Question

Importers of record require assistance in the decision factors of what to do with imported goods once they have arrived and are cleared through Customs. you are the importer's customs broker. explain the benefits associated with direct delivery, drop shipment, and warehouse entry. if the importer wishes to have access to the goods for more than just storage, then why a Foreign Trade Zone would be a better option than a warehouse entry?

Answer 1

The benefits associated with the direct delivery, drop shipment, and warehouse entry are discussed below

Direct delivery: As a direct delivery customs agent, the agent will import the products, maintains inventory and then supplied to the client as per the requirement. This benefits the customs broker with credibility, guarantee in quality, and timely delivery of the products.

Drop shipment: The dropshipping is an approach in which the sales agency or the customs broker doesn’t own the goods actually instead he is the middle man between the supplier and the customer. The benefit of being a drop shipment customs broker is that no inventory investment, no need for warehouse or storage space, no handling, packing, etc.

Warehouse entry: This is referred to as the entry of the bonded goods, its storage, maintenance, etc. The benefit associated with it is that the tariff or duty is not collected during a certain period of time or until the merchandise is not withdrawn. Hence the importer can have control over it and over the money spent on it.

When the importer wants more than just storage of the imported goods, the Foreign Trade Zone is best recommended than the warehouse entry. Some of the benefits of the FTZ over the warehouse entry are discussed below.

The FTZ is the secured option than the warehouse entry under CBP supervision. Hence, monitoring and supervision on the importer's activities can reduce the legal implications and enhances the accessibility for the importers. The warehouse entry is associated with too many restrictions and red tape which restricts the accessibility of the importers.