Storage costs can be conceptualized as all those costs associated with "goods at rest." Storage expenses are incurred because product is stocked in the warehouse. That is, these costs would occur whether or not any product in the warehouse was ever moved. Generally, storage expenses are related to the cost of owning or renting and maintaining a facility.

A. Facility
1. Rent or Depreciation and Interest.
Includes the costs of renting or owning the building. If the building is rented, the appropriate cost is the annual rental fee. If the building is owned, there is some question as to the appropriate expense. One approach is to include the yearly depreciation charge and the associated interest cost on borrowed capital. However, some warehouses prefer to recognize the current market value of the building when calculating the facility cost. From a decision-making perspective, the appropriate expense would be the opportunity cost of occupying the building, which would be the approximate market rent at which the building could be rented. (This situation might arise in cases where the cost or current lease rate is extremely low relative to rental costs in similar buildings in close proximity.)
2. Real Estate Taxes. Includes real estate taxes. If the building is rented, the appropriate cost is the real estate taxes for which the lessee is responsible according to the terms of the rental contract.
3. Insurance. Includes only that portion of insurance premiums that is directly related to the building itself.
4. Exterior Maintenance. Includes the costs of maintaining the building's exterior.
Expenses include labor, materials, equipment, and contracted services for repairing and maintaining roofs, walls, and foundations. Exterior painting is also included. Unforecastable damage as a result of impact is not included.

B. Grounds
Includes the expenses associated with areas surrounding the facility. The expenses include mowing, snow removal, and maintenance of the parking lot.

C. Storage Equipment
Includes the expenses associated with racks, shelving, and any other equipment used for storing product. The expenses include depreciation and interest for the storage equipment as well as the cost of maintenance. The maintenance costs for storage equipment involve labor, materials, equipment, and contracted services.

D. Facility Modification
Includes expenses for making structural changes in the facility as a result of a change in product line, systems, operations, and the like. These expenses are not related to repair and maintenance but are incurred to modify the facility to suit a change in procedures and operations.
The elements included in facility modification expense are labor, equipment, and materials to accomplish the modification. If contracted services are used, these should be included. This category would also include installed or attached equipment that pertains to the warehouse operation and is of a durable and non-disposable nature, and leasehold improvements or alterations.

E. Utilities
Includes the expenses for all utilities required to operate the building. The expenses include electricity, heat, water and sewage, and gas.

F. Interior Maintenance
Includes the expenses for maintenance and repair to the warehouse and interior. Expenses include labor, parts and materials, and equipment or contracted services to repair and maintain the facility, including windows and doors, HVAC, plumbing, floors, lighting, sprinklers, elevators, and stationary dock plates. Interior painting expense is also included in this category.

G. Security
Includes the expenses for protecting the building and its contents like payments to security agencies, wages for company security personnel, installation, operation and depreciation costs for security systems.

H. Pest Control
Includes expenditures on pest control services and equipment. Expenses include supplies, equipment (scrubbers, sweepers, foggers) and services (American Sanitation Institute, outside pest control) to maintain the requisite level of sanitation in a facility.

I. Other Facility Expense
Includes all other storage-related expenses not captured in the first eight categories