More and more companies are outsourcing the storage and handling of their product to third party logistics providers. Because of this, CRA has tailored services and developed a successful approach for producing the best results and lowest costs for our clients.
- Determine the client’s requirement for a dedicated (single company) facility or a shared (multi-tenant) facility.
- Identify the client’s storage goals and requirements in terms of: number of pallet positions, pallet height and weight, stacking or racking restrictions, inventory turns per year and any security or other handling issues.
- Prepare market research for all properties meeting client’s requirements for a dedicated facility (if applicable) or meeting client’s requirement for a shared multi-tenant facility.
- Schedule a tour with the client to view the prospective facilities.
- Submit a customized Request for Proposal to all Landlords with buildings that could serve as a dedicated facility (with the potential plan of having the low bid third party logistics provider (3PL) enter into a lease with the landlord for the selected building). Also submit a customized Request for Proposal to all 3PLs with existing shared or multiple company operations in the market area under consideration for both their shared existing facilities as well as operating the proposed dedicated facility.
- Spreadsheet the responses to the Requests for Proposal from the Landlords paying particular attention to: 1) base rent per square foot; 2) base rent per cubic square foot and 3) operating expenses for the Building (Property Taxes, Property Insurance, Exterior Building Maintenance, Utilities, Janitorial and Trash Removal). CRA will also pay particular attention to:1) per pallet storage cost;
2) per pallet handling costs (IN and OUT) and
3) case pick charges and any other conditions
(inventory turns, minimum lease term or minimum pallet such as storage requirements).
- Determine which format (dedicated or multi-tenant facility) to pursue and draft a customized Letter of Interest to the Landlord and selected 3PLs for the selected dedicated facility or to the selected 3PL only if a multiple company facility.
- Prepare financial analysis of all responses to the Letters of Interest and re-draft final Letters of Interest incorporating the outstanding business issues.
- Finalize a lease agreement on behalf of the selected 3PL for the dedicated storage facility and a final Logistics Services Agreement (hereinafter LSA) between the client and the 3PL. For a shared storage facility, negotiate a final LSA for the client with the 3PL.
- Follow up on the negotiations through move-in to insure all required tenant improvements are completed and that client is able to take occupancy of the facility on the scheduled commencement date.
During the last twenty (20) years, the number of third party logistics providers has expanded considerably. This, to a large degree, has been advantageous to companies looking to outsource this function as rates have been significantly reduced. However, in this highly competitive environment, CRA’s services have become increasingly important not only in driving down costs for storage and handling but by mitigating risks associated with onerous Logistics Services Agreements and providers that either are unable or unwilling to fulfill their obligations under the contract/agreement.