Warehousing
Contract warehousing is analogous to public warehousing. The dissimilarity between them is the absorption of risk by the owners of the goods that are covered under the contract warehousing. The leasing party makes a commitment to pay the fees whether or not the space is utilized. In this case, the risk is shared between the owner of the goods and the warehouse company. This implies that the cost is less, compared to public warehousing.
Benefits
Contract warehousing is very beneficial to new businesses or a business that is entering a new market. It benefits the businesses that offer an isolated cost center. Businesses that seek to minimize risk or liability also benefit from contract warehousing. The companies that require experience and back up support flourish and reap profits. The contracts ensure the safety, storage and transportation of the goods to the specified locations.
