Evaluate between private warehouse and 3rd party logistics services providers

To evaluate between private warehouse and 3rd party logistics services providers

Private Warehouse only performs as the storage for the goods but involve in the shipping of goods. Moreover, the start up cost is very high. However, the company do not have to pay for storage fees which mean that the companies such as manufacturing companies or chain stores, that handle large volume of a regular basis and one of their resulting economics of scales comes from integrating the warehousing function with purchasing and distribution to retail outlets, are suitable for it as in long term it will reduce a lot of cost.With more control, there is greater flexibility of designing and operating the warehouse to suit the needs of its customers and the characteristics of the products. This means that companies who have specialized handling for its products will not find public warehousing viable. In addition, the warehouse can also be modified through expansion or renovation to facilitate product changes, which is not possible on a public warehouse.

Third party logistics service providers are the service provider integrates more than one function within the overall supply chain but the service can be as narrow or broad as needed. In essence, 3PL providers sell three commodities: labour, space, and time. As for the company that do not need to store a lot of good can rely on them as they not only store the goods but also pack the goods and then deliver to the customer. However, sometimes when the goods are damaged, it would be difficult to blame on them because some 3PLs are not responsible for the damage of goods. So the company have made it clear before make a contract with them. Moreover, different customer service will cost the company different charges, i.e. the more services, the higher the charge. Furthermore, we cannot say that the warehouse of 3pls, which is also called public warehouse, can store all of our goods because there will be space limitation or the warehouse manager believes the goods can damage the other goods.