Marketing91

  • Home
  • Discounts and Deals
    • Marketing Tools Discounts
    • Financial Tools Discounts
  • Brands Analysis
    • Competitors
    • Top Brands Lists
    • SWOT of Brands
    • Brand Ownership
Home » Operations Management » Bonded Warehouse – Definition, Types and Advantages

Bonded Warehouse – Definition, Types and Advantages

November 29, 2021 | By Hitesh Bhasin | Filed Under: Operations Management

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.

Table of Contents

  • What is Bonded Warehouse?
  • Definition of Bonded Goods
  • Purposes of Bonded Warehouses
    • 1. Store inventory overseas
    • 2. Grading and Parking
    • 3. Provide Transportation Means
    • 4. For Price Stabilization
    • 5. Promote Risk Aversive Conditions
  • Types of Bonded Warehouses
    • 1. Public Bonded Warehouses or Type B Customs Warehouse
    • 2. Private Bonded Warehouses or Type C Customs Warehouse
    • 3. Type D and E customs warehouses
    • 4. Free Warehouses
  • Advantages of Bonded Warehouses
    • 1. Taxations can be avoided
    • 2. Proper storage facilities
    • 3. Payment of duty
    • 4. Convenient international shipping
    • 5. Advanced customer service
    • 6. Safety and security
    • 7. The proximity of ports
    • Bonded Warehouse vs Non-Bonded Warehouse
    • Bonded Warehouses vs Special Economic Zone
    • Customs Bonded Warehouse vs Free Trade Zone Warehouse
  • Conclusion!

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.

Also Read  Process Improvement: Meaning, Tips, Role, Steps, and Phases

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

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.

Also Read  What is Kanban? Principles and Benefits

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

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.

Also Read  Operations Management Definition and Principles

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.

Also Read  Operating Cycle: Meaning, & How to Reduce the Longer Operating Cycle?

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?

Liked this post? Check out the complete series on Operations Management

Related posts:

  1. Quality Audit – Definition, Meaning, Types, Advantages
  2. Process Control: Meaning, Objectives, Types, Importance, and Advantages
  3. Mass Production – Definition, Meaning, Understanding, Advantages
  4. Aggregate Planning – Definition, Importance, Strategies And Advantages
  5. Process Analysis – Definition, Meaning, Objectives, Advantages
  6. Incidence Rate – Definition, Meaning, Types, Examples
  7. Production Planning – Definition, Objectives, Need, Types, Importance
  8. What is Just in Time Inventory? Examples, Advantages and Disadvantages
  9. Operational Plan: Meaning, Limitations, Types, and how to Develop one?
  10. Types Of Resources: Natural and Man-Made Resources

About Hitesh Bhasin

Hitesh Bhasin is the Founder of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about.

All Knowledge Banks (Hub Pages)

  1. Marketing Hub
  2. Management Hub
  3. Marketing Strategy
  4. Advertising Hub
  5. Branding Hub
  6. Market Research
  7. Small Business Marketing
  8. Sales and Selling
  9. Marketing Careers
  1. Internet Marketing
  2. Business Model of Brands
  3. Marketing Mix of Brands
  4. Brand Competitors
  5. Strategy of Brands
  6. SWOT of Brands
  7. Customer Management
  8. Top 10 Lists
Not found what you are looking for? Search this website.
Advertisement
Recent Posts:
  • Helium 10 35% Off Coupon Code on Monthly Plans
  • Best Semrush Alternatives in 2025: 10 Top Competitors Compared
  • 3 Crucial Tools for Digital Acquisition Marketing – All for Free
  • Best Prop Firms for US Traders in 2025
  • eSIM Solutions That Save Big on Business Travel Expenses
Advertisement

Marketing91

ABOUT THIS WEBSITE:

  • About Marketing91
  • Marketing91 Team
  • Sitemap
  • Contact us
  • Advertise with us
 

LEGAL NOTICES:

  • Privacy Policy
  • Cookie Policy
  • Disclaimer
  • Editorial Policy
  • Terms of Use
Marketing91 - Discounts and Coupon Codes on Best Online Tools

Copyright © 2009 - 2025 Marketing91 All Rights Reserved