The Importance Of Reliable Warehousing & Logistics For Utility Corporations

  • Finding reliable warehousing and logistics solutions for your utility corporation can drastically reduce your holding costs.

New technology, new regulations, & industry standards, these are three significant factors that are driving major changes within the Power Generation and Utility Sector. Whether it is the rise of renewable energy sources or the phasing out of more traditional power generation methods, new technologies are pushing new power generation & the utility sector forward.    The burning question becomes, how do you properly manage and store this increase in industrial parts & equipment? The industry's need for replacement equipment and spare parts is only increasing. This is because corporations cannot afford to have any downtime due to equipment failure. Now more than ever, the need for reliable warehousing and logistics is critical.


The utility sector continues to invest more capital year over year on new technologies, equipment, and essential power generation equipment. This increased spending means that more and more material, machinery, and parts are becoming surplus to their operations. However, very few of these utilities are correctly leveraging the power of an asset recovery strategy to alleviate their surplus levels. This means increased demand for storage. According to a recent article, "Since 2015 warehouse demand has outpaced new completions by 169 million Sq.ft and rents have increased by 19.2%."

This means more businesses are desperately trying to find new warehouses and storage to no avail. If you are lucky enough to find a warehouse, you are going to be paying more because of the shortage of storage you will be paying more than ever before. This increase storage cost will only cut into your profitability, costing you more year over year.

When considering the cost of warehousing your surplus assets, there are a few factors to consider:

*Location and hours of the warehouse

*Terms and conditions that your items will be under

*Insurance that will be covering your items

*The volume of items that will be entering storage

*Static Expenses & Active Expenses

Security Each of these factors plays an essential role in pricing. There are static and fluctuating costs involved in warehousing services. A fluctuating price, for example, is location. Location is crucial as you want the assets you have stored to be in a reachable distance when you need them. If the warehouse is not close by, then you will need reliable transportation. Most warehousing services use third-party logistics (3PL) providers, so prices will vary depending on what they have been quoted at the time of shipping. This means that you will not have a clear idea of the actual cost of the service until you have to pay. The further away your company is from the warehouse, the more this could be. Hours are also critical, as they should reflect the needs of your business.

Static costs are costs that you can expect to remain the same over time, with little to no fluctuation. This includes the price per square foot that your assets will be stored at. Static costs are combined with active costs like labor and equipment. Active Costs vary depending on the month as you may not need your assets moved every month or need to rent equipment. Since there can be a lot of fluctuation in pricing, it is essential to ask questions to ensure you get the most value out of the experience like:

*Where is the warehouse located, and what security do you have in place?

*Is real-time inventory data available? How do you ensure accuracy?

*What is the timeline for the fulfillment of orders?

*What happens if commitments aren't met?


Finding a cost-effective and secure way to store your surplus assets is only half of the struggle. The other half of the battle is finding the right logistics and distribution processes that suit your business needs. Once you have decided to put your surplus assets into a warehouse, the assets need to be transported to the warehouse facility. Additionally, when you are ready to bring the assets back into service, they need to be returned to your facility. Warehousing and distribution services can be two separate services or can be provided as a package. By having one company provide both services, you will be able to find a more cost-effective solution while removing any hiccups in communication between two separate vendors.

You need to be able to trust the quality of service being provided. These assets are valuable to your business and need to arrive on time and in perfect condition. A delay in the shipment or having an asset arrived damaged could result in costly delays that you were trying to avoid by keeping the surplus assets in stock. By choosing a company with a reliable and robust network of logistics and distribution systems, you can avoid any issues with delays in shipments. They will be able to move the surplus assets between locations quickly and efficiently.


There are two main methods for Utility corporations to store their industrial surplus. The first method is with internal warehousing facilities. This can be storage area owned by the corporation or can that is being developed and built into a storage facility. The main benefit of this method of storing industrial surplus is that the asset never leaves your storage area. This means you can ensure there is no damage from transportation, and the item does not get lost during shipping. By keeping this asset in your facilities, you can have the most control possible over the asset and what happens to it during storage. However, in contrast to the benefits, the more control you have over the assets, the higher the costs tend to be. The following costs need to be considered when looking to store your surplus

  • Real Estate Costs - The cost of the land in which the warehouse or storage is built. You will want to have a warehouse near the location of each facility as you do not want to have to ship parts across a great distance. 
  • Building Costs - An obvious cost when considering using your own internal storage facility. 
  • Labour Costs - Once your surplus is stored in the facility, you will need to employ new staff members. Material handling staff and or staff that will maintain the equipment while it is in storage. 

  • For facilities that do not want to keep their surplus assets on hand, there are Warehouse Services. This service allows for your business to free up valuable floor space in your facility by storing your facilities surplus assets in a secure off-site location. Instead of trying to fit all your surplus equipment and MRO parts in the corner of your facility, you can have them moved and stored safely somewhere else. You will still have complete access to and control over your assets while being able to call them back into service whenever you need them without a hassle.

    You will be saving floor space in your facility by keeping your surplus equipment and MRO parts off-site. The extra space in your facility can be used to increase production or whatever other needs your company may have. Your assets will be stored in a well-maintained and serviced warehouse. Every item will be cataloged appropriately and stored, making it easy to access and locate. Your business will know what items you have and what condition they are in. This knowledge will help your business plan ahead and make decisions, and you will know what parts, if any, need to be replaced and what parts you are running a low on. This will eliminate the guesswork in maintaining the stock levels.

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