LOGISTIC
(a) Warehousing
Meaning, importance and types (public, private and bonded – meaning only).
Warehousing
Warehousing is the process of holding and preserving goods from the time
they are produced until they are needed for consumption or use. A
warehouse is an establishment for the storage or accumulation of goods.
IMPORTANCE OF WAREHOUSING
Warehousing has become necessary due to the following reasons.
1. Seasonal production: Several commodities such as rice, wheat, Sugar, etc., are
produced during a particular season but they are consumed throughout the year
hence they need to be stored.
2. Seasonal demand: Some products such as electric fans, umbrellas, woolen cloth,
etc., are demanded in a particular season. But they are produced throughout the
year. Such products have to be stored to meet seasonal demand.
3. Stability in prices: It is necessary to store goods to avoid violent fluctuations in
prices. Producers and merchants can secure better prices by storing goods in
warehouses.
4. Storage of raw materials: Manufacturers have to store raw materials in order to
ensure uninterrupted or regular production.
5. Public distribution: Warehousing is necessary for building up a buffer stock of
food grains. It enables the Government to supply essential commodities to the
people affected by calamities like drought, flood, earth quake, etc.
6. Equalization of demand and supply: Warehousing is needed to adjust the supply
of goods with their demand in the market. During depression, there is little
demand and goods have to bestored until the demand increases.
7. Scattered demand: Goods are produced at some places far away from different
places of consumption. Goods need to be stored near the market so as to make
them available to the buyers whenever and wherever they are required.
8. Processing: Some commodities require curing, blending or processing before
they are ready for sale. These processes for improving the quality of goods can
be easily done in warehouses. Some goods such as rice, gur, tobacco and liquor
fetch higher prices if they are stored for a longer period.
Private Warehouses
These warehouses are owned by manufacturers and traders to store the goods
produced or purchased by them until they are sold out. The expenses of
constructing, maintenance and insurance of private warehouses are paid by their
owners.
Public Warehouses
These warehouses are meant for use by businessmen in general. Any businessman
can store his goods in these warehouses for some charge. Public warehouses may
be owned by Government, public trusts and other public authorities.
Public Warehouses are located in places which are well connected by roads,
railways and water-ways/airways.
Bonded Ware House:
A Bonded Ware House is established under the bond with the customs authorities
for storage of dutiable goods till the payment of imports duty. The owner of a
bonded warehouse gives an undertaking not to release the goods until the customs
duty is paid.
Bonded warehouses are located in port towns and are licensed by the Government.
