Bonded warehouse

Bonded warehouse
See also
Door to door service Transloading Container lease Accessorial charges Transit shipment Trade counter Freight out Freight carrier Container depot

Bonded warehouse allows to storage the product, which are from other country in this way that companies do not have to pay export fees and value added tax while they will not sold them on topical market goods and services. When some business intend to deliver back the product which are on the bonded warehouse, they do not have to make a payments for duty (Galchhaniya, Iyer R, 2018).

Benefits

Benefits which are result from bonded warehouse (Manresa, 2010, s. 210):

• Suspension, through which company can avoid duty pay,
• It is easier to set a bonded warehouse in place which company dispose, than a foreign-trade zone,
• Also, the charges are lower, when there is a need to set and function this type of storage goods compared with foreign-trade zone,
• Product, which are on the describe concept, can be almost always transported to the other bonded warehouse.

Inconvenience

Inconvenience which are result from bonded warehouse (Manresa, 2010, s. 210,211):

• Restriction, which do not let for some maneuver for merchandise, for example production is prohibited,
• It is possibility to store the goods, only at a certain time, this period is five years,
• In case of destruction the goods and the loss, there is no reduction for duty, company have to make payment for totality consignment,
• There have to be some kind of protection to stored merchandise.

Division of the bonded warehouse

The bonded warehouse can be divided into twelve classes (Manresa, 2010, s. 203). To this subject it can be distinguished three main type of bonded warehouse. It is: self-owned bonded warehouse, public bonded warehouse and export bonded warehouse (De Toni, 2016, s. 236). The first of them mean that business set a bonded warehouse, exclusively for yourself. Public bonded warehouse can be understand as a possibility, obtained through the Customs to have influence for this type of storage goods. The last items means that the merchandises are waiting for receiving and cannot be delivery through deficiency information data (De Toni, 2016, s. 236).

Described subject is currently intended to storage for goods. A lot companies store their merchandise in this way, what is caused by companies forethought connected with the change price's on a worldwide. Moreover, the organization has the option to not make a payment, which is related to duty and may to control rightful business (De Toni, 2016, s. 236).

Composition the bonded warehouse

Bonded warehouse consist of: bonded warehousing, international logistic distribution and simple processing and value-added service (Manresa, 2010, s. 203).

Difference between foreign trade zone

In contrast to foreign-trade zone in bonded warehouse, the company cannot do produce goods. Another form of maneuver related to merchandise is possible. For example, unpacking the commodity and re-placing it on the package (Manresa, 2010, s. 203).

In this type storage the merchandise is impossible keep the products which are flammable, difficult to maintain and the transport to country is forbidden. Although in some case are special exceptions (Hinkelman, 2003, s.203).

Examples of Bonded warehouse

• A bonded warehouse is a secure area that is used to store goods imported into a country until taxes, duties, or other fees are paid. It is typically used by companies that wish to import goods from another country without having to pay taxes or duties until the goods are ready to be sold on the local market. In many cases, a bonded warehouse can provide financial benefits to businesses by allowing them to defer payment of taxes and duties until the goods are ready for sale.
• Companies can also use bonded warehouses to store goods imported from foreign countries for export. By storing the goods in a bonded warehouse, companies can avoid paying taxes and duties on the goods until they are sold in another country. This is beneficial for companies that export goods from one country to another as it allows them to defer payments of taxes and duties until the goods are sold.
• Bonded warehouses can also be used to store goods that are imported from other countries for use in manufacturing. By storing the goods in a bonded warehouse, companies can avoid paying taxes and duties on the goods until they are used in the manufacturing process. This is beneficial for companies that manufacture goods from imported parts as it allows them to defer payments of taxes and duties until the goods are used in the manufacturing process.

Limitations of Bonded warehouse

Bonded warehouses have certain limitations that can impede their effectiveness. These limitations include:

• High cost: Bonded warehouses are expensive to maintain and operate, due to the need for specialized personnel, equipment, and security measures. This can make them cost-prohibitive for smaller business operations.
• Limited access: Bonded warehouses are highly secure and only authorized personnel can access the stored goods. This can limit the ability of the business to efficiently distribute their products.
• Storage time limits: Bonded warehouses may have time limits, which can prevent businesses from storing goods for extended periods of time. This can lead to lost sales opportunities and higher costs.
• Limited capacity: Bonded warehouses may have limited storage space, which can prevent businesses from stocking up on goods. This can lead to lost sales opportunities.
• Complex regulations: Bonded warehouses are subject to complex regulations, which can be difficult to navigate and comply with. This can lead to costly delays and additional costs.

Other approaches related to Bonded warehouse

Bonded warehouses provide businesses with numerous benefits, such as storage without payment of duty and taxes, as well as the ability to transport goods without delays. Other approaches related to bonded warehouses include:

• Bonded Consolidation: This is the process of combining two or more shipments into one shipment, allowing businesses to reduce costs and improve efficiency.
• Bonded Transfers: This is the process of transferring goods from one bonded warehouse to another, allowing businesses to store goods in different locations.
• Bonded Cross-Border Transfers: This allows businesses to move goods from one country to another without having to pay duty or taxes.
• Bonded Warehouses for Export Purposes: This allows businesses to store goods in a bonded warehouse until they are ready to be exported to another country.

In conclusion, bonded warehouses provide numerous benefits to businesses, such as storage without payment of duty and taxes, as well as the ability to transport goods without delays. Other approaches related to bonded warehouses include bonded consolidation, bonded transfers, bonded cross-border transfers, and bonded warehouses for export purposes.

References

• De Toni A. F., (2016), International Operations Management: Lessons in Global Business, Gower Publishing.
• Galchhaniya A., Iyer R., (2018), Practical Guide to SAP GTS Part 3: Bonded Warehouse, Foreign Trade Zone, and Duty Drawback, Espresso tutorials.
• Hinkelman E. G. (2004) Importers Manual USA: The Single Source Reference Encyclopedia for Importing to the United States, World Trade Press.
• Keller S.B., Keller B.C., (2014), The Definitive Guide To Warehousing Managing The Storage And Handling Of Materials And Products In The Supply Chain, Pearson Education.
• Manresa M., (2010), How to Open and Operate a Financially Successful Import Export Business, Atlantic Publishing Group.
• Murray M., (2011), Warehouse Management with SAP® ERP: Functionality and Technical Configuration, Galileo Press.
• Wulf D.W, Sokol J.B., (2005), Customs Modernization Handbook, The World Bank.

Author: Anna Skórka