The Role of Commercial Warehouses in Disaster Relief Operations
November 13, 2019
Mr. Kei Fujioka
Corporate Adviser, MITSUI-SOKO HOLDINGS Co., LTD.
The warehousing business undertakes “receiving goods from clients, ensuring safe storage and returning them upon request by clients”. It is different from the logistics real estate business which “constructs and rents warehouse spaces”. It is also different from the so-called “Trunk Room” which can be handily used like your own storeroom.
I work in the commercial warehousing business which keeps goods entrusted by an unspecified large number of clients in safety, based on the Warehouse Business Act.
1. Main functions of commercial warehouses
�� Safekeeping: as a core function, warehouses ensure safe storage of entrusted goods in the same quality and quantity.
�� Regulating demand and supply: warehouses coordinate time-lags between demand and supply. Grains, for example, are transported to a warehouse in one lot when harvested and consumed over the year depending on demand. Likewise, demand and supply of industrial products are regulated by using warehouses.
�� Coordination and consolidation: mass transportation allows reducing the per unit freight costs. In collaboration with trading companies and manufacturers, we try to provide efficient solutions through freight consolidation from production sites and deliver a small lot using warehouses in between.
�� Financial Function: commercial warehousing companies issue receipts for goods received, which are called “warehouse warrants”. When endorsed at the Exchange, they can be transferred. At the London Metal Exchange (LME), warrants are traded, but the actual commodities (copper, aluminum etc.) are stored in warehouses designated by LME around the world.
2. The role of commercial warehouses in disaster relief operations
At the outbreak of disasters, an enormous amount of relief supplies is required to support life and reconstruction. Following the Great East Japan Earthquake of March 2011, an Advisory Conference was hosted by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT). It issued a report on logistics survey and countermeasures at the time of major earthquakes and identified the following challenges:
�� Lack of collection and distribution depots as well as insufficient information.
�� Restrained transport capacity due to shortage of vehicles and fuel.
�� Lack of logistics knowhow and consequent confusion in disaster relief operations.
Based on these findings, MLIT, local governments, Japan Warehousing Association and Japan Trucking Association agreed to make a list of private sector depots and to conclude a cooperation agreement between the Logistics and Transport Associations and local governments.
The commercial warehousing business, including my company, is ready to provide not only spaces and operations, but also expertise we have accumulated over the years in times of disaster.