Latest news with #LVKLogistics
The Star
21-05-2025
- Business
- The Star
US warehouses turn into tariff-free zones
NEW YORK: Companies importing goods into the United States from China are rushing to convert warehouses into facilities that are exempt from President Donald Trump's tariffs until they are ready to sell the merchandise. The United States has more than 1,700 bonded warehouses, facilities where imported goods can be held without immediate payment of customs duties such as tariffs, currently 30% for shipments from China. Such fees are only paid when the goods leave the bonded warehouse, allowing businesses to manage funds more effectively at a time of extreme trade policy volatility. The rush to bond US warehouses for goods ranging from clothing to auto parts is a bet for some that raised US tariffs will be only a short-term policy by the Trump administration. Due to Trump's tariff war, many of these bonded warehouses are now at full capacity, and prices for space in them have skyrocketed, four industry sources said, prompting companies to apply to US Customs and Border Protection (CBP) to expand bonded space. Utah-based fulfillment firm LVK Logistics, for instance, is in the process of making one of its warehouses bonded 'in response to the tariffs', chief executive officer Maggie Barnett said, adding that she expects the process to take three to four months. 'You can bond more or less anywhere,' said Chris Rogers, who manages the supply chain research team at consultancy S&P Global Market Intelligence. 'It involves money and it takes time, but if you are a big company and expect tariffs are going to remain elevated for an extended period, you can convert existing spaces into bonded warehousing.' Other companies and logistics firms are seeing their applications with the CBP backlogged in some cases by over six months, said Chris Huwaldt, vice-president of solutions at WarehouseQuote, a logistics research firm. Last year, the process would have taken a couple of months, he added. Huwaldt said getting storage space certified as bonded 'could cost thousands of dollars or it could cost six figures,' depending on the state the warehouse is based in, the financial status of the company and the additional security measures required by the CBP for a specific location. Trump's on-again, off-again tariff policy, which pushed duties on Chinese goods to as much as 145% in April before lowering them, makes the flexibility afforded by bonded warehouses appealing to firms. 'A lot of companies importing from China, not just China-based, but US importers as well, are taking advantage of bonded warehouses to assist with cash flow,' said Cindy Allen, shipping consultant at Trade Force Multiplier and a former FedEx Logistics executive. 'It doesn't necessarily save them money as the tariffs have to be paid when the goods are withdrawn from the warehouse. 'But it allows companies to pay duties in smaller increments as they are sold,' she said. The CBP said it has noticed an increased interest in the use of bonded warehouses for continued compliance with new regulations and executive orders. In early 2024, bonded storage space was rented at approximately twice the cost of standard storage rates, but since the start of 2025, it has risen to four times the price to rent non-bonded space, according to WarehouseQuote data. 'This rush to bonded warehouses to ease cash flow is unprecedented,' Allen said. During the first Trump administration, many companies simply accepted the levies on China. But this meant firms paid more over a prolonged period of time while also being forced to invest in alternative sources to China. 'Importers don't want to repeat the past mistakes,' Allen said. Setting up new bonded warehouses could be risky, because the United States may go back to higher tariffs once its 90-day reprieve ends. Vladimir Durshpek, co-founder of Venice, Florida-based warehousing and storage company CargoNest, said he is weighing adding a third bonded warehouse to his assets until US tariff negotiations are completed. 'What we don't want to do is rush into providing more capacity, and then things change,' he said. Fremont, California-based storage company DCL Logistics has not made definitive plans for bonded space because 'it's unclear if the demand will stay this high', chief revenue officer Brian Tu said. 'By the time a lot of warehouses would be able to achieve bonded status right now, these additional tariffs might be gone, and the demand for bonded space might not be there,' said Jacob Roseburrough, director of marketing at WarehouseQuote. — Reuters
CTV News
21-05-2025
- Business
- CTV News
Importers race to turn U.S. warehouses into tariff-free zones
A container ship sails off from a container terminal in Qingdao in eastern China's Shandong province Sunday, April 6, 2025. (Chinatopix Via AP) LONDON/NEW YORK - Companies importing goods into the United States from China are rushing to convert warehouses into facilities that are exempt from President Donald Trump's tariffs until they are ready to sell the merchandise. The U.S. has more than 1,700 bonded warehouses, facilities where imported goods can be held without immediate payment of customs duties such as tariffs, currently 30% for shipments from China. Such fees are only paid when the goods leave the bonded warehouse, allowing businesses to manage funds more effectively at a time of extreme trade policy volatility. The rush to bond U.S. warehouses for goods ranging from clothing to auto parts is a bet for some that raised U.S. tariffs will be only a short-term policy by the Trump administration. Due to Trump's tariff war, many of these bonded warehouses are now at full capacity, and prices for space in them have skyrocketed, four industry sources told Reuters, prompting companies to apply to U.S. Customs and Border Protection to expand bonded space. Utah-based fulfillment firm LVK Logistics, for instance, is in the process of making one of its warehouses bonded 'in response to the tariffs,' CEO Maggie Barnett told Reuters, adding she expects the process to take three to four months. 'You can bond more or less anywhere,' said Chris Rogers, who manages the supply chain research team at consultancy S&P Global Market Intelligence. 'It involves money and it takes time, but if you are a big company and expect tariffs are going to remain elevated for an extended period, you can convert (existing) spaces into bonded warehousing.' Other companies and logistics firms are seeing their applications with the CBP backlogged in some cases by over six months, said Chris Huwaldt, vice president of solutions at WarehouseQuote, a logistics research firm. Last year, the process would have taken a couple of months, he added. Huwaldt said getting storage space certified as bonded 'could cost thousands of dollars or it could cost six figures,' depending on the state the warehouse is based in, the financial status of the company and the additional security measures required by the CBP for a specific location. Trump's on-again, off-again tariff policy - which pushed duties on Chinese goods to as much as 145 per cent in April before lowering them - makes the flexibility afforded by bonded warehouses appealing to companies. 'A lot of companies importing from China - not just China-based, but U.S. importers as well - are taking advantage of bonded warehouses to assist with cash flow,' said Cindy Allen, shipping consultant at Trade Force Multiplier and a former FedEx Logistics executive. 'It doesn't necessarily save them money as the tariffs have to be paid when the goods are withdrawn from the warehouse. But it allows companies to pay duties in smaller increments as they are sold,' she said. The CBP said it has noticed an increased interest in the use of bonded warehouses for continued compliance with new regulations and executive orders. The White House did not immediately respond to a request for comment. 'Unprecedented' warehouse rush In early 2024, bonded storage space was rented at approximately twice the cost of standard storage rates, but since the start of 2025, it has risen to four times the price to rent non-bonded space, according to WarehouseQuote data. 'This rush to bonded warehouses to ease cash flow is unprecedented,' Allen said. During the first Trump administration, many companies simply accepted the levies on China. But this meant firms paid more over a prolonged period of time while also being forced to invest in alternative sources to China. Importers 'don't want to repeat the past mistakes,' Allen said. Setting up new bonded warehouses could be risky, because the United States may go back to higher tariffs once its 90-day reprieve ends. Vladimir Durshpek, cofounder of Venice, Florida-based warehousing and storage company CargoNest, said he is weighing adding a third bonded warehouse to his assets until U.S. tariff negotiations are completed. 'What we don't want to do is rush into providing more capacity, and then things change,' he said. Fremont, California-based storage company DCL Logistics has not made definitive plans for bonded space because 'it's unclear if the demand will stay this high,' Chief Revenue Officer Brian Tu said. 'By the time a lot of warehouses would be able to achieve bonded status right now, these additional tariffs might be gone, and the demand for bonded space might not be there,' said Jacob Roseburrough, director of marketing at WarehouseQuote. Reporting by Richa Naidu and Arriana Mclymore in London; additional reporting by Trevor Hunnicutt; Editing by Lisa Jucca and Rod Nickel, Reuters
Free Malaysia Today
21-05-2025
- Business
- Free Malaysia Today
Importers race to turn US warehouses into tariff-free zones
The US has had more than 1,700 bonded warehouses, facilities where imported goods can be held without immediate payment of customs duties such as tariffs. (EPA Images pic) LONDON : Companies importing goods into the US from China are rushing to convert warehouses into facilities that are exempt from President Donald Trump's tariffs until they are ready to sell the merchandise. The US has more than 1,700 bonded warehouses, facilities where imported goods can be held without immediate payment of customs duties such as tariffs, currently 30% for shipments from China. Such fees are only paid when the goods leave the bonded warehouse, allowing businesses to manage funds more effectively at a time of extreme trade policy volatility. The rush to bond US warehouses for goods ranging from clothing to auto parts is a bet for some that raised US tariffs will be only a short-term policy by the Trump administration. Due to Trump's tariff war, many of these bonded warehouses are now at full capacity, and prices for space in them have skyrocketed, four industry sources told Reuters, prompting companies to apply to US customs and border protection to expand bonded space. Utah-based fulfillment firm LVK Logistics, for instance, is in the process of making one of its warehouses bonded 'in response to the tariffs,' CEO Maggie Barnett told Reuters, adding she expects the process to take three to four months. 'You can bond more or less anywhere,' said Chris Rogers, who manages the supply chain research team at consultancy S&P Global Market Intelligence. 'It involves money and it takes time, but if you are a big company and expect tariffs are going to remain elevated for an extended period, you can convert (existing) spaces into bonded warehousing,' Rogers said. Other companies and logistics firms are seeing their applications with the CBP backlogged in some cases by over six months, said Chris Huwaldt, vice president of solutions at WarehouseQuote, a logistics research firm. 'Last year, the process would have taken a couple of months,' he added. Huwaldt said getting storage space certified as bonded 'could cost thousands of dollars or it could cost six figures,' depending on the state the warehouse is based in, the financial status of the company and the additional security measures required by the CBP for a specific location. Trump's on-again, off-again tariff policy – which pushed duties on Chinese goods to as much as 145% in April before lowering them – makes the flexibility afforded by bonded warehouses appealing to companies. 'A lot of companies importing from China – not just China-based, but US importers as well – are taking advantage of bonded warehouses to assist with cash flow,' said Cindy Allen, shipping consultant at Trade Force Multiplier and a former FedEx Logistics executive. 'It doesn't necessarily save them money as the tariffs have to be paid when the goods are withdrawn from the warehouse. 'But it allows companies to pay duties in smaller increments as they are sold,' she said. The CBP said it has noticed an increased interest in the use of bonded warehouses for continued compliance with new regulations and executive orders. The White House did not immediately respond to a request for comment. 'Unprecedented' warehouse rush In early 2024, bonded storage space was rented at approximately twice the cost of standard storage rates, but since the start of 2025, it has risen to four times the price to rent non-bonded space, according to WarehouseQuote data. 'This rush to bonded warehouses to ease cash flow is unprecedented,' Allen said. During the first Trump administration, many companies simply accepted the levies on China. However, this meant firms paid more over a prolonged period of time while also being forced to invest in alternative sources to China. 'Importers 'don't want to repeat the past mistakes',' Allen said. Setting up new bonded warehouses could be risky, because the US may go back to higher tariffs once its 90-day reprieve ends. Vladimir Durshpek, co-founder of Venice, Florida-based warehousing and storage company CargoNest, said he is weighing adding a third bonded warehouse to his assets until US tariff negotiations are completed. 'What we don't want to do is rush into providing more capacity, and then things change,' he said. Fremont, California-based storage company DCL Logistics has not made definitive plans for bonded space because 'it's unclear if the demand will stay this high,' chief revenue officer Brian Tu said. 'By the time a lot of warehouses would be able to achieve bonded status right now, these additional tariffs might be gone, and the demand for bonded space might not be there,' said Jacob Roseburrough, director of marketing at WarehouseQuote.
Reuters
21-05-2025
- Business
- Reuters
US importers race to create bonded warehouses amid Trump tariffs
LONDON/NEW YORK, May 21 (Reuters) - Companies importing goods into the United States from China are rushing to convert warehouses into facilities that are exempt from President Donald Trump's tariffs until they are ready to sell the merchandise. The U.S. has more than 1,700 bonded warehouses, facilities where imported goods can be held without immediate payment of customs duties such as tariffs, currently 30% for shipments from China. Such fees are only paid when the goods leave the bonded warehouse, allowing businesses to manage funds more effectively at a time of extreme trade policy volatility. The rush to bond U.S. warehouses for goods ranging from clothing to auto parts is a bet for some that raised U.S. tariffs will be only a short-term policy by the Trump administration. Due to Trump's tariff war, many of these bonded warehouses are now at full capacity, and prices for space in them have skyrocketed, four industry sources told Reuters, prompting companies to apply to U.S. Customs and Border Protection to expand bonded space. Utah-based fulfillment firm LVK Logistics, for instance, is in the process of making one of its warehouses bonded "in response to the tariffs," CEO Maggie Barnett told Reuters, adding she expects the process to take three to four months. "You can bond more or less anywhere," said Chris Rogers, who manages the supply chain research team at consultancy S&P Global Market Intelligence. "It involves money and it takes time, but if you are a big company and expect tariffs are going to remain elevated for an extended period, you can convert (existing) spaces into bonded warehousing." Other companies and logistics firms are seeing their applications with the CBP backlogged in some cases by over six months, said Chris Huwaldt, vice president of solutions at WarehouseQuote, a logistics research firm. Last year, the process would have taken a couple of months, he added. Huwaldt said getting storage space certified as bonded "could cost thousands of dollars or it could cost six figures," depending on the state the warehouse is based in, the financial status of the company and the additional security measures required by the CBP for a specific location. Trump's on-again, off-again tariff policy - which pushed duties on Chinese goods to as much as 145% in April before lowering them - makes the flexibility afforded by bonded warehouses appealing to companies. "A lot of companies importing from China - not just China-based, but U.S. importers as well - are taking advantage of bonded warehouses to assist with cash flow," said Cindy Allen, shipping consultant at Trade Force Multiplier and a former FedEx Logistics executive. "It doesn't necessarily save them money as the tariffs have to be paid when the goods are withdrawn from the warehouse. But it allows companies to pay duties in smaller increments as they are sold," she said. The CBP said it has noticed an increased interest in the use of bonded warehouses for continued compliance with new regulations and executive orders. The White House did not immediately respond to a request for comment. In early 2024, bonded storage space was rented at approximately twice the cost of standard storage rates, but since the start of 2025, it has risen to four times the price to rent non-bonded space, according to WarehouseQuote data. "This rush to bonded warehouses to ease cash flow is unprecedented," Allen said. During the first Trump administration, many companies simply accepted the levies on China. But this meant firms paid more over a prolonged period of time while also being forced to invest in alternative sources to China. Importers "don't want to repeat the past mistakes," Allen said. Setting up new bonded warehouses could be risky, because the United States may go back to higher tariffs once its 90-day reprieve ends. Vladimir Durshpek, cofounder of Venice, Florida-based warehousing and storage company CargoNest, said he is weighing adding a third bonded warehouse to his assets until U.S. tariff negotiations are completed. "What we don't want to do is rush into providing more capacity, and then things change," he said. Fremont, California-based storage company DCL Logistics has not made definitive plans for bonded space because "it's unclear if the demand will stay this high," Chief Revenue Officer Brian Tu said. "By the time a lot of warehouses would be able to achieve bonded status right now, these additional tariffs might be gone, and the demand for bonded space might not be there," said Jacob Roseburrough, director of marketing at WarehouseQuote.
Yahoo
28-02-2025
- Business
- Yahoo
Looming de minimis restrictions put importers at a crossroads
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. Without de minimis treatment for imports from key U.S. trading partners, companies are now figuring out the best path forward for their supply chains. During a webinar last week, cross-border logistics experts said there are several paths businesses can take depending on their particular needs. However, a deluge of trade policy changes and uncertainty about future regulations are making those decisions harder. "It's just fatigue around the conversation, because they just want to know what the rules are going to be," Maggie Barnett, CEO of LVK Logistics, said. The de minimis exemption is often leveraged by cross-border e-commerce shippers to ship sub-$800 products into the U.S. without having to pay additional duties, limiting shipping costs in the process. The Trump administration plans to ax the exemption for products from China permanently once "adequate systems are in place' to quickly process and collect related tariff revenue. De minimis eligibility is also slated to be cut for goods from Canada and Mexico under executive orders slated to take effect next week. Using a U.S.-based 3PL is a strong option at the current juncture, according to Barnett, since she expects the de minimis exemption will receive further scrutiny even when it no longer applies to shipments from China. If a company aggressively shifts their sourcing to Bangladesh, Vietnam or another country, that could just leave them vulnerable to future U.S. trade actions, Barnett said. "Why would they just close this for China?" Barnett said, referring to de minimis treatment. "If the mandate is to reduce fentanyl, increase revenues into the U.S. and increase U.S. jobs, why just stop at China?" Companies need to find a long-term fulfillment solution with less exposure to rapidly changing trade policies, as frequent supply chain shifts can be expensive for brands, Barnett added. Companies with 20,000 to 25,000 SKUs could incur expenses up to $100,000 just to move their inventory to a new 3PL, she said. "That's where the idea of coming back to a U.S. 3PL is basically the best option at this point," Barnett said. Aaron Rubin, CEO of warehouse management system provider ShipHero, recommended smaller brands lean on U.S.-centric operations and domestic 3PLs, while advising larger brands to partner with a capable customs broker and lawyer to minimize tariff costs. Higher brokerage fees are also a concern as importers navigate new trade rules. In response, Rubin said some companies are trying to clear as many products as possible in one customs entry, grouping them by both the client they're serving and the applicable Harmonized System (HS) code. "If you can do a formal entry and every line is going to be separate, you're going to run into a lot of brokerage fees," Rubin said. "And most people are using this to save, like, a couple dollars per package." Companies should weigh labor costs as well in determining their de minimis response. Mexico is a key location for fulfillment into the U.S., and eliminating the exemption won't entirely erase that, according to Rubin. That's because brands can still leverage Mexico's lower labor costs for more hands-on processes. This includes fulfilling shipments that are kitted — combining multiple items into a single package — or have more complex manufacturing needs. Experts also floated the use of Type 11 entry as an alternative for de minimis-reliant importers, although that requires more information during the customs process. Type 11 entry is a simplified procedure where goods can be cleared through customs without a bond as long as the shipment's value doesn't exceed $2,500, or $250 for China-based goods covered by Section 301 tariffs, Portless CEO Izzy Rosenzweig said in a LinkedIn post. Portless has been testing Entry Type 11 "with great results," according to Rosenzweig. Importers may adjust more quickly to Type 11 entries in the future after using the process during the initial ban on de minimis shipping from China earlier this month, said Scott Sangster, general manager of global logistics service providers at Descartes Systems Group, in an interview with Supply Chain Dive. Companies are "getting better at comparing the information that they're going to need to continue to comply with different types of filings," he added. "The Type 11 informal entry was the most natural entry for people to move to," Sangster said. Editor's note: This story was first published in our Logistics Weekly newsletter. Sign up here. Recommended Reading De minimis exemption temporarily returns for products from China
