Key Factors on Warehouse Location and the Effect There-of on Distribution
It’s no secret – Warehouse location has a huge impact on the efficiency of your distribution. In the world of logistics and warehouse distribution services in South Africa, the location of your warehouse is paramount. As a freight forwarding company based in South Africa, we’re fully aware that optimising warehouse locations can significantly enhance distribution efficiency, and ultimately customer satisfaction.
In this article we’re going to run through some key factors to consider when setting up a warehouse and the impact this will have on your distribution. Let’s go!
1. Closeness to major transportation locations
Your proximity to transportation hubs i.e. airports, sea ports, major road highways and railroads, is the difference between efficient cargo transportation and lacklustre distribution services. Being close to these hubs will significantly reduce both time in transit for your goods, as well as the cost to transport your cargo. Why? The turnaround time is far quicker for warehouse distribution services in South Africa that are in close proximity to major transport hubs. In the freight forwarding industry, efficiency and cost are two key concerns.
Things to consider:
- Airports + Ports: this is key for international cargo transportation.
- Rail + Road: this is key for local (regional / domestic) cargo transportation.
2. Accessibility
When it comes to warehouse distribution services, location, location, location is the name of the game! The ease with which cargo is transported into a warehouse and moved from a warehouse is greatly affected by its accessibility. Many elements can be factored in when it comes to accessibility of your warehouse. The below are just a few to take note of.
Things to consider:
- Quality of the road: the roads surrounding your warehouse, like it or not, have a direct effect on the efficiency of your warehouse distribution services. Well maintained roads that are smooth, free of potholes and other issues facilitate faster delivery and access to the warehouse.
- High traffic areas: Building a warehouse that is in a high traffic area, leads to congestion around your warehouse. This will impact the ability of your drivers accessing the warehouse for drop-off and pick-up. A less congested area is more ideal for warehouse location.
- Public transport: Whilst transport to and from your warehouse for your freight trucks is key, it’s also key for the individuals coming to work at the warehouse. Consider how your employees will get to and from work on a daily basis – the ability of your staff to arrive on time, and with ease, will impact the culture of your organisation and the ability of your staff to work happily and efficiently.
3. Vicinity to key markets
When it comes to warehouse distribution services, holding more than one warehouse assists in ensuring your proximity to key markets is always covered. Whether it’s one, two or many warehouses you own, one of the first assessments when considering locations should be, “where is the warehouse in relation to my customer”. This will not only cut your costs but also save on time, ultimately improving customer satisfaction and allowing for quicker delivery.
Things to consider:
- Where the customer is: the more customers you have around you the better. Consider areas in which your customer is close by.
- Potential growth: Factor in the potential for your market to grow. If you are building in an area that will soon have high demand – you’re in a good space.
4. Labour considerations
The South African market is spoiled when it comes to hard working labourers, and whilst difficulties with employees or labour unions is never guaranteed, being considerate of your labourers is always a must. Your labour supply and cost can have a dramatic effect on the efficiency and cost of your distribution.
Things to consider:
- Availability: start off by considering if there is a market of labourers available for your business, close by. When looking at this factor, be sure to consider the type of skills you require, and whether any training will need to be done ahead of employment. All these factors will influence your warehouse distribution costs and efficiency.
- Cost of labour: upskilling your labourers is only one facet to consider. The second important item to factor in is the cost of the labour on a monthly basis. Areas where labour costs are lower are going to positively impact your bottom line.
5. Be safety conscious
When making the decision of where your warehouse should be located, one factor that cannot be overlooked is safety and security. Warehouse distribution services in South Africa are greatly affected by the volatile environment in which our country exists. Doing your best to mitigate any direct impact to your warehouse is vital.
Things to consider:
- Percentage of crime: sourcing or building a warehouse in an area that has low rates of crime can diminish the potential threat of theft or damage to your stock.
- Take precautions: remember to take all precautions you can to mitigate the risk of a security breach. This includes implementing strong security systems and monitoring to give you peace of mind.
6. Abiding by the law: environmental and regulatory
South Africa is no different to any other country across the world – we have strict environmental and regulatory laws and rules that are in place to protect our environment and our people. The impact of warehouses on the surrounding environment has become more paramount in recent years with the onset of ESG policies being put in place globally. Whilst it’s important to consider these factors for the greater good of the community, it is also beneficial for your business and warehouse distribution services, to abide by these rules and regulations – providing you with improved reputation and compliance.
Things to consider:
- Local regulations: consider local zoning laws about where your warehouse is situated and what you can and cannot build in these locations.
- ESG: the environmental impact of your warehouse on the surrounding natural area and community. Be sure to implement eco-friendly practices, and conduct regular reviews to ensure you are abiding by all laws and doing the best for the environment.
In summary, warehouse distribution services in South Africa are deeply impacted by a variety of factors, some out of your control, but many within manageable parameters. When considering building a warehouse, or taking over an already existing warehouse, be sure to consult with experts who have experience in warehouse distribution needs.
At Inter-Sped we pride ourselves in being leaders in transport and logistics, providing skills in not only warehousing, but also freight forwarding and customs brokering. If you are looking to partner with experienced warehouse distribution experts, we have offices in Johannesburg, Cape Town and Durban and partners based around the world. Inter-Sped provides you with a dedicated team and personalised service. Let’s chat!
