Bonded Warehousing in the New Covid Economy
Posted on 15.07.2020
This is a time of economic uncertainty, and a difficult period for businesses all over the world.
In the UK and Europe, lockdown is over but social distancing measures remain. Consumer confidence, disposable income and high-street footfall are all down. Local outbreaks in various countries have prompted regional lockdowns like the one in Leicester, throwing businesses caught in the crossfire into further disarray.
Many companies are finding innovative ways to scrape by in the new economy – particularly those experimenting with home delivery – and the temporary part-freeze in international trade means businesses are eager to get their hands on held-up deliveries of crucial components or money-spinning new products.
All this means that, for the rest of the year, the economy looks set to rely on international logistics more than ever — and bonded warehousing has a vital part to play in the shift to the new-normal, delivery-based economy.
A bonded warehouse is a warehouse where imported goods can be stored without incurring import duties or VAT until they leave the facility. This might sound unusual or even a little unnecessary at first, but they play a crucial role in international shipping.
After all, bonded warehouses allow businesses to buy goods in bulk without paying import duties all at once. This is incredibly useful for those businesses looking to convert to a delivery model without burning through piles of cash, with each sale paying for import duties as products leave the warehouse.
Many customers choose whether to buy from a given supplier based on how fast they can deliver their goods — but when products are coming from overseas, shipping can be slow and expensive.
Using a bonded warehouse based in the country from which a business operates allows it to centralise its distribution in one place, to deliver goods as quickly as possible and to pay import taxes only as required.
Bonded warehouses provide all the flexibility of just-in-time shipping, without your company having to negotiate the tricky international freight environment caused by varying temporary restrictions on international shipping between countries, enforced in response to the Covid-19 outbreak.
Companies across Europe are nervous about the effects of a second wave or local lockdown, especially if they’re running a logistics operation from their own premises. But, in that unfortunate event, a bonded warehouse will help businesses to withstand a sudden shock by allowing them to continue to sell products through remotely-administered distribution.
However your business has fared this year, it’s worth looking into how bonded warehouses can help you save time and money.