA) in order to operate.
This type of warehousing plays a vital role in the interests of agricultural products and their promotion. Due to this, the U.S. government widely encourages the use of public warehousing in the co-op arena.
Most small to medium-sized businesses cannot yet afford to own and properly manage their own warehouses. For this reason, public warehousing is a very useful tool for the small business community.
Other times, the business just doesn't see a need to maintain a private warehouse. Often times, they simply opt to take full advantage of public warehousing instead.
Private warehouse
A private warehouse is one that is owned by large manufacturers or vendors who need to store their goods securely. By securely, what we really mean is in their possession.
Private warehouses are an excellent option for businesses who can afford to keep them properly maintained by trained employees. Needless to say, this is not the most inexpensive option on the list, but it does come with its own advantages.
For instance, until goods are ready for shipping out to the customer, they simply stay in the warehouse. This is especially true of high-value items that a company may not want to entrust to a third-party.
This minimizes the risk of damage, theft, loss, and many other issues that could arise at any given moment.
Bonded warehouse
Bonded warehouses are storage facilities which have been licensed directly by the U.S. government. They are used solely for the storage of any imported goods until the customs duty has been paid. These warehouses are generally under the direct control of customs authorities.
When a shipment comes across the border, a bonded warehouse holds onto it until the importer can pay the customs duty. This fee can be paid off in installments, with the goods being released in proportion to the amount being paid toward the duty.
This is probably one of the most complex warehousing processes you will ever run into, which is why it is always a wise idea to work with an experienced partner like Redwood who can guide you through it as easily as possible while potentially reducing logistics costs in the process.
Final Thoughts
Getting started with warehousing is simple, cost-effective, and most importantly, it adds value and resilience to your supply chain. Additionally, it adds a new level of scalability to your shipping processes that can benefit you greatly in the long run.
If you are ready to start warehousing, contact Redwood Logistics and let us help you take your first steps!
FAQs
What are the main benefits of warehousing for a supply chain?
The main warehousing benefits are more consistent production, better storage control, and less risk of damaged goods. Warehousing lets companies hold raw materials and finished products in one place, which helps smooth production schedules and reduce unnecessary transfers. It also adds resilience and scalability to shipping processes, making it easier to manage growth without crowding distribution center floors.
How does warehousing help manufacturers keep production steady?
Warehousing helps manufacturers keep production steady by giving them space to store raw materials and finished goods before they are needed. That makes it easier to produce goods ahead of time, plan seasonal output more effectively, and maintain consistent production schedules throughout the year. In practical terms, warehouse space supports smoother operations when demand changes.
Why does warehousing reduce the risk of damaged goods?
Warehousing reduces the risk of damaged goods by limiting how often products need to move between facilities. When goods are shipped repeatedly from one location to another and held in distribution centers for days, handling and transfer touchpoints increase. Storing products in a warehouse until they are ready to ship helps maintain better control over inventory conditions and lowers loss or damage risk.
What is the difference between a public warehouse and a private warehouse?
A public warehouse is rented storage space available to the general public and must comply with federal rules under the United States Warehouse Act. A private warehouse is owned by a manufacturer or vendor for its own goods and is usually used for secure in-house storage. Public warehousing is often a fit for smaller businesses, while private warehouses suit companies that can maintain their own facility.
What is a bonded warehouse used for?
A bonded warehouse is used to store imported goods until customs duty is paid. These facilities are licensed by the U.S. government and operate under customs control. In some cases, duty can be paid in installments, with goods released in proportion to the amount paid. Because the process is complex, it often requires experienced logistics support.
When should a business consider public warehousing instead of owning its own warehouse?
A business should consider public warehousing when it needs extra storage but does not want the cost and responsibility of owning and maintaining a facility. This option is especially useful for small to medium-sized businesses and for companies that do not see a strong need for a private warehouse. It provides flexibility without requiring a large capital commitment.
How does warehousing support business growth and scalability?
Warehousing supports business growth by freeing up valuable real estate and moving surplus goods out of distribution center floors. That extra space makes it easier to scale operations, manage inventory more efficiently, and handle increasing product volume without disrupting shipping flow. Over time, warehousing adds scalability and resilience to the supply chain.
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