FTZ Warehousing vs. Customs Bonded Warehousing: Which Is Right for Your Facility?

For third-party logistics (3PL) providers, tapping into international markets can be extremely rewarding, yet it requires proper due diligence and market research to take the first step.

With approximately 60% of U.S. manufacturers sourcing raw materials internationally, there’s a high demand for warehousing solutions that support importers and exporters. However, choosing between establishing a Foreign Trade Zone (FTZ) or operating as a customs bonded warehouse requires careful consideration of market demand, facility capabilities, and regulatory requirements.

Understanding Customs Bonded Warehousing

A bonded warehouse is a secured facility where importers can store goods without having to immediately pay the tariff duties. This allows importers to preserve their cash flow and wait until their products actually are sold or at least released from the warehouse facility. This payment deferral is crucial for importers who need more time to move goods to customers before the duties are due.

This arrangement allows for delayed duty payments on goods awaiting re-export. Goods that are re-exported from the bonded warehouse are exempt from duties, helpin…