How does it work? What does it cost?

MTM Transport and Logistics is a 3PL company. We help companies with the logistics element of their business. MTM falls as a hybrid between SCM (Supply Chain Management) and a Fulfilment Warehouse.

Well that’s great you say, but how does that help me? How does it actually work? A question that we get all too often.

Do I need Volume?

A lot of 3PL’s have minimum orders per month and limits to what you can do or a stringent set of rules to follow to ensure things go smoothly. You are expected to do things in a certain way to make sure that the system does not break. One of the most common requirements that we come across is that of minimum movements.

At MTM we don’t mind if you move 1 unit a week or 100 units a week, we are able to accommodate. From agree’d fixed amounts per month for storage to variable weekly sliding scale per pallet, there is always a way to accommodate the business needs of every company.

3 component to the price:

  • Storage
  • Inbound
  • Outbound

Inbound

Inbound tends to be few and far between but very labour intensive. Counting, verifying and double checking stock to ensure it is correct takes time which directly translates to labour hours. Inbound costs as of writing range between $5.00 per parcel to $15.00 per pallet.

The variance come from how complicated your stock is to unpack, reorganise and manipulate. Some people have a pallet in/pallet out requirement whilst others need parcels broken down into individual bins.

Storage

This is the easiest component to understand as it is the easiest to measure. Storage is charged based upon how much space you need in the warehouse.

For smaller entities with little movement storage starts at $65.00 per month for the first pallet/BIN location plus a fixed amount increase per pallet or BIN to a renegotiated weekly/monthly rate.

Factors that effect your per pallet storage:

  1. Volume of trade- The more your stock turnover the cheaper storage becomes)
  2. Trading space- How much space you physically use
  3. Administrative burden– Overheads and consumables

As you can see, the amount of space you need is not the most important factor. This is why the first pallet costs more than subsequent pallets.

For someone who has low turnover (1-5 orders per week), low stock holding requirement- the storage charge will be $65/month. Each additional pallet in the situation will cost $5.95.

Now take someone in a similar situation that trades