types of warehouse

Warehousing is one of the backbones of the supply chain as it is directly related to the management of customers and customer service.

It centres hold a special place in the heart of logistics and supply chain professionals. These secure facilities are where all the activity of a company happens.

The basic objective of warehouse management is to ensure the smooth functioning of the warehouse and its inventory.  In this post, we share with you 6 types of warehouse in Logistics.

What is a Warehouse?

A warehouse is a building, or part of a building, usually reserved for storage. In the case of business, it is a commercialized building and widely used to handle general cargo. 

It usually has movable racks for storage and is equipped with loading docks and forklift trucks or other means of product transportation. The warehouse usually has inventory management systems, recording equipment, and parking spaces for vehicles.

Warehouses do not only store the physical goods but more importantly, they maintain crucial data and information about the storage of each item.

They are often configured with technological tools for the facilitation of records and inventory of goods, as well as making them available on-demand with little or no room for surprises. 

Warehouses vary in size from small home garages to massive warehouses like Amazon.com’s fulfilment centres that can span 14 acres and even bigger. Some are designed for heavy-duty equipment, some may be for general cargoes. 

Types of Warehouse
Image of amazon’s fulfilment centres

There are various types of warehouses for different purposes. Some are established for the storage of drugs, chemicals, food and sensitive materials, and others are meant for general cargo with no capacity to handle sensitive goods, drugs, or chemicals. Below are the various types of warehouses:

Private Warehouse 

A private warehouse is a type of warehouse which is privately owned by wholesalers, distributors or manufacturers. It can also be owne by traders, retailers, farmers, mostly sited around their businesses for storage. 

They are usually large retail and online marketplaces that also have their own privately-owned warehouses.

Public Warehouse 

The Public Warehouse is one of the types of warehouse that is quite an affordable solution for small businesses, manufacturers, importers, exporters that may not financially be positioned to own their own warehouse.

In the UK and Europe, the Public Warehouse is the largest storage facility, specifically designed to cater for the needs of Small and Medium Scale (SMEs) businesses.

Public Warehouse is usually owned by the government or semi-government and mostly for rent to private companies, and as a form of support to small or medium businesses, importers, exporters, or manufacturers.

Bonded Warehouse

A customs-controlled warehouse for the retention of imported goods until the duty owed is paid. This one important type among the various types of warehouse.

For an agency to own, manage and/or control this type of warehouse, such an agency must obtain a bond license. The bonded warehouse may be owned by the government or private agencies especially. By virtue of the license, it tells that the building being used to store dutiable goods, carry out customs inspections or examination, cargo release, etc is not a bonded warehouse without being licensed. 

The bonded warehouse basically houses special types of projects, which may include time-sensitive consignments, Less than container load shipments.

Bonded warehouses are used for making deliveries of product safely and legally to their customers’ business. The connected inventory system is safe and under the control of customs, and the stored products are carefully watched upon and maintained.

So, if you think efficiency, easy access to cargo and minimal delays for your sensitive shipments, this type of warehouse is the go to option.

One other advantage of this type of warehouse is that the cost of going through manual port clearance processes, multiple examinations, and delays prompted by port congestion can be very high.

Co-operative Warehouse

As the name implies, this type of warehouse is a less profit-oriented warehouse owned, managed and controlled by a group of people who formed a cooperative or a full blown cooperative society with the aim of providing storage facilities at affordable cost strictly to members of the society.

Distribution Warehouse 

Types of Warehouse
Image from Glassdoor

This is also known as distribution centers due to its design for having large storage spaces. This also gives room for the quicker movement larger quantity goods over a short period of time. It can also serve as a large distribution hub where goods are bought by multiple suppliers to customers at a quicker rate. In most cases, effective inventory management and the distribution processes are technologically aided by warehousing software systems, like EPOS, an inventory tracking software system, 3PL Warehouse Manager, etc. Distribution centers are mostly sited closer to a transport facility with tailored capacity to handle goods meant for distribution within 24 hours – especially perishable and Fast Move Consumer (FMC) goods.

In conclusion, bearing in mind that the warehousing as a subject matter cannot be exhaustively discussed in a single article, this is the first of our series on warehousing. However, whether your business is centered on manufacturing, distribution, or service delivery, the importance of warehousing in every supply chain system is key and its potential to reduce cycle times through expert inventory, distribution, and storage management is even more pivotal.

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