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If you are planning a new warehouse, expanding an existing operation, or moving into a new facility, one of the first questions you are probably asking is:
How much does it cost to put pallet racking in a warehouse?
The answer depends on several factors, but simply saying “it depends” is not very helpful.
The cost of a pallet racking project is influenced by your warehouse layout, required storage capacity, pallet characteristics, rack configuration, installation requirements, and the type of storage system being used.
More importantly, the goal should not simply be to find the cheapest pallet rack.
The better question is:
What storage solution gives my operation the capacity, accessibility, and productivity it needs at the best overall cost?
What Determines the Cost of Pallet Racking?
Pallet racking is not typically priced based only on the square footage of a warehouse.
Two warehouses that are both 50,000 square feet could require completely different storage systems and significantly different investments.
Several factors influence the final cost of a pallet racking project, including:
- Warehouse dimensions
- Building clear height
- Required number of pallet positions
- Pallet dimensions
- Pallet weight
- Number of beam levels
- Rack height
- Storage system type
- Forklift and aisle requirements
- Freight
- Installation
- Engineering
- Permitting
- Rack protection and safety accessories
- Fire-code requirements
- Seismic or wind requirements where applicable
Because of these variables, asking “What does pallet rack cost per square foot?” does not always provide a useful answer.
A better starting point is determining how many pallets your warehouse needs to store and how efficiently those pallets can be stored within the available space.
Start With the Number of Pallet Positions You Need
One of the most important factors in warehouse rack design is your required storage capacity.
For example, imagine a 20,000-square-foot warehouse that needs approximately 1,000 pallet positions.
A conventional selective pallet rack system may provide the required capacity while maintaining direct access to every pallet.
However, what happens if the same facility needs to store 1,500 or 2,000 pallets?
At that point, the warehouse may require a higher-density storage system such as:
- Double-deep pallet rack
- Push-back pallet rack
- Drive-in pallet rack
- Pallet shuttle systems
- Other high-density or automated storage solutions
These systems can require a higher initial investment than standard selective pallet rack, but they can also significantly increase the amount of inventory stored within the same building.
That means the cost per pallet position — and potentially the total cost of operating the warehouse — may actually improve.
The Type of Pallet Rack Changes the Investment
Different pallet racking systems are designed to solve different operational problems.
Selective Pallet Rack
Selective pallet rack is one of the most common warehouse storage systems because it provides direct access to every pallet.
It is flexible, easy to configure, and often represents one of the lowest initial investments.
However, selective rack requires more forklift aisles, which can reduce overall storage density.
Double-Deep Pallet Rack
Double-deep racking stores pallets two positions deep.
This reduces the number of aisles required and increases storage density, although specialized material-handling equipment may be required.
Push-Back Pallet Rack
Push-back rack allows multiple pallets to be stored deep within the rack while maintaining access from a single aisle.
It can provide considerably higher storage density while still allowing relatively fast loading and unloading.
Drive-In Pallet Rack
Drive-in racking eliminates many traditional forklift aisles by allowing forklifts to enter the storage lanes.
This can provide extremely high storage density for operations with the appropriate inventory and SKU profile.
Pallet Shuttle Systems
Pallet shuttle systems use a motorized shuttle to move pallets through deep storage lanes.
These systems can create very high storage density while reducing the amount of forklift travel required within the rack.
Automated Storage Systems
Automated storage and retrieval systems can require a significantly larger initial investment, but they can also increase storage density, inventory accuracy, throughput, and warehouse productivity.
The important thing to understand is:
The cheapest rack system is not necessarily the cheapest warehouse solution.
Warehouse Height Can Dramatically Affect Storage Cost
Your warehouse’s clear height can have a major impact on how much storage capacity you can achieve.
Warehouse space is three-dimensional.
If a building has 36 feet of clear height but the storage system only uses 20 feet of that height, a large portion of the warehouse’s available cube is not being utilized.
For example, a warehouse rack design may initially provide four pallet storage levels.
Depending on the building, product, rack design, fire protection system, slab, and material-handling equipment, an optimized design may allow five or six levels instead.
Those additional levels can significantly increase pallet capacity without increasing the footprint of the building.
For companies operating in expensive industrial real estate markets, using vertical space more efficiently can have a major financial impact.
Don’t Forget the Costs Beyond the Pallet Rack
Another common mistake is budgeting only for the rack material itself.
The pallet rack is just one component of a complete warehouse storage project.
Depending on the facility and project requirements, additional costs may include:
- Pallet rack material
- Freight
- Installation
- Anchoring
- Engineering
- Permits
- Rack protection
- Safety accessories
- Seismic or wind design requirements
- Fire-code considerations
- Forklift requirements
- Possible sprinkler modifications
When comparing warehouse rack proposals, it is important to understand exactly what is included.
A low rack price may not represent the final installed cost of the project.
So, How Much Does Pallet Racking Actually Cost?
There is no single number that accurately represents every pallet racking project.
However, a realistic warehouse racking budget can usually be developed once several basic pieces of information are available.
These include:
- Warehouse dimensions
- Clear height
- Column locations
- Pallet dimensions
- Pallet weights
- Number of SKUs
- Required pallet positions
- Inventory movement and throughput requirements
With this information, different storage concepts can be developed and compared.
For example, one warehouse may evaluate a selective rack layout against push-back or pallet shuttle alternatives.
Instead of comparing rack prices alone, the analysis can look at:
Storage capacity
How many pallet positions does each solution provide?
Initial investment
What is the estimated cost of the complete storage solution?
Cost per pallet position
How much investment is required for each pallet position created?
Operational impact
How does the system affect forklift travel, labor, accessibility, and throughput?
Space utilization
How efficiently does the system use the building’s available square footage and vertical space?
This provides a much more useful comparison than simply asking which rack system costs the least.
What Does Wasted Warehouse Space Cost?
There is another cost that warehouse operators should consider:
The cost of inefficient space utilization.
Imagine industrial warehouse space costs $15 per square foot annually.
If an inefficient storage layout forces a company to lease an additional 20,000 square feet:
20,000 sq. ft. × $15 per sq. ft. = $300,000 per year
That additional space could represent approximately $300,000 in occupancy costs every year before considering utilities, labor, insurance, maintenance, and other expenses.
In that situation, investing more in a higher-density storage system could potentially be far less expensive than leasing or constructing additional warehouse space.
This is why warehouse operators should not only calculate the cost of the rack.
Calculate the cost of the space.
Pallet Rack Should Be Viewed as an Investment in Warehouse Capacity
So, how much does it cost to rack a warehouse?
There is no universal number that applies to every facility.
There is, however, a solution that makes the most sense for each operation.
The right warehouse storage design should consider your inventory, building, pallet characteristics, material-handling equipment, required capacity, and operational goals.
At Atlantic Rack, we evaluate these factors and compare storage alternatives to determine the best combination of:
Capacity. Productivity. Investment.
The goal is not simply to install pallet rack.
The goal is to help your operation get more out of the warehouse you already have.
Planning a Warehouse Racking Project?
If you are designing a new warehouse, expanding your current storage capacity, or evaluating different pallet racking systems, Atlantic Rack can help you determine which solution best fits your operation.
Send us your warehouse layout and storage requirements to begin evaluating your options.
