How to Calculate Bonded Warehouse Calc
What is Bonded Warehouse Calc?
The Bonded Warehouse Savings Calculator estimates duty deferral and potential savings from storing imported goods in a CBP-bonded warehouse, where duties are not paid until goods are withdrawn for domestic consumption or re-exported duty-free.
Formula
Duty Deferral Savings = Average Inventory Value × Duty Rate × Storage Duration (years) × Cost of Capital (%)
- IV
- Inventory Value ($) — Average value of goods stored in the bonded warehouse
- DR
- Duty Rate (%) — Applicable customs duty rate on the stored goods
- T
- Storage Duration (years) — Average time goods remain in bonded storage
- CC
- Cost of Capital (%) — Company cost of capital rate for deferral value calculation
Step-by-Step Guide
- 1Calculate the total duty that would be due on imported inventory
- 2Determine average storage duration in the bonded warehouse
- 3Apply your cost of capital to the deferred duty amount for the storage period
- 4Add savings from goods re-exported without ever paying duty
Worked Examples
Input
$10M inventory, 10% duty, avg 6 months storage, 8% cost of capital
Result
Deferred duty = $1M, Deferral savings = $1M × 0.08 × 0.5 = $40,000/year
Input
Same scenario + 20% of goods re-exported
Result
Deferral savings = $40K + Re-export savings = $200K = $240K/year
Common Mistakes to Avoid
- ✕Not accounting for bonded warehouse rent and compliance costs when calculating net savings
- ✕Forgetting the 5-year maximum storage limit for bonded warehouses
- ✕Not considering FTZ as an alternative that may offer greater benefits
Frequently Asked Questions
How long can goods stay in a bonded warehouse?
Up to 5 years from the date of importation. After 5 years, goods must be exported, entered for consumption (with duty payment), or they are subject to sale by CBP.
What is the difference between a bonded warehouse and an FTZ?
Bonded warehouses defer duty until withdrawal. FTZs also defer duty but additionally allow manufacturing, and you can choose to pay duty on either the imported components or the finished product, whichever rate is lower.