When it comes to a dedicated warehouse, the sole occupant bears all the fixed expenses of running the facility. Usually, this type of warehouse requires a long-term commitment, typically between two to five years, where the shipper and third-party logistics (3PL) company enter into a contract and align to a warehouse service agreement. This agreement covers various aspects such as labour structure, capital equipment expenditures, and implementation of a warehouse management system, along with other operational processes. Typically, the building lease, which can be tied to either the client or the 3PL, is aligned to the length of the warehouse service agreement.

With a dedicated warehouse, costs could be fixed month-to-month regardless of the volume of orders and product moving through the facility. The single tenant is responsible for 100 percent of the rent, labour and capital equipment costs within the distribution center.