Learning: Logistics and Transport
The Business School UK’s Business Development Director, David Ockleton talks about Logistics and Transport Warehousing
One essential of Logistics and Transport Warehousing is understanding warehouse costs and the terms used to define them. With a typical cost of operating a warehouse of between one and five percent or total sales it’s an import figure to get right. And therefore with this responsibility it’s important that a good knowledge of the logistics operation is held.
Logistics and Transport Warehousing terms used to define warehouse costs
There are two types of warehousing costs. Fixed are the costs regardless of what activity is happening in the warehouse. Variable costs change as activity levels vary.
- Space Costs: The costs associated with the building and land.
- Equipment Costs: Fixed – depreciation/leasing/rental and Variable – packing materials, equipment running costs.
- Labour Costs: Direct – warehouse operator, Indirect – warehouse management and administration, Variable – contractors, casual staff, overtime, bonuses.
- Overhead Costs: Management, finance, human resources, Sales and Marketing, IT and Admin staff.
- Recycling and Waste Management: Increasingly an important cost.
David’s top tip: It is for the warehouse manager to maintain a clear and accurate view of the warehouse costs and trends. Clearly not all of the above can be controlled by the warehouse manager, such as sales and advertising costs, but much of it is.
If you’d like to know more take a look at the Logistics and Transport courses that we offer, which are all approved by the CILT. Currently available for Level 2, Level 3 and Level 5 all are tailored courses for the RLC, with more courses coming soon: Logistics and Transport Courses.
Print off our Warehousing Essentials PDF, created for you in A4 format. With one half for your own notes and the other as shown below, you can fold in half to create a handy guide.
Over To You
What is the most important aspect of warehousing in your experience? We’d love you to share by leaving a comment in the comments section below. We will be back soon with more inspiring insights and we hope you will be too! If you have enjoyed our Learning post on Logistics and Transport Warehousing we would appreciate you sharing. David Ockleton, The Business School UK’s Business Development Director.