It can be challenging to complete the process of moving freight in-bond across the United States, especially without a thorough understanding of how this is done.
You may have been perplexed up until this point about how to correctly bind your shipment due to the intricacy of the global transportation environment.
We’ve described the key elements of bonded shipping in this post so you can make sure to accomplish this right when it’s time to move your next consignment.
What is a Bonded Shipment?
A bonded shipment is a type of shipment that is transported under a customs bond. A customs bond is a contract between the shipper, the customs broker, and the government, which ensures that all applicable duties and taxes are paid and that all required documentation is filed with the relevant authorities.
When a shipment is bonded, it means that it is being transported from one customs jurisdiction to another, or that it is being held in a customs-controlled area, such as a bonded warehouse or foreign trade zone. In some cases, a bonded shipment may also be used to defer payment of customs duties or taxes until the goods are released from customs control.
The use of bonded shipments can help facilitate international trade by providing a secure way to transport goods through different customs jurisdictions and ensuring that all necessary regulatory requirements are met.
A bonded shipment is one that travels through one or more auxiliary nations in order to reach its final destination. Bonded cargo doesn’t actually go through customs clearance until it reaches its destination country because it won’t be consumed or utilized in any of the nations it passes through on the route.
Bonding a shipment is most frequently done when freight needs to be moved through the United States with the intention of eventually moving to a foreign country, however there are other instances where this is appropriate.
How Does Bonded Shipping Work?
Bonded shipping works by providing a guarantee to the customs authorities that all applicable duties and taxes will be paid and that all required documentation will be submitted for the shipment.
When a shipment is transported under a bond, the shipper or their customs broker will typically submit a bond application to the relevant customs authority. The bond application will include information about the shipment, such as the type of goods being transported, their value, and the destination country or customs-controlled area.
Once the bond application is approved, the shipment can be transported under bond. This means that the goods will be transported from the point of origin to the destination customs jurisdiction, or held in a customs-controlled area, without payment of duties or taxes. However, the bond holder is responsible for paying any applicable duties and taxes before the goods can be released from customs control.
If the bond holder fails to pay the duties and taxes or to submit the required documentation, the customs authorities may seize the shipment and/or take legal action against the bond holder. Therefore, it is important for the bond holder to ensure that all necessary requirements are met in a timely and accurate manner.
Despite being a great option in many circumstances, shipping a shipment in-bond can be tricky at times. Each cargo must have the appropriate arrangements and paperwork in order for this process to be successful when shipping in-bond through the U.S.
You must find a bonded carrier and reserve capacity from them in order to transport merchandise in-bond throughout the United States. Additionally, a specific bonded warehouse must be employed if your shipment needs to be stored while it is in route.
Although using a capable freight forwarder and/or customs broker will speed up these procedures, here is what you need to know about each of them.
What is a Bonded Carrier?
A bonded carrier is a transportation company that is authorized to transport bonded shipments. Bonded carriers typically have a bond with the relevant customs authority, which allows them to transport goods under bond and provide a guarantee to the customs authorities that all applicable duties and taxes will be paid and all required documentation will be submitted for the shipment.
To become a bonded carrier, a transportation company must typically apply for a bond with the relevant customs authority and meet certain eligibility criteria. The customs authority may require the company to provide information about their financial standing, their operational procedures, and their experience in handling bonded shipments.
Once approved as a bonded carrier, the company will be authorized to transport bonded shipments on behalf of their clients. This means that they will be responsible for ensuring that all necessary requirements are met, including the proper handling of the goods, the submission of accurate documentation, and the payment of all applicable duties and taxes.
Using a bonded carrier can provide several benefits for shippers of bonded shipments. Bonded carriers have experience in handling bonded shipments and are familiar with the regulatory requirements involved. They can also provide specialized equipment and facilities to ensure the safe transport and storage of the goods. In addition, using a bonded carrier can help ensure compliance with customs regulations and reduce the risk of customs-related delays or penalties
A bonded carrier is a company that offers transportation services and is authorized to transport cargo through or across U.S. ports of entry (or border crossings) without the need to pay tariffs, taxes, or other fees on the products during that particular leg of the journey.
An importer and/or consignee may carry cargo while it is being cleared by customs up until it reaches the port of entry in the destination nation by using a licensed bonded carrier.
Trucking businesses must contact a surety firm that has been authorized by CBP in order to acquire an international carrier bond. They assist carriers in completing CBP Form 301 and providing all necessary details to get a “single transaction” or “continuous” customs bond.
The bonded carriers employed for transporting a load across the U.S. in-bond from Canada or Mexico typically also have international authority, enabling them to cross the border and lawfully conduct business in several nations.
What is a Bonded Warehouse?
A bonded warehouse is a facility that is authorized by a government agency, typically a customs authority, to store imported goods on which payment of duties and taxes has not yet been made. When goods are placed in a bonded warehouse, they are considered to be in a customs-controlled area, and the payment of duties and taxes is deferred until the goods are removed from the warehouse and released from customs control.
Bonded warehouses are often used by companies engaged in international trade to store goods that are awaiting customs clearance or that are being held for other regulatory reasons. For example, a bonded warehouse might be used to store goods that are awaiting inspection or testing, or to store goods that are being held for quota or license approval.
When goods are stored in a bonded warehouse, the warehouse operator is responsible for ensuring that all necessary regulatory requirements are met. This includes ensuring that the goods are properly labeled and identified, that they are stored in a secure and appropriate manner, and that any required documentation is submitted to the relevant authorities.
To operate a bonded warehouse, a company must typically apply for a license from the relevant government agency and meet certain eligibility criteria. The government agency may conduct periodic inspections to ensure that the warehouse is in compliance with regulatory requirements.
In a legally approved structure or secure area known as a “bonded warehouse,” cargo that will eventually be sent to another nation for consumption or use can be stored, handled, and/or manufactured without having to pay U.S. customs charges and taxes while it is there.
Bonded warehouses are often run by either a private entity (in which case a customs bond is necessary) or the United States government.
Documentation Needed For Bonded Freight Transport
The bonded transportation process is centered around a number of documents. A clear grasp of your obligations is necessary if you want to have your freight transported efficiently.
Here are the main documents that are often required to ship a load “in-bond:”
- In-bond application
- Customs Bond
- CBP Form 7512
- Comercial Invoice
- Bill of landing
- Packing list
Let’s talk a bit about each of them. . .
What is an In-Bond Application?
An In-Bond Application is a form used in the United States to request permission to transport goods through the country without paying duties and taxes. This form is used for shipments that are being transported from one foreign country to another through the United States, or for shipments that are being transported from one point in the United States to another point in the United States through a foreign country.
The In-Bond Application is filed with the U.S. Customs and Border Protection (CBP) agency by the party responsible for the transportation of the goods, such as a carrier or a customs broker. The application provides details about the shipment, such as the type of goods being transported, the point of origin, and the final destination.
Once the In-Bond Application is approved by CBP, the shipment can be transported through the United States without paying duties and taxes. However, the party responsible for the transportation of the goods is still required to follow certain regulatory requirements, such as providing a continuous bond to guarantee the payment of any duties and taxes that may be owed, and reporting the movement of the goods to CBP.
When the shipment arrives at the final destination, the party responsible for the goods must file an arrival notice with CBP, which will trigger an inspection of the goods to ensure that they have been transported in compliance with regulatory requirements. Once the goods have been inspected and any duties and taxes have been paid, they can be released from customs control.
The CBP must receive an in-bond application, which includes a detailed summary of cargo information and transit information, via an authorized electronic data interchange (EDI).
Every in-bond application submitted to the CBP must include the following information:
♦ A description of the goods or commodities that are being transported must sufficiently convey the specifics of the cargo so that the CBP can determine which government body is in charge of regulating it.
♦ The Harmonized Tariff Schedule of the United States (HTSUS) number for the good: each kind of good has a six-digit HTSUS number that is allocated to it. It is necessary to give this number.
♦ Quantities: The total amounts of the “smallest external packing unit” must be listed, along with other cargo quantities, as precisely as feasible.
♦ Every in-bond application for containerized cargo must include the container’s number as well as its linked seal number, which is the number that corresponds to the seal on the container.
♦ Transport Location Within the United States: International shipments that are destined for a U.S. port for export must expressly state the name of that port. It must be specified if the shipment is going through a border crossing.
♦ Any more identifiers: The in-bond application filed to the CPB must contain any further distinctive identifying information connected to this shipment. This covers items like admission codes, visas, and licenses issued by the United States or any other foreign authority.
What Is a Customs Bond?
A customs bond, also known as a surety bond or import bond, is a financial guarantee that is required by customs authorities in many countries, including the United States, Canada, and the European Union, to ensure that importers and other parties involved in international trade comply with relevant laws and regulations.
When an importer or other party involved in international trade files a customs entry with the relevant customs authority, they are required to post a bond to guarantee the payment of any duties, taxes, or penalties that may be owed. The bond provides a financial guarantee to the customs authority that these obligations will be met, and it can be used to cover any costs or fees that may be assessed in the event of a violation or noncompliance.
Customs bonds are typically obtained from a surety company, which will provide the bondholder with a bond certificate that can be submitted to the customs authority as evidence of compliance. The amount of the bond is typically determined by the value of the goods being imported, and it can vary depending on the specific requirements of the customs authority and the nature of the goods being imported.
Customs bonds can take several forms, including single entry bonds, continuous bonds, and international carrier bonds. Single entry bonds are used for one-time imports, while continuous bonds are used for frequent importers who have a history of compliance. International carrier bonds are used by transportation companies to cover the movement of goods across international borders.
An agreement known as a “customs bond” is made between the primary goods importer or shipper, a surety firm, and the U.S. Customs and Border Protection (CBP) organization. Customs bonds make it a condition of the contract that the major party in charge of paying for the freight will pay all taxes and charges on time by issuing a line of credit from a surety firm to the U.S. government.
No shipment can enter the United States without a customs bond because these records safeguard the CBP in the event that duties and taxes are not paid.
The shipper (seller) and importer (buyer) must each have a cargo bond, a commercial invoice, a bill of lading, and a packing list in order to effectively convey cargo in-bond.
What is CBP Form 7512?
CBP Form 7512 is a document used in the United States by customs authorities to monitor the movement of goods that are being transported through the country without being entered for consumption or entered for export. This form is used for goods that are being transported under bond, such as goods that are being transported from a port of entry to an inland destination, or goods that are being transported from one foreign country to another through the United States.
The CBP Form 7512 is used to document the movement of these goods and to ensure that they are being transported in compliance with relevant laws and regulations. The form contains information about the goods being transported, including their description, quantity, and value, as well as information about the parties involved in the transportation, such as the carrier and the consignee.
When the goods arrive at their destination, the party responsible for the goods is required to file a copy of the CBP Form 7512 with the customs authorities at the port of destination. This triggers an inspection of the goods to ensure that they have been transported in compliance with regulatory requirements, and it provides a record of the movement of the goods through the country.
The CBP Form 7512 is an important document for ensuring the secure and compliant movement of goods through the United States, and it is used by customs authorities to monitor the movement of goods that are being transported under bond. It provides a way for customs authorities to verify that the goods are being transported in compliance with relevant laws and regulations, and it helps to prevent fraud, smuggling, and other types of illegal activity.
What is a Commercial Invoice?
A commercial invoice is a document used in international trade that provides details about a commercial transaction between a buyer and a seller. The commercial invoice serves as a legal document that is used to support the shipment of goods and to establish the terms of the transaction between the buyer and the seller.
The commercial invoice typically includes information about the parties involved in the transaction, such as the name and address of the buyer and seller, as well as information about the goods being shipped, such as a description of the goods, their value, and their quantity. It may also include information about the terms of the sale, such as the payment terms, the delivery terms, and any applicable taxes or duties.
The commercial invoice is an important document for both the buyer and the seller, as it serves as a record of the transaction and can be used for a variety of purposes, including customs clearance, payment processing, and compliance with regulatory requirements. It is typically required by customs authorities in the importing country as a key component of the documentation necessary to clear goods through customs.
What is a Bill of Lading?
A bill of lading (BOL or BL) is a legal document used in international trade that serves as a contract between a carrier of goods and the shipper or consignee. It provides a detailed record of the cargo being transported, the parties involved in the shipment, and the terms of the shipment.
The bill of lading is typically issued by the carrier, such as a shipping line, trucking company, or airline, and it serves as proof of receipt of the goods and a contract for their transport. It includes information about the goods being shipped, such as their description, weight, and quantity, as well as the names and addresses of the shipper, carrier, and consignee.
The bill of lading also includes details about the terms of the shipment, such as the delivery location and time, the freight charges, and any special instructions or requirements. It is a legally binding document that serves as evidence of the carrier’s obligations to transport the goods and the shipper’s obligations to pay for the transport.
The bill of lading is an important document for both the carrier and the shipper, as it serves as a receipt for the goods being transported and can be used for a variety of purposes, including customs clearance, insurance, and financing. It is typically required for the release of the goods at the destination and can serve as a legal record of the transaction in the event of any disputes.
The information on bill of lading forms, which explain the journey of a shipment and include details such how the freight will be delivered as well as the names and contact details of all parties, is used to document freight services (consignee, carrier, freight forwarder, etc.).
There are various forms of bill of lading, and their formats will vary depending on the transport concept used for your shipment.
What is a Packing List?
A packing list is a document used in international trade that provides a detailed list of the items that are being shipped in a particular package or container. It typically accompanies the shipment and provides an inventory of the items, along with other important information, such as the weight and dimensions of the package or container.
The packing list is used by the exporter to communicate important information about the shipment to the importer, the carrier, and customs authorities. It provides a record of the items being shipped, which can help to ensure that the correct goods are delivered to the correct destination. The packing list is also used by customs authorities to verify the contents of the shipment, which is an important part of the customs clearance process.
The packing list typically includes information such as the name and address of the shipper and consignee, the date of the shipment, the description and quantity of the items being shipped, the weight and dimensions of the package or container, and any special instructions or requirements for handling or delivery.
In addition to helping to ensure that the correct goods are delivered to the correct destination, the packing list can also be used to facilitate the customs clearance process, as customs authorities may require detailed information about the contents of the shipment before allowing it to enter the country. The packing list can also be used for insurance purposes, as it provides a record of the items being shipped and their value.
What documents are required for international shipping?
The exact documents required for international shipping can vary depending on the type of goods being shipped, the countries of origin and destination, and the mode of transport. However, some common documents required for international shipping include:
Commercial Invoice: A document that provides information about the goods being shipped, including their value, quantity, and description. It is used to determine the customs duties and taxes payable on the shipment.
Bill of Lading: A document that serves as a receipt for the shipment, as well as a contract between the shipper and the carrier. It includes information about the origin and destination of the goods, the mode of transport, and the terms of the shipment.
Packing List: A document that lists the contents of the shipment, including the number and type of packages, and the weight and dimensions of each item.
Certificate of Origin: A document that verifies the country of origin of the goods being shipped. It is used to determine the applicable tariffs and trade agreements that may apply to the shipment.
Insurance Certificate: A document that provides proof of insurance coverage for the shipment, in case of loss or damage.
Import/Export Licenses: Depending on the type of goods being shipped and the countries involved, import or export licenses may be required to comply with local regulations.
In some cases, additional documents may be required, such as a Phytosanitary Certificate for agricultural products or a Dangerous Goods Declaration for hazardous materials.
It is important to consult with the carrier or freight forwarder, as well as the customs authorities of the countries involved, to ensure that all required documents are in order and that the shipment complies with all applicable regulations and requirements.
What Kind of Cargo Can Be Shipped In-Bond?
In general, any type of cargo can be shipped in-bond, as long as it meets the requirements set by the customs authorities. The purpose of in-bond shipment is to facilitate the movement of goods through the country while they are in transit to their final destination, without requiring full customs clearance at each point of entry or exit.
However, there may be certain restrictions or limitations on the types of goods that can be shipped in-bond, depending on factors such as the origin and destination countries, the mode of transport, and the nature of the goods themselves. For example, hazardous materials or controlled substances may be subject to additional regulations and requirements, and certain goods may be prohibited or restricted from entering certain countries altogether.
It is important to note that in-bond shipments are subject to strict regulations and requirements and must be properly documented and secured to prevent any unauthorized access or diversion of the goods. In addition, the parties involved in the shipment, such as the carrier, importer, and customs broker, must comply with all applicable laws and regulations, and must maintain accurate and complete records of the shipment at all times.
Most cargo can be sent in-bond throughout the U.S. when it is accompanied by the necessary paperwork.
This comprises products that were delivered via roll-on/roll-off or breakbulk ocean transportation, open deck and dry van freight, and containerized cargo (transported via chassis). It’s crucial that you cooperate with a transportation service who is knowledgeable in this field to assist you in preparing for your upcoming in-bond cargo.
What Will International Shipping Cost You?
The cost of international shipping can vary widely depending on a number of factors, including the size and weight of the shipment, the origin and destination countries, the mode of transportation (e.g. air, sea, or ground), the speed of delivery, and any additional services required (e.g. insurance, customs clearance, or handling fees).
In general, the cost of shipping is calculated based on the weight and volume of the shipment, as well as the distance and mode of transport. Air freight tends to be more expensive than sea or ground transportation, but it can be much faster for urgent shipments or smaller cargo. Sea freight is generally the most cost-effective option for larger shipments, but it can take longer to reach its destination.
Other factors that can affect the cost of international shipping include customs fees, taxes, and duties, which can vary depending on the type and value of the goods being shipped and the regulations of the importing country. These additional costs can be substantial and should be taken into account when calculating the total cost of the shipment.
The best way to determine the cost of international shipping is to obtain a quote from a reputable carrier or freight forwarder. They can provide a detailed estimate based on the specific requirements of the shipment, including the size, weight, and destination, as well as any additional services required. It is important to compare quotes from several different providers to ensure that you are getting the best value for your shipping needs.
We hope you feel a little more at ease now that you know what bonded shipments are, how this procedure should be set up, and what sort of cargo you can actually transport.
For what it’s worth, you don’t have to be afraid about shipping a shipment in-bond. You can do this correctly.
Need more info, check this
U.S. Customs and Border Protection: https://www.cbp.gov/
International Air Transport Association (IATA): https://www.iata.org/
International Chamber of Commerce (ICC): https://iccwbo.org/
World Customs Organization (WCO): http://www.wcoomd.org/
These sources can provide more detailed information about topics such as bonded shipments, customs bonds, international shipping documents, and regulations. Additionally, you can search for specific topics using reputable search engines such as Google Scholar or academic databases like JSTOR for scholarly articles and publications.