The Five Most Common Mistakes when Using Cold Storage

Over the decades we have been in operation we have helped countless people grow their business. Not only through providing great value cold storage and refrigerated logistics, but by helping our customers streamline their logistics operations. It’s one of the benefits of our services, is that we provide advice and feedback. Sometimes that advice makes the customer change their operations, and other times it just helps the customer provide great service to their end client.

Since the 1980’s we have seen so many varied ways of putting products in to Cold Storage, and Refrigerated Logistics, that I thought I would share with everyone, in the hope that it makes everyone far more efficient.

#1 Failing to Understand the staggering costs of logistics.

SA is full of great producers. We are able to use the pristine environment we live in to produce some of, if not the best produce in the world. However the one discussion I consistently have with people is the costs. Not to say that our costs our high, but more just helping the client understand, and hence charge accordingly for their goods, when incorporating storage and logistics. Traditionally we offer pallet based storage, but that was hard for some clients to calculate how much should be charged for carton based work. We introduced carton based charging to help with that, which enabled customers to break down their costs to a per unit, or per carton charge. On many of our small clients, the logistics bill is 10-20% of each product. Obviously the bigger they get, the more efficient it becomes, but it’s quite often overlooked at those early stages.

: Do cost modeling, and include your logistics partner to ensure you capture to real costs of logistics.

#2 A lack of consistency, readability, and accuracy when itemising and labelling produce.

We have a lot of clients start small with us. They traditionally have been able to manage their cold logistics in house, but then as business grows they need to choose a logistics partner. In the comfort of their own business premises all their staff may be able to easily identify what each product is simply by the box. Or even use short hand to write what the product is. However as soon as that product leaves the production facility, that corporate knowledge of the business doesn’t exist. For your goods to be treated well in logistics each carton needs consistent labelling. There should be standardised codes used for each product, with every carton having labels that are printed, and easily to read. The labels should contain a production date, a product code, a product name, and ideally weight. This enables us, when needed to check your stock, or count weights, and also ensures that when its received we can record accurately what has been sent to us. A decent carton label saves time, ensures accuracy, and also acts as a marketing tool when it gets to the end customer.

Tip: Develop a standardised list of product codes, and then develop unique labels for your business. Look at Zebra’s range of label printers, and choose some software that can work to your product codes. The Zebra printers are bullet proof and extremely cost efficient too.

#3 Do your sums before assuming you are getting a good deal.

There are many ways to quote for cold storage and refrigerated logistics. Personally, I am not a fan of the value add sale price. It’s common in the industry to quote a low price per pallet space, but that isn’t truly representational of what you are paying. For example a company may quote a low weekly storage rate, however apply an energy surcharge, pallet hire fee, minimum storage fee, in some circumstances charge you for picking it up from their warehouse. Do some cost modeling on your past months movements and storage costs with the various pricing points you have been given. More often than not, in high frequency clients, a low storage cost means high additional charges. Be sure to run your sums as what appears expensive may be cheaper in the long run.

Tip: Ask for the prospective provide to give you a quote on some of your previous months movements, and be sure to ask what are the circumstances that trigger other charges.

#4 Pallets and Cartons that aren’t suitable for long term cold storage and refrigerated logistics.

Often we receive pallets that you look at in amazement as to how they have managed to stay upright. A pallet may look stable when it has just been stacked, but over time, after it has been moved in and out of a truck, and in and out of racking, the integrity of the carton degrades. Choosing the right cartons, that are suitable to be used for long term storage is key. Your marketing should be consistent, and when its delivered to your customers, should provide a good post purchase influence to your customer. You also need to make sure your pallets fit within a standard pallet, as anything that does not fit, is a high chance of being damaged when being sent via line-haul.

Tip: Ask us what style of boxes work for your products. We have seen many different variations, and we know what works best.

#5 Not using all of our services.

We not only provide storage and logistics, but we also provide advice. I often have our clients that want to just chat. We act as a sounding board, and a logistics consultant, but for free. I really enjoy this aspect, as it gives us an opportunity to give back to the businesses that support us. We are able to see ways of making their business more efficient, or suggest ways to solve a problem. As a small business we all go thought periods to struggle, and it’s good to be able to talk to someone that has dealt with similar problems before.

Tip:  When developing new markets, ask about what impacts it has on your supply chain.

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