How Are Warehouses Reducing Costs By Using Lumper Services

by Vector | Mar 18, 2021 7:41:22 PM

How-Are-Warehouses-Reducing-Costs-By-Using-Lumper-ServicesWarehouses receive, store and ship out products for businesses around the world. There are expenses related to the operation of these warehouses which include:

  • Lease Payments
  • Utilities payments
  • Equipment 
  • Supplies
  • Payroll

Warehouse Lease/Rental Payments – Warehouses need to pay their rent whether the warehouse is rented, leased or owned. The cost to rent a warehouse can range from as low as $0.85 a square foot up to $5.00 per square foot. 

Utilities - Warehouses are large facilities with lots of open space, the costs to light, heat and cool will vary depending on the size and energy efficiency of the facility. As reference BC Hydro rates for electricity are about $0.0906 per kWh for medium sized businesses and $0.0567 per kWh for large businesses. 

Equipment - Warehouses require several types of equipment to function properly, these pieces of equipment include but are not limited to:

  • Forklifts/ Clamp Trucks
  • Pallet Wrap Machines
  • Pallet Jacks
  • Loading Bays
  • Loading Ramps

Supplies - Warehouses require supplies such as printer paper, label paper, pens, tape, markers, pallet shrink wrap and many more things. The costs associated with these supplies can really add up. 

Payroll - Payroll is typically the largest expense for warehouses, a typical 10,000 square foot warehouse could have up to 30 employees working throughout the day. Some positions that need to be filled in warehouses include:

  • management
  • forklift drivers
  • order pickers
  • container unloaders (Lumpers)

Flat Rate Lumper Service Vs Hourly Workers

Many of the costs associated with operating a warehouse are fixed costs that really can’t be lowered or changed. But one cost many warehouses are realizing that they can cut are on employee costs associated with container unloading and loading. 

Normally a warehouse will have hourly workers slowly unload shipping containers which can vary costs depending on how fast the employee wants to work that day. On the other hand a warehouse can hire a flat rate company to unload or load their containers for them for a flat rate. So instead of playing several workers an hourly rate and having to pay an unknown amount for each container, a warehouse can just pay a flat rate and let the Lumper company deal with it.

What Is A Lumper Service?

A Lumper service is a specialized service that supplies workers to unload containers. Lumper HQ is a lumper company that offers a flat rate for its lumper services. 

Cost Saving With Using A Flat Rate Lumper Services

The savings associated with using a flat rate lumper service will vary but let’s look at this scenario. The Warehouse has a shipping container that needs to be unloaded, they can use two options:

  1. The warehouse uses 3 hourly workers to unload the container which takes 4 hours for a total of 12 man hours. With current warehouse labourer wages the warehouse would be paying between $15-$18/ hour for their own employees or $21-$25/ hour for temp agency workers. So for the 12 work hours required to unload the container the warehouse would pay anywhere from $180 at the lowest up to $300.
  2. Option 2 is where the warehouse uses a flat rate service and pays a pre negotiated rate to unload the container which starts at only $195 per container. Check out this pricing calculator to get a quote for lumper services. 

Conclusion​
It is clear the best option for warehouses is to outsource their container destuffing (unloading) and loading to flat rate lumper services.

 

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