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Break Bulk Warehousing - receives large shipments and arranges for delivery to multiple destinations gaining economy of scale for the large consolidated shipment.
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Break-bulk: The warehouse in this case serves the purpose of receiving bulk shipments through economical long distance transportation from plant and breaking of these into small shipments for local delivery to various customers. This enables small shipments in place of long distance small shipments
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Break bulk warehousing is where raw material or output is in large volume, and then the warehouse manages the logistics of delivery, eg. petroleum is delivered by tanker, or cement by containers, or as with Oranges Farming here in South Africa, the season is say6 weeks where the oranges are ripe, picked and juice extracted, maintained in big bulk containers, of100,000 ltr vats, then bulk tankers are filled, and these transport the juice to manufacturers who add the preservatives, and package into small units which is used and further distributed to retailers.
The warehouse would have specialised vats, storage containers, which have stirrers, refrigeration if required, or fire controls for flammable liquids. Farmers and producers of the first process, do not have the capital capacity financially to have this sort of specialised equipment or plant.
Once you create a bulk using consolidation warehouse, then there has to be a method to break that bulk into smaller shipments. There is a reason why consolidation was done because smaller shipments were together into bulk for economical purposes and shipped to a destination. Once the consolidated shipment arrives at an importer’s site or at a destination then if it is for delivery to multiple customers then the bulk has to be broken. So this is where the break bulk warehouses play an important role. Break bulk warehouse operations are similar to consolidation except that it is the reverse of consolidation. Consolidated materials are broken into smaller chunks and delivered to individual customers based on customer requirements. This helps in managing the economy sub scale for the end customer. A break bulk operations receives the combined customer orders from a manufacturer and then ships them to individual customers based on the requirement. A break bulk warehouse fundamentally sorts and splits the individual orders and arranges for local delivery. Break bulk helps in ensuring economical large bulk transportation from origin into smaller sized local deliveries. Take a look at the example of this break bulk operation. A plant A is sending a large consignment to multiple customers, P, Q and R who are all located in a similar zone or a nearby location. So what happens is this large consignment goes to a break bulk warehouse and depending upon the customer order at P,Q and R,they are broken into smaller chunks and delivered locally using local delivery transportation methods. This is another example of break bulk where deliveries from multiple plants A, B and C are first consolidated at two break bulk warehouses and then delivered to customer D, E and F based on customer requirements. The reason why we need a break bulk warehouse here is that if the customer D directly gets the material from either plant A, B or C, the cost of logistics will be very high. So in this case the bulk cost of logistics is managed by the break bulk operator in a break bulk warehouse and then the customer D, E and F receives only what he has ordered. Although the break bulk warehouse receives a combined shipment.
Warehouses that receive product in bulk, often by rail car, and then repackage the product based on customer requirements. In the case of containers with imported products, this generally requires the inspection and relabeling of product. Generally, special billing rules apply.
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