What is Warehousing? Explain its types.

Answer:

Warehousing: Goods are generally produced in anticipation of demand and are not consumed immediately. A warehouse is a place used for storing goods from the time of production until they are sold or used. Warehousing means the activity of storing goods on a large scale in a systematic and orderly manner and making them available when needed. It creates time utility, protects goods from damage, helps in price stabilisation and provides facilities like grading, packing and finance against warehouse receipts.

Types of warehouses:

1. Private warehouses: Owned and managed by manufacturers, wholesalers or big retailers to store their own goods. They are built near the factory or market, designed to suit the nature of their products, and are not available to others.
2. Public warehouses: Owned by individuals, partnerships or companies and available to anyone for storage on payment of rent. They are licensed and regulated by the government, and are useful for small businessmen who cannot have their own warehouses.
3. Government warehouses: Owned, managed and controlled by the Central or State Government or public sector bodies, e.g. Central Warehousing Corporation, State Warehousing Corporations and Food Corporation of India. They are used by government and private businessmen, and are safe and reliable.
4. Bonded warehouses: Licensed by the government to store imported goods on which customs duty has not yet been paid. They are located near ports. The importer can take delivery in parts by paying duty on that part, and can also carry on packing, blending and branding there. Goods can be re-exported without paying duty.
5. Co-operative warehouses: Owned and managed by co-operative societies to provide storage to their members at reasonable charges, e.g. for farmers’ agricultural produce.
6. Cold storage: Warehouses with refrigeration where perishable goods such as fruits, vegetables, eggs, meat, dairy products and medicines are stored at low temperature.

Thus, different types of warehouses meet the storage needs of different businesses and help in smooth flow of trade.