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What is a reasonable cost model for providing a 3PL warehouse management service (Survey Result 1)

Written by: Jon Hansen

Article Overview: What is a reasonable cost model for providing a 3PL warehouse management service and how would it best be structured to hit the key points with both the logostics and finance executives?

What is a reasonable cost model for providing a 3PL warehouse management service (Survey Result 1)

Steven, Senior Supply Chain Manager, Miami, U.S.

I used to run this sort of operation at DHL. It was computer products and power supplies. There are several ways to price it - you can price management, overhead, storage and handling per pallet (which captures the labor) or you can roll it all into a per pallet charge. Per pallet will be higher because the 3PL can't guarantee a volume so they will have to make up overhead in less shipments.

Basically, go step by step through the process - receiving will take X amount of time per pallet. Stagging will take X amount of time per pallet. Picking will take X amount of time. Etc. List all of your overhead, manager salary, insurance, etc. Determine your storage space.

Then its a simple calculation to get a monthly cost breakdown for each item. The 3PL will probably provide the fixed charge, storage charge with a minimum, and a handling charge.

My advice is to keep it simple and detail everything that is included in each charge. When the scope of work changes, they will need the detail to determine what is included and what is not included for the new scope.

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Article Tags: 3pl, amount of time, computer products, cost breakdown, dhl, insurance, overhead storage, pallet, salary insurance, scope of work, several ways, storage charge, storage space, supply chain manager



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