Contract warehouses are businesses that handle the shipping, receiving, and storage products on a contract basis. Contract warehouses generally require a client to commit to a specific period of time (generally in years) for the services. Contracts may or may not require clients to purchase or subsidize storage and material-handling equipment. Fees for contract warehouses may be transaction and storage based, fixed, cost plus, or any combination. In contract warehousing, business is intended to be on a more long term basis compared to that of a public warehouse. When utilizing a contract warehouse, prices are generally cheaper as the costs per unit are cheaper. Contract warehousing also allow for better normal business expansion and/or contraction in a flexible, cost efficient manner. This option is not optimal for short term activities. For example, a business in Chicago, Illinois that needs its products stored in a warehouse for an extended period of time, a contract warehouse would be used. That business in Chicago would then be able to store is products in one facility, not having to worry about them, and then be able to distribute them to wherever in the Midwest or whatever destination it may be