Are Single Entry Bonds Cost Effective?

If you recall from my previous post, U.S. Custom Bond Basics For Importers, a Customs Bond is a financial guaranty between an importer, the insurance/surety agency issuing the bond and Customs & Border Protection (CBP).  The Customs Bond represents a guarantee to CBP that all the duties and fees associated with the imports will be paid either by the importer of record or by the insurance/surety agency.  The bond is mandatory for all importers to have, as shipments will not leave the port of entry without a bond on file.  The two most common types of Customs Bonds available to importers are a Single Entry Bond and a Continuous Bond.  This week we will be discussing Single Entry Bonds, their functionality and associated cost structure.

What is a Single Entry Bond (SEB)?  Single entry bonds do exactly what their name implies; they are good for a single import transaction, and can only be used at one port of entry.  The biggest negative about using a SEB is that the costs and fees are anything but “single.”

The cost of a single entry bond varies based upon the items being imported.  In a very general sense, the SEB cost is based upon the commercial value of the goods being imported along with the associated duties and fees required to be paid to CBP.  On average, the dollar value can be measured at $3 per $1,000 in policy size.  For example, let’s say that an importer on a SEB is importing goods that are valued at $800,000.  Duties and fees on this import will be roughly $80,000 (10% of the total value of imported goods).  So $3 x ($50,000/$1,000)=$150.  In this case a SEB Bond would cost $150.  Along with this cost, any importer using a SEB that brings goods in via an ocean vessel is required to purchase an Appendix-D stand-alone ISF Bond.  This ISF bond has to be created and sent to CBP within 12 hours of receipt of an accepted ISF filing.  The cost of an ISF Bond can range from $50-$100.  Adding this to the total price for a SEB gives us a grand total of $200-$250 per shipment when using a SEB.  For those who desire more information, CBP provides an outreach program with a schedule found here as well as a helpful FAQ document regarding ISF Bonds.

When looking at a total cost of roughly $200-$250 for a SEB, most importers find a better solution in the form of a Continuous Bond.  Some benefits of a Continuous Bond:

• Continuous Bonds are good at any port of entry.


• Continuous Bonds are effective for all import transactions over one year for multiple imports (including ISF Bond).


• A Continuous Bond is almost always more economical than a SEB.

When conducting research on a Continuous Bond, importers will find many options regarding pricing and providers.  The bond can be obtained from a broker or forwarder, or from a surety agency issuing the bond direct to importers.  Depending on who the bond is purchased from, importers can see a cost as low as $250 per year for a Continuous Bond.

Unless an importer is receiving one shipment a year, a Continuous Bond is clearly the most economical option.  Though it may seem counter-intuitive, a SEB usually does not offer any cost savings.  Rather, a SEB involves many fees that often add up to the total cost of a Continuous Bond.