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International Forwarding Association Blog » Warehousing logistics » Four Types of Warehouses and How They Work

Four Types of Warehouses and How They Work

When people think of warehouses, the image of a dark, cold, and dusty place usually comes to mind. Yet, today’s facilities are modern, clean, and full of light. They keep goods safe, meet urgent demand, and keep the economy moving. Here are 4 types of warehouses and the functions they serve.


  1. Cold Storage

Cold storage warehouses are used to keep temperature-sensitive and perishable goods at a specific temperature. They enable cosmetics, artwork, medicines, plants, and foods to have longer lives and maintain their quality and integrity. The types of items that require cold storage include:

  • Aircraft components
  • Hides, wool, fur, and other organic textiles
  • Disinfectants and reagents
  • Candles
  • Artwork and books, including film canisters, paintings, and historical documents
  • IVs, blood samples, vaccines, medicines, and certain dental materials
  • Perishable nutrient products
  • Foodstuff, including frozen and processed foods, dairy, seafood, meat, and fresh produce.

A number of industries use cold warehousing as well as refrigeration transport services, including healthcare institutions and pharmaceuticals, frozen food producers, exporters and importers, food service firms, supermarkets, and food outlets and restaurants.

There are also climate-controlled facilities where humidity and temperature are controlled by systems of air conditioning, ventilation, and heating. They are usually used for the storage of foods, electronics, and pharmaceuticals.



  1. On-demand Storage

On-demand facilities connect warehouses with excess storage space with users that need it, including shippers, retailers, and e-commerce companies. Businesses typically need extra storage due to seasonal and temporary spikes in sales which on-demand facilities offer on a pay-per-use basis.

There are different alternatives to on-demand storage, including third-party fulfilment companies, contract logistics providers, and in-house distribution capabilities. While building an in-house facility looks like an attractive option that allows for more autonomy and control, the start-up costs are typically high. There are also variable costs, such as packaging supplies, warehouse equipment, and labor.


  1. Smart Warehouse

Smart facilities leverage interconnected technologies and automation systems for receiving and picking orders, storage, and shipping. Advanced technologies help decrease errors and improve efficiency, enabling faster shipping. Further benefits include predictive order processing, improved space utilization, better tracking of inventory and assets, and lower operational costs.

Smart warehouses utilize automated systems and technologies such as:

  • Collaborative robots
  • Internet of Things
  • Automated guided vehicles and picking tools
  • Drones
  • Warehouse management systems
  • Predictive analysis and business intelligence
  • Electronic data interchange
  • Radiofrequency identification
  • Collaborative storage and retrieval systems
  • Inventory control platforms



  1. Distribution Center

A distribution center is a logistics facility designed to receive and keep items over a short period of time. Distribution centers often offer a range of valued added services such as order fulfilment, cross-docking, packaging, and product mixing. As a rule, such facilities combine fulfilment practices such as exchange workflows, product returns, and order processing with standard best practices like quality control, space optimization, and inventory management.  Many distribution centers also leverage mobile data collection, automation, and other smart technology solutions.

Other types of storage facilities include cooperative, consolidated, bonded, and pick, pack, and ship warehouses.