How Bonded Warehousing Reduces Business Costs
Companies in the business of importing and/or exporting merchandise are all too familiar with the pain of duty payments when products cross borders. Compounded with the fees of warehouse storage, charges can add up quickly. If you’re looking to reduce operating costs (and who isn’t?), consider the use of a bonded warehouse, which in many cases allow operators to delay or avoid the payment of duties on goods. Typically situated by a port, these specialized warehouses may be maintained under the supervision of customs authorities, or managed privately (in which case a customs bond is posted with the government).
When is a Bonded Warehouse Used?
Importers will want to use a bonded warehouse in any of the following circumstances:
• For entrepôt trading, wherein the imported goods are meant to be held temporarily before being exported to another destination
• When the importer is unable to immediately pay customs duties on the imported goods, and requires short-term storage before release
• When the importer does not have their own storage facility
5 Advantages of Bonded Warehouses:
Importers may store goods in a bonded warehouse without paying VAT or other custom duties for a rather long time, deferring this cost until it is time for the goods to be removed or sold and reducing the financial burden on the business. Certain bonded warehouses are qualified to hold goods up to four years, and hence serve as duty-free zones.
Storage in a bonded warehouse does not mean the goods are locked down and inaccessible. Importers are usually permitted to mix, divide, and pack stored goods to ready them for marketing, export, or other purposes.
Goods intended to be re-exported are entirely exempt from duty payment.
The importer may endorse their warehouse receipt or warehouse bond to sell or transfer the stored goods.
The importer may use the goods stored in bonded warehouse as collateral for acquiring bank loans – before having paid import tariffs.
In need of a bonded warehouse in the Atlanta or Savannah areas? Contact Bonded Service today.