If you deal in food, pharmaceuticals, chemicals, or other perishables with specific temperature or humidity requirements, you need a facility where you can store your goods at optimal temperatures and humidity levels to preserve freshness between production and retail.
But because there are different types of cold storage warehouses, choosing the closest facility to your operation or the one with the lowest rates without looking at specific crucial factors can have a tremendous impact on your operating efficiency, causing increased turn times and reducing your profit.
Understanding the differences between bulk cold storage and distribution cold storage — and asking the right questions at the facilities you’re considering — can help streamline your business’ operations and help you pave the way to higher profits.
There’s a reason why both bulk cold storage and distribution cold storage exist. Different businesses have different needs and objectives, and the two systems were developed to serve very different situations.
Manufacturers, agricultural producers, and other businesses that produce or harvest large quantities of the same perishable items are ideal candidates for bulk cold storage. Because each full truckload contains pallets with multiples of the same item that will be loaded out together, pallets don’t require individual access and can be placed end to end with no space in between.
Speed is the name of the game with bulk cold storage. With building designs and four-pallet-deep rack systems that serve the specific needs of these customers, efficient bulk cold storage facilities can rack the same amount of pallets in 20 minutes that would take an hour in a distribution facility.
Bulk cold storage is best for companies that ship full truckloads and don’t require case or specific-pallet picking.
As exciting a prospect as having faster load times is, bulk cold storage is not the best fit for all businesses. Companies that bring in mixed pallets with unique items or ship Less than Truck Load (LTL) may be better candidates for distribution cold storage. This model was created to serve the needs of companies who have frequent product turnover and require case or specific-pallet picking.
While bulk cold storage is generally more suited for the production side of the cold chain, distribution cold storage tends to focus on the (surprise!) distribution side.
It’s usually easy to tell which type of cold storage warehouse a facility is just by looking at it. Bulk cold storage warehouses are usually shorter and wider with roofs up to 40’ high, compared to the 50’-70’ roofs on distribution warehouses. They typically have wide loading docks with a large number of doors, making it easier for drivers to operate and allowing smooth traffic flow.
Bulk cold storage facilities require more land and are often found in less populated areas where larger properties are available. Distribution cold storage warehouses are often located in or near cities, closer to their customers. Because land in these areas is typically more expensive, the taller buildings use vertical space to fit more pallets into a smaller footprint. Due to their compressed footprint, distribution cold storage facilities tend to have tighter loading docks and less space for trucks to operate.
Bulk cold storage warehouses take advantage of the facility’s larger horizontal footprint by allowing 6’-7’ space between rows. This distance allows traffic to flow faster and provides multiple labor points with enough room for people and machinery to work at the same time while still staying safe.
Because single-item pallets are identical without any advantage to accessing one specific pallet in the lot, bulk cold storage facilities allocate sections to specific products and pack them 4-deep. This arrangement is faster and easier to rack and makes loading and unloading full truckloads extremely efficient.
Products in distribution cold storage warehouses are one-pallet deep and stored on high vertical racks to provide easy access for case picking. Pallets are placed wherever there is space available, which often means that a customer’s inventory is spread out in different areas. Aisles are closer together to leave more room for storage, which limits the number of workers that can occupy a given area at a time.
This arrangement allows for more surgical access to products and better supports the needs of customers who have smaller inventories or different items on each pallet that require independent access.
Just as an SUV would lose on the track against a racecar but would dominate on an off-road course, the better choice depends on your specific application.
Manufacturers, agricultural producers, and other businesses with large quantities of the same item can take advantage of the faster and easier bulk cold storage system to reduce turn times and get their goods in or out of their facilities in less time.
Companies that need to access specific items on a pallet or ship Less than Truck Load (LTL) may be better candidates for distribution cold storage.
It’s important to take the time to assess your company’s needs and understand the differences between your cold storage options. Making the wrong choice can be very costly.
If you choose a bulk cold storage facility but want to pick items from specific pallets, your items may be buried behind three other pallets. In order to access it, the pallets in front must first be moved, which takes extra time and labor. While this may or may not be too much of a problem during slow times, picking items during peak seasons will significantly increase delays.
Conversely, if you choose a distribution cold storage facility but have full truckloads of single pallets, your inventory will be spread throughout the warehouse on different levels. Since your business loads and unloads full truckloads and has no need to access individual pallets, the extra time required to move pallets to or from various locations in the facility for loading in or out would needlessly increase your turn times.
The cost of a mismatch gets significantly higher during peak season when both types of cold storage warehouse move considerably more products than other times of the year. If a problem comes up that causes a bulk cold storage warehouse to run behind, the facility can usually catch up within a day. The same backup at a distribution cold storage warehouse could take the facility up to five days to catch up, potentially causing expensive problems down the line.
Bulk cold storage and distribution cold storage are each good solutions for a wide variety of businesses, but what about industries that don’t fit neatly into one category, such as manufacturers who sell to both distributors and retailers?
Fortunately, there are also hybrid cold storage options available. These multi-room facilities provide options for both types of cold storage, so businesses can accomplish their diverse goals under one roof.
Now that you can see which of the different types of cold storage warehouses is more suitable for your business, you can compare the building structures of possible facilities. If you’re looking for bulk cold storage with fast turn times, consider the following:
If you see bottlenecks around doors and loading docks, it may be a sign that the facility is booking beyond its capacity.
The best type of cold storage is the one solves your business’ challenges most efficiently. Businesses on the manufacturing/producing end of the supply chain tend to benefit more from bulk cold storage. Businesses closer to the retail end are generally more likely to benefit from distribution cold storage. There is also a hybrid model for companies that have more than one focus. Choosing the most efficient type of cold storage for your needs can reduce your driver turn times and help keep your business running smoothly.
Interstate Cold Storage has been building strong relationships with customers in the Midwest since 1973. Other companies turn over their managers and dock laborers every two years. But as a business that’s family owned and operated, we understand the value of retaining tenured professionals that our customers know, and who understand and anticipate our customers’ needs.
Part of our service is taking the time to learn about our prospective customers’ goals and operations. That way, we can ensure that our bulk or hybrid cold storage warehouses are a good fit for their unique needs before entering into an agreement. And unlike corporations with stockholders whose main concern is short-term profit, we operate at optimum capacity instead of overfilling our facilities.
From simplifying operations to providing state-of-the-art cold storage equipment and technology, we work to keep operations running as smoothly as possible and ensure the safety of your products.
Contact Interstate Cold Storage today to learn more.
