“Ah, the memories of true business partnering”

Do you remember Barbara Streisand’s hit song “Memories”?  The lyrics say a lot about how we all feel about business partnering — we have recent memory because it is exactly how we do business.  As the song says, “Can it be that it was all so simple then?”  It was then, but why not now ? 

Off-site records storage is a classic business partnering area that was simpler then and not at all simple now.  The changes in this category, such as lack of competitive low storage rates or account managers who are readily available and negotiate from the perspective of your needs — ah yes, it was so simple then. 

Today you are confronted with 6 fundamental conundrums to navigate a fair off-site records storage arrangement where storage providers should actively be working with you to mitigate costs and keeping your best interests in mind. Never consider these areas ‘standard’ or non-negotiable.

The Six Conundrums

Storage Rates

When you first signed a storage agreement, you thought you had a good deal because rates were lower. Twenty years ago, the rate per cubic foot of storage was below $.20. Currently, if you do not have at least 100K cubic feet in storage, your rates are between $.35 and $.65. That equates to a $.42 rate for storing a standard size box ($.35 x 1.2cf) and much more for a legal-size box. Multiply the standard size rate for 6,000 boxes in storage and you arrive at a monthly fee of $2,520. This fee is for storage only and does not include services.

Retrieval / Refile Rates

Again, when you started your agreement, the rates were approximately $1.00 to retrieve or refile a box. Now, these rates range from $3.00 to $4.50. If you are an active account, retrieving and refiling with frequency, these costs can add up very quickly. Have you seen these fees on your bill?

Delivery Rates

Your initial delivery rates were around $12 to $15 per trip. Now, you are more likely to be paying $30 to $45 per trip and even more in major metro areas. Expedited deliveries such as Same Day or Emergency Delivery are exponentially more costly. Are these costs meant to be profit centers or a service for clients?

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Handling Fees

We have seen fees for ‘handling’ come into effect over the last 15 years. The providers applythis fee to ‘cover’ their costs to load and offload your records. Average rates range from $3.50 to $5.00 per cubic foot. Again, this fee for the storage provider to handle your box while it is being delivered. Why has this been added to your costs?

Destruction Costs

While you do not want to keep your boxes in storage forever, you will have a need to destroy records at some point. Previously, you were charged your retrieval rate and a destruction charge. Now, you will see that each box you remove is charged for retrieval, handling and destruction fees, with some costs as high as $25 per box. This drives you towards leaving the box in storage which is advantageous to your storage provider but not to you.

Permanent Withdrawal Fees (Perm-Out)

Perm-Out fees should logically be the opposite of fees to add a box as you pay to add a box and then you pay to remove it. Simple, right? Not so fast! In the early 2000’s, the storage industry began to change when the largest national providers started aggressively courting competitors’ customers. Customers would move from provider to provider for better service or lower rates. As a deterrent, the providers increased the Perm-Out rates so if a client moved to the competition, there were large associated costs.

As a result, the cross-competition movement stopped, but the Perm-Out rates continued to increase. The result is, if you want to call back your boxes and destroy them yourself, you will pay these Perm-Out fees in addition to the fees previously mentioned. The average customer is likely to pay upwards of $25 per box. 

The six conundrums look like insurmountable hurdles and you may feel that these just have to be paid as part of a business expense. However, these challenges can be overcome by negotiating with your provider. For optimum results, call in the experts. Reach out to consultants in your area who specialize in these negotiations and know exactly what to look for your storage contract.

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