Introduction to Storage Charges and Storage Periods
🔔 Note: this article is part of the CartonCloud Academy - WMS Charging Trail. Please ensure you have read Understanding Adhoc Charges first. 🎓
The next category of charges we will be covering is storage charges. Storage charges cover the costs associated with storing products for your customers. Storage charges can sometimes be complex, however, are also very flexible allowing you to charge according to your customer and operational requirements.
Follow along with Brittany as she explains storage charges and storage periods.
What is a storage period?
Storage Periods are the number of days at a time that you wish to charge storage for.
Storage Periods contain a start and end date and are created automatically within CartonCloud as soon as products are loaded into warehouse locations.
What is a storage charge?
Storage charges apply to stock that is in the warehouse and allocated to a warehouse location. Storage Charges are automatically calculated and applied to invoices.
There are a number of different storage charging methods available, making storage charges flexible to your customer and operational requirements and ensuring you are charging your customers correctly.
Storage Charges incur for the entire storage period. For example, if a pallet is only in the warehouse for 1 hour and the storage period is a week, it will still be charged for 1 week of storage. In addition, for 'partial' products, storage is never reduced.
Important points to note on storage charging:
- Storage charges are based on the product type of the stock in the warehouse location or the product type of that warehouse location. This is controlled from the rate card settings.
- Storage charge method set up for the rate must also be selected against the product that is being charged for that rate
Nick from Coffee Warehousing and Distribution is looking forward to setting up his customer’s storage charges and storage periods. Storage charges were previously calculated manually, Nick is looking forward to saving time and improving charging accuracy by automating the rate calculation process.
Storage Charges and Storage Period Settings
Before we start creating storage charges you first need to ensure you have the correct storage charges settings configured from within the customer’s rate card.
Follow along with Brittany as she explains the different settings and how you can configure them from the rate card.
Nick from Coffee Warehousing and Distribution is ready to start configuring his storage charges, however, he first needs to review the below settings, configure the settings in the appropriate rate cards and then he will be able to create his storage charges.
Storage Charges Settings
| Setting Name | Description |
|---|---|
| Storage Charge Period Generation | The period for which you wish to charge storage. Storage is typically charged Weekly, but you could set this to a value such as 1 day to calculate storage charges daily. Other options include Monthly/Fortnightly and a new option of Disable if you require no storage to be charged. |
| Storage Starts On | Based on the selection of the Storage Charge Period, options are Day of the week (Mon-Sun for Weekly/Fortnightly) or Date of the Month (1-28 for Monthly) |
| Pallet Rental | If you charge clients an additional fee for Pallet Rental such as CHEP for example, this can be entered here. This fee will apply for every warehouse location that is in use for the Storage Charge Days nominated. e.g. if 7 then this pallet rental value will be charged once every 7 days. The pallet rental charges apply for every pallet in the warehouse for the customer/s associated with the rate card. |
| Double Charge Storage | New storage charges will be applied even if the location was charged for existing storage. This means that if a location was in use at the start of the storage period, and then new stock arrived and went into the same location, it'll be charged again as 'New Storage'. This also applies if the location was in use at the beginning of the storage period, then went empty (stock went out), and then more stock was put into the location. By enabling 'Double Charge Storage', you'll charge the location once for the existing product, and again for the new stock coming in. |
| Charge on Split | Charge storage immediately when splitting or partially moving stock. If disabled (default), stock which is split or partially moved inside the warehouse within a given storage period does not begin charging for those new locations until the next storage period begins. The locations will only begin charging on the next storage period and are labelled as "Existing" Storage. If this is enabled, split and partially moved stock commences storage charges as "New" storage immediately upon the movement in exactly the same way as new stock entering the warehouse for the first time would be charged as New storage. Note that full stock movements do not trigger additional storage, the additional charges will only come into play if the stock is split between two or more locations. |
| Charge Product Type Option | Both Products and Warehouse Locations have a product type which controls the Storage Rates used. If, for example, you have an ambient product but temporarily store it in a Chilled location, you would probably still want to charge the Ambient Rate. In this circumstance, the Charge Product Type should be set to 'Products', as the Products product type is used to determine the charges. However, if you operate a warehouse which is all ambient, but you charge differently for Racked Locations vs Block Stacking (for example), you would want to charge based on the Warehouse Locations Product Type, rather than the Products Product Type - as all products will be 'Ambient' but you may have some locations setup as 'Block Stack' or 'Racked'.
Note: Not all Storage Charge Method take this setting into effect, for example, Item based Storage charges charge the same rate irrespective of the Product Type of the Warehouse Location the product is stored in. For a complete list of which charging methods are affected by this setting, refer to: Rate Card - Storage Charges |
| Storage Period Minimum Charge | The minimum charge for a Storage Period. For example, if the minimum charge is set to $600, and all storage charges added together come to $500, then the minimum charge would push the total price up to $600. |
| Storage Period Free Days | The number of free days storage to give to stock. For example, if you set this to 3 and stock arrived into your Warehouse on a Monday, then storage would begin charging on the Thursday. See "Setting the number of free days within a Storage Period" for more info. |
Once Nick has reviewed the above settings he can now configure the settings in the appropriate Rate Cards. To do this he:
- Navigate to the relevant Rate Card, More > Rate Card.
- Select the relevant Rate Card.
- Click Edit.
- Scroll down to the bottom and find the storage charge settings.
- Update the settings as required and click Save.
Now that Nick has updated his storage charge rate card settings he is ready to start creating his storage charges. How to create a storage charge will be covered in the next unit.
▶️ Follow along in the WMS Charging Trail...next up is Understanding Storage Charge Methods 🎓