Organizations have no ownership or interest in the goods which they store in public warehouse. They simply preserve them for others, who pay a charge for this service.Types of Storage Storage may be classified as private and public.
(1) Private Storage : The warehouses that are owned an operated by private individuals or firms for their own use are known as private storage. The private storage facilities are provided by the owners at their own expense and under their own supervision to meet particular needs. Private storage includes storage elevators for grain; cold storage for fruits, eggs, butter etc; yard storage for sand and gravel.
(2) Public Storage or Public Warehouses : Public warehouses are those warehouses which provide storage facilities to the public, subject to governmental regulation. They provide a variety of services and make a definite charges for the services rendered. Manufacturers, wholesalers and retailers use them widely in connection with the care of surplus production. The public warehouses are also used by the producers and middlemen in the financing of commodities during the storage period.
Public warehouses are sometimes classified as field and terminal warehouses. The field warehouses are established on the property of the owner of the goods by a public warehouseman. The warehouseman assumes the responsibility for the goods stored. On the other hand, terminal warehouses refer to storage facilities provided by the public warehouseman on his own property,
Public warehouses are also divided into the following types :
(1) General Merchandise Warehouses—They are the warehouses in which goods are stored and handled for manufacturers and others until delivery to middlemen or industrial buyers. They store a wide variety of goods usually for short periods of time.
(2) Bonded Warehouses—A Bonded warehouse is one which is licensed to accept imported goods for storage before payment of customs duties. They store goods on which a tax must be paid before the goods can be released. A bonded warehouse is a specialised form of the general merchandise warehouse. The difference is that the bonded warehouse store only those products which must be taxed. For example. whisky, some imported goods.
The importer, by storing his goods in a bonded warehouse, gains some control without paying the duty. The importer can save paying the full duty if he desires to remove from the warehouse only a small portion of the goods. In such a case, he can make delivery small quantities of goods as he sells them merely by paying duty on that portion only.
Home manufactured goods which are subject to excise duties can also be stored in bonded warehouses until they are required. In the cases of both the imported goods and domestic products, the warehouseman gives a ‘bond” that he will not, without the permission of the customs authorities, allow the goods to be removed from the warehouses.
(3) Special Commodity Warehouses—Such warehouses are used for long-term and short-term storage of farm products. Only agricultural commodities like rice, cotton, tobacco are stored in these warehouses.
(4) Household Goods and Furniture Warehouses—The household goods and furniture warehouses store the personal property. They can not he used for storage of agricultural products or industrial goods.
(5) Field Warehouses—They are also known as custodian warehouses. They are located on the premises of the owner of the goods but operated and contolled by a warehouseman so that he can issue warehouse receipts which makes the goods a proper collateral for loans. The receipts which are issued by the field warehouses can be used as good collateral security for loans to be obtained from the bank or other financial institutions.
Field warehousing started with agricultural commodities but has since been adopted by many manufacturers, particularly those whose annual production is completed within a few months of each year. Among the manufactured goods stored in field warehouses under custodian agreements are all types of canned goods, shoes, textiles, flour, clothing, wine. liquor, pulp and paper, steel and iron, furniture, petroleum and its products, sugar, cement, paint, rubber goods, meats and meat products, dairy products, lumber, automobile tires. radios, refrigerators, toys, plumbing and heating supplies and machinery.
(6) Cold Storage—The cold storages are also called refrigerated warehouses. These warehouses are used for the storage of perishable products like tomato, potato, onion, vegetables, fruits and the like.