Bonded Warehouse

Bonded warehouses are separated spaces left for cargo that needs to be stored, but has not yet been cleared by US Customs. Not only can it be due to the shipper stopping the shipment, but it can also be stopped due to problems with the shipping container or cargo within. Under the watchful eye of customs, this cargo cannot be changed in any way for re-manufacturing, but repacking, sorting or reconditioning may be allowed. This is one reason items may not yet be ready for customs clearance. On the other hand, sometimes companies will use a bonded warehouse for temporary storage if they are unable to handle the costs. They may not yet have the system in place to pay their duties to the destination country. There are also instances where import companies are not in sync with payments or are planning to reject the cargo and do not want the hassles of a duty drawback. Originally bonded warehouses were created for other reasons like a lack of capitol. Sometimes companies would need to sell the product before they were able to afford the duty amount that was required. At the time there was less communication and international shipping was a much riskier business. Although this instance was more common hundreds of years ago, it is still a well used strategy today, especially with the instability of the world economy. In the more recent times, bonded warehouses have been hailed for their flexibility. Not having to pay customs duties can allow for companies to reorganize their sales and re-export if necessary.