Congratulations on your booming business! Profits are up and you’re producing more than you ever have before. But now you have a new problem on the horizon — you’re quickly running out of cold storage to keep it all on site.
While this is a great problem to have, it’s important to choose the right solution for your specific situation. Moving to an offsite facility when your business is ready can help maximize efficiency, streamline your cold chain so you can meet demand, and keep your products in stock. The problem is that moving too soon can decrease efficiency and negatively affect your bottom line.
So how do you know if your business is ready for 3rd party cold storage?
Did You Know? Third-party logistics providers — also called 3PL cold storage facilities — are offsite cold storage warehouses that handle every aspect of your frozen and refrigerated inventory, from receiving and shipping to ensuring that your products are stored within specified temperatures.
Consider the perishable products you sell. Do you have flagship products that ship by the truckload? A large variety of products in a single truck? Or a combination of both?
If you have a variety of unique products with different Stock Keeping Units (SKUs) that typically ship in the same truck, expanding your onsite cold storage will most likely be your best choice. But if you already have 100–1,000 pallets on site and consistently produce enough to fill full truckloads with one or two SKUs, it may be time to consider an offsite cold storage partner.
If you’re a smaller producer or have a variety of SKUs with low pallet density, having a network of modular walk-in coolers and/or freezers onsite would most likely serve your needs better. These portable cold storage units instantly increase your square footage without having to add on to your existing buildings and allow you to use more affordable onsite labor to handle time-consuming tasks, such as case picking, that are inherent in this business model.
Modular walk in coolers and/or freezers can be configured for use with pallet jacks or with shelves, hooks, or a variety of other options. And you can simply add additional walk ins as your inventory builds, allowing you to grow as quickly or slowly as you need to.
We recommend Polar King standalone walk in coolers and freezers for onsite cold storage. Unlike panel boxes that have foamed-in insulation and seams that can harbor bacteria, these durable, one-piece structures come in a variety of sizes and temperature ranges and are constructed with polyisocyanurate rigid board covered by smooth, energy-efficient fiberglass.
This is an ideal setup for distribution to grocery chains & broadline distributors, such as Walmart, KeHE, and SYSCO, that offer customers variety with more diverse SKU sets (e.g. Rocky Road or Nutty Coconut varieties, if you’re storing ice cream) that are purchased in relatively small quantities. Or it can be an efficient way to keep costs low until your business has enough inventory and sales volume to make moving off site profitable.
If you don’t want to expand your onsite cold storage, you could alternatively seek out partnerships with compatible businesses, such as restaurants or catering companies, that may have different busy seasons than your business and be willing to rent out their unused cold storage space.
When your company is consistently shipping full truckloads with one or two SKUs, moving your best-selling products offsite to a 3rd party logistics (3PL) bulk cold storage facility becomes both cost-effective and scalable.
Efficient bulk cold storage warehouses have large, sprawling layouts, with a large number of doors and 6’–11’ between rows to allow forklifts to pass each other going opposite directions. Because no sorting is necessary with identical, single-item pallets, multiple forklifts can unload trucks with one or two SKUs very quickly, packing products on four-pallet-deep racking. This setup makes loading and unloading full truckloads extremely efficient and helps reduce labor costs.
Bulk cold storage works best for shipping to big box chains, such as Costco and Sam’s Club, that typically order high-volume SKUs (e.g., vanilla, chocolate, and strawberry varieties in our ice cream example) by the pallet.
Need more help figuring out what facility type is right for you? Check out this helpful guide comparing distribution and bulk cold storage facilities.
When requesting a quote from a cold storage provider, it’s a good idea to understand industry terminology and ask questions that will affect your pricing to avoid unpleasant surprises later. Here are some factors that will have the biggest effect on your pricing:
Understanding these details and making sure potential 3PL cold storage facilities are aware of your requirements helps ensure that you get accurate quotes that factor in all of your variables so you can make an informed decision.
Transitioning to a third-party cold storage partner takes planning. You will need to gather accurate data on your pallet counts, temperature needs, inbound/outbound volume, and more, as well as build enough inventory to get started. Communicate early so your provider can line up the space, labor, and equipment your business needs.
New to offsite cold storage? Choosing an experienced and reliable 3PL provider like Interstate Cold Storage can help you scale efficiently — without disrupting your operations.
Our experienced team is in it for the long haul, as shown by our employee retention rate that’s 5x’s higher than the industry average. Our veteran managers have a deep understanding of the industry and can help you increase efficiency and avoid common pitfalls as you transition inventory offsite.
Our cold storage facilities were built for efficiency from the ground up, with a large number of doors to allow forklift traffic to flow freely and spacious loading docks with plenty of room for drivers to get in and out. Our state-of-the art technology lets you track your inventory in real time, so you’re always ready to act quickly when opportunity arises. Best of all, you can always count on our team to get your drivers in and out as quickly and as efficiently as possible.
Explore which scalable, energy-efficient storage solutions might be right for your operation by speaking with a specialist at Interstate Cold Storage today.
