Types of Warehouses

A warehouse is a place where different goods are stored or accumulated for a temporary period. It created time utility for supply chain management. The need for warehouses arises out of the lack of adjustment between times of production and times of consumption of goods.

At present time the goods are produced for in advance of demand. So before the goods are short in the market, they should be stored.

It is the warehouse that stores the goods from the time of production to the time they are sold. In this way, through proper warehouse management to take maximum advantage of it. Businesses remove the hindrance of time between the places of production and consumption.

Uses and Importance of Warehousing

Many goods are not produced regularly at the point where they are wanted for consumption and they must be stored from the time of production until they are wanted by the consumer if they are to be used in satisfying human wants. Goods produced at a distance from the consumer must be transported to the consumer.

In order to ensure an even supply, a stock of such goods must be maintained near the consumers as protection against delays and uncertainties of transport and to permit transport in economical units.

Many agricultural goods produced seasonally are supplied to consumers more or less evenly throughout the year. Grain, Cotton, Tobacco, and Sugar furnish can be stored for several years without any deterioration. The demand for some products is irregular. In such cases, storage may be called into use so that production can be more regular.

If factories producing such goods are to be operated throughout the year, the goods produced in the “off months” must be stored until they are wanted by 1he consumers. Storage involves expense, but much expense is often less than the extra cost of providing buildings, machinery, and labor to produce seasonal products as needed.

Moreover, production and transport may be interrupted by fire, flood, strike, cold, or storm. Storage is a safeguard against such risks. It offers facilities to the traders or merchants to get loans from the credit agencies on the goods stored in the warehouse. The credit agencies will be in a position to give loans by the transfer of warehouse receipt, which is a negotiable instrument of title.

It offers goods facilities for the transfer of ownership of goods warehoused therein without the actual transfer of goods simply by transfer of warehouse warrants with the endorsement of the owner thereon. It removes the hindrance of time which would otherwise be involved in obtaining possession of the goods from the places of their production

Types of Warehouses

Public Warehouse 

It is operated in accordance with the law for the purpose of storing goods for other people at profit. Sometimes a large arrives in part when it is not convenient for the importer to take it into his custody.

During such periods these goods have to be stored somewhere. Similarly, even in trade, they have to be stored between the time they are made and the time they are required for use. A public warehouse provides facilities for storing all such goods. It thus renders many useful services to the trade.

It enables smaller sellers to carry regional stocks. This factor is very important in competitive markets.

Private Warehouse

This type of warehouse belongs to the owner of goods, usually a wholesaler, who stored his goods. There in order to supply to retailers in future. Goods are produced in large quantities in anticipation of future demand and for unknown customers. The ultimate wholesaler finds it necessary to purchases goods in advance in large bulk and to store them for future supply.

Bonded Warehouses

It is one that is licensed to accept imported goods for storage before payment of customs duties. By storing his goods in a bonded warehouse the importer gains some control without paying the duty. The goods in bonded warehouses are under the strict supervision of customs officers and before the owner can interfere with them, previous permission is necessary.

Government Warehouse

This type of warehouse is mainly located at the important seaports and in most cases is owned by the Dock Authorities. The general public can also use this group of the warehouse on payment of fixed charges.

If a customer cannot pay the rent within the specified period of time, then the authority can recover the rent by disposing of the goods.

Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger