What are the pros and cons re building/ leasing a warehouse vs a 3PL?
Sort by:
many thanks Zsofia!
Building/Leasing a Warehouse:
Pros: Customization, control over operations, long-term investment, potential for branding.
Cons: High upfront costs, time-consuming construction/retrofitting, ongoing maintenance expenses, ownership risks, scalability challenges.
Third-Party Logistics (3PL):
Pros: Expertise, flexibility, cost efficiency, focus on core business, access to a network of facilities.
Cons: Less control over operations, dependency on 3PL performance, limited customization, contractual obligations affecting flexibility.
The decision hinges on factors like business needs, growth projections, financial resources, and desired level of control and flexibility.
Many thanks for your valuable input
I am looking to set up a new Distribution Centre in Spain and considering whether to get engage with a 3PL or just find a property (leasing). Any ideas/ experience will benefit me
If it is in Spain, I would discuss with big shippers there to understand who are key players in 3PL sector. There are several good companies there, not well known abroad. If you want to lease property and run it yourself all depand on size of operations and what is your objective. If not crucial in value-added, I would always go for 3PL.
Hi Vladimir, thanks for sharing your view here.
Most important 2 key factors are:
1. the capabilities of your own team (or whom you can recruit) that would manage the WH if you build/lease it
2. your need for control of the processes and how much you need certain process efficiencies vs how much you are willing to tolerate a multi-tenant WH solution with a 3PL (there will be tradeoffs of course as others have pointed out below in pros/cons) compared to how your business is doing on the market
As soon as you answered these, you can dig into the detailed pros/cons.