Import Services has carved a niche for itself as one of a few logistics specialists to offer bonded storage from a port based location – a service which is becoming increasingly popular with importers looking to cut cost in their supply chain.
With two 10,000 pallet HM Revenue and Customs approved storage facilities within a short distance of Southampton Port, the logistics provider is combining its portcentric approach to distribution with bonded warehousing to improve cash flow for importers.
Once a client's products – as diverse as golf balls and toys – arrive in the UK, Import Services can store them under bond until they are ordered for delivery to its client's customers, such as retailers or direct to consumers, throughout the UK and Europe.
While consumer products are held at Import Services' bonded facilities, VAT and customs duty is deferred until the stock leaves the warehouse and is in 'free circulation' within the EC. Even then, payment is only due at the end of the month in which the goods are dispatched – this provides a positive cash flow advantage. The deferred payment can amount to 25 per cent of the landed value of the goods, depending on the nature of the imported product, its specific customs tariff and whether VAT is applicable.
“Opting for bonded storage of product remaining at our DC's for more than a few weeks before distribution, is a smart move by our clients wishing to keep cash in their business for as long as possible,” explained Mike Thomas, client services director at Import Services.
“We can also organise a deferred duty account, so for example, if product was released on the first of the month, payment of VAT and Duty would not be due until the 15th of the next month, providing an additional 15 days credit.”
Srixon Golf, manufacturer of playing and range balls, clubs and golfing apparel, is just one of a number of Import Services' clients taking full advantage of this cost effective solution.
“A common misconception is bonded storage operations are complicated, however this is actually not the case. Import Services serves as the interface between client and HM Customs, and with our automated systems the process is straightforward,” said Mike.
Srixon's strategic target is to grow market share by ensuring product is available at UK distribution centres ready to replenish its customers on demand. Import Services implemented this logistics process swiftly, utilising both port-based distribution and a bonded facility to contain Srixon's costs involved in implementing its strategy.
Flair, a major UK toy company distributing the latest brands such as Gormiti, is also benefiting from Import Services bonded facilities, to ensure new releases of collectable products are stored economically in the UK pending market launch. An alternative may have been to hold this product in the Far East, but the three to four week transit time via container ship means it is difficult to respond positively to surges in retail demand.
Portcentric distribution involves direct delivery to retail or consumer, from the entry port. It saves time, money and reduces carbon emissions as goods are no longer transported inland to intermediate distribution centres, cutting out the need to return thousands of empty containers along congested roads.