What Is Bonded Cargo and Bonded Transport

Bryanis MartinGeneral, Imports, Shipping Guide, Warehousing3 Comments

It can seem overwhelming at best to try and prepare paperwork properly, correctly package your materials, and follow every regulation set forth around the world by various controlling bodies. There are many things you have to take into account, such as where your goods are commercialized, meeting where they are going to be sold, and what countries they might pass through on their way to where they will be sold. You also need to know what fees, fines, or other costs you might be subject to along the way. Knowing how frustrating this can be, you can save your company the trouble of handling Customs offices individually by using a service that provides bonded cargo alongside bonded transport services.

What is bonded cargo?

But what exactly does this have to offer? What is bonded cargo? Remember that any shipment which is commercialized in a given country is subject to customs cost, taxes, and duties within that country as part of the import process. A customs bond is a type of insurance that protects a country if exporters or importers fail to pay fines, taxes, or duties that are incurred on their shipment. If this applies to your company and your cargo, your goods will need to be stored and possibly moved, but you won’t be able to do that until the payment is made.

Bonded cargo refers to any foreign shipment on which your company owes things like duties, taxes, or penalties, even regular Customs charges. Typically, bonded cargo is maintained in an area of a warehouse controlled by Customs agents. This happens everywhere in the world, and it’s referred to as a customs bonded warehouse. In some situations, these warehouses can be managed by Third parties. In these cases, importers have to pay the Customs fees before their goods are imported.

Bonded items are only released once Customs has received full payment. If payment is not received after a specific amount of time, Customs will dispose of your shipment or otherwise destroy it.

When you have a shipment that arrives at customs in the U.S., but that shipment has not yet been paid for, it remains under Customs control until all Tax & Duty issues are solved. In certain situations, a licensed freight company is allowed to move your shipment from Customs to the company facilities where it is held as bonded cargo. Companies that operate with bonded cargo effectively have the flexibility to act in ways that your company simply can’t. This includes moving your shipment to an official, bonded cargo warehouse rather than leaving it in the hands of U.S. customs.

What is bonded transport?

Of course, bonded cargo is not the only thing you need to consider. Bonded transport is another feature that should be reviewed if you are considering bonded cargo. But what does it mean exactly? Bonded transport refers to vehicles that have a license to carry shipments that are not yet paid for through U.S. Customs. Remember that bonded cargo is cargo that has not yet been paid for in terms of tax and duty. It would otherwise be left to sit with U.S. customs. It is through bonded transport that said cargo is allowed to be moved. Having your merchandise transported to an official bonded cargo warehouse, and held there until the duties and taxes are paid can only be done with bonded transport. This can refer to any vehicle or transportation method that is appropriately licensed. So when you work with a company that provides services for bonded cargo and bonded transport, they can serve as a useful intermediary by moving your bonded freight to the appropriate warehouses or facilities.

What shippers need to know

As a shipper, you must understand the difference between bonded cargo, bonded transport, and bonded shipments. If you are shipping things through the United States but not to the United States, the load is considered an in bonded shipment. This means it doesn’t have to clear Customs within the United States because it’s merely passing through, and that also means you don’t have to pay Customs costs, taxes, or duties during the import process. If this is applicable to your business you will need your cargo transported by a bonded carrier and appropriately stored in a Bonded Warehouse as necessary.

One of the other things you need to know as a shipper is that if you are not there to facilitate payments with the government, you will need a shipping partner who can function as an intermediary and do it on your behalf.

Good logistics companies can help your company save time, effort, and money by facilitating the movement of your goods straight through customs. They will store them in safe, reliable facilities, and even repackage them so that they can continue with their journey.

How to choose a shipping partner for your bonded cargo and transport needs

When selecting a shipping partner for all bonded cargo and transport needs, you need to find a company that has intimate knowledge of Customs regulations as well as licensing. Companies that function as successful Customs brokers will guide you through each step of the international shipping pass. Given the necessity of transportation, it is imperative that you also find a shipping partner for bonded cargo that has an appropriate bonded cargo facility and can simultaneously provide bonded transport. Having all of these options under one company roof is of most convenience for your company. Shipping partners that maintain accredited warehouses can also repack your bonded cargo on your behalf and help you out in other capacities with your shipment. Having shipping partners who are licensed to not only hold your shipments but accept payment on behalf of the government means your shipping partner can function as an intermediary between your business and U.S. Customs.

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Bryanis Martin
Bryanis is our Customer Relationship Manager here at ShipLilly, she loves to build strong partnerships and help people succeed. In the past few years, She's had the opportunity to work with many clients, helping them achieve better results through the improvement of their supply chain strategy.

3 Comments on “What Is Bonded Cargo and Bonded Transport”

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    Bryson Owens

    My son is trying to build a new company right now that will probably ship products around the entire nation. He needs to figure out how to transport all of these goods if he is going to be successful. I’ll share your article with him so that he understands things like his cargo being held in customs until all the taxes have been paid.

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