Warehousing is an essential part of any rapidly growing business. Beyond simply storing goods, warehouses ensure that the order fulfillment process moves as smoothly as possible by using various tools and solutions.
If your business has grown to the point where you need warehouses overseas, you may want to consider bonded warehousing. A bonded warehouse is a facility where you store goods in a different country before processing them for delivery.
These warehouses hold bonded goods for a set amount of time until the custom duty is paid. If duty is not paid within the specified time, the local government confiscates the shipment or it is disposed of.
Throughout this article, we go over what bonded warehouses are, how they work, and how they can benefit your business.
Bonded warehouses are used for storing imported or exported goods and are operated by private companies in foreign countries under the regulation of that country’s customs agency. The primary purpose of bonded warehouses is to defer the payment of customs duties.
Another objective of bonded warehouses is to allow businesses to have their goods closer to their foreign customers for faster delivery times.
Bonded warehouses also allow the deferring of payments of duty charges or any other taxes due until the goods are distributed for sale. They also provide some time to sort, repackage, and process goods before being distributed, during which you do not have to pay duties or tax. However, duty charges must be paid when goods leave the warehouse unless moved to another bonded warehouse or exported to another country.
Bonded warehouses facilitate faster delivery times to foreign customers while also making the delivery process safer due to the secure storage and following customs laws. Exporters frequently use bonded warehouses for more than the safety and fast delivery times they provide. Some of the other benefits these warehouses come with include:
Deferring/Avoid Duty and Taxes - When storing goods in a bonded warehouse, you only have to pay taxes and duty when goods leave the warehouse. The additional time allows the business to complete pre-sale tasks and can also boost cash flow. If the goods are exported, taxes and duties are avoided entirely.
Long Term Storage - While some exceptions exist, many countries allow goods to be stored in bonded warehouses indefinitely.
Versatile Storage - Bonded warehouses are designed to store any type of product for as long as necessary. Temperature-controlled, dry, and freezer storage is available at these facilities, making them versatile storage solutions.
Safe and Secure - Bonded warehouses provide additional security through the use of CCTV and proper documentation.
Close to Ports - Most bonded warehouses are close ports or airports, so businesses can store their goods at the port of entry until distribution, saving money on transport and lead time.
At FlexSpace Logistics, we offer bonded warehouses across Canada, so regardless of the location of your business, we will have the resources to accommodate. We will handle your shipping and logistic needs with care so you can get back to the more pertinent aspects of your business.
If you’d like to get started, get a quote today, or contact one of our FlexSpace Logistics advisors to find the right solution for your business at 1-844-985-3539.