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Unit 9: Warehousing

A classification of private warehouses, on the basis of the range of specialized operations Notes
performed, is as follows:
1. General merchandise,

2. Refrigerated,
3. Special commodity, and
4. Bonded warehouse.
Each warehouse type differs in its material handling and storage technology as a result of the
product and environmental characteristics.
General Merchandise Warehouses: This is a warehouse that is used to store goods that are readily
handled, are packaged, and do not require a controlled environment, such as paper, small
appliances, and household supplies.
Traditional general warehousing companies receive and ship goods on behalf of their customers,
serving as middlemen in the transportation process and a vital part of the logistics business. The
carrier is chosen either by the customer or by the warehouse operator who then acts as the
customer’s agent.
The increased reliance on warehouse operators for services other than storage prompted some
warehouses to diversify into different transportation areas, such as operating private trucking
fleets used for distribution. Others became involved in combining small shipments of freight
from various shippers into truckload shipments. These types of services were more typical of
freight forwarders or transport companies than of general warehouse operators. Such overlap
in services resulted in the emergence of the 3PL industry with many warehouse operators
developing from temporary caretakers of raw materials and finished goods into logistics experts.
Just-in-Time (JIT) inventory management is being used by more companies than ever before.
The successful execution of JIT requires constant monitoring of inventory levels and flexibility
on the part of shippers. JIT generally requires more frequent, but smaller shipments of goods to
and from warehouses. Private and contract warehouses are often better equipped than in-house
warehouses to execute time-based inventory management. A critical advantage of private
warehouses is their ability to create economies of scale in distribution. With this volume, the
warehouses often have more leverage than small manufacturers with suppliers and carriers and
better meet JIT inventory requirements.
General warehouses use EDI and other electronic devices such as bar coding and radio frequency
monitoring to enhance the productivity and efficiency of warehouse operations and simplified
inventory tracking. As customer expectations have become more stringent and competition in
the general warehouse industry has increased, more warehouses are investing in technology to
remain contenders in the market.

Did u know? Private warehouses owned by 3PL operators are extensively used in logistical
systems. Almost any combination of services is offered by such operators, either for a
short-term or over a long duration.
Refrigerated warehouses (either frozen or chilled): These are specialist warehouses designed to
handle and maintain products that are perishable such as food, medical items, and chemical
products with special temperature requirements.

For example, onions are available year round because they are stored in such warehouses and
released to the market based on demand. Onions must be cured and stored at an optimum
temperature of 0°C with 65–70 percent relative humidity.

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