What’s public warehousing?
“Well, we don’t store product for just one company, we store it for a multitude of companies,” said Roy Drake, who owns the Dakota Warehouse in Rapid City.
“In other words, multiple businesses utilize this space. It’s called third–party logistics public warehousing,” he said.
Drake put his public business in the old Nash Finch private warehouse in Rapid City. A private warehouse is owned by a big company like Nash Finch or single manufacturers.
The “public” means almost anyone can lease space in Drake’s facility. It’s not owned and used only by a single organization.
Public warehouses offer and charge for shipping options that let clients customize for their specific needs. Such options can include:
- “Pick and Pack”
- Contract Packaging
- Inventory Tracking
- Dedicated Workforce
- Physical Inventory Counts
- Flexible Volume
Companies Outsource Warehouse Needs
Many companies use public warehousing on a temporary basis, then shift to it permanently. They typically find outsourcing their warehouse needs makes more sense than to build their own storage and distribution systems.
Drake said it’s reminiscent to how even smaller businesses each had an in-house accountant 20 or 30 years ago. But now most outsource their accounting because they don’t use such services full-time.
“We take 20 different clients and use five forklifts for those 20 clients,” Drake said. “So instead of each one having to buy a forklift, it’s spread across all of them.”
Dakota Warehouse has good freight rates because they’re spread across its 20 customers. Volume drives down such costs and the resulting savings are passed on to customers.
“The same is true of our warehouse management system, the space and the freight we provide for them,” he said.
What Sets Dakota Warehouse Apart?
“Our commitment to detail and to our customers,” Drake said. “One of the things we say is if we can’t save our customers dollars, we have no reason doing business with them.”
Location can play a large part in public warehousing. If your plant is far from your customers, you may seek a closer public warehouse. Your goods are then delivered much faster and in sync with the just-in-time supply chain needs of your customers.
You may require extra warehouse space and services for things like:
- Seasonal Inventory
- Warehouse Re-Organization
- Warehouse Damage
- Unanticipated Growth
Drake visits different sites to see what they use for warehousing. He said most of the time when he walks into a warehouse, you can’t move around.
“My most recent was a school district. They had a large walk-in freezer out back,” he said. “They opened the door and you couldn’t walk in because it was full of stuff.”
Drake applied his hard-earned skills.
“I took the food, spread it out and catalogued it. I put everything else into a useable format,” he said. “Now we can just walk in, pick the product, put it on the palette, send it down to the schools and they’ve got their product.”
The other option is to access Dakota Warehouse’s system and have total product visibility. They can create an order for it and tell the warehouse staff how many of which items are needed.
“We palletize them and ship the products to them or their customers and they have it,” he said. “So why use us? Because of the efficiencies we drive into our customers businesses.”
Public warehouses operators like Drake can be very flexible about available volume. They provide access on short notice to additional space, trained staff and suitable technology.
The amount of space you access may grow, but you only ever pay for the space you actually use.
A Variety of Customers
Dakota Warehouse works with a variety of customers including Tonka, a protein bar company located in Kyle, S.D. They use Dakota Warehouse to send their product out to Amazon, REI and other distribution centers, as well as for fulfillment to their retail customers.
Another Dakota customer is Sweet Baby Wraps. Moms wear the wraps around them like a sling. Drake said the wraps include a ring sling, buckle sling and snap sling.
“Essentially, she did it all in her garage. But the business is growing, so now we do her fulfillment. She completes her order, it comes to our system, we fulfill it and it goes out by USPS, Fed Ex or UPS.”
Companies that sell large quantities of their products can benefit from public warehouses like Drake’s. While some operators only offer traditional dry warehousing, others provide ways to store goods based on environmental needs:
- Cold Storage
- Humidity Control
Drake had another customer called Global Worming. The product was dried meal worms bought in China. The client’s business was located in his Denver house, but Dakota Warehouse served as his fulfillment center and warehouse.
“We brought in truckloads of products and then he would sell it on eBay or Amazon, and we would fulfill his orders right out of here,” he said.
“Our warehouse services eliminate any need for you to have ‘brick and mortar.’”