Boosting The Bottom Line: Practical Approaches to Cost Control in Warehousing

4 min read

60-Second Summary

Warehouses in the UK are under pressure to reduce costs while maintaining performance. From tackling labour inefficiencies and reducing picking errors to optimising space and slashing energy bills, these practical strategies help operators cut waste, improve efficiency, and drive long-term savings, without compromising speed, safety, or service.

Introduction

Inflationary pressures, energy costs, and labour shortages remain persistent challenges in the current UK logistics climate. Controlling warehouse costs isn’t just prudent, it’s essential. For operators trying to maintain competitiveness and customer satisfaction without driving up overheads, the balancing act is more complex than ever.

Yet, amid these pressures, practical and proven strategies are available to drive efficiency and reduce costs, without sacrificing service or speed. Here are five approaches you can implement today to improve warehouse cost control and bolster long-term resilience.

1. Tackle Labour Inefficiencies Head-On

Labour accounts for between 50% and 65% of total warehouse operating costs in the UK and similar markets, and it’s often the largest and most unpredictable expense. Peak season demand, absenteeism, and reliance on temp workers all contribute to inefficiencies that drive up costs and reduce accuracy.

One proven solution is automation. Implementing systems such as semi-automated conveyors, robotic pickers, or high-throughput sorters like Sure Sort® X can transform how your team works. Capable of sorting up to 2,100 items per hour while using just 2.5kW of power, Sure Sort X streamlines labour-intensive tasks, reducing reliance on overtime and agency workers.

With fewer manual touchpoints, you not only cut costs but also reduce errors and injury risks, boosting productivity and staff morale in one go.

2. Reduce Picking and Packing Errors

A single mispick doesn’t just lead to customer frustration, it also carries a financial burden through re-picks, returns, refunds, and re-shipping. Multiply that across thousands of orders, and it quickly becomes a serious cost centre.

Minimise these errors by deploying:

Pick-to-light systems for fast, visual order guidance

Barcode scanning scanning to reduce human error in SKU handling

WMS-driven workflows that guide pickers through optimised routes

An advanced WMS can track SKU velocity and map stock to minimise travel paths, while error alerts and double-check protocols catch issues before they become costly. Integrated verification tools can further reduce the rework and returns often triggered by inaccurate picks.

Beyond cost savings, these improvements support stronger customer satisfaction, a key contributor to repeat business and positive reviews, particularly in fast-moving sectors like retail, e-commerce, and 3PL.

3. Optimise Space and Inventory

Warehouse space is expensive, especially in densely populated regions of the UK. Yet many facilities underutilise their existing footprint due to outdated layouts or inefficient racking. Optimising how and where you store inventory can unlock substantial savings.

Automated Storage and Retrieval Systems (AS/RS) make better use of vertical space while improving picking speeds and accuracy. Dynamic slotting can be used to place fast-moving SKUs in prime locations, reducing unnecessary travel time.

Instead of thinking about expansion, consider:

Reconfiguring existing racking with high-density or vertical solutions
Using modular AS/RS to increase capacity without increasing footprint
Regularly reviewing SKU velocity to inform slotting strategy

Better space use translates into faster fulfilment, lower energy costs, and postponed capital expenditure on new facilities.

4. Slash Utility and Energy Costs

Utility costs, especially electricity, can quietly erode warehouse profitability. Thankfully, this is one of the most straightforward areas to target for quick wins.
Simple upgrades can deliver outsized returns:

Even older buildings can benefit from these changes. Many UK facilities are eligible for government incentives or energy-efficiency grants, helping offset upgrade costs while reducing long-term outgoings. As sustainability becomes a regulatory and reputational priority, these improvements also bolster ESG credentials.

5. Control the “Silent Drainers” of Your Operation

Not all cost issues shout. Some of the most persistent drains on warehouse budgets are subtle and easily overlooked. These “silent drainers” include everything from idle conveyors and inefficient picking routes to unmonitored dead stock and excess material handling.

To identify and eliminate them, visibility is critical. Use real-time dashboards and analytics tools to track performance KPIs and uncover hidden waste. Even simple metrics, like time spent travelling between picks or bins, can reveal inefficiencies.
Look for:

Long picker travel distances due to poor slotting
Excessive touches or handovers in fulfilment
Dead stock occupying valuable storage space
Misuse or underuse of expensive equipment

Advanced systems like Xtract™ can help address some of these issues automatically by retrieving completed orders and transferring them to dispatch without manual intervention, saving both time and labour.

By treating your operation as a dynamic, evolving system, and not just a set of tasks, you can turn silent costs into active savings.

Efficiency is the New Cost Advantage

Operational excellence is no longer a “nice to have” it’s essential to staying afloat and competitive. Cost control isn’t about slashing budgets; it’s about getting more value out of the time, space, people, and resources you already have.

By addressing labour inefficiencies, eliminating errors, improving space utilisation, trimming energy use, and identifying silent costs, warehouse operations across the UK can move from firefighting to future-proofing.

Want to take your strategy further? Explore the complete guide, Optimising Operations: Strategies for Efficiency and Cost Control, for more insights tailored to the UK warehousing landscape.

Want to learn more? Contact us to schedule a meeting or demo today.

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