If you work in logistics, you probably know how helpful customs warehouses are, especially when it comes to international imports and exports. If you do not work in logistics, then you may not be familiar with the benefits that a customs warehouses provide.
In this article, we will explain what a customs warehouse is and its advantages.
What is a Customs Warehouse?
A customs warehouse (also known as a bonded warehouse) is a secure location where goods can be stored, exported, and imported. According to the U.N. Trade Statistics website, customs warehousing is defined as “the customs procedure under which imported goods are stored under customs control in a designated place (a customs warehouse) without payment of import duties and taxes.”
In this sense, customs warehouses allow companies to store imported goods under customs control without payment of import duties and taxes. Goods that are once imported and then exported can also be stored in a customs warehouse.
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What are the Benefits of Using a Customs Warehouse?
1. Long-Term Storage
Customs warehouses are ideal for long-term storage. In the United States, goods can be stored for up to five years without paying Customs Duties while in some countries, storage periods are indefinite. This eliminates unnecessary travel and gives importers a chance to develop relationships with vendors.
2. Deferred Duties
When goods are stored at a customs warehouse, duties are deferred until the goods leave the warehouse, allowing importers to save money and giving them extra time to complete the legal legwork required.
3. Restricted Goods
Importing restricted goods, such as firearms, certain fruits and vegetables, and animal products, involves more paperwork and legal legwork than importing conventional goods. Customs warehouses allow importers to store restricted goods for up to five years while they file the necessary paperwork.
4. International Shipping
Customs warehouses are highly convenient when shipping internationally. A business can import goods to a customs warehouse across the world and store it there until further notice without paying any duty fees.
The importer can then take one of two routes:
Importing
Goods can be stored at the warehouse until there is an increase in demand. At this point, the importer pays duties on the goods, which do not need to be imported all at once, as they are delivered to their destination within the country of holding.
Exporting
Importers can store goods at the warehouse to facilitate the consolidation of assets before being exported again. When the consolidated goods are exported out of the country of holding, importers are not charged duty fees because the goods are under the surveillance of Customs, preventing double taxation.
5. Safety and Security
Goods must remain at a secure location while they await distribution. Merchandise stored in a customs warehouse is under the joint custody and supervision of the CBP (Customs and Border Protection) and the warehouse owner.
Overall, storing goods at a customs warehouse is less stressful for importers, making the storage and transport of international goods a smoother process. In short, the benefits of using a customs warehouse are:
– Duties and taxes are deferred until their goods leave the facility.
– There is no rush on paperwork, payment, or inspection.
– Goods can be held for years if demand for the product is low.
– International shipping processes are smoother.
– Goods are kept safe and secure with 24-hour surveillance.
Are you looking for a reliable International Logistic Operator? At IFS, we have extensive experience helping companies meet their needs based on their specific requirements. Contact us for more information.
