A bonded warehouse is a secured place for imported goods (known as bonded goods) or duty payable goods for storing them closer to foreign customers before clearing the customs and process of delivery. These warehouses are government-owned or privately established large enterprises, and the bonded goods are retained without paying the import duties.
There are two types of storage for bonded goods, dry and wet. A wet bonded warehouse is only used for alcohol or tobacco items while dry customs bonded warehouses are used for the storage of all goods except Alcohol and excise applicable goods. In the USA, you can store importing goods in the bonded customs warehouse up to five years from the date of importation.
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What is Bonded Warehouse?
Definition: The bonded warehouse is defined as a safe place and duty-free zone for the storage of dutiable goods that are yet to be processed by customs. These bonded warehouses are used to keep imported and duty-payable goods safe before delivering them to the final destination without paying the duty.
The main aim of the customs bonded warehouses is to provide governmental or private supervision and security for the imported goods before going through formal customs entry procedures and payment of duty. This system is used widely both in the national and international shipment of goods.
This facility is one of the oldest and ruling the storage of imported and exported goods since the 1800s for secure storage without paying duty. Depending on the type of the product and what the company is trying to accomplish, anyone can determine the most suited Bonded Warehouse.
Definition of Bonded Goods
Bonded Goods are landed import goods kept under the supervision of customs authorities in the government-owned or private Bonded Warehouse where the payment of duty, taxes, and other customs charges are still unpaid.
These goods can be handed over to the delivery services after assessing and paying taxes, duties, and other charges.
Purposes of Bonded Warehouses
Some of the key purposes that bonded warehouses serve are
1. Store inventory overseas
Customs bonded warehousing offers spaces to store goods for imports and exports. They are also used for storing restricted goods or dutiable goods and let them undergo manufacturing operations without payment of duty.
2. Grading and Parking
When you will be ready to remove your goods, warehouse bond management will help you with packing services. They also offer full flexibility for your packing and grading preferences.
3. Provide Transportation Means
They alleviate the transportation of your merchandise and as an integral part of the global supply chain, they resolve the created supply chain bottlenecks.
4. For Price Stabilization
With the help of a customs bond warehouse operator, you will have the advantage of utilizing utility for your goods by letting your prices be more manageable and favorable.
5. Promote Risk Aversive Conditions
Using a bonded warehouse will let you have a system that can efficiently resolve the issues of theft, damage, fire, deterioration, etc.
Types of Bonded Warehouses
Depending on the various regions and countries, there are a few storage options are available, and those are as follows:
1. Public Bonded Warehouses or Type B Customs Warehouse
Public customs bonded warehouse is a type of warehouse that is state-owned where the administrator (who is the warehouse owner) can allow its premises available for anyone to store goods under the customs control. It is also known as Public Customs Bonded Warehouse and authorities provide government supervision to these.
These are licensed customs bonded storage warehouses by the customs authorities as custodians and lawfully store the goods until the payments for customs duties and other charges are not cleared.
2. Private Bonded Warehouses or Type C Customs Warehouse
In this type, only the administrators of the privately-owned bonded warehouse can keep their goods or store imported goods on behalf of others in their customs territory.
Private customs warehouse provides the top security to the stored goods, and the warehouse keepers remain responsible to Customs for keeping the imported goods.
It is also known as Private Customs Bonded Warehouse and is specifically designed for imported good services where the imported items from the licensed importers are stored.
3. Type D and E customs warehouses
These are also private customs warehouses in which only the administrator or the warehouse keeper is allowed for storing goods.
4. Free Warehouses
It’s a special type of public bonded warehouse where the warehouse is maintained and locked by the customs. This is a free service, and an
Advantages of Bonded Warehouses
As mentioned earlier, the customs bonded warehouses are beneficial in many ways. They offer the importers to save the payments of duty until the goods are in the process of delivery or sales.
From the numerous advantages that are associated with customs bonded warehouse, the primary ones are mentioned below:
1. Taxations can be avoided
Importers need to pay taxes and other customs charges during consumptions or sales. There is no payment required during the process of storage in the Bonded Warehouse.
So, it’s always profitable for businessmen to avoid such debts before sales. The pre-sale activities also boost the cash flow, and the imported goods can save 25-30% of tax charges.
2. Proper storage facilities
You can store both restricted and regulated items in the bonded warehouses. But, the importer should be licensed, and the goods should be legal as the customs authorities and CBP officers often supervise them.
Sometimes, the restricted items can be kept in the Bonded Warehouse for a limited and short period. This is a legal facility and can be done by paper works.
3. Payment of duty
The Bonded Warehouse only asks for the payment when the stored goods are delivered or sold by the importer. Until then, no duty needs to be paid.
You can keep the good in the warehouses as long as the keeper permitted you, and you can save up extra charges in this way.
4. Convenient international shipping
Companies can keep their goods in the Bonded Warehouse until the demand increases. Once the demand increases, the duty will be cleared easily, and some of the items are delivered domestically.
Now, if a domestic buyer is not available to collect the goods, the importer can easily export the items to its manufacturing company without paying international shipping charges.
5. Advanced customer service
Bonded Warehouse always offers the facilities to order the goods in advance according to the demand and store them safely.
When a customer is found to provide your services, you can simply contact warehouse keepers and deliver the goods on time to provide a better experience to the customer.
6. Safety and security
Safety and security are the keys of Bonded Warehouse and its offerings. Bonded Warehouse reduces the stressful life of manufacturers and fraudsters by introducing CCTV cameras.
Each warehouse stays under 24/7 surveillance, and importers and warehouse keepers can always be safe and tension-free. Moreover, the documentation for storing the goods is one of the compulsory jobs before getting access to Bonded Warehouse.
7. The proximity of ports
Most of the Bonded Warehouses are situated near some ports or airports. It helps the importers to get access to the warehouse very easily without hiring some transportation services.
As a result, the importers can save the costs during the entire supply chain, the possibilities of damage, and the carbon and transport emissions.
Bonded Warehouse vs Non-Bonded Warehouse
In the case of bonded warehousing at a secure location, tax fees, as well as duty payment, are not payable while on the other hand in non-bonded warehousing, concerned parties are supposed to pay their tax fees and duty payment.
Bonded Warehouses vs Special Economic Zone
Unlike a free warehouse, a special economic zone is not a building or premises, but a location.
This location is a geographical area that has been carefully charted and recorded. Sometimes these areas are known as bonded logistics parks.
Customs Bonded Warehouse vs Free Trade Zone Warehouse
The concepts of bonded warehouses came into practice in the year 1800s for offering government supervision and secure storage to the dutiable goods before the payment of customs duty and taxes.
Different goods stored in customs bonded warehouses need to follow the formal customs procedures.
While on the other hand, Free Trade Zone (FTZ) warehouses came into existence in the 1930s and they were introduced for optimizing the global trade and competition for U.S. companies.
FTZ warehouses are in specific locations around the USA that are considered outside of U.S. Customs territory. As FTZs are outside U.S. Customs territory, goods stored there can move without following the formal Customs entry procedures.
Conclusion!
Bonded customs warehouse is a beneficial approach for businessmen all over the world to store goods near to international customers and ship internationally.
The facilities offered by Bonded Customs Warehouse are the best for the importers in both cost savings and the existence in the international market.
Importers can avail themselves of the opportunity of exporting their goods without paying the duty if the domestic sale is not made properly. Before importing the goods, anyone needs to check out the facilities of warehouses in that country, preferably nearby ports or airports.
How beneficial do you consider the services of customs bonded warehousing in international trades and freight forwarding?
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