It's That Simple, Right?
Determining Proper Warehousing Code
Determining the proper warehousing code contemplates one very important question: Does the warehouse own the goods they store?
- No? Well now you’re left with 7360 or 8292 as your options.
- Yes? Great! Use 8018.
It’s that simple, right? Not quite. In the staffing industry we’re constantly pursuing the idea of perfect, easy classifications, but we all know that’s not an option. Especially with warehousing codes, there are a lot of grey areas. Even as I learned how to properly classify, I thought the warehouse rules were easy:
- If it’s short-term storage or “logistics” …7360
- If it’s long-term storage (six months or longer) …8292
- If the warehouse owns the goods they store …8018
But it’s not that simple. The one code that’s almost always the first one ruled out actually contemplates a lot more warehousing operations than it lets on. 8018 (Store-Wholesale-NOC) is typically eliminated as soon as we find out the goods aren’t owned by the company storing them. “Bye-bye 8018, thanks for playing.” But wait! That’s not all this wholesale code can do.
When it comes to warehouse operations, 8018 is most commonly used for something like a Costco or Sam’s Club. Big stores that also operate their own warehouse where they store inventory. “But what about if you aren’t an actual store?” Amazon.com warehouses, for example. They sell a lot of stuff online and have plenty of warehouses to store their inventory. “Easy enough, but they own their goods.”
There are some less common areas of 8018 that also apply to the world of warehouses. For example, if the company that runs the warehouse does NOT own the good but is doing some packing consolidation. This means they receive product in bulk, and then sort or repack the goods for another entity. This repackaging operation is one that’s covered by 8018 that doesn’t require ownership of the goods.
Another is when a warehouse is acting as a distribution center. If the warehouse is receiving goods and storing them short-term, until an order is received for this product at which point it’s packed according to the order and sent out. This order pulling/packing and storage operation is also contemplated by 8018.
These are the two biggest missed operations that most people write off immediately due to this ownership rule. Take some time to read the scope in its entirety because it’s really not as simple as it seems.
For more information on proper warehousing codes, contact a member of the ‘A’ Team.
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