Types of Warehousing

Types of Warehousing: 

There are different types of warehousing which may be classified as under different points of view:

A. On the basis of their structure, the following types of warehouses are available:

1. Classical warehouses: This types of warehousing is generally used for the storage of general merchandise. It is a single-story building divided into several compartments by raising concrete walls.

2. Silo: It is a vertical structure with mechanical devices for easy handling of the goods kept therein within the desired temperature level and is suitable for bulk storage of goods.

This types of warehousing are available in big cities where the cost of land and labor is very high.

3. Bins: These are specially designed structures operated either manually or mechanically for bulk storage of goods.

4. Elevator: Elevators are big vertical premises into which grain is discharged directly from the ship to the wagon or from the wagon to the ship.

5. Portable warehouse: It is one that can be set up in a very short time and similarly removed in no time. It is made in such a way that it is not affected even by high winds and heavy showers.

6. Automatic warehouse: It is a types of warehousing where the whole or a major part of receipts, storage, and dispatch operations can be performed automatically. The underlying idea is to reduce the cost of distribution of goods.

B. On the basis of ownership there may be the following types of warehousing:

1. Private warehouse: Private warehouses are owned and managed by large enterprises that store their own stock of goods in these warehouses.

In view of the heavy investment of money required for the construction of a warehouse, all businessmen cannot afford to construct and maintain a warehouse of this type.

It is a private warehouse, cannot serve the interest of others. Private warehouses are suitable where it is essential to make the goods available immediately.

To meet the needs of the business, the goods need warehousing facilities that are not available in other warehouses and where the owner is in a position to utilize the full capacity of the warehouse for stocking his own goods. 

2. Public warehouses: Public warehouses serve the needs of the public. These warehouses are usually available for use by the members of the business community on payment of storage charges.

It is essential for a public warehouse to have a license from the government and to abide by the instructions of the government.

These warehouses have to work under government regulation.

Its advantages are as under:

I. Safety: Public warehouses ensure full safety of the goods against the risk of fire and pilferage etc as they are constructed with all safety devices and guarded round the clock.

II. Useful to small businessmen: These warehouses are useful to small businessmen who cannot afford to have a warehouse of their own for storage of their goods.

3. Finance: The receipts issued by the public warehouses can be used by the owner of the goods as collateral security for raising finance.

4. Marketing function: Public warehouses provide facilities for grading, packing, labeling and weighing, etc., and it helps in making the goods ready for marketing within the warehouse itself.

5. Facilitates the easy sale of the goods by transfer of document: A public warehouse facilitates the sale of the goods through a transfer of document.

The owner of the goods can sell the goods lying in the warehouse only through the transfer and endorsement of the warrant.

6. Low insurance premium: Insurance companies charge a low premium for the goods kept in the public warehouse because of the low-risk factors.

7. Transportation facility: Public warehouses are usually situated at central points having convenient facilities for easy transportation of the goods by rail or road.

3. Cooperative warehouses: These warehouses are built up by the cooperative marketing societies for the benefit of the members but even the non-members can also avail the services of such a warehouse by paying some additional charges.

4. Household warehouses: Such warehouses are not available in our country. These warehouses provide facilities for storing household goods for a temporary period.

5. Government warehouses: These warehouses are established by the Central Government, the State Government and the corporations with the object of keeping the goods belonging to the government.

6. Bonded warehouses: Bonded warehouses are those warehouses that are granted a license by the Government for accepting imported goods for storage and these warehouses are meant for imported goods on which duty has not been paid by the importer.

Such warehouses are used by the importer when he does not have a godown of his own for storage of the goods or when he is not in a position to clear the duty immediately. A nominal rent is charged for use of these warehouses.

These warehouses are situated near the dock area and may be owned either by the dock authorities or by private individuals.

The functioning of such a warehouse is always subject to supervision and control of the customs authorities.

The owner of the warehouse has to give a declaration or an undertaking to the customs authorities that customs duties will be collected and paid before removal of the goods from his warehouse.

The importer of the goods is also required to sign a bond undertaking to pay the customs duty on the removal of the goods.

As the goods kept in the warehouse are under a bond, therefore, this type of warehouse is called a bonded warehouse.