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You're a manufacturer in Country A. I'm an importer in Country B. The cheapest way to get what you make to me is to ship it through Country C. It will never enter commerce in Country C, but anyone shipping goods into Country C has to pay duty on them. To get around having to pay duty to Country C, I have to post a bond and I have to store the freight in a special warehouse called a bonded warehouse until it's loaded on a plane and sent to Country B. There are fees and special handling involved, those cost money, and since you're the one who ran up the bills you're the one who gets to pay them.

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Q: Why is bonded cargo more expensive to transport than not bonded cargo?
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