The Ins and Outs of Bonded Freight Shipping

What Is In-Bond Cargo, Why Does it Cost More, and How to Avoid It

Bonded cargo is a term that often catches shippers by surprise – especially small businesses shipping cross-border. You might suddenly hear that your freight is “moving in-bond” or being held in a bonded warehouse, along with extra fees you didn’t budget for.

What does it mean when your shipment is bonded? Why does it incur additional charges, and how can you avoid it if you don’t actually need it?

In this article, we explain bonded cargo in plain language, what it is, when it happens, why there are extra charges, and tips to prevent unintentional bonded shipments.

By the time you’re done reading, you’ll understand the ins and outs of bonded freight, and you can save your business time, money, and headaches (and keep your shipments moving smoothly).

What Is Bonded Cargo?

Bonded cargo refers to freight that is transported or stored under a customs bond, meaning it has not yet cleared customs and no import duties or taxes have been paid on it. In simple terms, it’s goods being held under customs control until they are officially cleared for import or export. A bonded shipment can be defined as goods held in customs custody until import duties or other charges are paid, or until the goods are cleared for export.

Likewise, bonded cargo itself is freight held under customs control with its duties and taxes unpaid. While under bond, the cargo isn’t released into the commerce of the country it’s passing through. It remains in a sort of legal limbo, secured by a financial guarantee (the bond) that assures customs authorities that any owed duties will eventually be paid.

This bonded status can apply to various scenarios. It might be imported goods that have arrived in a country but are waiting in a warehouse until the importer pays the duties and completes customs clearance. It’s important to expedite the clearance in such circumstances since storage fees can start accruing fast.

It also includes in-transit cargo moving through one country to get to another without paying duties in the transit country. In all cases, the shipment’s customs clearance is deferred until a later point – either an inland destination or the final importing country.

When Does Cargo Become Bonded?

One common scenario is when freight must travel through an intermediate country en route to its final destination. For example, a load shipped from Canada to Mexico by truck will pass through the United States. Rather than clearing US customs (and paying US import duties) only to export the goods onward, the shipment can remain in bond through the U.S., deferring all duties until it reaches Mexico.

The U.S. Customs and Border Protection (CBP) explicitly allows this in-bond process: goods enter at one US port without formal customs appraisal or duty payment and are transported by a bonded carrier to another port or exit point for later clearance. Bonded transit is especially useful for routes like Canada–US–Canada (when a shipment briefly transits the U.S.) or vice versa, when the shipment briefly enters Canada.

Another situation for bonded cargo is when goods arrive at a border or port of entry but cannot be immediately cleared. This usually happens when the customs paperwork isn’t in order, or a customs broker hasn’t arranged clearance by the time of arrival. This is by far the most common case we at Freightera come in contact with. Instead of holding the truck at the border, the carrier might declare the shipment as in-bond and move it to an inland bonded warehouse to await clearance.

In Canada, for instance, a bonded carrier is allowed to transport goods beyond the first port of arrival to an inland warehouse or Canada Border Service Agency office for customs release. Similarly, in the U.S., an in-bond shipment may go from the port of arrival to a bonded warehouse or a different port where the entry will be filed.

Missing or incorrect paperwork is one of the most common reasons shipments get held up at customs or get shipped in bond instead of being released at the border.

Finally, importers sometimes intentionally use bonded storage for inventory management or duty deferral. Customs bonded warehouses are secure facilities where imported goods can be stored without immediately paying duties. Companies might store goods there if they plan to re-export them, or to defer taxes until the products are sold. The goods in the warehouse are considered bonded cargo, and duties become due only when they leave the facility for domestic consumption. This can be a strategic way to manage cash flow and avoid paying import taxes until necessary, which is particularly useful for high-value goods or items awaiting regulatory approval. (Keep in mind that storage in a bonded warehouse isn’t free. Carriers will charge storage fees which usually start after a day or two.)

Why Are There Charges for Bonded Shipments?

It’s important for shippers to know that bonded shipments usually come with additional fees. These charges are in place because moving or holding freight under bond involves extra steps, regulatory requirements, and financial risk coverage that wouldn’t apply to regular clearance. 

Here are the main reasons bonded cargo can cost more:

• Customs Bond Fees: To ship in bond, a customs bond must be in place as a financial guarantee. If you’re an importer, this might mean purchasing a single-entry bond (often around $50–$100 minimum, depending on the value of the goods) or maintaining a continuous bond annually. Carriers and freight forwarders also maintain bonds for in-transit moves. The bond cost itself is essentially insurance that guarantees customs will get paid if something goes wrong. 
• Carrier In-Bond Handling Fee: Most freight carriers charge an accessorial fee for in-bond shipments. This fee covers the paperwork filing and additional handling involved in moving freight under bond. Larger LTL carriers might charge over $150 for an in-bond or customs handling fee. 
• Warehouse and Storage Costs: If your bonded cargo must be stored in a warehouse while awaiting customs clearance or onward transport, there will be storage fees. Additionally, if customs exams or special handling is required while in bond, there could be inspection fees charged to the shipment. 
• Brokerage and Administration: Customs brokers may charge additional fees to prepare and file in-bond documentation on your behalf. There can also be fees for converting an entry to in-bond status or for closing the bond once the shipment is cleared. 
• Risk of Penalties if Not Managed: While not a direct upfront charge, it’s worth noting that failing to follow in-bond regulations can lead to costly penalties. In the US, if an in-bond shipment isn’t arrived and cleared within the regulatory time frame, it could be sent to General Order (a customs seizure warehouse) and incur heavy charges.. 

In short, the bonded cargo fees compensate for the additional work and financial liability involved in bypassing immediate customs clearance.

How to Avoid Unintentional Bonded Cargo (Practical Tips for Shippers)

Bonded cargo serves an important purpose in global logistics, but you generally wouldn’t use it unless there’s a good reason. Your small business that deals mostly in shipping LTL or truckload cross-border probably actually wants your shipment cleared through customs promptly so it can be delivered without extra stops or fees. However, mistakes in preparation can land your freight in bond even if you didn’t mean it to.

So here are some tips to avoid that outcome:

• Provide Complete and Accurate Documentation: Incomplete or incorrect paperwork is the number one cause of unwittingly bonded shipments. Ensure all your customs documents (commercial invoice, packing list, BOL, certificates of origin, etc.) are thorough and accurate. Double-check that product descriptions, values, and HS codes are correct and that forms are fully filled out. 
• Use a Customs Broker and Pre-Clear the Shipment: Don’t leave customs clearance to chance. Engage a qualified customs broker for your cross-border shipments and send them your paperwork well before the freight arrives at the border. Brokers can file entries electronically (pre-clearance) so that when the truck reaches the port of entry, customs has already processed the clearance or is ready to release the load. 
• Let Us Know: Make it clear in your shipping instructions whether the shipment should be in-bond or not. If you do not want an in-bond move, leave instructions that the load must clear at the border. Provide the broker’s contact info to the carrier and confirm that the carrier has all documentation before pickup. Clear communication can prevent a scenario where, say, a driver, not seeing a release on file, just opts to haul the freight in bond to an inland warehouse. 
• Plan Routes to Minimize Unnecessary Border Crossings: If you have a choice, ship direct to the destination country rather than routing through a third country. For example, if you’re in Canada sending to the southern U.S., you’ll likely go through the U.S. directly (which is fine, it’s the destination). But if you were shipping from Canada to an overseas destination via a US port, consider exporting directly via a Canadian port to skip the US bond process. 
• Ensure Duties and Taxes Are Handled: One reason shipments go into bonded storage is if the importer hasn’t arranged to pay duties or lacks the proper bond at import. Have your payment method for duties established (some brokers offer Duty Guarantee or you can use ACH accounts with customs). Essentially, signal to customs that you’re ready and able to clear the goods. 
• If your shipment does cross the border in-bond, ship it as is. If your shipment is delayed for any reason, such as missing paperwork, pending customs decisions, or broker inaction, those daily fees can accumulate quickly. In most cases, paying for the bond and clearing the shipment efficiently is far more cost-effective than having the truck turned around at the border. If that happens, you may be held liable not only for the re-entry of your own freight but also for all the other shipments on the truck, along with additional fines or handling charges. All these charges together can potentially cost thousands of dollars. 

By following these steps, you can greatly reduce the chances of your freight being involuntarily routed into bond. The goal is to have everything for customs done right the first time. As a bonus, avoiding bonded transit also tends to mean faster deliveries and fewer complications for you and your customers.

Final Thoughts: When Bonded Cargo Makes Sense (and a Quick Note on Freightera)

Bonded cargo isn’t always a bad thing. If you use it intentionally, it’s a valuable tool.

However, for many small and mid-sized shippers, bonded shipments are more likely an accidental hassle than a deliberate choice. In those cases, education and good planning are your best defense. It helps to work with experienced logistics partners who understand cross-border shipping. At Freightera, for example, we connect you with carriers and make sure that your shipping process in the USA and Canada goes smoothly. With our online system, you can get transparent quotes, and our team is familiar with cross-border requirements. It’s worth noting that using a reliable freight service can take a lot of the complexity off your plate. That’s why we’re here to ensure that the right carriers and customs procedures are in place so your shipment doesn’t get waylaid in bond unless you want it to be.

Got any questions for us? Contact us via Online Chat, email us at [email protected], or call us at (800) 886 4870.