Distribution centers are under intense pressure to perform. Between rising labor costs, increasing consumer expectations, and fluctuating demand, companies are looking for ways to stay agile without sacrificing quality. Enter warehouse outsourcing providers—partners who specialize in managing your labor force and operational performance so you can stay focused on your core business.
But not all outsourcing providers are created equal.
This guide explains what warehouse outsourcing really means, the pros and cons, how to choose the right provider, and why more companies are choosing partners like FHI to manage their warehouse labor with confidence.
A warehouse outsourcing provider is a third-party company that takes over specific operations within a distribution center—most commonly the labor management component. These providers recruit, train, and manage the workforce needed to perform tasks such as unloading, palletizing, inventory movement, picking, packing, and shipping.
Some providers offer managed labor solutions (like FHI), while others may provide temp staffing or fully integrated warehouse operations.
Outsourcing warehouse operations can offer a variety of advantages:
Cost Control: Reduce costs related to recruiting, training, and turnover.
Scalability: Flex labor up or down based on seasonal or market demand.
Expertise: Tap into experienced teams with proven warehouse processes.
Productivity: Gain performance improvements through incentive pay models.
Focus: Reallocate internal resources toward growth and innovation.
Before signing on with any third-party provider, consider these questions:
Do they offer on-site management to oversee daily operations?
Are their teams trained to meet your safety and compliance standards?
Can they support second and third shifts, or high-turn environments?
Do they use any technology for operational transparency or tracking productivity?
How do they ensure alignment with your KPIs?
FHI has been providing warehouse outsourcing solutions for over 30 years. Unlike traditional staffing agencies, FHI operates under a performance-based model with full on-site management and a commitment to OSHA standards. Their proprietary software, FHI INSITE, provides real-time visibility into labor output, safety, and productivity trends.
Whether you’re a national grocer, e-commerce brand, or a high-volume CPG distributor, FHI integrates seamlessly with your warehouse team and delivers consistent results.
A: Staffing agencies provide temporary labor with limited supervision. Managed labor providers like FHI take full ownership of the labor operation, providing on-site leadership, safety programs, and performance metrics.
A: No. A good provider operates as an extension of your team—not a replacement. At FHI, we work under your goals and standards, providing transparency through reporting and daily oversight.
A: Not when you consider the hidden costs of turnover, training, overtime, and unproductive labor. FHI’s performance-based model often results in a higher ROI through increased throughput and reduced overhead.
A: Yes. One of the key benefits is scalability. FHI can flex staffing levels up or down to meet seasonal or demand-driven fluctuations, helping you avoid disruption and overpaying during slow periods.
If your warehouse operation is struggling with labor shortages, inconsistent productivity, or rising costs, it may be time to explore a warehouse outsourcing solution. FHI provides tailored programs that help you regain control while offloading the burden of workforce management.
Let’s talk. Schedule a complimentary, no-obligation site visit to discover how FHI can improve performance and safety across your distribution center.
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