How 3PL's Should be Maximizing Their Warehouse Capacity


As warehouse capacity across the U.S. is shrinking rapidly, with under four percent vacancy nationwide, the lack of space left many 3PLs wondering how they can continue to grow. As a result, how a logistics provider utilizes the warehouse space they have is crucial.

Warehouse utilization is measured by calculating the space where there is product being stored divided by the total square footage of the building. This number is an important consideration in determining the warehouse requirements for a customer and is often underestimated. No warehouse uses every part of the warehouse for storage as some is inevitably used for items like columns, setbacks, rows between products, staging and loading areas, and maintenance areas. While no warehouse reaches 100 percent utilization, a well-run warehouse maximizes its potential by following these practices.

Identify underutilized space

A good place to start is examining all areas of the warehouse and identifying additional space that isn't being used. There is often space in a warehouse that the operator may have never considered using for storage, but can be used when necessary. Some examples include unused loading dock space, repackaging areas, or a mezzanine area. Turning an area such as this into additional pallet locations can increase a 3PL's capacity without decreasing its efficiency.

Evaluate your racking height

Nearly every 3PL warehouse has some form of racking in which they utilize. While standard pallet sizes are 48" x 40", the height of pallets tends to vary significantly. Changing each racking height by just a few inches can provide the opportunity to create a new level of rack space, get rid of empty air space, and potentially increase utilization significantly.

Reduce aisle width

A typical aisle width is around 10 feet, but can often be shortened to create additional rows of storage. When starting a new operation, calculate the minimum width required without disrupting efficiency. It is also important to consider your equipment and if it is capable of working safely in narrower aisles. 

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Topics: Customer Service Lessons, Supply Chain Strategy