For any company wishing to import to the US, customs bonds are a prerequisite. Any company or person wanting to ship goods worth more than $2,500 sales price is legally bound to hold one. However, there is a paucity of customs bonds options available to the purchaser. As we have said in previous blogs on this subject, two kinds of customs bonds are available: Single Entry Bonds (or Single Transaction Customs Bonds) and Continuous Customs Bonds. Should anyone be unsure which would be best for their needs, we provide below our thoughts on the most appropriate use for single entry customs bonds.
When is it best to use a single-entry customs bonds
What a Single Entry Customs Bond covers
A Single Entry Customs Bond applies to a single consignment. More specifically, this type of customs bond pertains to a single Bill of Lading and all that is covered by it. Thus, for an LCL consignment, all consignors with cargo on that container must hold a Single-Entry Customs Bond in respect of the goods they are shipping.
When to use a Single Entry Customs Bond
Reiterating, Single Entry Customs Bonds are only applicable to a single consignment. Each additional consignment must be covered by its own discrete customs bond, ergo any organisations wanting to send multiple consignments are required to obtain as many single entry or single-transaction customs bonds as necessary, one for each individual consignment.
At what point, however, does the decision of whether single-entry or continuous bonds reach critical mass? A continuous or annual customs bond extends across all global consignments for the twelve months from date on which the continuous bond was acquired. A continuous bond is, therefore, a more practicable option than a single-entry bond. The continuous or annual bond obviates the risk of consignment holdups or penalties due to late or missed renewal.
Single Entry vs Continuous Customs Bonds
There are considerable disparities in pricing between single and annual customs bonds, as mentioned in some of our other blogs. Not surprisingly, single entry customs bonds are not really cost-effective for companies shipping large tonnage each year. See below for more detailed information.
Single-Entry
The majority of single-entry customs bonds cost between 0.5% to 2% of your products’ sales price. A number of matters may affect this pricing – for example, liability, type of goods/products, transportation risks and country of origin are just a few of the considerations that can cause pricing to increase or decrease relative to each consignment.
Continuous
The 12-month bonds are priced according to a number of conditions, including – as for single-entry bonds – liability, type of goods/products, transportation risks and country of origin, to mention just a few. These annual bonds can be priced from as little as $500, increasing from that point according to the various factors that need to be taken into account.
When to use what bond?
Put succinctly, single-entry customs bonds are appropriate until the cost of an annual customs bond is clearly a better, cheaper option. Other than the cost, there are no particular positives or negatives relative to one or other; it’s a matter of what works best for your organisation relative to the number and volume you are shipping. Should your organisation intend to consign a lot over the coming year, consult with your freight forwarder re what your customs bond costs are likely to be in that year.
Before you speak with your freight forwarder make sure you have ready the information you will need to provide. You will need to aggregate the greatest and least possible sales amount of your shipments, plus the greatest and smallest number of containers you would likely be consigning during the 12-month period. These are the two major determinants driving the cost of a customs bond. Once you provide this information, your freight forwarder will be able to help you understand which customs bond will best suit your needs.
Single Entry vs Continuous Customs Bonds
Need help with single-entry customs bonds
If you need help selecting between a single-entry or continuous customs bond, or just want to learn more about the differences between the two, feel free to call us or send us a message. We are happy to help you work out what best applies to your situation. We can also help you attain the one you need quickly and easily.
By partnering with a reputable and experienced freight forwarder, you can eliminate unnecessary delays and reduce business risk. If you need help on single-entry customs bond when importing to the USA, contact us online and send a message. You can even message us on Facebook for assistance. We are happy to offer our expertise and be delighted at the opportunity to help.
