Flexport: Bond Amounts Grow Dramatically Amid Looming Higher Tariffs

People are "trying to anticipate the tariffs that have been put into place and also what might come into the future," said Lafayette, who serves as director of sales for Roanoke's western region. "So certainly a big change for liability for us, but also for importers to be able to obtain those high-level bonds."

In contrast, according to U.S. customs data, at the end of 2024, about 95% of bonds were set at about $50,000, which is the minimum level. A standard bond equals about 10% of duties, taxes and fees paid during a rolling 12-month period.

The increase in bond values also comes as CBP issued over 2,200 mandated increases in the first quarter of this year, as well as "a lot in the month of April." These mandated increase notices are significant because they occur when CBP determines that a company's bond is insufficient, according to Lafayette.

In response to CBP's actions and the uncertainties over how much companies might have to pay in duties and other trade-related fees, Lafayette urged companies to conduct some forecasting that includes not only tariffs but also how the supply chain might respond to all these changes in U.S. trade.

This is especially important because CBP requires 15 days to terminate a bond, and there is not a lot of turn-around time once a company receives it.

"On calculating your bond amount, again, the rule of thumb [is] projecting into the next 12 months [and] making sure you're looking if you are importing anything subject to antidumping or countervailing duties. De minimis is obviously also something that is changing potentially next month," as both ending de minimis and AD/CVD changes could affect duty rates, Lafayette said.

Furthermore, if a company is anticipating a larger bond, it should be "getting ahead of underwriting" since there is a possibility that might not be able to keep up with collateral requests, which is what happened when the first round of tariffs occurred, according to Lafayette.

"Importers were going to the banks trying to get a letter of credit, and it was taking them much more than 30 days, 60 days," Lafayette said. "And so if you're looking at that increase from customs, and you only have 45 days, that may not give you enough time."

Lafayette also said importers need to look at the credit ratings of the banks, as well as to be aware that with some of these very large bonds, an importer may need to go to multiple banks but one bank alone may not be able to provide a letter of credit.

"We definitely think that the risk of overestimating is certainly less than the risk of underestimating," she continued.

In addition to discussing bond strategies, the Flexport webinar also tackled duty deferral and the factors that determine the rates of duty.

While placing goods in a bonded warehouse is one strategy that importers can employ because companies don't pay duties until the goods leave the warehouse, it's not a strategy that works for everyone, particularly retail, according to Anna Zejac, senior manager of trade advisory at Flexport.

That's because goods that have been entered into a bonded warehouse are traditionally tracked by carton count, and companies must request CBP permission in advance to open a box and pull out individually packed items, Zejac said. "It becomes an administrative burden to track SKUs and tie them to a specific carton. So, it's not ideal for the traditional retail model that has 100 shirts in a box."

Companies also may have to obtain CBP approval in advance if a company has sold a good and wants to ship the goods from the warehouse, she said. A better option for some companies might be using a foreign-trade zone as FTZs allow goods to be tracked at the SKU level, she said.