Warehousing Costs

Warehousing costs are levied by the warehouse owners and are an unavoidable expense for the companies that use the space. The owners should be conversant with the applicable charges. In years to come, users will find it increasingly mandatory to implement nearline storage, to reduce their data warehousing costs and make data analysis more efficient and effective.

As the warehouses grow in number and provide more services, determining the cost of the company gets more difficult. Basic costs need to be understood, even if there is a third party involved. There are generally three types of expenses involved and they should be understood, while calculating the costs.

The first is the General Overhead Cost. This consists of the cost of space per cubic square foot. It may further include rent or mortgage, property taxes and utilities. General Overhead Costs also comprise of the cost of racks, tables and other equipment used in staging areas. They include the cost of various security devices, as well as the cost of material handling equipment, depreciation and document destruction services, if necessary and the cost of repairs or shrinkage.

The second type of cost included is the delivery cost. This cost includes freight charges from outside vendors. These costs may also include the cost of gas, the insurance and the cost of the delivery trucks. These rates are subject to the time involved in negotiating rates and to select vendors, as well as the time to prepare shipping documents.

The third type of cost is the labor cost. This involves the receiving of incoming goods, including entering the relevant data into the computer and assigning warehouse positions. It includes the time taken to move goods from shipping to pallet positions. It is necessary for warehouse owners to be informed about the existing warehousing costs.