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As the international logistics provides the goods movement process developing in the space-time, the warehousing helps to conserve quantity (e.g., against theft and accidental loss - in space) and quality of goods (e.g., bad physical environment in terms of temperature, humidity, etc. – in time) composing the value of the goods for the buyer. For the home logistics, as well as for international one, warehouse is a storage structure constructed for the protection of the said quality and quantity of stored goods. The need for a warehouse significantly arises in the case of international trade due to an ambiguity of the time gap between production in one country and consumption of products in another country. Warehousing or storage refers to the holding and preservation of goods until they are dispatched to the consumers. By bridging this gap, storage creates an additional value. Due to this value the goods are available to buyers as and when required. Storage enables a firm to carry on production in anticipation of demand in future. Warehouses enable the businesspeople to carry on production throughout the space-time and sell their products, whenever there is adequate demand. Need for warehouses arises also because some goods are produced only in a particular season but are demanded throughout the year. Similarly, certain products are produced throughout the year but demanded only during a particular season.[1] However, in the frame of international trade, there is one very important and specific function of the warehousing; namely, providing housing for bonded warehouses.

Bonded warehouse is a warehouse authorized by customs authorities for storage of goods on which payment of duties is deferred until the goods are removed. A Customs bonded warehouse is a building or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment or duty. Bonded warehouses are licenced by the government to accept imported goods for storage until the payment of customs duty. A bonded warehouse provides official supervision and security for imported goods before the payment of a duty. The duty then becomes payable only when goods are taken out of the warehouse for use and consumption. Usually, they are located near the sea ports or airports. They are either operated by the government agencies or work under the control of customs authorities. The warehouse is required to give an undertaking or 'Bond' that it will not allow the goods to be removed without the consent of the custom authorities. The goods are held in bond and cannot be withdrawn without paying the customs duty. Such warehouses are very helpful to importers and exporters. If an importer is unable to pay customs duty immediately after the arrival of goods he can store the goods in a bonded warehouse. He can withdraw the goods in installments by paying the customs duty proportionately. Goods lying in a bonded warehouse can be packaged,graded and branded for the purpose of sale.

Upon entry of goods into the warehouse, the importer and warehouse proprietor incur liability under a bond. This liability is generally cancelled when the goods are:

  • Exported; or deemed exported;
  • Withdrawn for supplies to a vessel or aircraft international traffic;
  • Destroyed under Customs supervisions; or
  • Withdrawn for consumption within the importing country after payment of duty.


  1. http://business.gov.in/manage_business/warehousing.php
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