What is a bonded warehouse and does your business need one?

Jun 16, 2022 11:14:45 AM

What is a bonded warehouse?

A bonded warehouse is a controlled storage facility where shippers can store imported goods before customs have processed them.

Goods stored in bonded warehouses aren't liable for customs duties. When the goods have been delivered to their next destination, all applicable duties become payable such as, VAT, import duty, etc. This allows a company to defer the payment of customs duties and store its goods closer to international clients, leading to faster delivery.

6 Benefits of a bonded warehouse

Bonded warehouses offer significant benefits for businesses that import and export large quantities of goods, particularly those attracting high customs duties.

Shifting product from one site into a bonded warehouse allows it to be moved closer to the customer or final destination, without attracting duties.

You can postpone paying customs duty and taxes

This can provide you some breathing room and allow you to do additional pre-sale tasks. In a bonded warehouse, you can postpone paying VAT and other duty taxes until the goods are withdrawn and sent.

Storage can be long term

Most bonded warehouses will agree to hold your items for up to five years or longer, this is useful if you need to complete work to meet import license requirements or if demand isn't as great as predicted.

Your product's quality can be preserved

Bonded warehousing facilities are built to store any product for an extended period without compromising the quality. In addition to dry containers and freezers, temperature-controlled storage facilities are also accessible on-demand. Bonded warehouses are suited to store anything that you can think of safely.

Your cargo is kept closer to the ports

Most bonded warehouses are near major ports; therefore, this permits businesses to keep goods until they are ready to be dispersed at the port of entry. By decreasing lead time, transportation costs, and potential damage, these bonded warehouses can save money across the whole supply chain.

Improved Customer Service

In a bonded warehouse, it is possible to order goods well ahead of projected demand and hold them until they are needed, allowing you to provide a better experience to your clients. Bonded warehouses offer importers stress-free storage space, allowing them to transit products without difficulty.

Safety and Security

As well as security measures such as CCTV, goods are well-cared for and fully documented. Other advanced and effective security solutions such as fire suppression systems, barcoding systems, and inventory management software are available, ensuring that all commodities stored are thoroughly documented and preserved.


Different types of bonded warehouse

Bonded warehouses may be run by the government or by private companies.

Public bonded warehouse

A public bonded warehouse is a form of a government owned corporation warehouse where the administrator (who is also the warehouse owner) can enable anyone to store items under customs control on its grounds. Short- and long-term storage is done at public warehousing facilities, with certain locations offering extra services and amenities.

The benefits of these are that public warehousing facilities are less expensive, more convenient, and more flexible than private warehousing. For starters, items like facility leasing and taxes, team onboarding, and safety training do not require a financial investment.

Private bonded warehouse

Only the administrators of a privately owned bonded warehouse can hold their goods or store imported items on behalf of others.

One of the most significant advantages of private warehousing is the high level of control that clients have. A private warehouse gives you complete control over the facilities, allowing you to select how best to use the space on your own, carefully track the internal movement of material or inventory, or have a team working around the clock.


Ready to see how bonded warehousing can support your business?


Topics from this blog: Freight management Warehousing Customs and Regulatory compliance bonded warehouse

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