The Benefits of Bonded Warehousing
4 minutes to read
What is a Bonded Warehouse?
A bonded warehouse is a place of storage for imported goods (also known as bonded goods) that have yet to be processed by customs. In simple terms, it is a duty-free zone. There are two types of storage – wet and dry. Wet bonded warehouses are the only ones in which alcohol and tobacco may be stored.
What Are Bonded Goods?
Bonded goods are imported goods upon which duties, taxes and any other customs charges are still owed. These goods are typically kept in a customs bonded warehouse, an area of a warehouse controlled by customs authorities.
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How Does Bonded Warehousing Work?
Bonded warehousing allows you to defer payment of duty and any other taxes due (such as VAT, if the goods are imported into the UK) until imported goods are distributed for sale. It also provides a period of time in which goods may be sorted, repackaged or otherwise processed prior to being distributed, during which no duty or tax need be paid.
Generally, goods eligible for bonded warehousing in the UK must have been imported from a non-EU country. Exceptions include goods moving from another EU country under a temporary duty suspension or Community Transit, and products covered by the Common Agricultural Policy (CAP) that are eligible for an export refund.
The majority of imported goods may be stored in a bonded warehouse in the UK for as long as you wish, although products covered by the CAP, such as oils and fats, meat and sugar, are subject to specific arrangements. When goods leave the warehouse, duty must be paid, unless they move to another bonded warehouse or are exported.
What Are The Advantages of Bonded Warehousing?
There are numerous benefits associated with using a bonded warehouse. Some of the main ones are:
Payment of duty and taxes may be deferred or avoided
Payment falls due only when goods leave the warehouse for sale. This provides breathing space to carry out any additional pre-sale activity, and can also serve as a welcome boost to cash flow. If the goods are to be exported, those costs are avoided entirely. Tax cost savings of 25–30% have been reported as a result of using bonded warehousing.
Storage can be long term
With the exception of products covered by the CAP, goods may be stored in UK bonded warehouses indefinitely. If work is required to satisfy, for example, import licensing requirements, or goods are restricted, they may be stored until requirements are met, or else exported.
Improved customer service
Goods can be ordered in advance of anticipated demand and stored, ready to be called on when needed, meaning you can offer your customers a better experience.
Bonded warehouse facilities are equipped to store any kind of product for as long as necessary, while maintaining the quality. Temperature-controlled facilities are available, as well as those with dry containers and freezers.
Safety and security
As well as security measures such as CCTV, goods are well-cared for and fully documented. In addition, approval to establish a customs warehouse comes from HMRC, and is subject to careful assessment and regular auditing, so you can be confident of dealing with a reputable organisation.
Proximity to ports
The majority of bonded warehouses are located close to major ports or airports, allowing companies to store their goods at the port of entry until they are ready for distribution. This creates cost savings across the entire supply chain as it reduces lead times and the potential for damage, while cutting the cost of transport and carbon emissions.
Additional logistics services
Most warehouses are affiliated with freight forwarders like HFS, who can offer a complete integrated logistics solution to keep companies’ supply chains moving and save them the hassle of dealing with multiple suppliers.
Bonded Warehousing with HFS
Our specialist warehousing team is able to handle loading and unloading, cross docking and order fulfilment, as well as pallet and carton distribution, and our warehouse facilities are monitored 24/7, giving customers total peace of mind.
We pride ourselves on our industry knowledge and ability to understand every customer’s needs, which allows us to recommend the most suitable logistics and warehousing solution. There aren’t many things we can’t store, so please don’t hesitate to get in touch today to discuss your requirements.