top of page

What is Bonded Cargo & Why Is It Important in Import-Export Trade

Logistics 101: the Nitty-Gritty of Bonded Cargo

Based on gigantic transportation networks that connect the entire world, the field of logistics is unimaginably vast. Developing a good understanding of its wide-ranging operations is extremely crucial, especially for someone dealing with import-export trade. In case you don’t know, these international transactions are widely based on bonded cargo.

What is Bonded Cargo?

Bonded cargo or bonded shipments are imported commercial goods worth $2,500 or more with pending customs taxes and duties. When arranged effectively, the bonded shipping process ensures that the cargo is routed appropriately. It can only be released once it completes its planned journey from point A to point B and becomes taxable.

Bonded goods may traverse one or more countries but they are only subjected to customs clearance once they reach the final destination. All duties and taxes are levied on their arrival at the desired import terminal.

How to Execute Bonded Shipping Properly?

To ensure a flawless in-bond shipping process in the US, you have to make a few necessary arrangements beforehand. Depending on your requirements, you must book a bonded carrier and warehouse before the cargo leaves its host country.

Each shipment should have proper documentation and paperwork to avoid any hindrance. Anyone dealing with bonded shipments needs a customs bond.

What’s the Purpose of a Customs Bond?

It’s an insurance policy that protects the US government from bearing financial loss if the shipper fails to pay the import duties and taxes. In scenarios of unnecessary delays in financial disbursements, the goods are temporarily stored in bonded warehouses. It’s an assurity for payment defaults or reneges, which are quite rare in this field.

What are Bonded Warehouses?

Managed by US Customs and Border Protection, Bonded warehouses are storage facilities used to withhold bonded goods until their release or disposal. The importers can store their dutiable merchandise for up to 5 years from the importation date. This mechanism also allows shippers to spread out the burden of taxes, allowing them to pay duties only when shipping the goods domestically.

How Does a Bonded Carrier Differ from a Normal Carrier?

As discussed, to ship your bonded goods, you need a bonded carrier. Unlike other shipping carriers, bonded carriers are licensed to move bonded cargo throughout the country, across ports and border crossings in the US. They are not subject to paying any duties or taxes while transporting bonded goods.

What Happens to Bonded Goods Upon Nonpayment of Duties?

Bonded cargo can only be released if all levied duties and taxes are cleared. However, if shippers fail to pay the outstanding dues—intentionally or unintentionally—bonded shipments are either destroyed or disposed of.

Handling Bonded Cargo Carefully — In a Nutshell

Make sure your shipping procedures are backed by proper documentation and effective management. The efficiency of the process is imperative for your bonded goods to reach their respective destinations without obstructions.

34 views0 comments


bottom of page