[FAQ] When Choosing A Warehouse, Are You Aware Of All The Risks?

When entering any contract, it is critical to understand your obligations fully to mitigate risk. This TT Brief provides a checklist that will assist warehouse operators in avoiding the pitfalls that could lead to unnecessary insurance claims or other disputes.

Physical Construction 

Before leasing or purchasing a  warehouse, consider its suitability by appointing a surveyor to establish the following:

• The age of the property and structural integrity
• Integrity of any previous modification works
• Drainage and run off capacities
• The maximum weight bearing of the floor
• Floor space, height of ceilings and size of doors (particularly relevant for out of gauge cargoes and forklifts)
• The height, size and number of truck ramps and loading bays
• The power supply and auxiliary power supply
• Fire detection and suppression
• Water supply and water pressure for sprinkler systems

Health and Safety 

Assess the following health and safety  precautions:

• Presence of health and safety maintenance logs (inspection reports for the roof, drains, pipes and guttering covering every area of the facility, including measures taken)
• Health and safety review schedules and responsibilities 
• Fire risks, operational risks and HSSE (it may be appropriate to hire a third party)
• Adequate smoke alarms, sprinkler systems and firefighting equipment
• Emergency response plan
• Employee awareness of health and safety protocols and responsibilities
• Implementation and enforcement of safety rules (smoking and mobile device usage on premises)

Location

Make sure that the location is suitable by checking the following:

• Suitability of surrounding road network and access (for both business operations and access to emergency services if required)
• Local time restrictions on use of trucks and machinery
• Local developments (whether political, regulatory or in terms of infrastructure) that may disrupt your operations
• Susceptibility to climate risks (heavy weather, flooding) and protective measures in place
• Adjacent neighbour risks (operations/stored cargoes)

Security 

Evaluate the security of the warehouse by assessing the following:

• Local crime levels (engage with local authorities)
• Security arrangements (secure entry points, CCTV, security guards, lighting, alarms)
• Security gates and perimeter fencing
• Third-party access protocols (limited to pre-arranged appointments, necessary display of formal ID)
• Employee access restrictions 
• Compliance with national and international dangerous goods storage regulations (if applicable)

Leasing Considerations

If you are leasing the warehouse, you may also need to consider:

• Responsibility for maintenance and repair
• Specific terms of lease, such as waiver of subrogation rights, obligations at termination or break clause/short notice to vacate
• Freedom to adapt the facility, such as racking or space for anticipated value add services

Operational Characteristics 

Ensure that current and future operational requirements are satisfactory considering:

• Capacity of overall space and high security, Dangerous Goods, temperature control etc
• Vehicular access, egress and parking capacity (for volumes anticipated)
• Pedestrian access and egress, including emergency assembly points

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Source: ttclub 

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