There are as many types of warehousing as there are varying business requirements. As the needs of companies have changed, warehouses have diversified to meet different demands, from unique product fulfilment workflows to industry and safety-compliant storage of food products, chemicals and medicines.
In this guide, we explore the different warehousing types you can choose from to help you find the right solution for your needs. Alternatively, you can contact our expert team at LTS Global Solutions for a personalised recommendation.
Different Types of Warehousing
Fulfilment Centres
A fulfilment centre, or distribution centre, is a common type of warehouse for e-commerce businesses, combining all necessary logistics processes into one, dedicated hub. This includes the storage of all products, order picking, processing and packing. Returns and exchanges can also be included in fulfilment centres, offering full oversight of every part of the process in one location.
Companies can opt to handle fulfilment in-house, or they can choose to work with a trusted third-party logistics provider. LTS is a highly experienced partner for end-to-end supply chain services, including fulfilment centres. We are registered under the HMRC’s Fulfilment House Due Diligence Scheme to ensure full regulatory compliance.
Public Warehouses
Public warehouses are owned by government entities and are hired out to private companies or individuals at an inexpensive cost. A public warehouse is well-suited to new businesses or startup companies due to its affordability and is often the first stepping-stone companies take before moving on to more advanced solutions.
These warehouses are generally very pared-back and offer a simple place for storage, making them an ideal seasonal or shorter-term inventory solution. They will not have the additional features or functionalities you may see in other warehouses, which makes public warehouses unsuitable for businesses that have strict compliance or regulatory requirements.
Private Warehouses
Private warehouses are also known as proprietary warehouses. They are owned directly by a company as part of its private property, offering increased control over building facilities and ensuring full ownership of the space. Private warehouses are expensive, as they require the purchase of the property in addition to ongoing maintenance and running costs.
Businesses may choose a private warehouse to save on rental costs and to have a permanent location for their operations. Some companies may incorporate offices into private warehouses, particularly in wholesaling, distribution and manufacturing, bringing their whole operation into one central hub.
Cold Storage Warehouses
Cold storage warehouses are temperature-controlled facilities that allow businesses to adhere to necessary compliance and regulatory standards for their products. For example, perishable items like food products or pharmaceuticals may require cold storage to ensure they remain fresh before they are shipped in refrigerated vans or lorries.
A cold storage area can be a part of a warehouse or encompass an entire building as a specialised unit. These units feature complex cooling systems to maintain a suitable temperature for the relevant products. Ambient storage is a similar warehousing system that helps to preserve products within a monitored temperature between 15˚ and 25˚.
Smart Warehouses
Smart warehouses utilise a range of different technologies to improve and enhance the management of inventory. Automation is increasingly common in warehousing systems, with large-scale e-commerce companies making use of anything from advanced robotics to innovative AI tools for instantaneous order fulfilment.
Businesses can implement smart solutions in many different areas of warehousing, such as implementing a warehouse management system that integrates a range of processes. Various warehouse automations exist to make logistics and processes easier, from barcode scanning systems to automated storage and retrieval systems to improve efficiency and speed of output.
Cooperative Warehouses
A cooperative warehouse is a space that is shared between multiple businesses, typically within the same industry or market. The warehouse is part-owned by each business and is a common solution for businesses that require specific functionality from a warehouse but lack the funds to purchase one on their own.
Some common industries where cooperative warehouses are used include agriculture and wine production. These products have similar requirements for storage and temperature, making a combined solution for multiple inventories an ideal choice. Warehouse owners can also offer cooperative tenancies as a way to save money while still maintaining their own stock.
Bonded Warehouses
Bonded warehouses are specifically designated for imported goods entering the country. Items are stored safely until customs duties can be completed and any duties are paid. Businesses that store these imported items receive a bond from the relevant government body for the rental of space, helping to offset any loss in profit that may occur between purchase and customs clearance.
Importers may invest in a bonded warehouse as an ideal solution for the safe storage of items that would otherwise be restricted. These warehouses tend to be well-equipped to meet the storage requirements for a wide range of products. Duties do not need to be paid on items in bonded warehouses until they are shipped out.
Consolidation Warehouses
A consolidation warehouse is a specific type of logistics facility that takes existing orders and combines them into bulk shipping packages for efficiency. By combining orders into a single shipment, companies can save on costs and potentially reduce their environmental impact. For example, multiple pallets to be delivered to the same area can be combined at a consolidation warehouse onto a single lorry.
Consolidating orders was already relatively common within B2B companies, but this process is now becoming standard for many logistics processes in e-commerce. Consolidation warehouses are often situated near distribution centres to group orders together ahead of shipping to their final destination or a local distribution centre.
Bulk Storage Warehouses
Bulk storage warehouses are used primarily to hold large amounts of a single product, or similar products, in one space. The focus of these warehouses is maximising storage density in the smallest cubic space possible. Products are typically stacked in pallets, silos, tanks or other sizeable containers rather than being kept on shelves.
Industries where products include industrial supplies, raw materials, liquids and bulk food items will often use a bulk storage warehouse to safely store large amounts of products. Orders are usually in large quantities, requiring specific, specialised heavy-duty equipment to retrieve items and send them outbound to customers, distribution centres or production lines.
Government Warehouses
Similar to a public warehouse, a government warehouse is owned by a government entity. These types of warehouses are frequently preferred by businesses with expensive inventories but low budgets, as they have a higher level of security. These warehouses are available at affordable rates and provide accessibility to warehousing for newer or smaller businesses.
While there are numerous benefits to government warehouses, they are also notoriously challenging to be approved for. A significant amount of paperwork and an in-depth application process is required to rent government warehouses. It’s also worth noting that if a business fails to pay its rent, the government can then sell the in-situ inventory to cover the rent through Commercial Rent Arrears Recovery (CRAR).
On-Demand Warehouses
On-demand warehousing is a variation on cooperative warehouses, where the owner of the warehouse can temporarily rent out space to another company to meet their demand requirements. This setup is increasingly common in the e-commerce sector, where fluctuation in demand around holidays can lead to a temporary increase in warehousing requirements.
The benefit of on-demand is that it is not a permanent solution, allowing businesses to adapt to changes in stock requirements. For warehouse owners, this means they can rent out space only when they don’t need it, and not take on any warehouse tenants when they need the extra room themselves.
Contract Warehouse
Contract warehousing is an arrangement where an external provider offers businesses, typically in e-commerce, access to a warehousing space as part of a contract. This contract frequently includes fulfilling orders and managing operations from a pre-existing warehouse space that is owned by the company offering its services.
The exact specification of a contract warehouse varies per company. Some may offer a full service to businesses to cover all order fulfilment requirements, while others will simply rent the space and facilities needed for the business to complete fulfilment in-house themselves.
Cross-Docking and Transloading Warehouses
Cross-docking and transloading are two different methods companies can employ to improve shipping efficiency. Warehouses with transload services store products during shipping in the transitional period between two modes of transport – for example, from truck to ship – for a small amount of time before the items are containerised or packed and can continue on their journey.
Cross-docking is the shorter of the two processes, where goods from a vehicle are transferred to a holding space, such as a short-term warehouse, before they are placed on a secondary vehicle. Cross-docking has extremely short turnaround times, and nothing is stored on-site for long – if at all, in cases where the secondary vehicle is ready for immediate transfer.
Considerations when Choosing the Right Warehouse
Budget and Cost
Cost is an important factor to consider when choosing the correct type of warehousing for your business needs. For example, buying a warehouse has a significant up-front cost compared to renting. It’s also worth considering the other costs involved in logistics and fulfilment, such as equipment hire or purchase and labour requirements.
Environmental Impact and Sustainability
Certain types of warehousing are more sustainable than others. For example, choosing a cooperative warehouse has less of an environmental impact than using an entire warehouse unit. Consolidated warehouses can also help you lower your carbon footprint by combining shipping into larger groups of packages or pallets, reducing the number of vehicles on the road.
Strategic Location
Proximity is of key importance with warehousing. Poor placement can cause delays in incoming and outgoing shipments, resulting in missed delivery targets. If you are choosing to manage fulfilment in-house, you will likely also want to place your warehouse close to your existing workplace, so you have better oversight. LTS is ideally situated for easy access to motorways, providing complete fulfilment services to make running your business as smooth and efficient as possible.
Up-to-Date Software
An up-to-date system for the management of both stock and fulfilment processes is an essential consideration when looking at warehouse options. Out-of-date technology may not be compatible with modern processes, including newer generation RFID scanning and similar stock management practices. If you opt for a smart warehouse, it’s worth exploring the technology they offer before you make your decision.
Security Measures
The safe storage of your stock and a trustworthy fulfilment process with minimal loss are vital for the success of any business. LTS offers safe storage solutions for a wide range of businesses, including ambient storage for the safe storage of goods with strict temperature requirements. We are Brand Reputation Compliance Global Standards (BRCGS) accredited, meeting their high standards for the quality of our service.
Adequate Storage Space
Stock can fluctuate throughout the year due to seasonal changes, increases in demand and other relevant factors. A warehouse that offers ample space to meet your requirements during busy periods is essential to prevent overflow. Working with a company like LTS Global Solutions offers an ideal way to secure the storage space you need, with the option to scale as your business grows.
Warehousing at LTS Global Solutions
We examined all key types of warehouses in our guide, covering everything you need to know to make an informed choice for your warehousing.
If you are looking for a reliable logistics partner, LTS offers safe, reliable and flexible warehousing storage solutions to suit your business requirements. Our services include both pallet storage and food warehousing alongside many other options. For more information, get in touch with our team directly today.
