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Chirag Agrawal
Logistics and Data Analytics Expert
Asked a question last year

What are the different functions of warehousing?

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Chirag Agrawal
Logistics and Data Analytics Expert

i. Storage of goods
The basic function of warehouses is to store large stock of goods.
These goods are stored from the time of their production or purchase till their
consumption or use.
ii. Protection of goods
A warehouse provides protection of goods from loss or damage
due to heat, dust, wind and moisture, etc. It makes special arrangements for different
products according to their nature. It cuts down losses due to spoilage and wastage
during storage.
iii. Risk bearing
Warehouses take over the risks incidental to storage of goods. Once
goods are handed over to the warehouse-keeper for storage, the responsibility of
these goods passes on to the warehouse-keeper. Thus, the risk of loss or damage to
goods in storage is borne by the warehouse keeper. Since it is bound to return the
goods in good condition, the warehouse becomes responsible for any loss, theft or
damage, etc. Thus, it takes all precautions to prevent any mishap.
iv. Financing
When goods are deposited in any warehouse, the depositor gets a receipt,
which acts as a proof about the deposit of goods. The warehouses can also issue a
document in favour of the owner of the goods, which is called warehouse-keeper’s
warrant. This warrant is a document of title and can be transferred by simple
endorsement and delivery. So while the goods are in custody of the warehouse-keeper,
the businessmen can obtain loans from banks and other financial institutions keeping
this warrant as security. In some cases, warehouses also give advances of money to
the depositors for a short period keeping their goods as security.
v. Processing
Certain commodities are not consumed in the form they are produced.
Processing is required to make them consumable. For example, paddy is polished,
timber is seasoned, and fruits are ripened, etc. Sometimes warehouses also undertake
these activities on behalf of the owners.
vi. Grading and branding
On request warehouses also perform the functions of grading
and branding of goods on behalf of the manufacturer, wholesaler or the importer of
goods. It also provides facilities for mixing, blending and packaging of goods for the
convenience of handling and sale.
vii. Transportation
In some cases warehouses provide transport arrangement to the
bulk depositors. It collects goods from the place of production and also sends goods
to the place of delivery on request of the depositors.