When it’s time to select a new warehouse location the list of boxes to check can seem endless. Whether it is in a new market or in the same area, the complexity that goes into site selection can be overwhelming. The easy way out is to choose your final location based on price, but there are several other factors to consider outside of the price per square foot.
We’ve all heard it time and time again, it’s all about location. But when analyzing the details of a warehouse location, it’s also important to keep in mind things like the availability of skilled talent and the cost of labor, technology, government regulations, tax/economic incentives, safety, and more.
Skilled talent and Cost of Labor
The cost of general labor in your warehouse is important, but it’s also imperative to consider the availability of specialized logistics and supply chain management skills and talent in the area. This will become especially important if you need value added services in your warehouse location.
Technical capacity continues to become a primary concern in the warehousing space. Ensuring the facility meets the growing demands in your information services space is essential to a competitive operation. Make sure the building has adequate space for servers and network hardware, is easily accessible for cabling runs, is free of obstructions that degrade wireless signals, and is located in an area with adequate broadband connectivity.
Depending on what type of product you intend to store, you may need special zoning permits for hazardous material, or you may not be permitted to warehouse your product in certain areas. The age of the building and its condition may become a factor if upgrades are needed to ensure the building meets codes set by the city. Be sure to document any existing damage to the building that exists before you move in. This will prevent you from being held liable following your occupation of the building. Additionally, you should also look into any available economic incentives for opening a new warehouse in the area and creating new jobs.
The safety of your employees, guests, and product is of utmost importance. If the warehouse you are looking at is not in the best neighborhood, what precautions is the landlord taking to ensure everyone, and everything, is safe and secure at the warehouse? Additional upgrades to safety may be able to be negotiated in the lease agreement, or you may have to pay for those upgrades and those should be considered in the overall warehouse cost and investment.
Proximity to highways
You want your product to be able to hit the road quickly once it leaves the warehouse, so proximity is important. It’s also a good idea to get a feel for the congestion of local roads on the way to the highways. Are those roads easily traveled by a semi-truck carrying your product? Are there multiple routes that lead to the highway in the event of construction or an accident? As on-time deliveries are one of the biggest concerns in the logistics industry, you do not want your product delayed right out of the gate.
Additional Items to review
In a perfect world, we would be able to predict the future, but since we can’t, it’s always a good idea to plan for the unexpected. When reviewing warehouse sites, you’ll need to have outlined which party is responsible for unforeseen repairs or upgrades. Furthermore, amenities such as energy efficient lighting, the latest in fire prevention, plenty of parking for your employees and trailers, and clearance for trucks all play a role in weighing the benefits of a warehouse location, outside of the price per square foot.
As you can see, there are plenty of features about a warehouse location that should be weighed before settling on price alone. After all, isn’t your goal to get the product to your customer as soon as they need it in the most efficient way? Selecting a warehouse location based on price may prove to be more expensive after all the little things are accounted for.