Bonded warehouse (Part 3) History

 

Mason Transfer and Grain Co., bonded warehouse on the South Texas Border. Taken by Robert Runyon  sometime between 1900-1920.

Previous to the establishment of bonded warehouses in  England the payment of duties on imported goods had to be made at the time of importation, or a bond with security for future payment given to the revenue authorities. The inconveniences of this system were many:

• it was not always possible for the importer to find sureties, and he had often to make an immediate sale of the goods, in order to raise the duty, frequently selling when the market was depressed and prices low;
• the duty, having to be paid in a lump sum, raised the price of the goods by the amount of the interest on the capital required to pay the duty;
• competition was stifled from the fact that large capital was required for the importation of the more heavily taxed articles;

To obviate these difficulties and to put a check upon frauds on the revenue, Sir  Robert Walpole proposed in his "excise scheme" of 1733, the system of warehousing for tobacco and wine. The proposal was unpopular, and it was not till 1803 that the system was actually adopted. By an act of that year imported goods were to be placed in warehouses approved by the customs authorities, and importers were to give bonds for payment of duties when the goods were removed.

Bonded warehouse (Part 2)

Bonded warehouses are warehouses in which dutiable goods may be stored without paying the duties on such goods. For importers, there are a number of advantages to using bonded warehouses which make them a popular storage option in many ports all over the world. Different governments have different laws about how such warehouses can be administered and who can use or operate a bonded warehouse.

Also known as a customs warehouse, a bonded warehouse acts  like a no man's land where goods can be deposited without an importer or an agent needing to pay duties on them. If the importer decides to sell the goods for re-export, duties will not be incurred. Likewise, if the goods are destroyed, the obligation to pay duties will also be resolved. If the imported goods are released for sale, however, customs duties will come due.

Importers appreciate the flexibility of bonded warehouses, as if they can't get a good price for goods domestically or can't sell them at all, they can sell them for re-export without having to worry about the duties which might already have been paid. Paying duties on arrival can also be expensive, and using a bonded warehouse allows importers to access funds from the sale to pay the duties, rather than having to pay duties in advance. Customs officials also use bonded warehouses to store impounded or confiscated goods while working out what is going to happen to the goods, thereby ensuring that people don't pay duties on goods they cannot use.

Some bonded warehouses are operated by the government. Others are run by third parties which contract out their warehouse space, and in some cases they may take on the responsibility for paying duties, while in other instances, the importer or agent who arranges for the storage is responsible. Import/export companies may maintain their own bonded warehouses for the convenience of themselves and their clients, especially if they do a great deal of business

Individuals who want to open bonded warehouses generally need to file applications with Customs in the nations where they intend to operate warehouses. The application process can be complex and lengthy, and some people choose to contract it out to a lawyer who is experienced in such issues. In addition to meeting Customs requirements, bonded warehouse operators may also need to meet requirements set by the port where they operate, including providing evidence of insurance, installation of security systems, and measures to prevent loss due to fire or contamination

Bonded warehouse (Part 1)

A bonded warehouse is a warehouse in which, duty on goods stored within need not be paid until the goods are removed from the warehouse.  A bonded warehouse is referred to by Malaysian Customs as a ‘Gudang Berlesen Awam’ or Licenced General Warehouse.

A bonded warehouse is therefore a duty free zone, akin to a port.  It is usually fenced and has high security.  The warehouse operator normally gives a ‘bond’ or more usually nowadays a bank guarantee (instead of a cash deposit in the old days) to customs to guarantee that there will be no loss of revenue to customs should any of the goods stored within be inadvertently released from the bonded area.  In Malaysia, a license from customs is required before a public bonded warehouse can begin operations.

What are the benefits of storing in a bonded warehouse?

1. By storing goods in a bonded warehouse, traders can enjoy substantial cost savings through the deferment of payment of tax if the goods are not immediately required when they arrive in the destination port.

2. Duty need not be paid on imported goods which are intended for re -export.

3. Duty need not be paid on goods which are produced in a Free Industrial Zone pending export if they are stored in a bonded warehouse.

Warehouse Management System (WMS)

                                                                  Warehouse Management System

WMS  is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, put away and picking. The systems also direct and optimize stock put away based on real-time information about the status of bin utilization.

WMS  often utilize Auto ID Data Capture (AIDC) technology, such as barcode scanners, mobile computers, wireless LANs and potentially Radio-frequency identification (RFID) to efficiently monitor the flow of products. Once data has been collected, there is either a batch synchronization with, or a real-time wireless transmission to a central database. The database can then provide useful reports about the status of goods in the warehouse.

The objective of a WMS  is to provide a set of computerized procedures to handle the receipt of stock and returns into a warehouse facility, model and manage the logical representation of the physical storage facilities (e.g. racking etc), manage the stock within the facility and enable a seamless link to order processing and logistics management in order to pick, pack and ship product out of the facility.

Warehouse management systems can be a  stand alone systems, or modules of an ERP system or supply chain execution suite.

The primary purpose of a WMS is to control the movement and storage of materials within a warehouse – you might even describe it as the legs at the end-of-the line which automates the store, traffic and shipping management.

In its simplest form, the WMS can data track products during the production process and act as an interpreter and message buffer between existing ERP and WMS systems. Warehouse Management is not just managing within the boundaries of a warehouse today, it is much wider and goes beyond the physical boundaries. Inventory management ,inventory planning, cost management, IT applications & communication technology to be used are all related to warehouse management. The container storage, loading and unloading are also covered by warehouse management today.Warehouse management today is part of SCM and demand management. Even production management is to a great extent dependent on warehouse management. Efficient warehouse management gives a cutting edge to a retail chain distribution company. Warehouse management does not just start with receipt of material but it actually starts with actual initial planning when container design is made for a product. Warehouse design and process design within the warehouse (e.g. Wave Picking) is also part of warehouse management. Warehouse management is part of Logistics and SCM.

Warehouse Management monitors the progress of products through the warehouse. It involves the physical warehouse infrastructure, tracking systems, and communication between product stations.

Warehouse management deals with receipt, storage and movement of goods, normally finished goods, to intermediate storage locations or to final customer. In the multi-echelon model for distribution, there are levels of warehouses, starting with the Central Warehouse(s), regional warehouses serviced by the central warehouses and retail warehouses serviced by the regional warehouses and so on. The objective of warehouse management is to help in optimal cost of timely order fulfillment by managing the resources economically.

Warehouse management = "Management of storage of products and services rendered on the products within the four walls of a warehouse"

Article extracted from Wikipedia