Beverage Warehousing – Storage with Service

Beverage Warehousing, means storing others’ beverages in a warehouse, but it’s more than that.  I like to think of it as “storage with service” because it’s a combination of storage and ancillary services.  There are many ways to charge for beverage warehousing, but they all involve charges for the storage, and charges for the services.  In this article, I will go over the most common ways that warehouses charge for beverage warehousing.  While I speak in generalities about the pricing and charges, I have based my article on our company’s actual pricing.  We are located right in the middle of Northern California so this article reflects at least one example of the costs of Beverage Warehousing in Northern California.

Storage Charges

Generally the warehoused beverages are palletized and the pallets of goods are stored either on racks, or on the floor of the warehouse.  If stacked on the floor, some types of beverages can be stacked two or three pallets high.  Others cannot be stacked on top of each other without causing damage to the lower layers.  Generally this depends on the type of container the individual beverages comes in – plastic, aluminum, glass, or some other material, and the type of material the case of beverages comes in.  Some cases of beverages are packed in solid cardboard boxes as shown in this photo of Boylan Brand Sodas stored in our warehouse,

and other cases of beverages are packed in cardboard trays with shrink-wrapped plastic holding it all together as show in this photo of River City Brand Sodas:

Often warehouses charge a flat monthly rate for storage of palletized beverages.  If they can be stacked on top of each other, the rates may be cheaper.  For example, it might be $16 per month to store a pallet of beverages that cannot be double stacked.

Single-Stacked Warehoused Beverages

It might be $8 per pallet for double-stacked pallets, and $5.33 per month for triple-stacked pallets. It doesn’t take up any more floor space in the warehouse to store two or three pallets on top of each other, so warehouses often offer a discount for pallets of beverages that can be double or triple-stacked.  With racking, a warehouse may just charge one flat price per pallet of beverages per month.

Double-Stacked Warehoused Beverages

For beverages stored for less than a full month, the warehouse will likely prorate the storage charges.

Service Charges

Before getting into how each service is charged for, it’s helpful to have a list of the possible services that can be provided for beverage warehousing.  Here’s a list of a few of them:

  • Handling Charges
  • Repalletizing Charges
  • Hourly and Overtime Charges.
  • Administrative Charges

Each of these warehousing services involves some sort of handling which brings us to our sub-section on handling charges.

Handling Charges

In and Out Charges

When a warehousing customer requests a withdrawal of stored beverages, the warehouse charges fees for handling the beverages.  Handling charges may include a flat fee for removing a pallet of beverages out of a truck and storing it in the warehouse, or for pulling a pallet of beverages out of the warehouse and loading it onto a truck.  An example might be $4.00 per pallet in and $4.00 per pallet out, or a flat $8.00 that covers both the “In” and the “Out”.

Mixed Pallet Charges

Warehouses also charge for pulling various cases of beverages from the warehouse and putting them together on a mixed pallet.  This may be called a mixed-pallet charge.  This could be, for example, $20.00.  Other warehouses charge a per-item fee for all the cases that are brought together to make the mixed pallet.  If this per-item fee is say, $0.30 per item, the total per charge per pallet of goods will depend on how many cases of beverages have been brought together on the pallet.

Repalletizing Charges

Sometimes beverages arrive on a pallet that has been damaged in transit to a point where it’s unsafe to store the beverages on that pallet. In other cases, the beverages will arrive on a standard pallet but need to be shipped out on a special pallet such as a CHEP Brand pallet such as the one shown in this photo:

When it is necessary to repalletize beverages, warehouses generally charge a repalletizing fee of say $25.00.

Hourly and Overtime Charges

Sometimes the warehouse must perform unexpected work for the customer that falls outside of the normal categories of handling, repalletizing.  Warehouses generally charge an hourly rate for this type of work.  They may also charge overtime if this work must occur outside of regular business hours.  This may occur, for example, if a trucking company is only available to deliver or pick-up the product outside of normal business hours.

Administrative Charges

The warehousing company takes full responsibility for the beverages stored in its warehouse and must keep accurate count of all the warehoused beverages under its care.  The quantities of beverages stored change constantly as the customer ships beverages in or sells them and ships them out.  The warehousing company must accurately track all ins and outs, labor time, etc. to be able to report out inventories on hand to the customer and send appropriate billing, thus it may charge a fee for the administration it takes to account for all this.

The Benefits of Beverage Warehousing

After reading this, and learning about all the potential costs involved, you may be wondering if it’s a good idea for you to warehouse your beverages with a warehousing company, or to store them yourself.  Here are a few quick bullets about why you may want to consider warehousing your beverages even though there are some costs involved:

  • Save money on shipping, especially if your co-packer is located in an out of the way place
  • Store all your beverages in one centralized location (such as right in the middle of Northern California)
  • Have your beverages handled, packed, and shipped safely by an expert in the beverage industry
  • Track your beverage inventory accurately without any work on your part
  • Save time and money by warehousing with a beverage distributor who also brings your product to market
  • Avoid renting a warehouse that is larger than you actually need

Clearly there’s enough content here on the benefits of beverage warehousing to merit another blog post, so watch for it in a few weeks!  Thanks for reading!