Understanding warehouse equipment costs is crucial for businesses and freight forwarders to optimise their logistics operations. This post will delve into the various aspects that influence these costs and explore ways to manage them effectively.
Starting with the different kinds of warehouse pallet storage rack that are accessible, such as typical dry storage, refrigerated storage, electrical storage, automotive.
This knowledge is essential in selecting the most suitable racking type for your logistic warehouse needs.
What are the several factors affecting storage racks costs today? For example, size and type of warehouse, distance and route of picking system, special inventory needs, installation cost,and etc.
We will also break down cost components such as racking types,racking layout, route design, picking module and convyor equipment to provide a comprehensive understanding of how each element contributes to overall expenses.
Lastly but importantly, we will offer practical strategies on reducing logistic storage costs through consolidation.
1. Types of Warehouse Pallet Storage Racks
Warehouse Pallet Storage Racks is the common storage equipment in warehouse storage, but how to choose the high efficiency solution from different types available ? Here is types of storage racks to help you make informed decisions when it comes to storage your products. In this section, we will briefly explain the 4 common types of 3PL Warehousing: standard dry containers, refrigerated containers, open top containers, and flat rack containers.
For a messy warehouse optimization, as well as more details and examples see our helpful ‘Quick Optimization Guide’.
a. Selective Pallet Racking
Selective pallet racks are the workhorses of the warehouse industry. They are the most common and widely used type of pallet rack you’ll find in facilities around the globe. Typically available suit for all main pallet sizes—North America(1200*800mm), Australia (1165 mm x 1165 mm), Europen(1000 mm x 1200 mm), Aisa (1100 mm x 1100 mm), these pallets can hold a variety of items, from electronics to clothing and furniture.
| Standard | Size |
| North America | 1200*800mm |
| Australia | 1165 mm x 1165 mm |
| Europen | 1000 mm x 1200 mm |
| Aisa | 1100 mm x 1100 mm |
One of the biggest advantages of selective pallet racks is their configuration flexibility. They feature vertical frames and horizontal beams, allowing for easy access to each pallet. This setup makes it simple for warehouse staff to pick and place items without hassle. Whether you’re running a small operation or a large distribution center, the ability to access each pallet individually is a huge plus, facilitating efficient inventory management and quick turnaround times.
b. Drive-In/Drive-Through Pallet Racks
For 3PL warehouses looking to maximize storage space, drive-in and drive-through pallet racks offer an effective solution. These racks are designed to let forklifts drive directly into the rack system, making them ideal for high-density storage.
The difference between the two is quite straightforward. Drive-in racks allow access from one side only, while drive-through racks provide access from both sides. This feature is particularly beneficial for storing large quantities of similar products(Standard Amazon Cartons, standard furniture, heavy quantities of materials like steel, titanium, and stones) as it compacts the storage density and reduces the amount of aisle space needed.
However, while these racks allow for efficient storage, they do require careful management, especially regarding FIFO (First In, First Out) inventory practices. This way, older stock is accessed first, reducing the risk of obsolescence or spoilage—especially important for perishable goods.
c. Push Back Racks
Push back racks are a fantastic option for those who prioritize high-density storage but still want easy access to their products. These racks are cleverly designed with inclined rails that allow pallets to slide back as new pallets are added to the front. When staff need to retrieve a pallet, the pallets behind it automatically push forward, ensuring a smooth flow of goods.
This system is particularly suited for distributor warehouses,3PL warehouse that have limited space yet need to store varying products efficiently. With push back racks, you can optimize your storage without sacrificing accessibility. Plus, they support FIFO inventory management, which is crucial for sectors dealing with perishable items or fast-moving consumer goods, ensuring older items are sold first.
d. Pallet Live Racks & Carton Flow Racks
Pallet live racks represent a dynamic and innovative approach to warehouse storage. This system utilizes gravity to facilitate inventory movement, featuring sloped lanes equipped with rollers. As pallets are loaded from the back, they automatically move forward toward the picking area, allowing easy access as items are removed.
Ideal for businesses with seasonal fluctuations in inventory or a large number of cartons, pallet live racks enhance picking efficiency significantly. They inherently support FIFO inventory management, making them a go-to choice for warehouses with fast-moving products. By integrating this system, Logistic business can streamline their operations, and increase the shipping container storage speed.
2. Factors Affecting Logistic Storage Racking Costs
One of the most significant considerations is the type of racking system you choose. Different systems come with varying costs and benefits. For example, selective racking is the most commonly used and economical option, allowing easy access to individual pallets.
However, if you need a solution that maximizes your storage capacity, drive-in racking might be worth the investment. It allows you to store pallets in a dense manner, reducing the need for wide aisles, but it may require specialized equipment for handling.
Alternatively, push-back racking enhances storage efficiency by allowing pallets to slide backward into the storage lane, but this option comes at a higher initial investment.
Lastly, pallet flow racking uses gravity to automatically move pallets down the racking system, which greatly enhances speed and accessibility but often requires significant upfront costs.
Material and Construction Quality
The materials and construction quality of your racking system also play a crucial role in overall expenses. For instance, steel racks, while typically more expensive than those made from other materials, offer unparalleled durability and safety, which can lead to lower long-term maintenance costs. Additionally, opting for added coatings or finishes, like powder coating for corrosion resistance, can increase your initial costs but ultimately protect your investment for years to come.
Height and Configuration of Racks
Another factor to consider is the height and configuration of the racks. Taller racks can undoubtedly maximize vertical space and increase storage capacity, yet they often come with higher costs due to advanced engineering requirements. Moreover, if you’re looking for a more customized design, such as angled or tiered racks, be prepared for increased expenses, as these configurations typically require additional materials and more complex assembly.
Installation and Maintenance
The costs of installation and ongoing maintenance can’t be overlooked. If you opt to hire professionals for installation, this can represent a considerable portion of your budget—especially for complex systems requiring expertise. Even after installation, regular maintenance is necessary to ensure safety and compliance with industry standards, contributing to long-term operational costs.
Location and Accessibility
The geographical location of your storage facility is another essential factor that can influence racking costs. Local labor costs can vary significantly, impacting installation and maintenance expenses. Additionally, if your facility has an irregular layout or requires special site preparation, the initial setup costs can rise accordingly.
Regulatory Compliance and Safety Standards
Finally, compliance with local safety regulations and standards is paramount. Depending on where your facility is located, you may face specific requirements for safety inspections and certifications, leading to additional costs over time. Furthermore, modifications to meet load capacity requirements can increase both design and material expenses, so it’s vital to factor these into your budget.
3. Ways to Reduce Waste of Warehouse Space
Optimize Warehouse Layout
- Design Efficient Flow: A well-planned layout enhances the movement of goods, reducing unnecessary travel time and energy use. Implementing warehouse management systems (WMS) can help analyze and optimize space utilization.
- Strategic Item Placement: Position frequently accessed items closer to shipping areas to minimize handling time and streamline operations.
Implement Recycling Programs
- Establish Recycling Stations: Set up convenient recycling receptacles throughout the warehouse to encourage proper waste disposal and recycling practices.
- Train Staff: Educate employees on recycling processes and the importance of reducing waste to foster a culture of sustainability.
Optimize Packaging and Shipping Practices
- Use Appropriate Packaging: Select packaging that fits products well to eliminate excess materials and wasted space. This includes using biodegradable or recyclable materials.
- Consolidate Shipments: Combine multiple orders into single shipments when possible to reduce packaging waste and improve shipping efficiency.
Improve Inventory Management
- Avoid Excess Inventory: Implement just-in-time (JIT) inventory practices to prevent overproduction and reduce the storage space needed for unsold goods. This also minimizes holding costs.
- Conduct Regular Audits: Use cycle counting and ABC analysis to maintain accurate inventory records and prioritize high-value items.
Foster a Culture of Waste Reduction
- Engage Employees: Encourage staff participation in waste reduction initiatives through incentives and recognition programs. This can include contests for the best waste-reduction ideas.
- Promote Awareness: Conduct training sessions to inform employees about sustainable practices and the impact of waste reduction on the environment and the company’s bottom line.
Leverage Technology
- Utilize Advanced Software: Implement WMS or ERP systems to track inventory and optimize storage solutions effectively. This technology can help identify underutilized areas and improve overall efficiency.
- Adopt RFID Technology: Use radio frequency identification (RFID) to enhance inventory accuracy and visibility, reducing the likelihood of overstocking.
Regularly Review Processes
Streamline Workflows: Analyze and refine processes to eliminate unnecessary steps that contribute to waste, ensuring that operations are as efficient as possible.
Conduct Waste Audits: Regularly assess operations to identify inefficiencies and areas for improvement. This ongoing evaluation can lead to continuous enhancements in waste management practices.
Frequently Asked Questions Pallet Storage Racks Costs
Can You Install Pallet Racking Yourself?
While it’s technically possible to install pallet racking by yourself, it’s not generally recommended unless you have the appropriate technical knowledge and experience. Pallet racking installation involves understanding specific weight distributions, safety regulations, and engineering principles. For these reasons, it’s often best to have it installed by professionals. They ensure that the racking is safely and correctly set up, adhering to all relevant safety standards and building codes.
Why Every Shipping Warehouse Needs a Pallet Racking System?
The benefit including: Efficient Use of Space, Various Rack Options for easily storage, Reduced Merchandise Damage, Growth Potential, Streamlined Inventory Management, Cost-Effectiveness.
What Is The Cost of Logistic Picking With Pallet Racking?
Picking Costs with Pallet Racking
1st Pick – one SKU: €1.20 – €1.70 per pick
2nd Pick – same SKU: €0.10 – €0.50 per pick
These costs cover the labor and equipment required for picking items from pallet racking. The higher end of the range (€1.70) represents a single pick of one SKU, while the lower end (€0.10) is for picking additional units of the same SKU during the same order.
Factors that can impact picking costs with pallet racking include:
Labor rates: Higher labor costs in certain regions or for specialized workers will increase picking costs.
Picking method: Manual picking from floor level is less expensive than using order pickers to access higher levels.
Picking technology: Advanced picking systems like voice picking or pick-to-light can increase accuracy but also raise costs.
Picking efficiency: Well-designed warehouse layouts and optimized storage locations can improve picking productivity and lower costs.
In addition to direct picking costs, there are other warehousing expenses related to pallet racking:
Receiving: €3.50 – €6.00 per pallet
Storage: €14.58 per pallet per month
Packaging materials: €0.20 – €0.50 per order
Conclusion
With pallet racks, your logistic inventory management becomes more efficient, as items are organized and easily accessible. This leads to quicker order fulfillment and better visibility of stock levels, reducing the risk of overstocking or stockouts. In short, investing in warehouse storage pallet racks can significantly enhance your operations and make better use of your space. Let me know if you need further adjustments!
