Tariff Relief with Bonded Warehouses
How to Delay Duties & Boost Margins
With tariffs remaining a key concern in global trade, bonded warehouses are becoming an increasingly strategic option for importers looking to delay duty payments. These secure facilities allow goods to be stored under U.S. Customs supervision, with tariffs only due when the items are withdrawn. This flexibility has made bonded warehouses an attractive tool for businesses navigating uncertain market timing, fluctuating demand, and large inventory cycles.
Merchants Bonding Company™ is a market for bonded warehouse surety bonds. We bring a flexible, common sense underwriting approach and are prepared to support bonded warehouse operators that demonstrate financial stability and strong business practices. These operations are often part of larger logistics or transportation networks, making them a natural fit for agents working in those sectors.
For surety agents, bonded warehouse bonds offer a timely and targeted path to growth. These bonds can serve as a valuable entry point to broader logistics relationships, with the potential to open conversations about other commercial bond needs. They also give agents a way to serve clients navigating the complexities of international trade with tailored solutions that matter.
What is a bonded warehouse bond?
Bonded warehouse bonds are a specific type of Customs bond, required by U.S. Customs and Border Protection. These bonds guarantee the warehouse operator’s compliance with federal rules for storing and handling imported goods. Unlike importer bonds, which are often tied to unpredictable duties or high-limit requirements, bonded warehouse bonds are centered on the physical facility and its operation, often making them a more attractive and stable surety risk.
Why the increased demand for bonded warehouses?
Tariff deferral is the biggest driver. Bonded warehouses allow goods to remain stored without duties for up to five years. This gives importers time to manage their inventory, assess market conditions, and align product flow with financial planning. In a tariff-heavy economy, this kind of control can lead to stronger margins and lower risk.
What does Merchants need to underwrite?
To evaluate bonded warehouse bond submissions, Merchants typically requires:
- A clean personal credit report from the owner(s)
- Current business financial statements
- Personal financial statements from the owners
We review each request on a case-by-case basis, using our knowledge of the industry and our signature common sense underwriting model to assess the strength of the account. Agents should be ready to present a complete financial picture and context about the warehouse operation.
Meeting Evolving Market Needs
Bonded warehouse bonds are just one example of how Merchants supports evolving market needs. If you're working with warehouse operators, freight handlers, or global trade clients, this could be the right time to make your move.
Surety bonds are issued by Merchants Bonding Company through insurance agents. Contact your local insurance agent or use our Find an Agent tool. They will guide you through the process, informing you of what documents and information are needed by Merchants to underwrite your bond.
What is a Surety Bond?
A surety bond is a three-party agreement that ensures the fulfillment of a commitment or contract. For instance, the surety, Merchants Bonding Company, may provide a surety bond to a construction company (the principal) which is required by the state (the obligee), ensuring the construction company will perform the duties as outlined in the contract. In bonding the construction company, Merchants assumes the risk should the company default or not fulfill their contract. A surety bond is different from traditional insurance in that the principal is obligated to pay back the surety company on any claims paid out.
All information provided is subject to change