An Investigation into the Decision-Making Processes of Transport Companies when Selecting a Warehouse Location

This study examines and analyses the decision-making processes used by companies in the transport industry when making a warehouse location decision. Previous research has looked at location decision-making in many industries and at location decisions specifically in the retail and manufacturing sectors but not at the managerial decision process regarding warehouse location by transport companies. The conceptual model developed indicated that there are three specific decisions required; first the need for a new warehouse; secondly the need to determine an appropriate regional location, and finally the specific site within the region. When making a location decision the companies interviewed used a process that comprises the three phases of identification, collection and evaluation for each of the sequential decisions required in each case. In many cases the requirement for a new warehouse was driven by a new business opportunity and in many cases the client requirements drove the regional decision. Of primary consideration in determining the specific site for a warehouse is the access to freeways and other transport infrastructure. The locations of current and potential customers together with the building quality, configuration and flexibility were other major factors in the decision. The current research makes a contribution by applying a case study method to eight warehouse location decisions made by 7 companies in Victoria between 2003 and 2005. The case studies provide a depth and quality of data previously not found regarding location decisions in transport companies and provides an understanding of how these Victorian transport companies have made warehouse location decisions in recent years and the findings contribute a conceptual model and listing of managerial actions in the location decision making process The ability to use the developed model and the listing of management actions will encourage a more informed understanding of decision making for participants and provide for enhanced warehouse location decision making by transport companies in the future