Bonded Warehouse Meaning and its Significance in Logistics

Shraddha Thuwal

By Shraddha Thuwal

November 08, 2023

Bonded Warehouse

Bonded warehousing is a secure structure or area where imported commodities can be separated, stored, cleaned, packed, or processed without paying import charges. Bonded storage can keep goods for up to five years. After paying duty, products might be dispersed, re-exported, or destroyed. Goods held in bonded warehousing might include supplies needed by air and ocean carriers to operate, such as fuel for aeroplanes and cargo ships, as well as commodities sold on passenger flights.

Table Of Contents
  1. Benefits of Bonded Warehouse
  2. Types of Bonded Warehouse
  3. What is a Logistics Park?
  4. At a logistics park, how does bonded warehousing work?
  5. Conclusion
  6. FAQs

Benefits of Bonded Warehouse

  1. Tax and Cost Advantages: VAT and other duty duties can be deferred in a bonded warehouse until the products are removed and transported. This might provide you with breathing room and space to do extra pre-sale tasks. Furthermore, if you export these items, you may completely avoid these expenses. Companies have reported tax savings of 25-30% as a result of using bonded storage.
  2. Extended Product Storage: Most of it will hold your products for up to five years or longer. This can be advantageous if work is needed to meet import licensing requirements or if demand is lower than projected. You can hold your items in these warehouse until you meet the standards or demand increases.
  3. Improved Product Availability: You can order items ahead of expected demand by utilising it. Because items are housed closer to the client, you can deliver them faster and provide a better overall experience.
  4. Versatile Storage Facilities: These are prepared to keep a wide range of items for as long as necessary while retaining quality. Many of it, for example, have dry containers, deep freeze systems, temperature control facilities, and bulk storage facilities.
  5. Robust Security and Oversight: Aside from conventional security measures such as CCTV, products in a bonded warehouse must be adequately recorded. You don’t have to worry about your cargo because security professionals watch the space 24 hours a day. These are subject to comprehensive examination and frequent audits, giving you peace of mind that you’re working with a reliable company. 
  6. Strategic Location Benefits: The majority of these are situated near major ports. This enables businesses to keep products at the port of entry until they are ready for distribution. By decreasing lead time, transportation costs, and potential damage, these bonded warehouses may save money across the whole supply chain.

Types of Bonded Warehouse

Bonded Warehouse TypesDescription
Private and PublicState-owned and operated warehouses, as well as privately owned ones.Both importer/exporter and warehouse owner incur temporary liability under a bond.
Temporary Storage AreasTemporary covered or open areas for goods awaiting approval or documentation in the customs territory.
Public Bonded WarehousesOwned by the state or local port authority, available for anyone needing customs-controlled storage.
Private Bonded WarehousesType 1: Reserved for owner’s use but accepts goods from external clients.Type 2: Reserved for owner’s goods only, cannot accept external client goods.
Free WarehousesPremises guarded and locked by customs agents, open for anyone to store dutiable goods.
Bonded Logistics ParksRun by local authorities, usually more expensive, demarcated areas for warehousing and logistics.

What is a Logistics Park?

  1. A logistics park is a collection of ready-made and custom-built warehouses, office complexes, data centres, transport depots, gasoline pumps, piers or bays, worker accommodations, retail facilities, customs offices, and so on. Clients can select the services that best suit their needs.
  2. logistical parks provide clients with cutting-edge logistical facilities. Space is leased to logistics firms for the purpose of establishing logistics activities inside the park.
  3. Companies who want to set up shop in such logistics parks must fulfil specific requirements. They must have the required financial backing as well as the knowledge and experience in running efficient supply chains.
  1. Logistics parks provide clients with services such as warehousing, skilled labour, transportation, customs clearance, order processing, repackaging and packing, data processing and reporting, and product tracking. Clients can rent warehouses that specialise in the storage and management of dry, chilled, or frozen commodities, as well as a variety of additional specialised services.

At a logistics park, how does bonded warehousing work?

  • Bonded warehousing is a secure structure or area where imported commodities can be separated, stored, cleaned, packed, or processed without paying import charges. These type of warehouses can keep goods for up to five years. After paying duty, products might be dispersed, re-exported, or destroyed. 
  • Goods held in it might include supplies needed by air and ocean carriers to operate, such as fuel for aeroplanes and cargo ships, as well as commodities sold on passenger flights.
  • These are frequently constructed within logistics parks, which provide access to ports of entry, transit, and public amenities such as office space. These are secure and safe. An importer can keep products in warehouses with temperature-controlled facilities, freezers, wet containers, or dry containers, depending on their demands.

Conclusion

Bonded warehousing is a secure structure or area where imported commodities can be separated, stored, cleaned, packed, or processed without paying import charges. VAT and other duty duties can be deferred in a bonded warehouse until the products are removed and transported. Because items are housed closer to the client, you can deliver them faster and provide a better overall experience. The majority of bonded warehouses are situated near major ports. This enables businesses to keep products at the port of entry until they are ready for distribution. Goods held in it might include supplies needed by air and ocean carriers to operate, such as fuel for aeroplanes and cargo ships, as well as commodities sold on passenger flights.

FAQs

What is a bonded warehouse?

It is a secure facility where imported goods can be stored, processed, or handled without paying import duties.

How long can goods be stored in a bonded warehouse?

Goods can be stored in it for up to five years, allowing flexibility in managing inventory.

What are the tax advantages of using bonded storage?

VAT and import duties can be deferred until goods are removed, potentially saving companies 25-30% in tax expenses.

How does bonded warehousing improve product availability?

It enable ordering items ahead of demand, facilitating faster delivery and a better customer experience.

What types of storage facilities are available in bonded warehouses?

It offer various storage options, including dry containers, deep freeze systems, and temperature-controlled facilities.

How are bonded warehouses secured?

These are equipped with security measures like CCTV and have 24-hour monitoring by security professionals.

Why are bonded warehouses strategically located near major ports?

 Proximity to ports reduces lead times, transportation costs, and the risk of damage, benefiting the entire supply chain.

What are the main types of bonded warehouses?

There are public and private bonded warehouses, as well as temporary storage areas and free warehouses.

What is the purpose of bonded logistics parks?

Bonded logistics parks offer a range of services, including warehousing, customs clearance, transportation, and more.

Who can set up operations in logistics parks?

Companies looking to establish operations in logistics parks need financial backing and expertise in running efficient supply chains. They can access services such as warehousing, labour, customs clearance, and more.

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Shraddha Thuwal
Author

Shraddha Thuwal

Shraddha Thuwal worked as a content writer at WareIQ. She actively contributes to the creation of blog posts centered on eCommerce operations, fulfillment, and shipping, in addition to providing insights on various strategies and techniques tailored for eCommerce sellers. With an impressive track record, Shraddha boasts over two years of content writing experience, spanning a spectrum of industries including logistics, supply chain, and media.

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APOB for Jiomart facilitates efficient warehousing and logistics and ensures that sellers adhere to the legal requirements necessary for smooth business operations. Proper registration, meticulous inventory management, and leveraging Jiomart’s marketing tools are essential strategies for enhancing your presence on the platform. By following the tips outlined for Jiomart sellers, such as optimising product listings, managing customer service effectively, and staying updated with platform changes, sellers can significantly boost their chances of success. Ultimately, a well-managed APOB setup and adherence to best practices will lead to a more organised and profitable e-commerce business on Jiomart. FAQs About APOB for Jiomart What is the role of APOB in Jiomart?APOB, or Additional Place of Business, plays a vital role in the operations of Jiomart sellers by ensuring proper registration and compliance with GST regulations. 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Clear Product Descriptions: Provide detailed and accurate product descriptions and high-quality images to attract and inform potential customers. Competitive Pricing: Regularly review and adjust your pricing strategy to remain competitive in the market. Customer Service: Offer excellent customer service by promptly responding to queries and resolving issues quickly. Leverage Promotions: Participate in Nykaa’s promotional campaigns and offers to boost visibility and sales. By implementing these tips, sellers can enhance their presence on Nykaa and build a loyal customer base. Also read: APOB Registration on AJIO Conclusion In the dynamic world of e-commerce, managing an Additional Place of Business (APOB) efficiently is crucial for sellers on platforms like Nykaa. APOB registration ensures compliance with regulatory requirements and facilitates smoother business operations across multiple locations. By understanding the intricacies of APOB for Nykaa, sellers can leverage their business's potential, expand their reach, and enhance their service quality. Embracing effective logistics and delivery partnerships is equally important. Nykaa's collaboration with trusted delivery partners and robust tracking mechanisms ensures timely and reliable deliveries, contributing to a superior customer experience. Following the outlined tips and best practices, Nykaa sellers can streamline operations, boost customer satisfaction, and achieve sustainable growth in the competitive e-commerce landscape. FAQs About APOB for Nykaa What is an Additional Place of Business (APOB) for Nykaa sellers?An Additional Place of Business (APOB) for Nykaa sellers refers to any location other than the primary registered office where business operations such as storage, dispatch, or delivery are conducted. These locations must be registered with GST authorities to ensure compliance and smooth operations.How do I register an APOB for my Nykaa seller account?To register an APOB, log in to your GST portal and update your business details by adding the new location. If applicable, submit necessary documents such as proof of address and a lease agreement. Once approved, the APOB will be officially recognised and used for business operations.Who are Nykaa's delivery partners?Nykaa collaborates with several reputable delivery partners, including Delhivery, Blue Dart, and Ecom Express. These partners help ensure efficient and timely product delivery to customers, enhancing the overall shopping experience.What are the steps to become a Nykaa seller?To become a Nykaa seller, create an account on the Nykaa Seller Portal, provide detailed business information, submit necessary documents for verification, and list your products on the platform. Once your account is approved, you can start selling.How can I track my deliveries on Nykaa?Nykaa offers a robust delivery tracking system that is accessible through the Seller Dashboard. Sellers receive real-time updates on the status of their shipments, from dispatch to delivery, ensuring transparency and timely information for both sellers and customers.

July 24, 2024