If you’re managing supply chain operations or looking for ways to optimize your distribution network, you may have come across the term “warehouse take over in place,” or TOIP. This increasingly popular approach is helping companies streamline their warehouse operations, reduce costs, and adapt quickly to market demands.
In this guide, we’ll break down exactly what a TOIP is, how it works, who benefits most from it, and why it’s becoming a strategic move for many businesses.
A warehouse take over in place (TOIP) is when a third-party logistics provider (3PL) takes over the full operational management of an existing warehouse facility—right where it stands. Unlike moving operations to a brand-new facility, the 3PL steps into an already running location, assuming responsibility for:
- The workforce (often by rehiring or rebadging existing employees under their payroll),
- The lease or ownership obligations on the physical building,
- The equipment and assets like racking, forklifts, conveyor systems, and IT infrastructure.
In short, the 3PL inherits the day-to-day operations of the warehouse so the original company can step back from managing it directly.
Here’s a closer look at what typically happens in a TOIP:
The 3PL often takes over the existing warehouse staff. This could involve rebadging employees (moving them to the 3PL’s payroll and benefits structure), hiring new associates, or supplementing with their own trained teams. This approach keeps valuable experience on-site while bringing in fresh operational standards.
Rather than disrupting operations by relocating inventory, the 3PL assumes responsibility for the existing warehouse lease. This makes it possible to transition quickly without the headaches of moving goods to a new building.
Depending on the agreement, the 3PL may outright purchase or simply manage existing assets like racking, dock equipment, or warehouse management systems (WMS). This allows them to immediately optimize the facility’s layout and processes.
Many organizations choose a TOIP when they recognize that running a warehouse isn’t their core business. Here are some of the major advantages:
A TOIP can often be rolled out within weeks instead of months, because there’s no need to build or move. This is a huge benefit for companies that urgently need improved operational performance.
3PLs operate at scale and bring deep expertise in warehouse optimization, which can lead to lower cost per unit handled, improved labor utilization, and better inventory accuracy.
With a 3PL managing warehousing, companies can concentrate on their main priorities, like product development, sales, and customer relationships.
If your business is seasonal or growing, a 3PL can adapt labor and processes quickly. This means less time worrying about staffing up during peaks or rightsizing during slower periods.
Some common scenarios where a TOIP is the best strategic move include:
📉 Underperformance: When a warehouse is struggling with labor inefficiencies, high error rates, or missed SLAs, a 3PL can step in to overhaul operations.
📈 Rapid growth: Companies experiencing fast expansion may not have the bandwidth to optimize warehousing in-house. A TOIP gets professional systems and processes in place quickly.
🔄 Network redesign: During mergers, acquisitions, or shifts in market strategy, a TOIP helps ensure warehouse operations stay smooth without interruption.
Imagine a food & beverage distributor struggling with late shipments and high employee turnover at its regional DC. By engaging a 3PL in a TOIP, the distributor could keep the facility running in the same location—but under new management, with upgraded safety protocols, incentive-based labor models, and better technology integration. The result: improved on-time delivery rates and happier customers.
✅ A TOIP is when a 3PL takes over an existing warehouse’s operations, including staff, lease, and equipment.
✅ It provides a faster path to improved efficiency, cost savings, and scalability—without moving operations.
✅ Businesses use TOIPs to focus on what they do best, while experts handle warehousing.
Q: Is a TOIP the same as outsourcing to a 3PL?
Not exactly. While all TOIPs involve a 3PL, not all 3PL arrangements are TOIPs. A TOIP specifically involves taking over an existing warehouse operation right where it stands, versus moving to a different facility owned by the 3PL.
Q: What happens to my existing employees in a TOIP?
In many cases, employees are “rebadged,” meaning they stay on the same site but start working under the 3PL’s management and payroll. This maintains institutional knowledge while shifting employment responsibility.
Q: How quickly can a TOIP be implemented?
Depending on the complexity, many TOIPs can be completed in 30–90 days, which is much faster than building or migrating to a new DC.
As you've seen, a warehouse takeover-in-place (TOIP) offers a strategic way to optimize operations without the challenges of relocating or overhauling your existing facility. But success ultimately comes down to having the right people and processes in place to carry that transformation forward. That’s where a partner like FHI can make the difference. With decades of experience in warehouse operations and a reputation for driving measurable productivity gains, FHI can work alongside your team to keep your supply chain running smoothly and efficiently—helping you realize the full potential of your facility, today and into the future.
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