Realestate Realtors LLP is

1. Definition of Warehouse
A warehouse is a commercial building for storage of goods. Warehouses are used
by manufacturers, importers, exporters,wholesalers, transport businesses, customs, etc. They are usually
large plain buildings in industrial areas of cities, towns and villages. They usually have loading docks to load
and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods
directly from railways, airports, or seaports. They often havecranes and forklifts for moving goods, which are
usually placed on ISOstandard pallets loaded into pallet racks. Stored goods can include any raw materials,
packing materials, spare parts, components, or finished goods associated with agriculture, manufacturing
and production.
Warehouse Presentation: Realestate Realtors LLP : 9818896670, 9811006052

2. Functions of Warehousing:
(1) Storage:
This is the basic function of warehousing. Surplus commodities which are not needed immediately can be
stored in warehouses. They can be supplied as and when needed by the customers.
(2) Price Stabilization:
Warehouses play an important role in the process of price stabilization. It is achieved by the creation of time
utility by warehousing. Fall in the prices of goods when their supply is in abundance and rise in their prices
during the slack season are avoided.
(3) Risk bearing:
When the goods are stored in warehouses they are exposed to many risks in the form of theft, deterioration,
exploration, fire etc. Warehouses are constructed in such a way as to minimize these risks. Contract of
bailment operates when the goods are stored in warehouses.
The person keeping the goods in warehouses acts as bailer and warehouse keeper acts as bailee. A
warehouse keeper has to take the reasonable care of the goods and safeguard them against various risks.
For any loss or damage sustained by goods, warehouse keeper shall be liable to the owner of the goods.
(4) Financing:
Loans can be raised from the warehouse keeper against the goods stored by the owner. Goods act as
security for the warehouse keeper. Similarly, banks and other financial institutions also advance loans
against warehouse receipts. In this manner, warehousing acts as a source of finance for the businessmen for
meeting business operations.
(5) Grading and Packing:
Warehouses now-a-days provide the facilities of packing, processing and grading of goods. Goods can be
packed in convenient sizes as per the instructions of the owner.

3. Types of Warehouses:
Warehouses can be classified into four groups viz:
(a) Private warehouses
(b) Public warehouses
(c) Bonded warehouses
(d) other type of warehouses

4. Private warehouses are constructed and owned by the business enterprises in order to store the
products produced by them. These are exclusively owned and used by the producers
themselves and are not meant for other manufacturing or business units.
On account of heavy cost of construction and maintenance of these warehouses, there number
is quite small. Only big business houses can afford to have such type of warehouses.
Private Warehouses

5. These are also known as duty paid warehouses. A public warehouse or duty paid warehouse is one which is
open for public at large. Most of the business organizations, especially small and medium scale, can’t afford
to have their own warehouses on account of large financial investment in their construction and
maintenance.
They make use of these types of warehouses, which may be owned by an individual or some agency whose
main object is to provide storage facilities to people for certain fees or charges. These warehouses operate
within rules and regulations formed by the government.
Public warehouses are very useful to businessmen. These warehouses are usually situated near railway lines
or main roads, so as to provide quick transportation services. Goods lying in the warehouse can be
hypothecated to banks and other financial institutions for getting loan and financial assistance.
Public warehouses ensure greater security and handling of goods on account of latest mechanical devices
used in handling and preserving the goods. Goods can be branded, graded and packed in desired sizes in the
warehouses.
Public Warehouse

6. Bonded warehouses are used for imported goods which are not granted clearance on account of non-
payment of custom duty by the importer of these goods. Such warehouses are situated near the ports.
Goods can’t be removed from these warehouses until the custom duties are paid.
Bonded warehouses may be run by the government or private agencies (when granted licenses to operate
such warehouses). In both the cases there is a strict control and supervision imposed by custom authorities
on their operation and functioning.
Importer of the goods has some control over his goods and he can inspect and check the goods as and when
he wants. After making part payment of the custom duty, goods can be proportionately withdrawn from
these warehouses.
Goods kept in these warehouses can be branded, packed, graded, labeled and canned in the warehouse
itself. Bank loans can be raised with the help of receipt issued by these warehouses by giving that receipt as
collateral security.
There is a least possibility of goods being exposed to any risk of theft, damage and deterioration. The
entrepot trade i.e., re-export of imported goods is greatly facilitated as the importer can have the delivery of
goods without paying any custom duty.
Bonded Warehouse

7. These include:
(a) Special Commodity Warehouses.
(b) Cold Storages or Refrigerated Warehouses.
(c) Institutional Warehouses.
(A) Special Commodity Warehouses:
These warehouses are constituted for storing a particular type of commodity, e.g., tobacco, cotton, wheat
etc. Mature of commodity is important in selecting the type of warehouse. For storing petrol, storage tanks
are needed and for storing agricultural products, godowns are needed.
(B) Cold Storage or Refrigerated Warehouses:
These are the warehouses which are used for storing perishable commodities like eggs, butter, fruits,
vegetables, fish, fresh meat etc. Goods stored in cold storages can be held for longer time. Infact, cold
storages have made possible the regular supply of certain commodities throughout the year.
For example, fruits and vegetables of all types can be made available to the people throughout the year.
Refrigerated warehouses have greatly improved the modern way of life.
(C) Institutional Warehouses:
Different institutions and bodies have their own warehouses on account of the nature of their operations.
For example, Banks, Railways, Food Corporation of India etc. has their own warehouses for conducting their
activities. Banks keep the stock of the parties in these warehouses as security against the loans advanced.
Railways maintain warehouses to store large quantity of goods. Goods to be dispatched to different parts of
the country are kept in warehouses before they are sent. Similarly, goods received for the purpose of
delivery are kept till they are disbursed to the claimant.
Various transport agencies also maintain warehouses for storing the goods which are to be dispatched and
received. Food Corporation of India has built many big warehouses throughout the country for storing
agricultural products.
Other type of Warehouses