Commodities imported into a new market are processed and held in storage facilities known as bonded warehouses. There are no customs duties on the items kept in the warehouse, but once the goods are released and delivered to their intended location, all necessary duties become due. Bonded warehouses, which can be owned by the government or private businesses, can help improve inventory management and cash flow. Commodities can be moved closer to their final location by using a bonded warehouse, and tariffs can be postponed until the item is relocated. This practice provides significant benefits to companies that conduct cross-border operations.

Advantages

• Duty payments can be deferred

In a bonded warehouse, you can postpone paying VAT and other duty taxes until the products are removed from the warehouse and sent out. This allows the shipper to have some breathing room and space to do more pre-sale activities. Additionally, you can completely avoid these costs if you export these goods.

• Long-term storage

Most bonded warehousing facilities agree to keep your products in storage for at least five years. If labour is necessary to meet import license requirements or demand isn’t as strong as anticipated, this can be helpful. You can hold your items in a bonded warehouse until the requirements have been fulfilled, or the demand has increased.

• Quality preservation

Bonded storage facilities are capable of storing any commodity for as long as required without compromising quality. For example, there are facilities with bulk storage areas, deep-freeze systems and dry container storage.

• Safety and security

Due to the facility’s constant surveillance by security personnel, you don’t need to worry about your cargo in a bonded warehouse. Modern and effective security measures such as surveillance cameras, barcoding systems, and inventory systems are also available, which guarantee that all goods kept in storage are thoroughly recorded and safeguarded.

• Proximity to ports

There are numerous bond storage facilities near ports and airports where importers can hold their goods until they are able to be dispersed. Costs associated with transportation and carbon emissions are reduced across the whole supply chain since lead times and damage are decreased.

• Better service

You can place orders for commodities in advance of anticipated demand by using bonded warehouses. You can deliver products more swiftly and provide an overall better experience because the items are kept closer to the end customer.