Issue link: https://read.dmtmag.com/i/112433
Broker basics By Robert Mucci LIA, AAI CIC, CWCS Bonded Cargo Gives Rise to Unknown and Often Uninsured Risks E ach year our society relies more heavily on foreign imports, putting truckers and warehousemen in the cross-hairs of an ever-increasing risk. According to a November 2012 report issued by the U.S. Dept of Commerce Bureau of Economic Analysis, the U.S. imported a whopping $191 billion of goods for the month of September 2012 and that was $3.9 billion more than was imported the previous month. The August to September imports of goods reflected increases in consumer goods ($2.7 billion); industrial supplies and materials ($1.2 billion); capital goods ($0.6 billion); other goods ($0.1 billion); and foods, feeds, and beverages ($0.1 billion). Customs and other import duties are all levies collected on goods that are entering the country or services delivered by nonresidents to residents. These duties totaled more than $25.3 billion for 2010. All these goods must clear customs before their final destination. Three such operations that deal with freight in bond are custom bonded warehouses, central examination stations (CES) and bonded carriers. This is not something to be taken lightly. Because under the U.S. Code and it���s regulations, that very same truck driver, central examination station or warehouse, is liable for duty to the United States Customs Service in the event of a shortage, irregular delivery, theft, disappearance or non-delivery of cargo, while held under bond. / Owner���operator/ March 2013 / / Per Customs and Border Protection (CBP) a custom bonded warehouses is ���a building or other secured area in which imported dutiable merchandise may be stored, manipulated, or undergo manufacturing operations without payment of duty for up to five years from the date of importation.��� Upon entry of goods into the warehouse, the warehouse proprietor incurs a liability for the merchandise under a warehouse bond. This liability is generally cancelled when the merchandise is exported, withdrawn for supplies to a vessel or aircraft, destroyed under CBP supervisions, or withdrawn for consumption within the United States after payment of duty. There are 11 types of bonded warehouses authorized by Federal regulation. The advantage of storing imported goods in a bonded warehouse is that payment of the duty is deferred until they are withdrawn. This gives importers access to the cash that would otherwise be payable upon entry and if the goods are sold outside of the U.S., duty may be eliminated altogether. Another facility where bonded freight can be found is a central examination station (CES). A CES is a privately operated facility at which imported merchandise identified by Customs for physical examination is made available to Customs inspectors for that purpose. Often times, goods designated for examination may be transferred from the importing carrier���s point of unlading or from a bonded 36 OO 0313_text.indd 36 2/4/13 3:56 PM