Insured, Bonded, or Free Trade Zone 3PL: Which is the Best?

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Searching for a top-level 3PL warehouse entails many aspects that are sometimes impossible to deal with without professional assistance. Just one aspect to finding the right warehouse is deciding among an insured, bonded, or Free Trade Zone 3PL. If these terms still sound arcane to you, it’s time to learn about these different warehouse types and what it means in helping you financially and bringing more security.

Insured, Bonded, or Free Trade Zone 3PL

All of these factor into the unexpected and myriad fees involved in the logistics process. Since you need to work closely with your 3PL to keep things running optimally, knowing what’s going on behind the scenes is essential. However, you can discover these aspects with proper vetting before signing a long-term contract.

One thing you’ll learn is not every warehouse is alike. The above warehouse types prove this based on specific aspects you may need for your business structure. Nevertheless, you’ll frequently find 3PL’s with combined elements, which is all the more reason to scope out the details.

An Insured Warehouse

Logistics analysts almost always talk about how important an insured warehouse is. When doing your research on your 3PL, find out whether they have insurance at all. If they don’t, you shouldn’t even consider working with them since the potential for accidents is always high in a warehouse setting.

While you’ll discover most warehouses do have some level of insurance, it’s perhaps not up to date. This isn’t readily apparent by just doing simple vetting. You have to dig deeper and ask the warehouse whether they’ve updated their policy.

If they’re not current on their insurance coverage, it could easily cause problems if you incur damage to your freight. Having damaged goods can cost you thousands of dollars if an insurance company ultimately refuses to cover losses or damages.

Ask the warehouse how comprehensive their insurance coverage is so it covers all catastrophic events like theft, or loss from natural disasters.

A Bonded Warehouse

Finding a bonded 3PL is vital if you’re importing goods from overseas and need to store these items long-term until demand exceeds supply. It’s a license your warehouse receives from the government to store goods up to five years without immediate payment of duty.

You may find it necessary to use a bonded warehouse if you need to store your imported inventory for a while and need product protection. In this regard, a bonded warehouse usually requires insurance as well to keep the goods from getting damaged while in storage.

If you expect public demand to increase later for your products, a bonded warehouse keeps your inventory in reserve to save you time and money finding expensive storage on your own.

A Free Trade Zone Warehouse

You get many advantages using a 3PL in a Foreign Trade Zone. Similarly to bonded warehouses above, you don’t have to pay customs until goods are actually shipped. The difference, however, is that bonded warehouses are only good for storage and not manufacturing.

Another major advantage here is an FTZ gives you more control over product delivery, whether it’s foreign or domestic. A warehouse in these zones ultimately saves you time having to fill out customs entry documents, which are frequently protracted. The latter also has major fees, which an FTZ ultimately helps you eliminate or cut down.

Before you find a 3PL, do some research on where Foreign Trade Zones exist. They’re in every state now, albeit in designated areas.

Let us help you find the 3PL right for your business this year.

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