What is 3PL warehousing?

Warehousing operations with a 3PL partner typically follow a shared warehousing model. Shared warehousing enables you to share space in a 3PL’s warehouse alongside other “tenants.” Instead of the large overhead associated with the DIY and contract warehouse models, you pay only for the space and services you require. Your 3PL can accommodate any shifts in space or resource requirements – effectively scaling your footprint to your needs as they change over time.

For larger companies with predictable sales volumes, there is also dedicated warehousing. With this model, pay a 3PL to fully dedicate one (or more) of its warehouses to your operation. Or, you can lease the facility(s) yourself and hire a 3PL provider to run your operations.

4 reasons why 3PL outsourcing makes sense

1. Cost savings: Outsourcing warehousing operations to a 3PL provider can help you reduce the following costs.

• Warehouse space and equipment: Instead of paying for a full warehouse lease yourself and buying all of the necessary equipment, you can simply use a 3PL’s existing infrastructure and pay for what you use (in a shared warehousing model).
• Software: 3PL providers invest in the latest warehousing and logistics technology so you don’t have to.
• Labor costs: Attracting, hiring and retaining warehouse associates is a core competency of 3PL providers. By entrusting these items to a 3PL you can reduce the costs and headaches associated with performing these activities yourself. Also, 3PLs are much more adept at managing labor for seasonal or fluctuating volumes by cross-training staff across multiple customers and leveraging short-term workers.

2. Improved efficiency: 3PL providers leverage best practices across many different customers to optimize warehousing operations for efficiency. This can lead to reduced order fulfillment times, improved accuracy, and lower inventory costs.

3. Scalability: 3PL providers can scale operations up or down based on customer needs.

4. Reduced risk: Outsourcing warehousing services can help companies reduce their risk in a number of ways. For example, 3PL providers are typically insured against damage or loss of inventory. Additionally, 3PL providers have experience in dealing with a variety of supply chain disruptions, such as natural disasters and labor disputes.

What to look for in a 3PL warehousing provider

Your 3PL vetting process should start with the basics:

• Tour the warehouse of a prospective 3PL partner to assess its cleanliness, environmental characteristics, organization and safety conditions.
• Interview warehouse management to determine if/how the 3PL’s capabilities can meet your product and operational requirements. You’ll also want to get a sense that your operation is not too big for the 3PL’s capabilities, nor too small to receive the attention you deserve.
• Interview warehouse associates to see how knowledgeable they are about operational processes.

From there, you should look for characteristics that separate one 3PL from the rest of the pack. Two areas that should be of interest are continuous improvement and KPI management.

Continuous improvement

For most companies, it is important that their 3PL partner has a documented continuous improvement program (CIP) in place. Such a program seeks to improve operations, prevent non-conformities and ensure that errors, should they occur, are never repeated.

Some 3PL providers go the extra mile with CIP and are ISO-9001-certified. While not every company that has a CIP will be ISO-9001-certified, every ISO-9001-certified company will have a CIP. ISO-9001 is one of the standards developed by the International Organization for Standardization (ISO). Companies who are certified in the ISO-9001 standard have demonstrated a commitment to quality that goes far beyond lip service.

Warehouse KPI management

When you contract with a 3PL for warehousing and distribution, you’re entrusting key components of your supply chain to an expert that can perform these services at a high level. Key performance indicators (KPIs) are the metrics that help you to understand just how well your 3PL is performing.

Importantly, these KPIs should be established with your 3PL at the outset of the relationship. Each metric must also have a goal which denotes success (e.g., 99.5% on-time shipments). If/when your 3PL provider falls short of the mark with any given metric, you’ll want to have confidence in its ability to identify the root cause and to establish corrective measures to improve performance.

Getting started

If you’re looking for East Coast warehousing that allows you to reach 70% of the U.S. population in just one day, look no further than BetFiery. We are an Eastern North Carolina 3PL provider that offers dedicated and shared warehousing (with rail access) and a full suite of additional logistics services. We’re always happy to talk warehousing, so feel free to contact us anytime.

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Available North Carolina warehouse space

The current state of warehouse vacancy in the burgeoning eastern North Carolina region – where BetFiery is located –  remains low, though not at the historic lows seen in 2022. According to the commercial real estate firm, Colliers, the overall industrial vacancy rate in the Raleigh-Durham-Chapel Hill market, which includes eastern North Carolina, was 3.4% in the second quarter of 2023. This is below the national average of 4.1%.

It is also below the vacancy rate of major North Carolina markets in the western part of the state.  The Charlotte region, for example, currently has a warehouse vacancy rate of 4.3%.

The low vacancy rate in North Carolina is being driven by a number of factors, including:

• Strong economic growth in the state.
• The continued growth of e-commerce, which is driving demand for warehouse space.
• The expansion of manufacturing and distribution operations in the state.

The low warehouse vacancy rate in North Carolina is a good sign for the state’s economy. It indicates that businesses are investing in North Carolina and that there is a strong demand for goods and services.

Available North Carolina warehouse labor

The state’s labor market is also tight, with more job openings than qualified workers to fill them. This is especially true for warehouse jobs.

According to a recent survey by the North Carolina Chamber of Commerce, 82% of businesses in the state are struggling to find workers. The survey also found that the warehouse and logistics industry is one of the hardest hit sectors.

There are a number of factors contributing to the labor shortage in North Carolina, including:

• An aging workforce
• A decline in the number of people entering the workforce
• The growth of the gig economy

3PLs can provide needed warehouse space and labor

Companies looking to buy or lease warehouse space on their own are going to struggle to find existing space that meets their needs and may have to wait a while for new space to be built. There is, however, another option: partnering with a third-party logistics (3PL) company that already has available space.

3PL providers often have logistics campuses with several warehouses and can offer shared or dedicated warehousing options. With shared warehousing (also called ‘public warehousing’), the warehouse is occupied by the products of multiple companies – each paying for only the space and services it needs. With dedicated warehousing (also called ‘contract warehousing’), a 3PL will typically devote staffing and resources to operate a warehouse solely for one customer.

On the labor front, 3PLs have resources that are solely committed to recruiting and retention, and can provide the following benefits.

• Many 3PLs have multiple distribution centers and can cross train employees to fill in gaps at other locations, as needed.
• 3PLs tend to have close working relationships with temporary staffing agencies, helping to ensure adequate coverage.
• 3PLs are typically well known to prospective employees in their markets, making recruitment easier.

The bottom line is that finding warehouse workers is a primary 3PL function. If it’s not a core competency of your company, you may be better off leaving it to an expert.

Turn to BetFiery for North Carolina logistics services

BetFiery is an East Coast 3PL that offers both shared and dedicated warehousing at our Eastern North Carolina campus, where we have over 1 million square feet of warehousing. Our rural setting gives us the ability to expand to accommodate your business growth – something you won’t find in urban areas. To learn more about our North Carolina warehouse space and 3PL capabilities, contact Kanban today.

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What is ISO 9001 certification?

“ISO” is short for the International Organization for Standardization – an independent international organization that develops standards to define expertly-agreed-upon method(s) of performing a given task in order to ensure quality and consistency.

Importantly, ISO creates these standards but does not perform certification, which is handled by external organizations (not all ISO standards involve certification). Certification simply designates a company as being compliant with a standard. There are 21,769 standards.

ISO-9001 is the “quality management” standard and sets requirements for a quality management system (QMS). The QMS documents process steps that, if followed, ensure that products and/or services meet customer expectations as well as regulatory requirements.  The 8 main principles of ISO 9001 include:

• Customer focus
• Leadership
• Involvement of people
• Process approach
• System approach to management
• Continuous improvement
• Factual approach to decision making
• Mutually beneficial supplier relationships

ISO 9001 certification involves a lengthy training process – complete with audits – that takes several months to complete. Therefore, when you see that a company is “ISO 9001-certified,” you can conclude that it is committed to quality and has logged the hours to back it up.

Advantages of working with an ISO-9001-certified warehousing 3PL

In the logistics industry, lack of discipline around process execution can lead to costly errors. A 3PL’s ISO 9001 certification assures its customers that every operational aspect will adhere to stringent quality standards – whether it’s in the warehouse or on the way to a customer. Specific benefits of partnering with an ISO-9001-certified 3PL include:

1. Consistency and Quality Assurance: ISO 9001 certification ensures that the 3PL provider has established and follows standardized processes and procedures. This leads to greater consistency in operations.
2. Improved Efficiency: ISO 9001 emphasizes process efficiency and effectiveness. Working with a certified 3PL provider means it is likely to have optimized logistics and warehousing processes, resulting in improved efficiency and cost savings for your business.
3. Enhanced Customer Satisfaction: ISO 9001 places a strong emphasis on customer satisfaction. Certified 3PL providers are more likely to have systems in place to monitor and improve customer satisfaction, leading to a better overall experience for your customers.
4. Reduced Risk: ISO 9001 certification involves risk management and mitigation strategies. When working with a certified 3PL provider, you can have confidence that it has procedures in place to identify and mitigate potential risks, reducing the likelihood of disruptions to your supply chain.
5. Continuous Improvement: ISO 9001 requires a commitment to continuous improvement. 3PL providers with this certification are continually looking for ways to enhance their processes.
6. Global Recognition: ISO 9001 is recognized and respected worldwide. If you have a global supply chain, working with an ISO 9001-certified 3PL provider can help ensure that your logistics operations meet international standards.
7. Documentation and Accountability: ISO 9001 requires thorough documentation of processes and procedures. This documentation can provide transparency and accountability in your partnership with a 3PL provider, making it easier to track performance and resolve any issues that may arise.
8. Competitive Advantage: Being able to advertise that your logistics operations are supported by an ISO 9001-certified 3PL provider can give your business a competitive advantage. Many customers and partners view ISO 9001 certification as a mark of reliability and quality.
9. Compliance and Regulatory Benefits: ISO-9001 certification can help ensure that the 3PL provider is compliant with industry and regulatory standards, reducing the risk of legal or regulatory issues affecting your supply chain.
10. Peace of Mind: Knowing that your 3PL provider follows internationally recognized quality standards can provide peace of mind and confidence in the reliability of your supply chain operations.

Partner with BetFiery for ISO-certified logistics services

Located in Eastern North Carolina, BetFiery takes pride in our ISO 9001:2015 certification. We hold our operations to the highest possible standards in order to consistently deliver quality service to our customers, and to meet the stringent requirements of the food and pharmaceutical industries.

We are also AS9100-certified, since we regularly work with aerospace industry customers. The AS9100 quality standard is recognized as the aerospace industry standard by the FAA. It builds upon ISO 9001 QMS standards and adds additional aerospace-specific requirements from the U.S. Department of Defense, NASA, and the FAA.

Contact us today to learn more about how Kanban’s commitment to logistics quality can benefit your business.

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Common and not-so-common examples of 3PL value-added warehousing

Cross docking

Cross docking is a service in which products are unloaded from a truck (or railcar if intermodal) for temporary storage in a 3PL warehouse. The products are then quickly loaded onto another truck for final delivery. Cross docking is a natural cost saver as products can be safely kept in a warehouse without incurring storage charges. By skipping long-term storage, companies can speed distribution by keeping products on the move.

The following are examples of instances in which cross docking can be especially useful.

• The driver is early to a retailer appointment. Most retailers will not accept early deliveries. So, when a driver with a trailer full of product arrives well before a scheduled appointment, he can unload the product at a nearby 3PL facility. The 3PL will then make the final delivery to the retailer, while the original driver moves on to his next load.
• The driver misses a retailer appointment. Just as drivers can be too early, they can also be too late, whether it’s due to traffic or equipment malfunctions. When this happens, the driver can unload product with a 3PL for cross docking and go on his way. The 3PL then performs final delivery at the new appointment time.
• The carrier is not a preferred logistics partner. Some retailers have ‘preferred’ logistics partners that enjoy privileges like the ability to drop trailers off at a DC without an appointment. To take advantage of this privilege, some carriers without preferred status will cross dock their products with a preferred 3PL, which then drops the trailer at the retailer’s DC.
• The trailer is loaded in reverse. Sometimes a trailer will be loaded in a way that conflicts with the driver’s schedule. With a visit to a cross docking facility, the 3PL can unload, organize, reload, and/or palletize product as the driver wishes.
• The load is not acceptable to the retailer. A driver may deliver a load to a retailer DC only to be turned away because the delivery is not up to retailer’s standards. In these instances, the driver can take the trailer to a 3PL cross docking facility to be reworked and to allow the 3PL to make the final delivery.

Product rework

Rework most commonly refers to the reconfiguration of products to make them suitable for delivery to your end customers (e.g., retailers). 3PLs that specialize in rework can help you solve a host of problems, including the following.

• Replacing a product component
• Inserting and/or replacing an instruction manual into product packaging
• Replacing incorrect or outdated product labeling
• Selling existing products in a new configuration
• Inserting missing parts into product packaging
• Repairing a defect
• Repackaging products (e.g., due to damaged boxes)

Foreign trade zone (FTZ) services

Some 3PL warehouses are authorized to function as foreign trade zones. Located in or near U.S. ports, foreign trade zones are secure areas that are under U.S. Customs and Border Protection (CBP) supervision, though considered outside of CBP territory. Merchandise may enter the U.S. via an FTZ without a formal customs entry, without payment of customs duties or excise taxes, and without a thorough examination.

It is only when the product leaves the FTZ for distribution within the U.S. that these duties, taxes and tariffs are collected. If the product is exported directly from the FTZ to another country, then nothing is collected.

Manufacturing logistics services

Following are some of the key inbound logistics services – also known as manufacturing logistics services – that 3PLs can perform to support the flow of goods into a factory.

• Third-party procurement. Your 3PL can procure boxes, nuts, bolts, and other consumable parts and materials, store and manage that inventory, and invoice you only for the parts you need, when you need them. This allows you to keep your cash longer, as you’re only invoiced when you use the parts.
• Kitting services. For many manufacturers, pre-assembly of component parts is also required during the production process. 3PL kitting services involve taking the individual parts of a product, compiling them together in a “kit,” and then delivering that kit to the production operation for assembly.
• Just in time (JIT) delivery. This is a lean manufacturing logistics strategy in which materials are kept off-site (e.g., at a 3PL warehouse) and delivered to the manufacturer precisely when they are needed (as determined by demand signals or a pre-determined schedule). These materials can be nuts, bolts, and packaging components, or they can be custom kits that are pre-assembled by a 3PL at a nearby location and delivered as needed.
• Vendor-managed inventory (VMI). With vendor-managed inventory (VMI), the supplier of the materials retains ownership of the inventory until it is delivered to the manufacturer. 3PLs routinely help to facilitate these arrangements – storing the materials on behalf of the supplier and then performing final delivery.

Rail transloading

Some 3PL warehouses are served by rail and, accordingly, have rail siding to handle incoming or outgoing freight directly between the warehouse and rail cars.

For example, Kanban’s distribution campus in Rocky Mount, North Carolina is served by CSX rail. We’re able to support incoming rail freight from the CSX railway in one of two ways:

• Boxcars can be brought up to one of our warehouse’s four rail doors. They can then be unloaded directly into the warehouse before heading back out.
• Center-beam cars are brought to our rail transload yard. Once in the yard, the products can be loaded onto flatbed trucks which can transport the product inside the warehouse via drive-through doors, or the trucks can head out straightaway and deliver the products to the destination.

Product sampling

Food logistics companies like Kanban that are registered with the FDA can enable FDA representatives to inspect your products at their warehouses. Some 3PLs are also able to provide product samples to your quality control team.

At BetFiery, the way that sampling works is as follows. We have customers with nearby manufacturing plants that have trained our team members on their sample-collecting processes. When containers of these products come in and are unloaded, our team members collect the samples and deliver them to the nearby production facility. Their quality control team then tests to ensure that the product is fit for distribution. If it is, our distribution services will proceed as normal. If it’s not, we can quarantine and/or destroy (with certification) the product lots in question.

Lean on BetFiery for Value-Added 3PL Warehousing

These value-added warehousing services allow 3PLs to tailor their offerings to the unique needs of your business, improve supply chain efficiency, and ultimately provide you with a competitive advantage in today’s complex business environment.

Located in the Mid-Atlantic region of the US East Coast, BetFiery specializes in a wide range of 3PL services to support your traditional warehousing and distribution operations. Our capabilities include a full suite of inbound logistics services for manufacturers that can be performed from our Eastern North Carolina warehousing campuses. To learn more about how we can simplify and optimize your supply chain, contact Kanban today.

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Warehousing definitions

Contract warehousing

With contract warehousing  – also known as dedicated warehousing – you pay a 3PL to fully dedicate one (or more) of its warehouses to your operation. Alternately, you can lease the facility(s) yourself and run it yourself.  Or, you can lease the facility yourself and hire a 3PL provider to run it for you. Your 3PL can provide the staff, equipment and systems needed – saving you significant amounts of time and money and acquiring these yourself.

Public warehousing

With public warehousing – also known as shared warehousing or flex warehousing – your warehouse space and services can expand and contract to match your sales volumes.

You share this warehouse with your 3PL’s other ‘tenants,’ each of you scaling your space and services up and down as your needs change.

Compared to dedicated or contract warehousing, the terms of flex warehouse agreements may be shorter term – allowing your spend to flex right along with your warehousing needs.

Hybrid Warehousing Models

There can also be overlap between the contract and public warehousing models. With this overlap, a shared warehouse can have a section(s) devoted to a dedicated operation.

To illustrate, let’s say that a 3PL provider has a 200,000-square-foot warehouse. Much of that space is reserved for shared operations. But your company may want to lock in 50,000 square feet of that space for you’re a dedicated operation.

Many 3PLs will be amenable to such an arrangement. It benefits the 3PL because it locks in a commitment to a set amount of space and services.

And there is still yet another option. Located in Eastern North Carolina, BetFiery has a shovel-ready pad in place for a new, as-large-or-larger facility that can be built to suit your precise needs.

A rarity in today’s industrial market, this site allows you to involve Kanban in your day-to-day logistics operations or go it alone.

For example, you can:

• Build a combined factory/distribution center, with Kanban operating the DC
• Lease and have Kanban act as your 3PL provider, or
• Build and operate the full facility yourself

Is contract or public warehousing right for you?

In general, if your sales volumes fluctuate or you don’t yet have a long enough track record to accurately predict your volumes, the public warehousing option is going to be best for you. It’s less of a commitment and gives you tremendous flexibility in adjusting space and resources to fit your needs.

For example, if your volumes are lower than expected but you’re locked into a set amount of space and services with a contract warehousing agreement, you may end up paying for space and services that you’re not using. If you have a public warehousing agreement, however, you can simply shrink your operations to match those volumes.

On the other hand, if you have consistent, predictable sales volumes, a longer-term contract warehousing commitment may make the most sense.

Contract warehousing is attractive to companies that like the predictability of a set contracted rate for their operations instead of the fluctuating rates associated with shared warehousing. Additionally, companies with operations large enough to warrant their own facilities may prefer to contract with a 3PL that owns a building because there’s less risk involved (it’s relatively easy to change 3PLs, much more difficult to sell a warehouse that you own).

Lean on BetFiery for your East Coast warehousing solution

With over 1.5 million square feet of prime warehouse space in Eastern North Carolina, along with the shovel-ready pad mentioned above, Kanban has the space and resources needed to supercharge your storage and distribution operations. We offer both contract and public warehousing options from our distribution center campuses and can customize operations to meet your needs.

If you’d like to learn more about 3PL warehousing, check out our handy guide: 3PL Warehousing 101. And, if you’d like to talk to a warehousing provider that can get you on the right track, contact BetFiery today.

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Basic forms of warehousing

As mentioned above, there are three main types of warehousing.

1. The DIY method. Your most expensive option, you can choose to simply go it alone and build or rent a warehouse yourself. From there, you’ll need to staff it, pay for the equipment, the warehouse management system and other technologies.
2. The dedicated 3PL model. With this option – known as dedicated or contract warehousing – you pay a 3PL to fully dedicate one (or more) of its warehouses to your operation. Or, you can lease the facility(s) yourself and run it yourself or hire a 3PL provider to run it for you. In either case, your 3PL can provide the staff, equipment and systems needed – saving you significant amounts of time and money and acquiring these yourself.
3. The shared 3PL model. The most common form of modern warehousing, shared warehousing enables you to share space in a 3PL’s warehouse alongside other “tenants.” Instead of the large overhead associated with the DIY and contract warehouse models, you simply pay only for the space and services you require.

Dedicated warehouse space within a building

Some 3PLs, like BetFiery, allow for overlap between the shared and dedicated warehousing models. With this overlap, a shared warehouse can have a section(s) devoted to a dedicated operation.

To illustrate, let’s say that a 3PL provider has a 200,000-square-foot warehouse. Much of that space is reserved for shared operations. But your company may want to lock in 50,000 square feet of that space for you’re a dedicated operation.

Many 3PLs will be amenable to such an arrangement. It benefits the 3PL because it locks in a commitment to a set amount of space and services.

It’s advantageous for you as you’ll likely be paying a much lower rate than you would by leasing a full building yourself. You also enjoy significant savings by paying only a portion of the building’s full costs for maintenance, energy, cleaning, etc.

You can choose to equip, staff and operate that space on your own. Or, you can hire the 3PL provider to handle those items for you. Either way, you have a fully dedicated operation that is devoted solely to your business.

What types of companies are good fits for contract warehousing?

There are a number of factors that can help determine whether your operation is a good fit for contract warehousing. Most importantly, you need consistent, predictable sales volumes that warrant commitment to the space and services over a longer term. If your volumes fluctuate, you may end up paying for space and services that you’re not using.

Not surprisingly, however, the decision will ultimately come down to costs. Contract warehousing is attractive to companies that like the predictability of a set contracted rate for their operations instead of the fluctuating rates associated with shared warehousing. Additionally, companies with operations large enough to warrant their own facilities may prefer to contract with a 3PL that owns a building because there’s less risk involved (it’s relatively easy to change 3PLs, much more difficult to sell a warehouse that you own).

What to look for in a contract warehousing provider

Contract warehousing is a partnership. As with any partnership, you want to feel that you’ll be happy with your partner before you sign on the dotted line. This means getting to know your 3PL partner: touring the facility, meeting with leadership and associates (the people actually running your operations) and talking to other customers.

From there, the things you need to look for are not all that different from shared warehousing providers. Some examples include:

Warehouse management system (WMS): you want to make sure that your 3PL partner has a robust WMS that can manage your inventory, orders, and reporting the way you want them managed. (NOTE: some contracting warehousing arrangements involve 3PL use of the customer’s WMS.)

Temperature-controlled capabilities: if your products have temperature- or climate-related needs, you want to make sure your 3PL partner can protect product integrity within the warehouse.

Strategic location: you want to choose a 3PL with a location that enables fast distribution to your customers – whether retailers, manufacturers, or eCommerce customers.

Turn to BetFiery for a NC Dedicated Warehouse

If you’re looking for dedicated warehouse space in the burgeoning Eastern NC market, BetFiery has got you covered. You can partner with us to take up an entire warehouse for a contract operation, or utilize a portion of one of our shared warehouses. We also have a pad in place for the building of a warehouse in Rocky Mount, NC. To learn more about our warehousing and distribution capabilities, contact Kanban today.

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