What Is Bonded Warehouse and When Is It Useful?
In the world of freight-forwarding and import/export services, many companies will find that one of the biggest challenges will be in finding where to store your goods. While you are, in fact, free to store them wherever you see fit, you may find that many locations lack the safety and security that you need. Additionally, you will be required to pay the duty tax required by the Customs and Border Protection once your goods have been imported (or exported) to their destination.
Instead, many businesses rely on bonded warehouses, or bonds, to safely and securely store their goods. This is especially true for companies that regularly export merchandise internationally to foreign countries. Why? Well, bonded warehouses offer a number of convenient solutions to suit a variety of logistics needs, including duty-free storage for up to five years. Additionally, in the event that no domestic buyer is found or the initial buyer withdraws, you can repackage and resell your goods to thereby eliminate your obligation to pay a duty tax.
As defined by the Customs and Border Protection (CBP), a bonded warehouse is a secured building or similar facility wherein taxable goods can be “stored, manipulated, or undergo manufacturing operations” without being subject to duties or applicable fees.
In most United States bonds, clients can store their goods without penalty or duty payment for up to 5 years. This allows importers to enjoy a bit of flexibility in the event that they must store their items for an extended period of time. Upon removal of the merchandise from the bonded warehouse, the importer will be responsible for taking care of any necessary payment or paperwork required by CBP or their client.
Types of Bonded Warehouses
According to CBP, there are currently 11 different classes of bonded warehouses. The types of requirements for each will vary depending on the country or region of its location. There are various options of storage depending on your particular needs. Here are the designated classifications:
- Locations that can be owned or leased by the Government when certain circumstances decided by the port director dictate the necessity. The can be used for the storage of merchandise that is currently undergoing examination by the CBP, has been seized, or is pending release from CBP custody. Goods stored in these warehouses are done so as per CBP’s discretion and will be held under what is known as “general order”.
- A private warehouse that is used only for the storage of goods that are the property of or have been consigned to the owner. A class 4 or 5 warehouse can be deemed a private warehouse in certain instances.
- Public bonded warehouses available to importers for the storage of their goods.
- Bonded yards or sheds that are used exclusively for the following: storage of large and cumbersome materials, building, or enclosures intended for the storage of animals, and tanks to store liquids in large quantities.
- Bonded bins, parts of buildings, or elevators used for the storage of grain.
- Bonded warehouses used wholly for the exportation of merchandise subject to internal revenue tax, and for the manufacture or distribution of cigars imported from another country.
- Bonded warehouse used in the smelting and refining of metals used for exportation or domestic use.
- Warehouse and buildings used for the cleaning, sorting, repacking, reconditioning, and packing changes of any imported merchandise under CBPO supervision.
- Bonded warehouses known as duty-free stores used exclusively in the distribution of duty-free merchandise outside of Customs territory. Class 9 goods must be owned or sold solely by the proprietor and delivered directly to an airport or similar exportation point.
- Warehouses bonded with the intention of storing international travel merchandise, including goods sold duty-free on aircrafts rather than in a duty-free store. The regulations on this class are still being written.
- Bonded warehouses intended for the storage of general order (GO) merchandise, which is considered any good that has not been claimed for 15 days following arrival in the US.
Benefits of Using a Bonded Warehouse
Of course, opting to store your goods in a bonded warehouse isn’t required. Rather, it is a service offered by logistics companies and importers/exporters as an option that allows more financial freedom and offers a reliable level of security. Bonded warehouses can be beneficial for a number of reasons.
Long-Term Storage Options
In many cases, sellers are left with goods that have been abandoned by the original buyer or have a lot of goods that have seen a significant decrease in demand. The smartest decision financially would be to store them in a bonded warehouse. In the US, most bonded warehouses will allow you to store your merchandise in their facility for 5 years max.
Recommended for Restricted Goods
If you are in the business of dealing with restrictive materials, you are familiar with the necessary paperwork and delicate procedures required to legally import them. Since a bonded warehouse allows you to defer taxes while in storage, you can take care of all the necessary legal work without having to pay an arm and a leg.
This may be the most popular reason to choose a customs bonded warehouse: duty deferment. This means that you will not be subjected to any applicable taxes or duty costs unless your goods are withdrawn for consumption. This gives you the freedom to manage your money as you see fit until the next step is made.
Secure Storage Solutions in Miramar, FL
Promptus, LLC owns and operates a Class 2,3, and 8 Bonded Warehouse that stores the goods of import companies from around the world. Our state-of-the-art warehousing & distribution facility licensed to store bonded cargo with 24-hours surveillance and protection against natural disasters such as hurricanes or flooding. The convenience of choosing a privately operated warehouse is that you can rely on the expertise of the company to maintain the requirements and expectations of CBP. Turn to the experts at Promptus, LLC for all your global logistics needs. Contact us for a quote today!