Mitigating Tariff Impacts with Bonded Warehouses and Foreign Trade Zones (FTZs)

The Key Differences Between Bonded Warehouses and FTZs

While both bonded warehouses and foreign trade zones allow importers to defer duty payments, there are some important distinctions:

• In class 3 bonded warehouses, the duty rate is based on the date of withdrawal
• In foreign trade zones, the duty rate is generally based on the date of admission into the zone

This key difference makes bonded warehouses an attractive option for many importers, especially given the possibility that tariffs may be reduced under future trade agreements. By storing goods in a bonded warehouse, companies can potentially benefit from lower duty rates if tariffs are cut before the merchandise is withdrawn.

Benefits of Bonded Warehouses

FreightAmigo has partnered with several third-party providers to offer class 3 bonded warehouse space to our customers. Some of the key benefits include:

• Duty deferral for up to 5 years from the date of import
• Ability to export merchandise from the warehouse without paying duty
• Options for cleaning, sorting, and repackaging goods
• Flexibility to change the importer of record prior to withdrawal

These solutions are already available in multiple markets, with more locations expected to launch soon. Our bonded warehouse options give importers valuable time and flexibility to develop long-term strategies while minimizing short-term financial impacts.

Leveraging Foreign Trade Zones

In addition to bonded warehouses, FreightAmigo operates two FTZ warehouses - one in Chicago and another in Los Angeles. Our FTZ facilities offer:

• Admission and release of goods
• Long-term or indefinite storage options
• Duty collection only when merchandise is removed for U.S. consumption
• Ability to export goods from the zone without paying duty
• Options for kitting and manufacturing in some zones

While recent tariff actions have limited some FTZ benefits, these facilities still provide valuable duty deferral and storage options for many importers.

Choosing the Right Solution for Your Business

At FreightAmigo, we work closely with our clients to determine the optimal tariff mitigation strategy based on their unique supply chain needs. Our logistics experts can help you evaluate whether a bonded warehouse, foreign trade zone, or combination of both solutions is right for your business.

Some key factors to consider include:

• Types of goods being imported
• Expected storage duration
• Likelihood of re-export
• Manufacturing/kitting requirements
• Duty rates and tariff outlook for specific products

By leveraging FreightAmigo's Digital Logistics Platform along with strategic use of bonded warehouses and FTZs, importers can gain greater control over duty costs and optimize their supply chains in this uncertain trade climate.

Getting Started with Bonded Storage and FTZs

FreightAmigo makes it easy to incorporate bonded warehouses and foreign trade zones into your logistics strategy. Our Digital Logistics Platform provides a seamless way to manage inventory across facilities, automate documentation, and gain full visibility into your global supply chain.

To learn more about how FreightAmigo's bonded warehouse and FTZ solutions can help your business mitigate tariff impacts, contact one of our logistics experts today. We'll work with you to develop a customized strategy aligned with your unique supply chain needs and goals.

In today's complex and fast-changing trade environment, having a knowledgeable partner like FreightAmigo can make all the difference. Let us help you navigate the challenges and unlock new opportunities to optimize your global logistics.