Page 4 - L5

manufacturers or any member of the public after the payment of a storage fee or charges. The
government regulates the operation of these warehouses by issuing licences for them to private
parties.

The owner of the warehouse stands as an agent of the owner of the goods and is expected to take
appropriate care of the goods. These warehouses provide other facilities also like transportation
by rail and road. They are responsible for the full safety of the goods. Small manufacturers
find it very convenient as they cannot afford to construct their own warehouses. The other
benefits include flexibility in the number of locations, no fixed cost and capability of offering
value added services like packaging and labelling.

(iii) Bonded warehouses: Bonded warehouses are licensed by the government to accept
imported goods prior to payment of tax and customs duty. These are goods which are imported
from other countries. Importers are not permitted to remove goods from the docks or the airport
till customs duty is paid. At times, importers are not in a position to pay the duty in full or do not
require all the goods immediately. The goods are kept in bonded warehouses by the customs
authorities till the customs duty is paid. These goods are said to be in bond. These warehouses
have facilities for branding, packaging, grading and blending. Importers may bring their buyers
for inspection of goods and repackage them according to their requirements. Thus, it facilitates
marketing of goods.
Goods can be removed in part as and when required by the importers and buyers, and import
duty can be paid in instalments. The importer need not block funds for payment of import duties
before the goods are sold or used. Even if he wishes to export the goods kept in the bonded
warehouse he may do so without payment of customs duty. Thus, bonded warehouses facilitate
entrepot trade.
(iv) Government warehouses: These warehouses are fully owned and managed by the
government. The government manages them through organisations set up in the public sector.
For example, Food Corporation of India, State Trading Corporation
(v) Cooperative warehouses: Some marketing cooperative societies or agricultural cooperative
societies have set up their own warehouses for members of their cooperative society.

Functions of warehousing

The functions of warehousing are discussed as follows:
(a) Consolidation: In this function the warehouse receives and consolidates, materials/goods
from different production plants and dispatches the same to a particular customer on a single
transportation shipment.