Handling expense is considered to be all those costs associated with moving product into or out of the warehouse. The primary components are labor and equipment to handle the product, supplies, and other items related to the handling, picking, and loading of products.
A wide range of warehousing activities, from unloading vehicles to handling product returns, is included in the category of handling expense.


Some examples of warehousing activities and services to be included in the handling expense category are shown below.
• unloading inbound vehicles
• palletizing/sorting inbound goods
• handling inbound carrier damage
• placing goods in storage
• filling orders
• staging outbound orders
• checking outbound orders
• loading outbound vehicles
• rewarehousing
• janitorial/sanitation work
• segregating warehouse damage
• Q/A checking
• stickering
• equipment pre-operation check
• scheduled breaks
• training & meetings
• recouping warehouse damage
• handling merchandise returns
• sampling

A. Warehouse Labor
1. Direct Payment to Employees. This category includes wages paid to warehouse workers, including forklift operators, leads, working foremen, casual labor, part-time labor, janitors, and salvage labor. The expenses for warehouse labor include regular wages, bonuses, and overtime.

2. Compensated Fringe Benefits. This category includes all company-paid benefits for the warehouse labor described above. These expenses include health and welfare, pension contributions, insurance paid by the company, company-provided uniforms, and any other fringes.

3. Compensated Time-Off. This category includes wages paid to all warehouse labor for company sanctioned time-off. These expenses include pay for vacations, holidays, funerals, sick leave, personal leaves, jury duty, and any other paid time-off.

4. Statutory Payroll Taxes. This category includes all local, state, and federal payroll taxes paid by the employer for the warehouse labor. The expenses include FICA payments, federal and state unemployment, worker's compensation, state long-term disability payments, and any other payroll taxes.

5. Purchased Labor. This category includes wage payments for part-time, temporary labor, contract labor, and any other warehouse labor for which there is no obligation for fringe benefits. The expenses include wage payments and any payroll taxes associated with this type of labor.

6. Fees and Compensated Time. This category includes expenses incurred for the training, education, and development of warehouse labor. The expenses include fees to attend seminars, reimbursements for educational expense, expenses for in-house training programs, and wages paid to employees while in training or attending seminars.

B. Handling Equipment
1. Lift Trucks and Attachments. This category includes the expenses for lift trucks and their attachments, including rental or depreciation and interest, fuel, maintenance, tires, and other accessories are included in this category. If the equipment is not owned, then either rent or lease expenditures should be included. If it is owned, then the appropriate expense is depreciation and any interest paid on financing the equipment. Under fuel, the cost of propane, batteries, chargers, and electricity should be used, depending on the type of equipment. Oil and lubricants should be included here also.
Maintenance includes the cost of maintenance labor, parts, and equipment, or the expenses of an outside maintenance contract. Maintenance labor includes wages, benefits, and payroll taxes.

2. Special Purpose Handling Equipment. This category includes the rent or depreciation and interest, power, and maintenance costs for all other handling equipment used in the warehouse.
This special purpose equipment may include automated handling equipment, stretch and shrink wrap equipment, labeling equipment, conveyors, bundling equipment, palletizers, AGVs, remote data terminals, movable dock plates, staple guns, air compressors, and any other handling equipment. Expenses to be included are rent or depreciation and interest, fuel or electricity costs, and maintenance, including labor, parts, equipment, and contracted maintenance.
C. Other Handling Expense
1. Pallets. This category includes the cost of purchasing and repairing wooden pallets.
2. Supplies. This category includes the cost of all supplies used in the warehouse in the handling process. The types of items included as a supply expense are small tools, stretch wrap, string, tape, wiping towels, recoup supplies, janitorial supplies, printed forms, labels, staples, glue, packing supplies and dunnage.
3. Detention/Demurrage. This category includes the cost of both railroad and motor carrier charges for unloading delays.
4. Recouping Warehouse Damage. This category includes those expenses incurred to return damaged merchandise to its original state. The expenses include labor, supplies, and equipment used in the recouping process.
5. Trash Hauling. Includes commercial or municipal charges for hauling waste.
6. Other. This category captures any remaining handling costs not classified elsewhere.