A customs bonded warehouse, or bonded warehouse, is a secure storage facility that is free from import duties. When a business stores imported goods in a bonded warehouse, those items can be stored duty free for up to five years in the United States. The business and the owner of the warehouse consequently enter a contract of liability with the customs agency to either export the goods duty free or pay import taxes when the goods are withdrawn for domestic use. This contract, or obligation, of liability is called a customs bond. What is a customs bonded warehouse and why should my business use one?While in the bonded warehouse, the manipulation of duty-free goods is highly regulated. Usually, goods stored in most types of bonded warehouses cannot be used in any significant manufacturing process or manipulated in such a way as to alter their material condition. However, they can be cleaned or repackaged while in the duty-free environment. Bonded warehouses may offer other services, including cargo handling and transportation and customs negotiations.
The customs bonded warehouse has been around since the 19th century when importers of heavily taxed goods sought relief from the large capital outlay required for imported goods. The bonded warehouse allowed importers to delay excise taxes until the goods were needed for consumption. This allowed importers to lower their inventory carrying costs and consequently to hold more inventory closer to the point of sale or consumption.
There are many types of duty-free storage options, both public and private. The public customs warehouse is a storage solution that is available for anyone. The owner of this type of warehouse offers storage space to anyone who requires duty-free warehousing, and he shares bond responsibility with the owners of the goods. The private customs warehouse, however, is only available for storage of goods belonging to the proprietor of the warehouse. In this scenario, the proprietor of the private warehouse may store goods on behalf of others but remains wholly responsible to the customs agency for all duties on goods stored in the private warehouse.
There are a few other types of duty-free locations in use around the world. One such type of duty-free warehousing is controlled directly by customs agencies. These customs-owned facilities are available to the public so that anyone can store duty-free goods in them. Then, there are free-trade zones which are geographic locations that, unlike bonded warehouses, are outside of customs territory. Duty-free goods, as well as goods with no tax obligation, may remain in the free-trade zone indefinitely.
Customs bonded goods can move from bonded warehouse to bonded warehouse without incurring any duties, thereby delaying any tax obligation until the goods are ready to be sold or consumed. Partial shipments can be held duty free in bonded warehousing prior to consolidation. Thereby, bonded warehousing can be used logistically to smooth fluctuations in supply or demand.
Contact Port City Logistics for Your Customs Bonded Needs
Customs bonded warehouses are in use all over the world. As one of Savannah's top logistics companies, Port City Logistics leads the way for those who need top-tier customs bonded warehousing. Our experienced team will keep your goods safe, secure, and ready for transport. If you think you may need to learn more about customs bonded warehousing, please contact us today.