What Are 3PL Storage Fees?

3PL storage fees can be confusing for business owners and importers. Here's a quick guide to understanding these fees so you can make informed decisions about your shipments.

Why Do 3PLs Charge Storage Fees?

3PL storage fees are the costs charged by third party logistics (3PL) providers for storing goods in their warehouses. This storage space is allocated to you and managed by your 3PL provider, so they need to be compensated for the value of that space.

The storage fees vary depending on the specific market and the services and capabilities offered by your logistics provider. They can range from storage fees charged per unit, storage fees that are based on the space used (such as cubic feet or pallet), storage fees for hazardous materials, or storage fees for long-term storage.

The amount you pay for storage also depends on the length of time your goods are stored. Generally, storage fees will increase the longer your goods remain in storage. This is due to the fact that storage space is a limited resource, and 3PLs need to be able to generate revenue from the space they have allocated for your shipments.

When it comes to storage fees, taking into consideration all of these factors can help you make informed decisions about which logistics provider you want to use and how much storage space you need.

How Are Storage Fees Calculated?

Storage fees can be calculated a few different ways. It is important for your business to understand how storage fees may impact your bottom line.

Location Type

storage fees will vary depending on the type of storage location you use and the size of the footprint you occupy. Many warehouse offer an array of different size bins, shelves, and palletized locations at fixed prices. These prices may also differ from products that require special handling like cold storage, oversized pallets, and forward pick locations

Volume (Cubic)

Storage fees can be calculated based on the total storage space used, such as cubic feet. You are charged only for the space your items occupy in your 3PL providers warehouse.

Fixed Price

Storage fees can also be based on a predetermined amount of storage space you have been allocated by your 3PL provider. Many times larger importers and distributers will know how much space and capacity they will need at various times of the year. Some 3PLs will designate a set amount of square footage or pallet locations at a fixed price to ensure space is available. There may be penalties if you go over this allotment so it is important to understand your agreement with your provider.

When Is Storage Calculated?

Storage fees may be calculated daily, weekly, monthly or any other period of time based on the agreement with your 3PL. This is important when considering pricing as you may have to compare rates across different It is important to understand how storage fees are charged in order to budget for storage costs throughout the year.

Finally, storage fees may be calculated differently depending on your 3PL provider and how they determine how much space was utilized during your billing cycle. Some warehouses charge based on utilization at the beginning or end of a period, some use the average utilization, while others will charge for the maximum utilization any time during the billing period.

Conclusion:

Storage fees are a necessary part of utilizing the services of a third-party logistics provider and can vary depending on storage location type, storage volume, and storage fee calculations. Understanding how storage fees work is important for ensuring that you make informed decisions about your shipments and budget for storage costs throughout the year. Knowing exactly what you're paying for can help you make the most of your storage fees and ensure that you get the best value for your money.

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