February 2, 2023

Container Yard VS Warehouse for a Manufacturing Business: Which is More Profitable?

In the last post, I talked about how to run a container yard. This time, I’ll talk about whether or not it would be better for your manufacturing business to have a container yard instead of a warehouse.

In the manufacturing business, you can’t avoid needing a place to store both your raw materials and your finished products.

So, you have a lot of choices for the storage area. You can build a container yard, have your own warehouse, or rent a warehouse from 3PL. So what? As long as it makes money.

But in this post, I’ll just talk about how building and running your own warehouse VS building and running your own container yard.

But before we talk more about this very interesting topic, make sure you’ve also joined the scmguide telegram channel so you don’t miss the latest blog posts and can learn more about supply chain management in general.

Which is better: building a warehouse or a container yard?

Before deciding whether to build a warehouse or a container yard, here are a few things to think about.

Costs of building

What do you think of when you see a container yard?

It’s a big field with no buildings, just a floor, and there are lights in several places. Only that.

What about the warehouse?

You need to build the whole building, from the foundation to the roof, including the floors, walls, and roof. Not to mention the dock with the dock leveler, right?

At first glance, it seems cheaper to build a container yard because there isn’t much to build. But you have to remember that the containers that hold your things are what you will store in the container yard.

container yard VS warehouse

Your things are heavy on their own. Add to that the weight of the container. The need for the floor must, of course, be much stronger than the warehouse floor in general.

Plus, there are reach stackers there that can move around while carrying containers full of your goods. Then the weight that the floor of the container yard will have to carry will be much higher than the weight that the floor of the warehouse has to carry in general.

Reach stacker obviously much heavier than a forklift. And the weight of the container is a burden that wouldn’t be there if you just put the goods on racks in your warehouse.

With this in mind, you must agree that the price of building a container yard isn’t as low as you think.

Stronger floors also mean that they cost more. You should think about this.

If you build a container yard the same way you build the floor of your warehouse, it won’t be long before the floor fails. And if that’s the case, fixing those floors will cost you a lot of money. Not to mention the dangers that come up when heavy containers have to be moved by reach stackers through damaged container yards. Too much is at stake.

You might also like:

What about places to put lights?

You’ve seen containers stacked up, right? How high does it go? Can be up to 10 meters or more. And your lights (lamps) must be higher than the containers stacked on top of each other. That means that, of course, the price will go up as the pole goes up.

container yard VS warehouse

The number of lights you need is also important. Maybe not as many as there will be in the warehouse, because you don’t want a lot of light poles in the middle of the container yard, right? But since there are fewer light points, you need more powerful lights to light up the whole container yard.

You also know that the price goes up as the power of the lamp goes up.

Area

You shouldn’t also make a mistake with the area. Forklifts may only need a space 2–4 meters wide to get through a general warehouse. But container yards? You need something much wider.

About 12 meters is how long a 40-foot container is. Not to mention that the reach stacker has to move around when putting the container on or taking it off. In container yards, operations need that much space to be done. Plus, there needs to be area for the container itself. Do you still think that container yards can fit more of your goods than warehouses on the same amount of space?

Running costs

What about the costs of running container yards?

Let’s see.

How much does it cost to keep a warehouse up and running? Man power? Equipments? Electricity? Water?

In general, it costs the same to run a container yard. But, let’s look at it in more detail.

You will need to buy or rent a forklift for warehouses. You do know how much it costs, don’t you?

What about the container yards? Reach stackers can be bought or rented. The costs you have to pay are, of course, much higher. Not to mention the fact that operators are paid more because not everyone can drive a reach stacker.

Plus, you have to pay for fuel, which is much more expensive than when you use a forklift.

Of course, you have to think about these costs before making a decision.

You might also like:

Keeping track of inventory

From the point of view of keeping track of inventory, it may seem easier to run container yards because the inventory is still in large containers that are easy to see and count.

But to each other, the containers look the same. The only difference is the number of the container. So, you can only use the number to figure out which container will be unloaded first. Not to mention if the number is hard to see because it is blocked by other containers.

And you still need to know what’s in each container to figure out which one to open first.

And when it comes to unloading containers, it’s not a problem if you need all of the things inside. But it’s a problem when you only need a small amount of what’s in the container. Still, you have to empty the container in its entirety, right? And you still need space in your warehouse to store things you don’t need right now. In the end, having container yards won’t make a big difference in how much warehouse space you need.

Pay attention to detention costs

And you should really pay attention to these ones. Detention costs. You can’t keep containers for too long in your container yard. It won’t be free, and trust me, it won’t be cheap.

So, if you want to put your inventory in a container, you should make sure you will need it soon. If you don’t, you’ll have to pay a big fee.

Conclusion

If you want to build a container yard instead of a warehouse, you might want to think about some of the points above.

Calculate and carefully study each of the pros and cons, and make sure that whatever choice you make fits with what you need. Don’t choose the wrong thing. The bad effects can sometimes be very big.

Both container yards and warehouses are used for different things. Don’t get it wrong.

Make storage spaces based on what you need.

I hope it helps!

If you thought this article was helpful, please tell your other coworkers about it. Make sure you’ve also joined the scmguide telegram channel to stay up to date with this blog and get more useful information about supply chain management. You can use any of the articles on this blog for any reason, even for profit, without giving credit to the author.

Avatar photo

Dicky Saputra

16+ years of experience in supply chain management. I help companies improve their end to end supply chain performance.

View all posts by Dicky Saputra →
%d bloggers like this: