Any port in a storm, as the saying goes.
That’s certainly how huge numbers of US importers undoubtably feel in the face of the Trump tariffs, and that is spurring demand for a special kind of warehouse space.
According to an article this week in the American Trucking Association’s Transport Topics magazine and website, that demand is for something called a customs bonded warehouse, which enable users to delay paying tariffs, under provisions of a law that was enacted in the 1800s.
That allows importers to sit on inventory for up to 5 years before the tariff payment is due – who knows, maybe sometime in those 5 years the tariffs go down.
According to the US Customs and Border Protection website, a customs bonded warehouse 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 5 years from the date of importation.”
This as noted above can allow companies to await a more favorable tariff time for their products before bringing them into the US, but even in regular times can enable a company to await paying the tariff until the goods are sold.
On the other hand, using a customs bonded warehouse means a company is just sitting on that inventory while it’s there, taking up working capital and subject to a variety of inventory risks.
The customs bonded warehouses are logically located near US ports.
The Transport Topics article quotes custom bonded warehouse expert John Shea of Momentum Commerce as noting that right now the interest is really about “buying time to see where policy, demand and margin pressure settle.”
Of course, importers are going to have to pay and pay well for the service.
The Transport Topics article notes that “Bonded warehouse space is pricey at the best of times because the buildings have more regulatory requirements, and cargo owners have to clear customs entering and exiting them.
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The current surge in demand for space is a bet that paying more to store goods now is still better than paying the tariffs as currently valued.
 Warehousing on-demand provider Flexe told Transport Topics that Inquiries about bonded warehouse space are up sixfold so far this year. A Flexe executive added that customs bonded space now costs as much as 60% more than typical warehouse space.
Flexe also said that its network includes about 140 facilities in the US that are customs bonded for a total of 21 million square feet, which it said is selling quickly.
The article notes that strong interest in bonded facilities will likely serve as catalyst for other warehouse operators to seek certification from the federal government, an application process that can take as long as a year and require security investments and inspections.
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