Top 5 Factors to Consider When Choosing a Warehouse Location



Although cost is a very important factor in the selection of an industrial development site, there are several other things to consider when choosing a location for your warehouse. Here are the top five items to consider when choosing your warehouse location.

  1. Layout and Flow of Building – The optimal layout of the building is largely influenced by the type of operation that will be run inside. Older buildings often lack the utility necessary for modern material flow. Column spacing and ceiling heights can limit the types of equipment that will fit in a given space and can affect the flow of raw materials in, and finished product out. Be sure to inspect the building plans thoroughly to determine if your layout will fit within the given space.
  1. Availability of Skilled Workforce – Purchasing a building in a remote area may cost less, but it can come at a cost, with a shortage of skilled or trainable workforce. It is best to be located in an area that will have ample supply of the proper mix of skill sets which will support your operation. The best locations will have linkages to nearby high-density residential areas, with minimal worker transience. If there is a seasonal supply of workers, ensure that the seasonality does not coincide with your needs, or else labor costs could escalate.
  1. Zoning and Intensity of Use – How intense is your operation and what are your needs going to be in the foreseeable future? If your operation involves warehousing or light assembly, a less-intensive allowed use may be the right choice. However other items to consider are noise levels, emissions and need for outdoor storage. These needs will drive which districts to target for your new operation.
  1. Proximity to Major Linkages – What is the predominate mode of transportation of your goods? Rail, truck, air, or sea transport? These factors help drive the need for the site to have accessibility to off ramps from the expressway or perhaps fast airport access. In addition, proximity to your customers might be an important factor to consider. If most of your product is exported by sea, with the remainder delivered by land to retail locations, easy highway and railway access might drive the decision on warehouse location. A key factor to keep in mind is that 20% or more of your costs come from transportation of your goods. High gas prices and increasing driver wages may help drive the decision towards rail transport, as opposed to shipping by truck. Goods that are less perishable, and shipments that are not heavily time sensitive might be better and more economically served by rail service as the price of truck shipping continues to grow.
  1. Material Handling Capabilities – Another factor to consider is availability of staging facilities and handling equipment. If the primary mode is truck/trailer, does the facility have depressed docks and is there a need for these docks to be internal? Perhaps a highly intense distribution use will need cross docks. In addition, are there ample outdoor storage facilities and is there turning room for material handling equipment and trucks?

As you can see, there are many factors to consider when looking into a new warehouse location for distribution purposes. Layout and flow of the building, proximity to a good labor force, allowed intensity of use in the district, proximity to the appropriate modes of transportation and material handling needs are some of the most important. Following these basics will help you find the warehouse location that best suits you and your customer’s needs.


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