Ever wondered how businesses import goods without breaking the bank on customs fees? Look no further than bonded warehouse. These warehouses are a strategic hub that can pivot the cash flow of eCommerce businesses and operational dynamics.
They are like a vault of opportunity that offers businesses a powerful tool under the complexities of international trade. Globally, businesses can store goods in these secure warehouses.
They operate under private companies’ strict supervision of the local customs agency. They offer a unique advantage: delaying payment of import duties until the goods are ready to be released from the warehouse.
Let’s see more about these customs warehouses in detail.
Bonded Warehouse Inventory
Are you familiar with the idea of customs duty taxes at an airport? These are the duty-free stores that you can see at the airports. They carry an exclusive selection of stock that usually comes from foreign importers.
The restricted goods are probably originally from a customs warehouse before they arrive at their final destination. This occurs because company owners may want to avoid paying duties as they would at a non-bonded warehouse.
Items You Find
There’s a long list of items that you can find at this type of warehouse. Here the management postpones the duties until the exporters withdraw the goods. They can also postpone the storage of bulk liquids, between long-term storage options, under reliable supervision.
This is not done until the foods leave the warehouse. Thus, they can take advantage of the government or privately owned customs warehousing. This is hugely beneficial for your companies.
Here are a few examples of warehouses that are bonded:
- Antiques
- Original artwork and paintings
- Gourmet chocolates
- Coffee
- Alcohol
- Handbags
- Perfume, skincare, and cosmetics
- Tobacco products
- Watches
- Electronics
- Luxury clothing and accessories
- Other restricted goods
Even with these warehouses, there are specifications of their types. Let’s see them.
Types of Bonded Warehouse
You can divide these warehouses into two broad categories: private-owned and government-owned:
| Government Warehouses | Private Warehouses | Temporary Storage Areas |
| Owned and monitored by government bodiesServe as storage that undergoes minute critique to ensure compliance with regulations and security of the goods. | Managed by independent companies. Businesses offer a dedicated space to securely store goods.Type 1 warehouses are company-owned but operate as shared spaces. Their goods come from the proprietor and external clientsType 2 warehouses are reserved for storing goods that the warehouse proprietor owns. | These areas encompass covered and open spaces. They act as holding zones where you temporarily house the goods waiting for approvals or completion of documentation. |
| Public Warehouses | Free Warehouses | Bonded Logistics Parks |
| Government entities or port authorities-owned.They are an accessible option for those businesses that seek customs-controlled storage. | These types of warehouses are under the vigilant monitoring of custom agents. They offer the flexibility for businesses to store goods. However, you need to settle the custom duties within the premises. | This is a specialised economic zones overseen by local authorities, bonded logistics parks that offers meticulous warehousing and logistics operations. |
All these warehouse types offer a plethora of benefits that supply chain experts must know about.
5 Bonded Warehouse Advantages
There are a few reasons why companies across industries choose to utilise customs warehouses. Here are some of the benefits that take the crown:
1. Ease of International Shipping
Whether your inventory store is overseas or you use a customs warehouse, shipping these goods is simple. You can import and export these items from the bonded storehouses. However, you need to pay the duty tax only on imported goods.
2. Long-Term Storage Options
You can store items in these warehouses for extended periods. This allows you to defer payments of duty taxes until you’re sure that the items are ready for shipment.
3. Round-the-Clock Access to Stored Items
Using this type of warehouse, allows you to have access to the items at any time. Therefore, importers and exporters can organise and prepare the goods before shipping them. It improves overall logistics.
4. Improvement in Customer Service
There are some major improvements from manufacturing to processing and distribution. You can spend more time focusing on customer service aiming to exceed their expectations.
5. Helps Save Money
Since duties and taxes are deferred until the goods exit the warehouse, customs warehouses can save the company money. This way you don’t have to pay anything upfront until you’re ready to fulfil orders and complete the shipments.
So far we have discussed the concept and the benefits of bonded warehouse. Shall we see the opposite now?
Difference Between Bonded and Non Bonded Warehouse
Unlike bonded storage facilities, these warehouses are the ones that are for public or regular use. This means there are no custom privileges or exceptions on these warehouses. The main purpose of such warehouses is to serve as a temporary storage point before the goods move onto the next step of the supply chain.
Here are the major differences between the two:
| Parameter | Bonded Warehouse | Non-Bonded Warehouse |
| Definition and Purpose | Under the authorisation of the government, this secured facility stores imported goods without immediate payment of duties, taxes or custom fees. | They store goods without any customs privilege. They serve for domestic distribution before paying for duties. |
| Customs Control and Regulations | Oversight deferral of customs duties | Upfront taxes, regulations and custom duties |
| Time Limitations and Storage Periods | Flexible time limit for efficient inventory | Flexible duration, costs for duties and taxes |
| Value-Added Services | May have services like labelling and sorting. | May have services like labelling and sorting. |
| Storage | Allows long-term storage up to five years. | It meant for temporary storage |
| Deferring Duties | Saves money by deferring duties. | Duties are dealt upfront which impact costs. |
| International Shipping | Facilities allow easy internal shipping without any upfront duties | Goods need to have upfront duties which affect flexibility. |
| Stress-Free Choice | Secure storage and deferred taxes | Immediate settlement of duties impacting costs can be jarring at times. |
So which bonded warehouse facility should you choose? Decide with the following parameters in mind.
Choosing the Right Warehouse
Before you choose a partner for your warehouse, keep the following in mind:
Locations Considerations
Your warehouse must have a strategic location near transportation networks, ports and land routes. This proximity gives you an upper hand which impacts your logistic efficiency. This warehouse can shorten delivery times, reduce shipping costs and more.
Equipment and Facilities
The warehouse infrastructure also contributes to the selection process. Modern facilities and robust equipment ensures safety of the stored goods.
It also ensures that the products are protected and preserved and preserved under the right conditions. Also, the warehouse needs to comply with security, safety and control standards.
Flexible Solutions
You must get adaptable storage solutions that align with your business’s evolving needs. Such flexibility can happen in various ways- from scalable storage space to customisable service options. All you need to do is find a partner who can provide tailored service that drives efficiency and supports your business strategies.
Customer Services
This is an invaluable part of any service. You must have 24×7 customer service available. It is this round-the-clock support that ensures that you can handle any issues or emergencies that your customers might have. You can prioritise them and minimise potential; disruptions to your supply chain.
Expert Industry Experience
The expertise and experience of a warehouse partner are non-negotiable. When you choose a partner with a proven track record in managing logistics operations, particularly within the retail and eCommerce industry, it is essential.
This ensures that the warehouse is well-versed in eCommerce logistics unique challenges and intricacies.
Warehouse Layout and Flow
The warehouse’s design and layout play a significant role in operational efficiency. A well-planned warehouse layout optimises storage space, ensures smooth-running retrieval and enhances overall operational performances.
FAQs: Importing Made Easy: Benefits of Bonded Warehouse
What is one drawback of warehouses that are bonded?
One downside of bonded warehouse is slower access to goods since they’re under customs control, delaying deliveries.
What is the limit on customs warehouses?
There’s a 1-year storage limit in Indian customs warehouses, but extensions are possible with approval.
What is the charge in the customs warehouse?
The fee typically varies. But the storage fees are based on per square metre per week. It also includes interest on customs duty after 30 days.
Conclusion
Overall bonded warehouse facilitate international trade and commerce. Their valuable service keeps businesses engaged in the global supply chain. If you are looking to extend your business to an international level it’s best to evaluate the features and assets of these warehouses. With experts like Qodenext, you make informed decisions about warehouse requirements.
