July 30, 2008




1.0  Background of the Study

Primarily used by manufacturers, exporters, importers, wholesalers and transport businesses, a warehouse refers to a commercial building that serves as the storage place for goods. These warehouses are usually large plain buildings in industrial areas of cities and towns and are equipped with loading docks, cranes and forklifts. Goods on which the duties are unpaid and stored under agreement and suretyship are stored in bonded warehouses, however. Bonded warehouses store goods which are under joint custody of the importer and the customs officer. These bonded warehouses are usually managed by the state or by private enterprises, but with the requirement to post customs bond with the government for the latter.

Goods that are being stored in the bonded warehouses are liable to duty and are lodged until the duty has been paid. For importers, duties should be accomplished at the time of importation. The system of bonded warehousing has several inconveniences such as the difficulty in finding sureties on the part of the importers and the immediate selling of the goods in order to pay the lump sum. Such condition has a trickle down effect on consumers since there will be a mark-up on the prices of the goods. Realising this matter, there will be resultant situation: smuggling and low consumption because of high taxes on bonded warehouses.  

2.0  Statement of the Problem

The problem that will be addressed in this research is the extent of efficacy of bonded warehouses. How the present situation could be improved and how bonded warehousing could be a value-adding activity for business operators will be addressed. The study will answer the following questions.

1)     What are the services that bond warehouses provide? What are the benefits of using bonded warehouses?

2)     What are the problems that could be expected when using bonded warehouses?

3)     How bonded warehouses are managed? What systems, techniques and processes are being used?

4)     What are the excising schemes used? How do these schemes and other taxing requirements affect the operation of the bonded warehouses?

5)     In what ways bonded warehouses contribute in reducing costs and in product optimization? 

6)     How important is the role of bonded warehouses to global supply chain?

3.0  Objectives of the Study

The main aim of this study is to investigate, evaluate and analyse the degree of efficiency and effectiveness of bonded warehouses. In lieu with this, the research will seek to accomplish the following specific objectives:

§         To explore the concept of bonded warehousing based on the advantages and disadvantages of using them

§         To determine the services that bonded warehouses provide business operators (wholesalers, manufacturers, exporters and importers)

§         To study how bonded warehouses are managed and controlled based on identifying the systems, techniques and processes in place

§         To distinguish excise and taxing strategies and how these strategies affect the business operators

§         To understand the function of bonded warehouses in the global supply chain as a value-adding activity  

4.0  Research Methodology

The study will explore the problem in an interpretivist view, using exploratory research strategy because it aims to know more about the concept of bonded warehouses. Exploratory research will enable the study to look at the problem in both descriptive and exploratory manner. It will look into the problem by exploring the views of different sets of respondents, as well as by exploring different literatures related with the study. This qualitative study will conduct primary and secondary research.

The primary source of data will come from the researcher-made questionnaire and interview questions. The primary data frequently gives the detailed definitions of terms and statistical units used in the study. These are usually broken down into finer classifications. The secondary sources of data will come from published articles, business management journals, theses and related studies on bonded warehouses. Acquiring secondary data are more convenient to use because they are already condensed and organized. Moreover, analysis and interpretation are done more easily.

All data will be evaluated using the latest SPSS software. Data will be analysed using the frequency analysis. The following will be the formula:

Percentage – will be used to determine the magnitude of the responses.


% = -------- x 100        ;           n – number of responses

            N                                 N – total number of respondents


Weighted Mean

            f1x1 + f2x2  + f3x3 + f4x4  + f5x5

x = ---------------------------------------------  ;


where:             f – weight given to each response

                        x – number of responses

                        xt – total number of responses


The research will be presented in written form with the addition of data charts which will present the findings. Pie charts and network charts will be needed to illustrate some of the analyzed data. This cannot be confirmed, however, until the research data have been analyzed.




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