Cold storage is often priced by the pallet position each month, with a fee for each pallet moved in or out, and sometimes a fee per case picked for a mixed order. To set the rate, add up what the cold room costs you each month, its share of rent, power, the build-out spread over its life, repairs and insurance, and divide by the pallet positions you can expect to keep full, not the number you have. Rate a pallet = cold room costs ÷ (positions × share kept full) ÷ (1 − margin). In the example below, a food hub's 60-position cooler costs $2,925 to run each month; at 70% full, a full position costs $69.64, and $120 a pallet each month leaves a margin of about 42%. Below is the rate, handling fees, a renter's bill, and a free calculator.
The short version
- Price by the pallet position each month, plus in-and-out handling fees.
- Count every cost: rent share, power, the build-out over its life, service and repairs, insurance.
- Divide by the positions you'll really keep full; an empty position still costs money.
- Add your margin; check it against what others nearby charge.
- Charge for handling and case picks separately: they're labor, not space.
- Freezer space costs more to run than cooler space; price it higher.
- TaroStack keeps each renter's pallets as theirs, counted and released. More below.
The rate, from your costs
Two Rivers Food Hub, a made-up food hub in Mankato, Minnesota, I use in these examples, rents spare positions in its cooler to farms and food makers:
| The cold room, each month | Cost |
|---|---|
| Share of warehouse rent | $900 |
| Power | $1,400 |
| Build-out, spread over 10 years | $375 |
| Refrigeration service and repairs | $150 |
| Insurance share | $100 |
| The cold room | $2,925 |
| Pallet positions | 60 |
| Share kept full | 70% |
| Cost of a full position | $69.64 |
| Rate at a 40% margin | $116.07 |
Two Rivers charges $120 a pallet each month, a margin of about 42%. If it kept the room 90% full, a position would cost $54.17 and the same price would leave 55%; at 50% full, $97.50, and it would barely cover the room. Occupancy moves the cost more than anything else. How a farm that rents space plans what it grows and stores is in market garden business plan.
Handling fees
Moving a pallet in or out takes a person and a pallet jack about ten minutes, about $6 of labor and wear; at the same 40% margin, Two Rivers charges $10 each way. Building a mixed order from cases on different pallets takes longer, so case picks are priced separately, 50 cents a case. Without handling fees, a renter who moves pallets daily costs far more than one who stores for a month.
A renter's bill
| Charge | Quantity | Rate | Amount |
|---|---|---|---|
| Pallets stored, average for the month | 4 | $120 | $480 |
| Pallets in | 6 | $10 | $60 |
| Pallets out | 5 | $10 | $50 |
| Case picks for a mixed order | 40 | $0.50 | $20 |
| The month's bill | $610 |
Agree in writing what happens to a renter's pallets if the bill isn't paid, who's responsible if the power fails, and how much notice ends the arrangement. How a cold room's temperatures are logged is in temperature log template.
Freezer space
A freezer costs more to run than a cooler, often much more in power, and a failure ruins more. Work its rate out the same way with its own power and service costs, and expect it to come out well above the cooler's. Many renters need a little of both. How much stock to keep at all is in how much inventory to keep on hand.
Get the calculator
Download the cold storage rate calculator. Two sheets: a rate a pallet, where your cold room's costs, positions, the share kept full and your margin give the cost of a full position, the monthly rate and a handling fee; and a renter's month, where pallets stored, moved and case picks give the bill. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
Ten renters' pallets in one cooler, each coming and going on its own schedule, and the hub's own produce on the next rack. A spreadsheet can't say whose pallet is in which position, how many each renter had on average this month, or what a renter who stopped paying left behind.
How TaroStack does it
TaroStack keeps each renter's pallets as theirs, counted and released.
Renters' goods as theirs. With We make or keep goods for clients turned on, each renter is a client and their pallets are their own: received at no cost to you, kept apart from your stock and out of your stock value, and released when they take them.
Counts and lots. Counting the cold room on a phone, even with no signal, records each renter's goods where they sit, by lot and date.
A statement each month. Each renter's monthly statement shows their goods you held and how each moved, received, released and counted, with the month's charges typed onto their order.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| Whose pallet is this | A tag on the wrap | Every item says whose it is |
| Pallets in and out | A clipboard by the door | Receipts and releases |
| A renter's goods at month end | Walk the cooler | Their goods, counted |
| The month's bill and record | Two lists | Their order and statement |
Keeping renters' goods, with releases and monthly statements, is on Standard at $99 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.