A bonded warehouse, also called a customs warehouse, is a government- or privately-owned facility subject to strict regulation by the country’s customs or port authority. In a bonded warehouse, items can be stored without being present in the country you want to export them to. This creates a duty-free zone by exempting import and export businesses from paying customs fees while the items are stored here.
Therefore, it will be valuable to understand the functions of a bonded warehouse, especially if you’ve opted to hire a customs bonded warehouse for your e-commerce business.
Items Reach a Bonded Warehouse
The importer and warehouse operator accepts responsibility under a warehouse customs bond when the items are received in the warehouse. When the goods are ready to be delivered or exported, all necessary customs fees, taxes, and duties are postponed until they leave the warehouse. This is one of the most common functions of a bonding warehouse.
Items are Sorted and Repacked
The items are then appropriately stored, often in specialist storage facilities. Depending on the kind of product, these services may involve bulk liquid storage or deep freezing.
Furthermore, bonded commodities are subject to sorting and repacking or go through other manufacturing changes. At the same time, they are stored in the warehouse and watched by a customs official. Bonded raw materials may also undergo various production processes even when the duties and taxes haven’t been paid yet.
Items Are Transported to Their Destination
Transportation and logistics are two of the most prominent functions of a bonded warehouse. The items are then fulfilled to the consumer or exported to the next location following any alterations. After all, many bonded warehouse owners/administrators also provide transport and logistics services and storage. In fact, they complete the customer’s order and ensure that the goods are delivered quickly and efficiently.
Regarding order fulfillment, they either have their own fleet of vehicles or hire third-party transport and logistics providers. Typically, it’s the latter!
Taxes, Fees, and Duties Are Paid Upon Release of Items
The items are typically taken out of storage once all tariffs and taxes have been paid. Much like bonded customs warehouses, these fees must be paid after the items are released. On the other hand, non-bonded warehouses require you to pay any pending charges before they release your items. However, non-bonded warehouses are not subject to custom payments or duties. You only have to pay the owner/administrator for using their space.
Wrapping Up
These are some of the essential functions of a bonded warehouse you need to know about before renting one. Equipped with this knowledge, we hope you understand that renting one will benefit you, especially if you run an import and export business and want to defer unnecessary custom taxes. These bonded warehouses also provide a host of other order fulfillment services, including transportation, sorting, repacking, and much more. So, don’t wait and rent one today!
