Cold chain
How cold storage is priced: pallet rates, handling and blast
Two cold stores quote the same product for the same volume, and the number on the page differs by 15%. Six months later the invoices tell a different story: the cheaper quote costs more. Almost every surprise on a cold storage bill traces back to a line item that never appeared on the headline rate, and the quotes that look comparable on paper often are not measuring the same thing at all. This guide breaks a real quote into its component parts so you can build one that is.
Key facts
- A quoted pallet rate covers storage only, and storage is often the smaller half of the bill once handling in and handling out are added on every pallet that moves.
- Minimum commitments are billed on committed space, not used space: a 200-pallet minimum on 140 pallets stored means paying for 60 empty positions every period.
- Blast freezing is a separate charge from storage, priced by tonne or by hour of tunnel time, and slow-loading product that runs long costs more without the rate changing.
- The cheaper pallet rate frequently loses once handling, minimums and surcharges are added, so compare total annual cost per pallet moved, not the headline rate.
The storage rate is one line, not the whole quote
A pallet storage rate is priced per pallet position per week or per month, and the counting convention matters more than the number itself. Weekly billing usually counts any part of a week as a full week, so a pallet that arrives Friday and leaves the following Tuesday is billed for two full weeks, not five days. Monthly billing typically prorates by day, which favours short-stay product, or bills a flat calendar month regardless of arrival date, which does not. Ask which convention applies before comparing a weekly quote to a monthly one: converting a weekly rate to a monthly equivalent by multiplying by 4.33 understates true cost if the store rounds up on partial weeks, because real stock rarely arrives and leaves on tidy weekly boundaries.
Storage rate alone also says nothing about pallet footprint. A store quoting per pallet position assumes a standard footprint, usually 1.0 to 1.2 square metres, and a non-standard pallet, an oversized bin, or double-stacked product changes how many positions your volume actually consumes. A supplier moving 40 percent of volume on non-standard pallets should ask for the rate per position by pallet type, not a single blended figure, because the blended figure is built on an assumption about your mix that may not hold.
The rate itself is also the easiest number to shop on precisely because it is the only one printed in bold on most quotes. Everything below this section is deliberately less visible, and that is where the total cost gap actually opens up.
Handling in and handling out: charged separately, charged every time
Handling is a per-pallet fee for physically moving product across the dock, once on the way in and again on the way out, and it is charged independently of storage. A pallet that sits in store for one week and a pallet that sits for twenty weeks pay the same two handling charges, so handling is effectively a fixed cost per pallet cycle, while storage is the variable cost that scales with how long product stays.
This changes the economics of turnover. For a fast-moving product with an average dwell time of two weeks, handling can be 40 to 60 percent of the total per-pallet cost even at a modest per-move fee, because storage never accumulates long enough to dominate. For a slow-moving product held six months or more, storage dominates and handling becomes a rounding error. A quote that only states the storage rate tells you almost nothing about which of these two situations you are in, which is exactly why the pallet rate alone is a poor comparator between a store serving fast-turn retail-ready product and one serving long-hold bulk commodity.
Some stores also split handling further: inbound palletising or de-palletising, cross-dock handling that skips storage entirely, and put-away to a specific rack location can each carry a separate line. Ask for handling to be quoted as a single all-in per-pallet figure covering dock to rack and rack to dock, or ask for the full breakdown, but do not accept a quote that states handling as "included" without a number attached, because included at what rate is the question that matters.
Minimum commitments: paying for space you are not using
Most cold stores that offer a competitive per-pallet rate do so in exchange for a minimum commitment, either a minimum number of pallet positions or a minimum monthly spend, sometimes both. The mechanism is simple and the cost trap is not: if your committed minimum is 200 pallet positions and your actual stock averages 140, the invoice is for 200 positions every period, not 140. The unused 60 positions are billed at the full storage rate regardless of whether anything sits in them.
This matters most for seasonal exporters. A packhouse whose volume peaks for twelve weeks a year and sits at 30 percent of peak the rest of the year faces a real choice: commit to a minimum sized for peak, and pay for empty space most of the year, or commit to a minimum sized for the trough, and risk being turned away or charged a premium spot rate when volume peaks and the store's committed space is already allocated to someone else. Ask explicitly how the minimum is set, whether it can flex seasonally with notice, and what the penalty or spot-rate premium is for exceeding committed space during peak. A store willing to write a seasonal minimum into the contract, higher in peak months and lower in the shoulder, is worth more than a marginally lower flat rate.
Also confirm whether the minimum is measured on committed space or on billed throughput. A throughput minimum, based on pallets moved rather than pallets held, behaves differently and rewards fast turnover instead of penalising low occupancy, so the two structures suit different supply patterns and are not interchangeable when comparing quotes.
Blast freezing: priced separately, and slow product costs more
Blast freezing brings product from a starting temperature down to a target core temperature fast enough to limit ice crystal formation and preserve texture, and it is billed as a distinct service from storage, not folded into the pallet rate. Two pricing structures are common: a flat rate per tonne processed, which is simple to budget against but does not account for how long product actually occupies the tunnel, and a rate per hour of tunnel time, which does.
The hour-based structure exposes a real cost driver: product that is poorly stacked, arrives at a higher starting temperature, or has a dense, water-heavy composition takes longer to reach target core temperature, and that extra tunnel time is charged even though the tonnage processed has not changed. A batch of whole fish blast-frozen at minus 35 to minus 40 degrees Celsius core temperature might run four to six hours depending on size and loading density, and a batch that runs eight hours because pallets were stacked too tightly for airflow costs roughly twice as much to freeze for the same tonnage, with the difference driven entirely by stacking discipline at the exporter's own dock, not by the store's rate card.
Ask for the blast rate structure explicitly, and if it is hour-based, ask what starting temperature and loading configuration the quoted rate assumes. A quote based on pre-chilled product loaded to spec will understate real cost if your product routinely arrives warmer or gets loaded densely to save trips, and that gap only shows up on the invoice, not on the quote.
Value-added services and the surcharges that show up later
Palletising, re-labelling for a specific market, repacking into retail cartons, and order picking for multi-line orders are all priced separately from storage and handling, usually per unit, per case, or per hour of labour. These are easy to quote upfront because they are discrete, countable tasks, and most stores will give a straight per-unit figure on request. The surcharges that cause budget surprises are the ones that only apply under specific operating conditions and therefore rarely appear as a headline number: out-of-hours or weekend handling premiums, small-order or less-than-pallet picking fees, and seasonal peak surcharges that apply during the store's own busiest months, which may or may not align with your busiest months.
Out-of-hours surcharges matter disproportionately for exporters shipping against a vessel cut-off or a tight export window, because container loading often has to happen whenever the slot is available, not during standard dock hours. A rate that looks flat on the quote can carry a 25 to 50 percent premium for any handling outside a defined weekday window, and if your shipping pattern regularly needs weekend or evening loading, that premium effectively becomes part of your normal cost, not an edge case.
Ask for a full surcharge schedule as part of the quote, not just the headline rates. A store that hesitates to provide one, or says surcharges are "case by case," is signalling that the real cost of a peak-season, off-hours, or small-order shipment will be negotiated after the fact, when your leverage is lowest.
Normalising two quotes onto the same basis
The only comparison that means anything is total annual cost per pallet actually moved through the store, built from your real volume and turnover pattern, not the headline rate. Take your expected annual throughput, your average dwell time per pallet, and your seasonal peak-to-trough ratio, and run each quote's full rate card, storage plus handling in plus handling out plus any applicable minimums, against those same numbers.
A worked comparison makes the failure mode concrete. Store A quotes USD 12 per pallet per week storage and USD 12 per pallet for handling in, USD 12 for handling out. Store B quotes USD 15 per pallet per week storage but only USD 6 per pallet for handling in and USD 6 for handling out. On the headline storage rate, Store A looks 20 percent cheaper. Run both against a product with a four-week average dwell time: Store A costs 4 weeks times USD 12 plus USD 24 handling, USD 72 per pallet cycle. Store B costs 4 weeks times USD 15 plus USD 12 handling, USD 72 per pallet cycle, a dead heat despite the storage rate gap. Now run the same two quotes against a fast-turn product with a one-week average dwell time: Store A costs USD 12 plus USD 24, USD 36. Store B costs USD 15 plus USD 12, USD 27, and the store with the higher storage rate wins by 25 percent because handling, not storage, dominates at short dwell times. The cheaper pallet rate loses once the actual turnover pattern is applied, and it loses in a different direction depending on how fast your product moves.
Ask each store for the same structured breakdown: storage rate and billing period, handling in, handling out, minimum commitment structure, blast rate and basis, value-added service rates, and the full surcharge schedule. A store unwilling to itemise this is telling you the total cost will be assembled after you have already committed, which is the position you want to avoid before signing a term longer than a single season.
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