Duty Optimization Guide

FTZ vs. Bonded Warehouse

Both options defer duties — but only one eliminates them entirely, allows manipulation, and consolidates your CBP entries. Here's the full picture.

Foreign Trade Zone (FTZ)
✅
Duty Deferral Pay duties only when goods leave the zone and enter U.S. commerce
✅
Duty Elimination on Exports Goods re-exported from FTZ owe zero U.S. import duties
✅
Inverted Tariff Relief Pay the lower rate — finished good or components, whichever is less
✅
Manufacturing & Manipulation Repack, relabel, assemble, test, or sort goods before duties assessed
✅
Weekly Entry Consolidation One CBP entry covers all shipments in a week — major fee savings
✅
Unlimited Storage Duration No time limit on how long goods can remain in the zone
✅
No CBP Exam at Admission Goods are admitted without examination — only examined at entry activation
✅
Merchandise Processing Fee Savings Weekly entry dramatically reduces per-shipment MPF charges
Bonded Warehouse
✅
Duty Deferral Duties deferred until goods are released into U.S. commerce
❌
Duty Elimination on Exports Duties may still apply depending on export process and bond conditions
❌
Inverted Tariff Relief Not available — you pay the rate applicable to the imported commodity
⚠️
Manufacturing & Manipulation Limited — minor manipulation only (cleaning, sorting, repacking may be allowed with restrictions)
❌
Weekly Entry Consolidation Each shipment requires its own CBP entry at time of withdrawal
⚠️
Storage Duration: 5 Years Maximum Goods must be withdrawn within 5 years of importation or abandoned
❌
CBP Exam May Occur at Entry Goods entering bonded warehouses may be subject to CBP examination
⚠️
Standard Per-Shipment MPF Merchandise processing fees apply per entry withdrawal — no consolidation benefit

Bottom line: A Bonded Warehouse defers duties. A Foreign Trade Zone can eliminate them entirely — and lets you do much more with your cargo while it's there.

For importers with export volume, manufacturing operations, or high shipment frequency, the FTZ advantage is substantial.

Decision Guide

Which Option Is Right for You?

The best choice depends on your cargo flow, export volume, and operational complexity.

Choose FTZ When...
  • You re-export a portion of your inventory
  • You need to manipulate, repack, or assemble goods
  • You receive multiple shipments per week
  • Your components carry higher tariffs than finished goods
  • You want unlimited storage with no customs deadlines
  • You want to reduce CBP merchandise processing fees

Consider Bonded Warehouse When...

  • You only need simple duty deferral on a small volume
  • Your goods will definitely enter U.S. commerce within 5 years
  • You don't need to repack or manipulate goods
  • Your shipment frequency is low (1–2 per month)
  • Setup costs are a primary concern over long-term savings

Not Sure Which Option Fits?

CEI's team has been advising importers and exporters for 40+ years. We'll help you figure out exactly which solution saves you the most money.

Talk to Our FTZ Team Read the FAQ