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Think of it as hitting “snooze” on a shipment.
With the onset of President Donald Trump’s trade war last month, many importers are exploring all sorts of ways to delay the arrival of their goods in the hopes that a more favorable deal is reached.
One suddenly popular option is the century-old concept of bonded warehousing, which has seen prices and inquiries skyrocket in recent weeks, according to Flexe, a network for storage facilities.
With bonded warehouses, arriving cargo is placed in a secure space in which it is exempt from tariffs for up to five years — as though it hasn’t yet officially entered the country.
“Bonded facilities within the US warehousing ecosystem exist as a duty deferral option for businesses that are bringing goods stateside but don’t necessarily need to consume them within a short period of time,” Flexe’s head of network, Ben Dean, told Business Insider.
In calmer periods of global trade, this looks like delaying the official arrival of inventory so the import costs are more closely timed to sales — and helps keep accountants happy.
“In a high-tariff environment, the value of deferral goes up, so immediately this increased demand,” Dean added.
Dean said Flexe had received 19 requests for bonded warehouse space in the first four months of this year (largely in April), compared with two for the same period in each of the prior two years. Another four requests have already been made in May so far.
One partner Flexe works with in the Los Angeles area reported 60 proposals for its bonded space as of April 29, he added.
“There are shippers who are in a position that they don’t believe the 145% tariff will hold maybe 30, 60, 90 days later, so by holding the goods under bond, there’s the possibility that they might pay at a lower rate,” Dean said, but he cautioned against that strategy.
“Making bets about where tariffs will be any point beyond today is a risky business to be in,” he said.
In addition, bonded warehouses ordinarily charge more than conventional facilities anyway, and now prices are going up sharply.
Flexe manages pricing by the pallet, which earlier this year cost $17.50 a month to store in a normal warehouse.
“In the last week, I have seen bonded warehouses charging $5 per day,” Dean said. That works out to about $150 per month, though some monthly contracts are priced closer to $52, he said.
Either way, Flexe’s data shows that bonded storage is now between three and nine times more expensive than what might be considered “normal.”
“We’re seeing a premium that’s beyond anything I’ve seen in this space in my career,” Dean said.
With rising costs and limited availability for bonded warehousing, Dean said importers are likely to turn to other solutions, such as ports in Mexico and Canada.
For retailers, storing inventory near the border has the potential advantage of avoiding duties until the uncertainty around consumer prices and demand is more settled.
Companies are more likely to pay the 145% tariff on an air fryer from China if they’re confident that shoppers will actually buy it at a higher price — and it’s beneficial to have products ready within a few hours or days via truck or train, rather than weeks on a ship.
Regardless of which option importers choose, the ongoing trade war means there are likely to be new costs that they didn’t have to manage before.
“A lot of folks are looking at this as a panacea for tariffs, but there is none,” Dean said.
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