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A Look at Bonded Warehousing

Wednesday, April 29th, 2015

Bonded Warehouses and Foreign Trade Zones (FTZ) both deal with foreign goods with varying degrees of custom clearance and other import related statuses. However, that’s where the similarities end. FTZ’s and bonded warehouses both have pros, cons, and different purposes for each. This article will focus on the advantages inherent to bonded warehousing solutions.

What Is a Bonded Warehouse

A bonded warehouse exists as a secure building or area in which dutiable goods and items may be stored. They may also be manipulated or undergo manufacturing processes without a payment or duty. These warehouses provide secure and official supervision over goods prior to the payment of duty. The duty becomes payable once the goods have been moved from the warehouse for consumption or use. In a bonded warehouse re-labeling, storing, manipulation, remarking, processing, and salvaging may take place. Cleaning, sorting, and repackaging may also take place but only under special approval.

Bonded Warehouse Advantages

Delayed payment of duties is one reason a business or company may opt to utilize a bonded warehouse, as payments are not due until the product is moved for distribution or consumption. Therefore, the importer has full control over their money until the duty is paid upon withdrawal of the items. If no domestic buyer comes forward for the imported articles, the importer then has the option to opt to sell the merchandise for exportation. This way, the importer does not have to pay any duties.

Perhaps the most significant advantage, however, is the greater geographic flexibility of locating the bonded warehouses. Additionally, the application process is somewhat less rigorous than that of the FTZ. Businesses not located within a designated FTZ or sixty miles from the nearest zone might find a bonded warehouse to be an excellent option.

Though both are used to store imported goods, FTZ and bonded warehouses vary immensely. If you would like to learn more, contact us today.

Commercial Warehousing