What’s the connection between warehousing and freight forwarding?
Warehousing and freight forwarding go hand in hand. Recently, the world of freight forwarding in Kenya was impacted heavily by the news that Africa Logistics Properties had signed Kenya’s biggest warehousing lease with a regional freight company.
The news is abound that these warehouse distribution centers will be fitted with ultra modern facilities and will provide Grade A warehousing that targets large distribution and logistics companies such as Sidoman Investment Group. The facilities, which will be built in Tatu City and Limuru, will signal a change in the freight forwarding and logistics services that will be offered in Kenya from now on.
This new warehouse complex will be the first international standard logistics and distribution hub. It is set to open in October 2018. The warehouse complex is going to be huge at 14,000 square meters, which is equivalent to the size of some of the largest shopping malls in Kenya such as the Galleria Mall which is situated in Karen.
So what is the connection between warehousing and freight forwarding?
Warehousing and warehouse management are crucial parts of a global logistics management system. As such, warehousing is an essential component in supply chain management. To put it simply, warehouses in freight forwarding refer to the locations which are simply used for the storage of goods.
Other functions that take place in warehouses include inbound activities that prepare the goods for storage, as well as outbound functions that help to consolidate, pack and ship orders so that they can be shipped to both customers and businesses. If you have ever bought anything online from Amazon or E-bay, the goods that you purchase are probably acquired from a warehouse before they are eventually shipped to you.
The role of warehousing in freight forwarding
Warehousing’s role in the supply chain has become more important during the past two decades. The duties assigned to warehouse operators have evolved from maintaining and taking care of the long term storage of goods and products to supporting businesses in the economics of purchasing, producing, and transporting goods, which has allowed businesses to develop time-based supply chain strategies.
Warehousing is valued because it can contribute to reduced costs, improved services, enhanced flexibility, as well as improved responsiveness. Warehouses provide value in the supply chain by:
- Storing products to fulfill the customer demand
- Warehouses provide customers with product assortment
- They postpone or delay inventory commitment by keeping the goods in one location until the demand can be understood better
- Warehouses allow the sequencing of materials and components from 3PLs or multiple third party logistics
- Some warehouses even perform light manufacturing, assembly, and knitting services if they have the capability to.
Best of all, warehouses affect YOU, the customer that receives your goods in numerous critical ways. For instance, the personnel at the frontline of a warehouse are usually the first defense when it comes to ensuring product accuracy, correct quantities, the proper time of shipment and delivery occurs, as well accuracy of all vital documentation. More importantly, warehouse personnel ensures that the overall condition of your products is perfect so that you do not receive any damaged goods.
The different types of warehouses in freight forwarding
Raw material and component warehouses
These types of warehouses hold raw materials which are then used in the manufacturing or the assembly process. This means that most of what you will find in a component warehouse are just parts to be used in the assembly process later.
Work in process warehouses
These warehouses hold cargo that has been partially completed. They also hold products that are at various points of assembly in a production line. Sometimes products particularly vehicles must be transported to other countries or locations for assembly to be completed fully; work in process warehouses allow the final assembly to take place.
Finished goods warehouses
Finished goods warehouses are used to store inventory that is often used to balance the demand for some goods. For instance, makeup companies and fashion retailers often use finished goods warehouses to replenish their inventory. For this reason, finished goods warehouses are usually found near the point of manufacture. A warehouse that serves this role may face different demands ranging from monthly to annual replenishment of stock that will be used in the next wave of distribution.
Distribution centers or distribution warehouses
These types of warehouses are vital in freight and forwarding because they allow products to accumulate at certain points of manufacture so that they can be shipped to customers. Such a warehouse is usually centrally located at the production location or near the customer base to make distribution easier.
Fulfillment warehouses tend to be smaller than most warehouses. They are used for receiving, picking up, and transporting or shipping small orders for individual customers.
Local warehouses are typically used for the purposes of shortening transportation distances so that customers can receive their goods rapidly. The items that move through local warehouses are varied but transportation to the customer occurs almost every day.
Value added service warehouses
Value added warehouses are used to provide vital customization services. These services may include packaging, marking, pricing, labeling, as well as processing returns.
Climate controlled warehouses
Climate controlled warehouses are designed to handle the storage of different types of products that need special handling conditions such as freezers or humidity controlled environments. The types of goods that are stored in climate controlled warehouses include plants such as flowers or edible food stuff.
Bonded warehouses are those warehouses that are licensed by the government to accept imported goods for storage until the customs duty can be paid. Bonded warehouses are usually situated next to the port and are operated by government officials or people that are under the control of customs authorities. Any goods that are held in a bonded warehouse cannot be withdrawn unless the customs duty is paid, hence the name bonded warehouses.
Bonded warehouses are vital to people that import or export. For instance, if an importer is unable to pay the customs duty immediately after his or her goods arrive, these goods can be stored in a bonded warehouse. The goods can be removed as the customer pays the customs duty in installments.
Looking for warehouses and freight forwarding services
The next time you are looking for an experienced freight forwarding service from a reliable and professional freight forwarder such as Sidoman Investment Group, you should ask about the types of warehousing they offer.
Want to know more about warehousing and freight forwarding, and how it all works?