Why Use a Railroad Siding Warehouse?

Posted on October 11, 2018

Why Use a Railroad Siding Warehouse?Whether or not you plan on using 3PL warehouses for the first time or are experienced in warehouse logistics, having a warehouse with rail siding presents many benefits and allows you to develop a more flexible transportation process for your supply chain. Most of your public warehousing decisions will probably be made based on the category and quantity of products you plan to store. Rail siding is just one more tool you can now use to make the best decision for your particular product’s needs.

Warehouse operations
There are a few things that can make for a great warehouse. The way it’s operated and organized is one of the key factors that can make it efficient. The real estate of a warehouse can use complex organization sheets or it could use a common-sense approach such as expected time to pick (ETP). On average, pickup is a much more time-consuming activity than putting away since it’s where the most labor is utilized. If a warehouse optimizes their slotting to ensure that pallet positions and storage match the flow of goods than overall everything is much more organized and concise. It’s all about keeping like products together, so shipments become easier to fulfill.

Additionally, we all know that having large batches means more of something is being made or produced. In this instance, the batch orders refer to bulk orders. Instead of shipping one item at a time, you can ship things in bulk which would make your operations much more productive. There would be no need to revisit the same location consistently because all of one shipment would be sent out at the same time.

This type of shipping makes sense for any company that frequently ships large quantities. It could aid in cost-saving measures that would make both the 3PL and the companies they provide services for quite happy.

Cost benefits
There are numerous cost benefits to utilizing railroad-siding warehouses, the most significant being that you can eliminate the constantly fluctuating cost of gas because freight doesn’t require that means of power. Furthermore, railways are extremely economical in that they cost more initially, but the fuel needed to run the rails allows for further distances to be covered.

The plus side of the railway is that most anything can be shipped by rail. While trucks can be a good solution for goods traveling short distances, the farther a product needs to travel, the better a solution railway can become.

Business growth
The way in which a business transports their goods is vital to their effective operations. Railways are a fantastic option because they provide high-volume capacity at a low cost. When transportation can be brought directly to the warehouse, it cuts out excessive and additional costs usually acquired through the utilization of trucks to transport goods.

When a warehouse possesses rail siding, it makes accessibility and proximity to the warehouse that much easier, removing the need for any additional transportation. So not only does rail siding make distribution that much simpler, but it also affects the bottom line regarding transportation costs.

This can be particularly enticing for businesses that are undergoing a growth, whether it be in quantity of goods or acquiring new contracts from companies looking to distribute their products. Finding ways to conserve funds is always helpful, particularly in times of great expansion, which could cost more regarding finding new locations for warehouses or acquiring more modes of transportation.

As we have discovered, there are great benefits to using railroad siding-warehouses. The choice to make the transition needs to be one that will advantageous for your company. Be thorough in your decision and try talking to other businesses that have made the transition into rail siding. The more people you talk to, the better an idea you could have about how it will improve the way you do business.

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