A Bin Center is a drop off facility that is smaller than a public warehouse.
Often operated by a third-party logistics provider, the bin center serves as a consolidation point for smaller shipments or overflow from an existing warehouse.
Bin Centers are popular with ecommerce fulfillment providers because they provide low cost storage for small parcels before they are shipped to consumers. They also serve as an excellent secondary location for retailers that may lose shipments in transit due to high security risks.
Bin Centers are normally used to collect small packages that are shipped via ground transportation. For deliveries requiring faster transit times, many e-tailers use a public warehouse for their primary distribution location. These facilities offer larger storage space and have higher security standards than Bin Centers.
The difference between a public warehouse and Bin Center is similar to the difference between renting an apartment vs. owning your own home. Public warehouses provide more storage space at a lower price point because the building is shared by multiple companies. A commercial distributor owns their own smaller facility in order to have complete control over operations including security, staffing levels, receiving times etc.. Businesses that may not yet need the high cost associated with owning or leasing a public warehousing facility choose to use a Bin Center in order to get the benefits of shared storage.
Another benefit of using a Bin Center is speed. Transportation providers are not required to wait for security clearance before picking up packages at a public warehouse or distribution center. However, deliveries are often diverted to an outside location until security protocols have been satisfied. This can add significant delays. Bin Centers serve as drop off locations for transportation companies that don’t require additional screenings due to their remote location and small size . Security policies still apply when shipping with ground transportation carriers but these procedures do not require special handling like large warehouses and distribution centers.
Due to their “in-between” nature, most ecommerce businesses use of more than one type of facility. A distribution center is used for high-volume shipments while Bin Centers are primarily used to store overflow or low priority packages.