A common issue that can cause problems for businesses in need of warehousing facilities is a misunderstanding of the different types of storage solutions and services that are on offer. – The logistics and shipping industry is packed (no pun intended) with terminology and abbreviations that are very similar, and this can lead to potential confusion.
When researching your options, make sure you take into account what each facility offers, and that you understand how different services can affect the costs you are quoted.
In this article, we’ll be examining the main differences between three types of widely available storage facilities and highlighting the key factors you need to consider when selecting your preferred warehouse provider.
Container Yard – (CY)
A container yard is simply an area inside a terminal or port where containers are stored before and after being shipped.
When exporting cargo, a business will deliver their container to the specified CY, and from that moment the container is under the control of the shipping line until it reaches the designated CY at the port of delivery.
Typically, container yards will be relatively simple storage areas, and all the containers stored there will be FCLs that are already sealed. Therefore, the cargo inside will not require any further manipulation or consolidation.
Full Container Load (FCL) – Ok, you might be thinking, “what’s an FCL?” – A ‘Full Container Load’ means that all the items in that particular container are noted on a single Bill of Lading and are owned by a single party – Remember; it doesn’t actually matter how physically ‘full’ the container is, it can still be classed as an FCL.
Container Freight Station – (CFS)
CFS stands for ‘Container Freight Station,’ and these facilities are usually located near a port, ocean or airport.
At a CFS, goods are quickly grouped with other items, in preparation for export. Containers that arrive at a CFS will usually be designated as an LCL shipment. The logistics organization that operates the CFS will pack all of your separate cargo into a container with the other LCL items your goods will be travelling with.
When the container reaches the delivery port of call, the process happens in reverse, and your designated carrier will then move your items to the next stage of your delivery chain.
Less than Container Load (LCL) – Yep, time for a useful look at another logistics abbreviation! – A ‘Less than Container Load’ means the shipment does not require the full capacity of a cargo container. Your items are combined with other goods heading to the same destination, and you are charged only for the space your cargo occupies.
The key thing to remember about a CFS facility is that staff will be consolidating cartons and cargo, but not opening or manipulating the items. – As you will see later, this has a major impact on the pricing structure you’ll encounter when selecting the type of warehouse that is appropriate for your needs.
Key Factors to Consider When Selecting a CFS Warehouse:
Loading Dock: CFS facilities require secure and easily accessible areas for export/import loading and unloading. – In order to reduce mistakes and operational issues, ensure that the CFS you select utilizes the latest technology, such as barcode labeling, etc.
Ground Floor Location: If your chosen CFS facility isn’t located on the ground floor, this could mean delays to order processing and greater delivery times for you. E.g., imagine the scenario of one of the CFS’ lifts being out of service! – If you decide to go with a CFS that is above the ground floor, remember these important questions: How many lifts does the facility have? What will be the impact on your delivery times if problems arise?
Wide Spaces: Make sure the CFS you pick has enough space so that cargo can be moved quickly and efficiently in and out of relevant areas. – The products have already been sold, so a fast turnaround is needed!
Cross-docking: Cross-docking reduces material handling and the need to store products in a warehouse. This type of logistics solution allows businesses to expedite shipments to customers, and the factors concerning CFS warehouses we examined above go well with the fast-moving nature of cross-docking.
Logistics Warehouse – (LW)
The final type of facility we want to examine in this article is ‘Logistics Warehouses.’
Unlike the simple storage facilities of a container yard or the fast turnaround of the container freight station, a logistics warehouse offers businesses the opportunity to store their inventory for longer periods of time securely. – This is particularly useful for organizations that do not have their own dedicated storage premises.
Coupled with the ability to store products for longer, LWs offer a range of specialized storage and logistics services, which are NOT available at a CY or CFS. – When cargo is manipulated, i.e., the cartons are opened, and the contents checked, collated, moved, etc., the cost of utilizing specialized staff and facilities, plus the added time and effort means you will be paying more for these fulfillment services.
Examples of Services in a Logistics Warehouse:
Kitting – Combining multiple products into one customer-ready package. This allows businesses to bundle SKUs and makes processing and inventory management more efficient.
Labeling – Inaccurate labeling of products may cause shipping delays and issues with customs agencies. Logistics warehouses can take care of all customized label printing, removing and relabeling.
Specialist Packaging – A logistics warehouse can advise businesses on the best packing materials to protect items in transit and reduce shipping charges.
Reverse Logistics – A vital part of any business! A good logistics warehouse can provide an efficient and comprehensive reverse logistics and returns policy, focused on inspection, re-shipment, and disposal.
Click HERE for more information on value-added logistics services.
Depending on your type of cargo, a logistics warehouse can also provide specialized conditions for protecting valuable items against pests, humidity, and atmospheric and environmental issues. – This is especially important when you are storing items in tropical or sub-tropical zones.
There are certain inherent risks with the manipulation of cargo. When you open cartons, move products around and collate items, you run the risk of mis-picking, loss of items, damage to goods, etc. A good logistics warehouse facility will be able to mitigate these problems with well-trained staff, as well as utilizing the latest technology to manage inventory.
Key Factors to Consider When Selecting a Logistics Warehouse:
Security: Items will be stored in a logistics warehouse for a more extended period than in a CFS location. Security against theft, fire, etc. must be paramount.
Humidity/Atmospheric/Temperature Controls: Certain types of cargo require specific and specialized conditions for storage. Examples may include but are not limited to, artwork, textiles, wine, food, and electronics.
Pest Control: Again, the long-term storage of inventory in a logistics warehouse requires that adequate pest control and other environmental factors must be considered.
Wide Spaces: Any LW you select should have the necessary space to segregate your goods securely. There also needs to be the correct facilities and adequate capacity for providing value-added services.
Value-Added Services: As previously mentioned LWs often provide value-added and fulfillment services. When selecting an appropriate facility, ensure they offer the type of business solutions you require.
Inventory Management: Many logistics warehouses will offer order fulfillment and inventory management services. You need to ensure your LW is operating efficient WMS software to control your inventory properly.
Did You Know? – TDS uses a unique and versatile API called logico™. Accessible from any device, this easy-to-use system allows you to smoothly fetch orders from the most widespread and popular online shopping platforms, as well as manage inventory and organize warehouse services.
When considering quotes for warehouse costs, it’s important to understand your business needs and storage requirements. – Is your cargo shipped FCL or LCL? Do your items need to be stored under specialized conditions? Will you require value-added services? What about inventory management?
As we’ve learned, not all warehouse types are the same! – Remember; the more your cargo is manipulated, the greater the warehouse cost will be. So make sure that amazing warehouse quote you received actually covers everything you need!
Here at TDS Logistics, we operate our own warehouse facilities, complete with 24/7 security systems, specialist storage areas, and an extensive range of value-added and fulfillment services.
If you’d like to discover more about how TDS can provide the exact solutions to your warehousing needs, contact our helpful and knowledgeable team, today.