How Much Ransom Will You Have to Pay for Your Off-Site Records?

by Joe Grubb

A Standard Practice?

One of the standard practices in the off-site records storage industry is the charging of permanent removal, and other associated costs, when storage is removed.

The Theory

The theory is that there are costs associated with:

  • Pulling the material
  • Placing the material on a pallet
  • Placing the pallet in an area for pick-up
  • Shrink-wrapping the pallet
  • Removing/updating data in the vendor’s records system
  • All reports associated with removal

By having permanent removal costs outlined in an agreement, it should allow you to understand exactly what it would cost you to remove storage. Of course, that is the “theory.”

What are all these fees, anyway?

In practice, costs associated with permanent removal vary widely by vendor and account. Typically, vendors will charge a permanent removal plus a retrieval (cost to pull the box). In addition, some vendors will also charge for dock access fees, shrink-wrapping, pallets and labor.

We have seen the total costs for the removal of storage range from $1.00/box (usually just a retrieval charge) to almost $20.00/box.

Interestingly enough, vendors will charge these same rates whether you are permanently removing a few boxes during the term of the agreement, such as those that may need to be returned to a client, or removing your entire collection.

Additionally, it is industry practice to request the entire permanent removal costs be paid up-front before a single box is transferred. And more often than not, the amount of time to transfer the boxes is not clear, allowing the vendor to dictate the pace, while continuing to charge for storage. Unlike the movies, where the good guys bring the money to a meet and an exchange is made for the hostage, in this case, the bad guys take the ransom and keep the hostage until they decide it is okay to release them.

Tips to Minimize Fees

When you negotiate your contracts, aim to minimize these “hostage” fees, both during the term and in the event of a transition of storage.

Many firms miss the mark. Here are some tips and ideas to keep in mind when reviewing your agreement:

  1. Contracts can be changed. If your contract is silent, or not in your favor in regard to these items, work with your vendor to change the terms. If your vendor is not willing to partner with you to meet your objectives, it may be time to re-evaluate that relationship.
  2. Industry practice is just that…practice. Allen Iverson said it best: “We’re talking about practice, man!” Just because a vendor tells you that this is the way a thing has always been done does not mean that you are obligated to abide by that. Pushback. You are the customer and the customer should always be right.
  3. Don’t assume you know how your vendor will handle a termination and transition. Even if you have explicit contract language and requirements, vendors may still try to delay or change things if they are actually faced with a termination request. Ask your vendor now to provide you with a detailed quote, payment terms, process and schedule, supported by your contract, for the removal of all of your holdings – you may be surprised at what they give you.

We are certain these tips can be of great value but if you find yourself curious to further investigate how your firm’s off-site contract can be molded to your favor, do not hesitate to give us a call.