In Bond Shipment - Meaning & Definition

Published in Operations and Supply Chain Terms by MBA Skool Team, Last Updated: December 10, 2015

What is In Bond Shipment?

The In-Bond Shipment includes the entering of the cargo to a country that may be ordained to other locations. An in-bond entry is needed when the cargo is derailed to a different location for entry; transits the U.S. destined to another country, or are straight away exported.

In bond transport is the either import or export shipment that has not been cleared by the customs department and is shipped, kept, or managed with security to the administration provided by insurance bonds. Particularly, in the U.S., in-bond shipments have been a crucial part of trade. Usually, the in-bond shipments to & within the United States are shipments not planned to enter the U.S. business. Hence, permits issued for progress of an in bond shipment must be considered as an individual shipment and must be combined with the bill of lading and shipping order.

The in-bond system allows merchandise not intended for entry into U.S. commerce to travel through the United States without being subject to duties and taxes. The in-bond system makes this feasible to facilitate trade to foreign markets.

There are three types of in-bond movements:

• Foreign merchandise exported from the U.S. port of arrival without payment of duty

• Foreign merchandise traveling through the United States in-bond for exportation at a destination port without the payment of duty

• Foreign merchandise arriving at a U.S. port of entry and transported to another port where a superseding entry will be filed by the importer or broker

In-bond smuggling occurs when someone knowingly and willfully avoids paying lawful customs charges or duties on imported or exported merchandise that should have been invoiced. For instance, smugglers may divert goods into the domestic market after U.S. Customs and Border Protection (CBP) declarations show the goods have been exported. Smugglers may also try to divert imported goods by removing them from containers in transit between the initial port of entry and a bonded facility. They may also redirect containers between the initial port of entry and the alleged port of destination for exportation or misclassify imported merchandise held inside the containers. Doing so, allows smugglers to evade duties and taxes and intellectual property laws by gaming the in-bond system. It also introduces potentially harmful goods into the United States for consumption.

Homeland Security Investigations special agents investigate individuals and corporations responsible for the illegal entry of merchandise into the United States. These investigations are often related to foreign trade zones, bonded warehouses and customs brokers. They pursue both criminal and civil penalties against in-bond system violators.


Hence, this concludes the definition of In Bond Shipment along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.

Continue Reading:

Share this Page on:
Facebook ShareTweetShare on Linkedin