The Ultimate Guide to Warehouse and Distribution Services

Warehousing and distribution are essential parts of many supply chains, but finding the right services can be overwhelming — especially with so many different options and providers out there. 

Whether you’re looking for short-term storage solutions, shipping temperature-sensitive goods, or navigating complex multimodal logistic needs like transloading, the sheer number of choices can make it difficult to know where to start.

Each type of service has its own set of potential benefits, challenges, and costs, which can further complicate the path forward for even the most experienced shippers.

If you’ve ever felt stuck trying to make sense of what warehousing solution best fits your business, you’re not alone. Anderson Trucking Service (ATS) has been helping businesses navigate their logistics needs for decades, and we’re here to help you do the same.

This comprehensive guide will help you cut through the confusion and better understand the variety of warehousing and distribution service offerings available to you. 

You’ll come away feeling confident in your ability to navigate these choices and find a logistics partner that will meet both your current needs and your goals for growth. Let’s get started! 

• What does warehousing and distribution mean?
• What does warehousing cost?
• Why do shippers choose to warehouse?
• Warehousing and distribution services

What Does Warehousing and Distribution Mean?

“Warehousing and distribution” is a catch-all phrase that encompasses short- and long-term storage, inventory management, value-add services, order fulfillment, and distribution to end customers. 

A warehousing provider owns or leases facilities where products are securely stored, and typically integrates some degree of technology to provide customers with inventory visibility. 

Traditional warehousing providers that focus primarily on storage and inventory management might partner with specialized drayage companies or transportation providers to handle the container transport portion of the supply chain.

Providers that are part of a full-service logistics company may also offer transportation solutions related to warehousing and distribution, such as transloading, drayage, and final-mile transportation. 

These transportation services require specialized equipment and experience in managing port and rail yard operations, which not all warehousing providers have. 

Warehousing and distribution services may also be offered by third-party logistics providers (3PLs) with comprehensive supply chain capabilities. 3PLs aim to offer end-to-end solutions, which can include transportation, brokerage, freight forwarding, and other services that complement warehousing. 

Because no two providers are exactly alike, it’s important that shippers ask any prospective warehousing partner to clarify what specific services it offers and whether they’ll need to contract a separate provider to coordinate container transportation. 

What Does Warehousing Cost?

The cost of storing products in a warehouse can vary widely, as various elements influence these costs. 

Inventory type and volume, space requirements, turnover rate, and even the warehouse’s location will factor into a customer’s final costs per month. 

WarehousingAndFulfillment.com has conducted a Warehousing Services Costs, Pricing, Rates and Fees Survey annually since 2017. The results of its May 2024 survey were the basis of the following estimate of current pallet storage pricing: 

As with most services in the transportation industry, your mileage will vary (pun intended) depending on your specific freight type, storage and distribution needs, and external factors like the state of the market or your location. 

Why Do Shippers Choose to Warehouse? 

It’s true that, on its face, warehousing is a simple solution to a simple problem: A shipper needs a place to store freight at a transition point in its supply chain or as a risk-mitigation strategy, and  a warehouse provides a secure, dry space to do so. 

But if you look a little deeper, you’ll find that many shippers choose to warehouse because of the flexibility it adds to their supply chains. 

Warehousing and distribution services allow shippers to store products closer to their markets, better manage stock levels, and handle seasonal demand fluctuations. 

Retailers, e-commerce companies, and manufacturers who need to store products before they reach the market or end customer all benefit from the efficiencies and agility warehousing and distribution services afford them. 

A strategic storage location near major ports and rail yards within a shipper’s markets can lead to reduced transportation costs and transit times, and can allow shippers to respond more quickly to changes in the market. 

And that’s just one example of why businesses seek out warehousing and distribution services — we’ll get into many more below.

Warehousing and Distribution Services

Now that you know there’s more to warehousing and distribution than basic handling and storage, let’s take a look at some of the most in-demand services within this area of logistics management. 

These services can be vital to any business that deals in containerized freight, ocean cargo, or rail freight in their supply chains. Some shippers may need support in just one of these service areas; some might need full-service logistics solutions. 

Wherever your business falls on that spectrum of needs, these warehousing and distribution service explainers should help you understand the key terms and processes — and better equip you to seek out a quality logistics partnership. 

• Breakbulk and project cargo
• Cross-docking and transloading
• Drayage
• Container stripping and stuffing
• Storage and distribution
• Final mile (Over-the-road transportation)

Breakbulk and Project Cargo

The term breakbulk refers to goods that are transported individually rather than in containers due to being oversized, heavy, and/or awkwardly-shaped. 

Common breakbulk shipments include machinery, vehicles, and construction materials. Breakbulk is typically loaded and unloaded piece by piece.

While breakbulk items are typically standard goods like cars, project cargo refers to the transportation of specialized, high-value pieces of equipment for projects like infrastructure, energy, or industrial developments. 

Like breakbulk freight, project freight typically includes heavy lift or oversized items, but with the additional requirement of special handling, planning, and/or logistics solutions to move them from origin to destination. 

Both services involve specialized equipment like cranes, forklifts, or other heavy-lifting equipment — which typically makes them more expensive than other types of freight handling, such as cross-docking or transloading. 

Cross-docking and Transloading

Both cross-docking and transloading are freight handling strategies that involve the direct transfer of goods from inbound to outbound transportation with minimal or no storage time. 

While these two services may seem quite similar, there are some key differences. 

Cross-docking focuses on speed — namely, unloading goods from inbound transport directly onto an outbound truck. This strategy is ideal for shipments that are time-sensitive or contain high-turnover products, and is a common solution for cross-border shipping from the U.S. into Mexico.

Transloading refers to the transferring of goods from one mode of transportation to another. Typically, inbound cargo will arrive via rail or container ship and will be transferred to trucks, or vice versa. 

Unlike cross-docking, transloading often includes additional handling steps between loading and unloading. This may include de-palletization and re-palletization, sorting, bulk handling, transferring into containers, crates, or other packaging forms, or short-term storage until the consignee is ready. 

These “touches” are often performed to meet the requirements of the next mode of transportation or the delivery location, whether for space economy, meeting specific handling needs, or preparing for specialized transport conditions.

Cross-docking and transloading services can help shippers reduce storage costs, accelerate delivery times, and improve supply chain efficiency. 

Business models that can benefit from these services include retailers with fast-moving consumer goods, e-commerce companies needing quick turnarounds, and manufacturers aiming to streamline their distribution networks, among many others. 

Drayage

Drayage is a crucial link in intermodal shipping logistics, one commonly relied upon by shippers with international supply chains, including importers and exporters. 

It refers to the process of transporting shipping containers between ports, rail yards, and warehouses — a process that, if not executed smoothly and with skill, can cause unwelcome supply chain hiccups. 

Once an inbound shipment arrives, there is a specific window of time during which the containers must be unloaded from the inbound ship or train. Missing this window can result in demurrage fees. 

Shipping containers are loaded onto a unique trailer called a container chassis for their journey to their next destination; the containers must then be returned to port or rail yard within a specific time period. 

Again, missing this window can be costly; detention fees are charged when shippers keep a shipping container outside of a port or terminal for longer than their free time allowance.

It’s important to note that truck drivers need a special certification (a Transportation Worker Identification Card, or TWIC card) to enter ports. 

Without a valid TWIC card, drivers may be turned away or experience long delays while waiting for an authorized escort. 

While not a universally-required certification, carriers may also need to hold a Uniform Intermodal Interchange and Facilities Access Agreement (UIIA) certification. 

UIIA certification was created to simplify the port entry process for carriers by eliminating the need for state- and port-specific safety inspections.

With so many potential pitfalls (read: additional costs) lurking behind unloading windows and driver certifications, working with an experienced drayage partner is vital for shippers that wish to avoid fees and keep goods flowing efficiently. 

Container Stripping and Stuffing

In the transportation industry, container stripping refers to the process of unloading cargo from a shipping container, while stuffing is the reverse — loading goods into containers. 

During container stripping and stuffing, cargo is often sorted, consolidated, or de-consolidated according to its final destination(s), type of goods, transportation requirements, or customer orders. 

This is especially critical for shippers that regularly ship containers that hold products bound for multiple retailers or distribution centers, but virtually any business that moves cargo via shipping container will require some degree of stripping and/or stuffing support. 

These services are essential for shippers managing import and export operations, as cargo must be efficiently packed to maximize space, balance weight, and ultimately ensure safe transport and accurate contents. 

Storage and Distribution

By now it should be clear that warehouse storage and distribution services are incredibly versatile. 

Competitive providers can work with prospective customers to tailor the right combination of services and terms for their specific needs. This can help shippers save money by optimizing inventory management, reducing overstock, and minimizing associated storage costs. 

Short-term storage is ideal for businesses with fluctuating inventory levels, quick-turnover goods, or seasonal items that only require temporary space. This is a flexible option that can help prevent overpaying for unused capacity and allow shippers to adapt quickly to market demands.

Long-term storage, on the other hand, provides a stable, secure environment for goods that must be stored over extended periods, such as surplus inventory, slower-moving items, or products in the off-season. 

Long-term storage solutions can be advantageous for shippers looking to stockpile inventory in anticipation of seasonal shifts in demand or to safeguard against supply chain interruptions. 

In addition to the different term options, there are a variety of types of warehouses available to shippers, including: 

• Bonded warehouses: Securely store imported goods until they are exported or the duties are paid, making them useful for international shippers awaiting or delaying  customs clearance or payment.
  
  
• Climate-controlled warehouses: Designed to maintain specific humidity and temperature levels suitable for goods that could be damaged by environmental fluctuations, such as electronics, artwork, and certain luxury items.
  
  
• Contract warehouses: Provides warehousing services based on long-term contracts, allowing businesses to outsource logistics operations while maintaining control over inventory and distribution.
  
  
• Distribution centers: Focus on rapidly receiving, processing, and shipping large volumes of products to retailers, wholesalers, and other downstream locations.
  
  
• Fulfillment centers: Similar to distribution centers, but focus on picking, packing, and shipping individual customer orders, typically on behalf of e-commerce companies.
  
  
• Private warehouses: Usually owned and maintained by large, lucrative companies with high-volume inventory needs.
  
  
• Public warehouses: Offer shared storage space, which typically allows for lower pricing and greater flexibility for shippers.
  
  
• Temperature-controlled warehouses: Designed to store perishable goods that must remain within certain temperature thresholds (refrigeration, frozen, room temp, etc.) such as food, pharmaceuticals, and some chemicals.

Value-added services can help warehousing customers streamline order fulfillment, minimize handling time, and increase end-user satisfaction. Here’s a list of some of the most common value-added warehousing services:

• Custom Packaging Solutions: Providing specialized packaging services like shrink-wrapping, crating, or palletizing to protect products on the next leg of their journey.
  
  
• Kitting and Assembly: Combining multiple products into a single package or assembling components into finished goods before shipping.
  
  
• Labeling and Repackaging: Adding labels or branding elements, or repackaging goods to meet specific requirements.
  
  
• Pick and Pack Services: Selecting items from stored inventory and packing them for shipment based on customer orders.
  
  
• Quality Control and Inspection: Inspecting goods for damage, defects, or quality assurance checks before distribution. This is especially important for shippers of fragile or perishable goods.
  
  
• Reverse Logistics and Returns Management: Efficiently handling returns, refurbishments, and/or restocking of goods.
  
  
• Seasonal Storage and Fulfillment: Temporary storage and tailored fulfillment solutions offered specifically to help businesses manage seasonal fluctuations in demand.

Final Mile (Over-the-Road Transportation)

“Final mile” is a transportation industry term that refers to the last leg of delivery from a distribution center to the end customer — one that involves over-the-road (OTR) transportation, aka trucking. 

This service is critical for ensuring timely and accurate delivery, particularly for businesses in the e-commerce, retail, and food and beverage sectors.

Shippers that need reliable, customer-focused delivery options — such as those delivering large appliances, furniture, or perishables — also frequently choose plussed-up final mile services to enhance customer satisfaction and ensure that products arrive safely at their destination.

Not all warehousing providers offer OTR services, as they require access to trucks; those that do are typically part of a full-service logistics company or 3PL. 

If you are working with a company that specializes strictly in warehousing, you will most likely need to contract another provider to handle your final mile services. 

However, it’s always worth it to ask your warehousing and distribution providers about their final mile capabilities — they may have preferred partners they regularly work with, and you may receive a small discount for being their customer. 

Prepare to Find Your Best-Fit Warehousing Partner

It’s no wonder that many shippers feel overwhelmed by warehousing services. With such a wide range of services and value-adds available, understanding each service’s value and potential benefits is key to making the best choice for your business.

But understanding these services (and how they could fill gaps in your supply chain or create efficiencies) is only half of the equation. The other critical element is choosing the right provider. 

Your best-fit warehousing and distribution partner will be an experienced provider that offers the right combination of location, services, and expertise to meet your operational goals — whether that means reducing storage costs, improving delivery times, or managing complex inventory needs.

By understanding the depth and breadth of services available under the warehousing and distribution umbrella, you’ll be better equipped to find those elusive perfect-fit partners. 

Now that you have a better grasp on warehousing services, you may be feeling ready to request some quotes. But before you do, check out our article on Requesting a Warehousing Quote: What Shippers Need to Know.

Reading it will help ensure you have all the necessary information on hand before you reach out to your first-choice providers, setting you up for a more successful partnership.