Logistics Industry: Functions of Warehousing

Some of the functions of warehousing include storage, price stabilization, financing, grading, and packing.

FREMONT, CA: A warehouse can be defined as a setting used for the storage or accumulation of commodities in a systematic and orderly manner. The purpose of storage can be carried out effectively with the help of warehouses used for storing the goods. They offer protection to products against heat, storm, wind, and moisture and also cut down losses due to spoilage and wastage. This is the primary function of each warehouse. In addition to this, warehouses today also perform a variety of other purposes. Below are a few functions of warehouses.

Functions of Warehousing

1. Storage

Storage is the essential function of warehousing. Additional commodities that are not required instantly can be stored in warehouses and can be supplied as and when desired by the customers.

2. Price Stabilization 

Warehouses play a vital role in the process of price stabilization. The instance is achieved by the formation of time utility by warehousing. Besides, fall in product prices when their supply is in plenty and rise in their cost during the slack season is avoided.

3. Risk Bearing

When the commodities are stored in warehouses, they are exposed to lots of risks in the form of theft, fire, deterioration, exploration, and others. Warehouses are constructed in a way so as to reduce the risks. A warehouse keeper is required to take reasonable care of the supplies and safeguard them against various risk factors. For any damage or loss sustained by goods, the warehouse keeper will be accountable to the owner of the commodities.

4. Financing

Loans can be procured from the warehouse keeper in opposition to the goods stored by the vendor. The way products act as security for the warehouse keeper, banks, and other financial organizations also advance loans on warehouse receipts. In this way, warehousing serves as a source of finance for the businessmen for meeting business operations.

5. Grading and Packing

Warehouses these days provide the facilities of packing, processing, and classification of commodities. Goods can be packed in suitable sizes as per the orders of the owner.

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