The Rising Cost of Warehousing

The Rising Cost of Warehousing

In today’s volatile economic landscape with rapidly increasing energy bills, the rising cost of warehousing is beginning to take its toll on companies across the country. There is a growing need for cost-effective, sustainable storage solutions. Profitability is becoming harder to achieve when you are faced with daily operating costs and rising warehouse bills.

The real price of the energy cap 

At the time of writing, the wholesale price of gas has risen by 404 per cent in the past 12 months. Despite Prime Minister, Liz Truss freezing the energy bills for consumers, there isn’t a price cap for businesses. Although Truss confirmed “an equivalent guarantee for businesses for six months”, many companies are still facing unprecedented costs for energy.

Typically, energy bills amount to around a quarter of warehousing overhead costs, but in recent months this has increased dramatically. Many warehousing businesses are questioning their very survival, as it’s becoming harder to break even let alone make a profit.

Lighting and power costs

Lighting is one of the largest costs and can be between 65 – 95 per cent of a warehouse energy bill. Although modern industrial buildings are designed to increase the amount of natural light, many warehouses are older buildings and most still require lighting at night.

Switching to LED lightbulbs can also have a big impact when it comes to saving costs and energy.

The increased use of robotics when it comes to automating manual processes helps to ensure staff do not have to work around the clock, reducing the need for lighting. But despite modern machinery being designed to use less power, batteries still require electricity. Although solar panels are increasingly being fitted on industrial roofing systems, there’s still a long way to go before the warehousing sector becomes self-sustainable.

Building and property prices

The cost of buying or leasing a warehouse is on the rise too. According to Savills, “the average cost of warehousing property increased by 8.4 per cent between June 2021 and June 2002 across 52 global markets”. These rising costs are exacerbating a sector which is already under pressure with increasing energy and other utility bills.

The question is: do you need such a big warehouse after all? Instead of spending money on storing items in a warehouse, a Just In Time service ensures all your parts are delivered to your field service engineers. Your technicians get what they need, when they need it, and we can even deliver parts directly to their vehicles before they start their working day.

We know how costly it can be to run a warehouse, which is why GenRev’s Just In Time distribution is the answer for many businesses currently wasting money on expensive storage. And with our latest Parts Storage, Pick and Pack service, your business can benefit from speedy access to small consumables.

GenRev is your strategic partner for streamlining your overheads and increasing your efficiencies. Why not reduce the need for warehousing storage by using our Just In Time distribution services? Contact us to find out more.

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