Guide to Australian 3PL Warehousing

A Quick Guide to Australian 3PL Warehousing Services

By Nick Bartlett on November 14, 2022
For the interested e-commerce seller, here are some of the things you need to know when sourcing warehouses in Australia.

At long last, Australian e-commerce is on the rise.

Though e-commerce in the Land Down Under has historically lagged behind other developed countries, large 3PLs like Amazon have established a firm base in Australia since 2017. 

And since COVID-19, the industry has begun to take off. Its relatively affluent population and proximity to massive Southeast Asian e-commerce hubs like Singapore, China, Korea, and Vietnam are making it a coveted hub for merchants and logistics companies alike.

Along with Australia’s rising e-commerce landscape, warehouses of all types have become much easier to find and contract. As of 2022, there were 1,986 general warehousing and cold storage businesses in Australia with the industry expanding at 5.2% (compared to 2.6% for the past 5 years).

Our business has been operating with logistics companies in Australia since 2019 because we believe in its bright future too. For the interested e-commerce seller, here are some of the things you need to know when sourcing warehouses in the region.

Curious about shipping from China to Australia? Read our guide.

How Much Does 3PL Warehousing in Australia Cost?

Warehousing fees can vary pretty wildly between providers. Most businesses have variable pricing depending on:

  • The length of your contract.
  • How long you intend to store your goods.
  • The season you are using them (seasonal product season can be priced higher for handling at peak times e.g. xmas)
  • The nature of the product you're storing, e.g. small and light vs big and heavy. 

If you choose to use FBA in Australia, for example, storage fees can range from $19.00 - $27.00 per cubic meter per day depending on the time of year. Amazon also charges $1,100 per cubic meter for any item stored at their facilities for more than 365 days.

In general, you can expect prices to fall in these ranges (as of 2022):

  • For general warehousing (8-12 AUD/Per pallet per week) 
  • For climate-controlled warehousing (10-15 AUD/Per pallet per week)
  • For long-term warehousing (8-10 AUD/Per pallet/per week )

The most common billing method for 3PL warehousing is a fixed rate based on usage for the three most common services (receiving, storing, fulfillment) — often called a “transaction-based cost.” However, there are other ways of charging, such as:

  • Fixed cost basis - where the client is charged a monthly fee that is paid regardless of activity.
  • Cost plus basis - where the client is charged only the cost of fulfillment plus a markup for profit.
  • A combination of the two for different services.

Keep an eye on where your money is going:

  • For receiving fees, you’ll pay the handling cost per pallet or per inbounding container and processing/putting away fees depending on what they will be handling.
  • Storage fees are typically done per pallet, quoted as a weekly fee, and billed monthly.
  • Fulfillment fees include the labor for picking (by unit/carton/pallet) and packing materials for safe delivery.

What type of Australian 3PL warehouse should you use?

Googling 3PL warehousing online usually yields a confusing hodgepodge of results — 3PL warehousing is a relatively new concept and there are few clear definitions out there.

According to CBIP’s definition of 3PL (third-party logistics), 3PL warehousing is a warehouse that provides additional services besides storage like fulfillment, value-added services like insurance, and reverse logistics. In the industry at large, 3PLs are often used interchangeably with fulfillment centers (although arguably not all 3PLs are fulfillment centers).

Fulfillment centers are special types of warehouses that store goods for brief periods before they are sent on to the customer. Usually, fulfillment centers help with final delivery as well as any returns.

There are generally two types of 3PL warehouses or fulfillment centers you’ll work with:

  • Express courier services - These are usually the big names you may have heard of before like Amazon and DHL. They often own many warehouses throughout a region as well as shipping, ground transport, software, and fulfillment services.
  • Standalone third parties - These are smaller entities that usually own one or two individual warehouses. They compete with large couriers with more flexible contracts, pricing, and software integrations.

Some of the Primary Express Courier Warehousing Services in Australia

CouriersPlease

A fully-owned subsidiary of Singapore Post, CouriersPlease started in 1983 and recently upgraded to an international service that ships to over 200 countries including Australia. 

CouriersPlease is a “franchised parcel delivery service” that allows customers to pick up their parcels at their own convenience using POPstations. They also run a traditional warehousing and fulfillment model in most major metro areas.

Australia Post

The oldest Australian courier, AusPost is a government business enterprise (the Australian government is the sole shareholder) formerly known as the Australian Postal Corporation. It has been around the block since its founding in 1809 with post offices in 2,500-plus rural and remote areas.

AusPost services millions of Australians every day offering 3PL warehousing services integrated with their logistics management software, Fulfilio. For deliveries, they use an internal logistics service called StarTrack.

Aramex (Formerly Fastway)

UAE-based franchise courier, Aramex, is currently one of the larger presences in the region with operations in all major cities. To secure its spot in the market, it acquired longtime Australian logistics incumbent, Fastway, in 2016 for $116 million.

Currently, Aramex has large amounts of warehouse space available for rent in most of their locations. They integrate with Shopify, Magento, WooCommerce, and TradeVine. Aramex also has an integration with eBay.

Sendle

Founded in 2014, Sendle is another Australian-native courier service that uses Aramex (FKA Fastway) for its last-mile fulfillment. They specialize in speedy, small-business fulfillment around the nation.

Sendle specializes in easy package drop-offs for customers at blue boxes or mailboxes. Their software integrates with a host of e-commerce stores like WooCommerce, Shopify, eBay, and Etsy. For warehousing, they operate using individual third-party providers across Australia. They even integrate with CBIP.

How to find the best 3PL warehousing service for your business

As you can see, while there are many options out there today, finding the right 3PL warehousing service in Australia can actually be pretty challenging. Prices are rarely transparent and you usually won’t know which logistics providers a warehouse can work with without calling them.

As a small business, you may have the best luck working with an express courier service — they can take care of every aspect of your logistics with little work on your end. However, if you plan to expand your logistics and wish to work with standalone 3PL warehouses, we suggest another option: fourth-party logistics.

Today, there is a fast-growing network of third-party providers in every part of logistics competing head-to-head with express courier services. They bring to the table more flexible pricing and integrations with software and other logistics providers. But it’s a chore to piece together these supply chains – that’s where we come in.

When you contract with CBIP you get one point of contact for hundreds of 3PL logistics providers across Australia and the world. We can create these flexible networks for you and adapt our service as your business grows.

Curious how we could help your business do warehousing in Australia better? Head over to our website and register for a free, no-strings call with one of our experts.

Sources:

https://www.ibisworld.com/au/number-of-businesses/general-warehousing-cold-storage/498/#:~:text=There%20are%201%2C986%20General%20Warehousing,increase%20of%202.6%25%20from%202021.

https://www.sellerapp.com/blog/amazon-australia-seller-fee-explained/

https://www.abf.gov.au/licensing/warehouses/about

About Author

Nick Bartlett

Nick Bartlett is CBIP’s director of sales and marketing. His expertise lies in marketing, supply chain management, and corporate retail experience. He honed his skills over 10+ years working across the Asia Pacific region and beyond.

Nick keeps a close eye on new markets and believes successful business operations come through value-based relationships.

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