Who Needs a Customs Bonded Warehouse?
A customs bonded warehouse is one that allows for storage of duty-payable, imported goods prior to them being processed and sent on to their final destination. Some are government-operated, while others, like On Time Delivery & Warehouse, are privately-owned.
But the primary differentiating feature of customs bonded warehousing versus any other warehousing proprietor is that payment for inspections and duty taxes can be deferred – in some cases up to five full years past when the date of import. Until the duties are paid, the goods must stay at the warehouse. But this allows companies to get their products “in the door,” which can mean major savings, especially when you’re up against constant supply chain instability, as many have been the last two years.
Having a Cleveland warehousing partner that is customs bonded can prove essential. As reported last month by Freight Waves, congestion at ports has meant importers who aren’t proactive in determining what will be needed – or could be needed – in terms of customs documents in preparation for inspections, etc. are running into excessive, painful delays. Utilizing customs bonded warehousing is one strategy that may help some companies better cope with supply chain snags in the future.
“Given that some of these disruptions are likely to continue into next year and beyond, companies may want to consider customs bonded warehousing as a means to just get their goods and materials in the country,” explained On Time Delivery & Warehouse CEO Anthony Figliano. “Once they’re here, we offer safe, secure storage until such time our clients are ready to retrieve them. We also provide kitting and assembly – which can even be done prior to the duties being paid. And then of course once duties are paid, we offer delivery to the next destination.”
The customs bonded warehouse proprietor agrees to be liable for goods that are under a customs bond until they’re exported, withdrawn, or removed for consumption – after the duties are paid.
How a Cleveland Customs Bonded Warehouse Helps Firms of All Sizes
Whether it’s a pandemic or a hurricane or a labor strike, supply chains are always at risk of uncertainty (though some may be more vulnerable than others – particularly if you’re not working with a dedicated 3PL). Customs bonded warehousing in many ways acts as an insulator from geopolitical disruptors. Effectively, it’s a form of protective custody of your goods.
The most obvious recent example was the pandemic. The virus’s ripple effect on the markets involved major bottlenecks for some goods and plummeting demand for others. Lots of manufacturers and distributors, desperate to retain their supplier trade contracts and hopefully save some money, turned to customs bonded warehouses. If products weren’t moving as fast in retail locations, the excess imports could be stored in a customs bonded warehouse. This served to temporarily relieve these businesses of the hefty burden of paying those duties promptly. For some, that was what allowed them to survive the dramatic supply chain swings in demand.
That brings us to another benefit of this type of warehousing, which is flexibility. Let’s say you import a sizable shipment of goods, but it’s not all spoken for upon import. If you store those items with a Cleveland customs bonded warehouse, you can keep them there until there’s demand for them. This is particularly helpful with importers of seasonal goods. If you’re unable to sell those products domestically, you still have the option of exporting them to another country – without having to pay excise taxes.
Customs bonded warehousing proprietors may also be exempt from stringent CBP storage timelines on certain regulated or restricted goods. Importers can also rest assured their goods are safe, as there are certain security requirements – such as 24-7 surveillance – that must be met to meet the criteria for customs bonding in the U.S.
Ultimately, using a customs bonded warehouse simplifies and de-stresses the whole international shipping process for businesses, offering more time for paperwork, inspection, and payment.
Contact On Time Delivery & Warehouse by calling (440) 826-4630 or send us an email.
Bonded Warehouse Manual for Customs and Border Protection and Customs Bonded Warehouse Proprietors, January 2012, U.S. Customs and Border Protection
More Blog Entries:
Outsourcing Ohio Warehousing & Distribution Saves Dollars, Makes Sense, July 15, 2021, Ohio Customs Bonded Warehouse Blog
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