It’s time for another exciting post from the Customs Bonds 101 e-Book series, this one pertains to the different ways import bonds are acquired.
There are two main ways importers can get Customs Bonds. Commonly bonds are purchased via a third party or directly from a surety agency.
The Nature of Bond Sources
When a bond is purchased via a third party, commonly a Customs Broker or Freight Forwarder, it can mean higher cost and unawareness about specifics for an importer. However, bonds acquired directly from a surety typically are inexpensive and give importers a closer relationship to their individual policy.
Indicators of Service Level
There are many factors that pertain to deciding which of the bond sources is best for you, but the major areas of concern are cost, claims, payment options, additional services, and surety rating.
The cost can be a major difference between a bond purchased through a third party and one via a direct provider. Typically bonds bought from a third party are more costly, as Customs Brokers and Freight Forwarders are not licensed sureties and must go through another agency to buy the bond. Then, they will mark up the price before providing it to the importer.
The claims process is another factor an importer should consider before purchasing a bond. Finding out how your potential provider deals with claims is a great indicator of how well they treat their customers, as often times these processes can be stressful and costly.
Payment options for bonds purchased through a third party vary from those bought directly from a surety. Depending on what works best for your needs, this attribute can make all the difference when picking a bond source.
Identifying which additional services are provided is another great way to find out which bond source is right for your importing needs. Occasionally bonds from third parties do not cater to an importer’s individual needs like those via a direct provider, because they may have less familiarity with policy specifications.
Finally, the surety rating will illustrate how well you will be taken care of when picking a bond source. The financial strength and stability of every surety are rated on a letter grade scale, and knowing this quality will aid your decision when picking between a third party source and a direct provider.
Remember an informed importer is a successful one, and thinking about these factors will help you become more knowledgeable about your bond sources. Whether you’re a new importer or have been in the industry for years, it’s never too late to change and get the service you want at a price you deserve. Before we leave, we must give a shout out to George Dickson, who composed this engaging eBook series.
