Blog: The Benefits of Equipment Leasing for 3PLs

As more and more distribution centers and warehouses shift to eCommerce, they are faced with a completely different set of challenges from the traditional warehouse model: juggling more orders with fewer lines per order, needing better access to a variety of products, and keeping costs low when more labor seems like the only answer.

Let’s talk about how leasing automation equipment can address these issues and help eCommerce third-party logistics providers (3PL) keep up with all those incoming orders. Automation saves labor, improves productivity, and offers a smart way to meet your ever-growing demands. A vertical lift module (VLM) is one of the magic bullets in your automation arsenal. As a modular storage unit that can deliver products at an ergonomic height in a matter of seconds with a push of a button, VLMs meet a lot of challenges.

How automation helps 3PLs work more efficiently

A smarter storage and retrieval system makes better use of space than traditional racking and shelving so warehouse workers can immediately improve productivity by batch picking several orders at once. In fact, one VLM can recover up to 85% of floor space. They also are completely modular to build up or add to as you need. Reducing storage space (and increasing storage density) also reduces walking and searching time, thus increasing pick time productivity by 66%. That kind of time savings means you may be able to get rid of overtime or ancillary shifts – saving labor costs. Inventory accuracy also can be significantly improved as light pointers can facilitate picking the correct product in the correct quantity and works very well with batch picking.

So, you’re sold on the idea, but it can feel overwhelming to invest in all-new equipment in a changing world. The answer? Leasing automation equipment.

Why lease warehouse equipment?

Six Shuttle XP VLMs can save the labor of six people, paying for itself in three years, in a single shift operation. The savings are even more dramatic in operations with two or three shifts per day. By leasing, you are often cash flow positive every month, as the lease costs are less than the labor savings. With a 20 plus -year lifetime on a Kardex Remstar VLM, you’ve made a smart investment in your business but aren’t locked into ownership.

At the end of that lease, you’ll have the option to continue to use the equipment as is, move it to another location for a different customer, or store it for the future. Or, simply walk away from the lease, although we’ll bet you’ll think of new and effective ways to put a VLM to use.

Ecommerce is changing everything. Warehouses are huge, and labor is scarce. As you manage outsourced elements of a company’s distribution and fulfillment services, you may be faced with questions about ways to maximize efficiency and productivity in cost-effective ways. The answer may be leasing automation equipment like a VLM. Talk with a material handling experts to review your needs and see what they can do for you.