The nearest harbour may be 1,000 miles away in Galveston, Texas, but Jamie Cord likes to use nautical references to explain the unique features of one of his warehouses in Altoona.
“It's like the cargo is still on board and hasn't officially arrived on the coast, so the tax is not owed until the cargo leaves (the warehouse),” said Cord, president and CEO of JT Logistics.
It is believed to be the first in the Des Moines metro. But this may not be the last time as President Donald Trump hires high tariffs to address trade issues.
JT Logistics has seven warehouse buildings in Altoona with over 2 million square feet of space.
Bond warehouses supervised by the U.S. Port Administration are still relatively rare in the United States, but are becoming increasingly popular. Importing goods to the United States, especially companies from China are rushing to convert warehouses into bond facilities.
The United States has about 1,700 warehouses that can import goods without paying customs such as tariffs immediately, currently 30% of Chinese items. Fees are paid only when the goods leave the margin warehouse, allowing businesses to manage funds more efficiently when extreme trade policies fluctuate.
JT Logistics has over 2 million square feet of warehouse space in seven buildings on Interstate 35 and US 65, with 200,000 square feet of bonded warehouse space. The warehouse is called a bond because the company simply issues bonds with the government to ensure it meets trade requirements.
In turn, it uses fences and security cameras to protect the warehouse. To prevent unauthorized deletion of inventory, only workers who conduct background checks are allowed to access.
“It’s 100% safe,” Cord said. “I am the owner of the building and I can’t go there.”
Jamie Cord, President and CEO of JT Logistics at Altoona.
The Port Authority was unable to confirm how many margin warehouses there were in Iowa, but JT Logistics' chief operating officer Jason Ickert said the company owns the only such facility in the Des Moines area.
Cole said his company began providing storage space for bonds a few years ago before Trump’s tariffs. Recent trade measures have inspired interest.
Another option to manage tariffs is foreign trade, which some manufacturing industries can use imported goods.
Peter Ralston is director of the supply chain forum at Iowa State University.
“This is the reason you do this is to actually do something called inverted tariffs, maybe you can bring three components from another country, but by putting those three components together, the tariff rate for that new finished product is actually less than the single tariff charge than the three components themselves,” said iowa State Coumel of Iowa State Counsial’s supply chain supply chain RALSTON. ”
Ryan Carroll is the Director of Regional Business Development for the Greater Des Moines Partnership.
Free Trade Zones are also sometimes used to manufacture goods that use foreign components and then export, thereby obtaining production-related work and other benefits, but avoiding tariffs and other cost barriers.
Iowa has foreign trade zones in Des Moines, four cities, Iowa and Cedar Rapids and can be geographically expanded to form sub-regions around specific facilities. For example, the Des Moines Trade Zone, managed by the Greater Des Moines Partnership, includes a company in the Forest City of Bluffs and Winnibago Industrial.
“We can do something that basically enables us to expand the FTZ around the company's physical property in several counties outlined for this. Then we have a common area, which is Clive's warehouse, with some FTZ space.”
Carroll and Ralston said eligibility for a designated involves some expenses, such as the cost of establishing a facility that meets federal requirements.
“Obviously, there are some fees to establish a sub-region of foreign trade zones,” Carroll said. “There are application fees, legal fees, and other items must also be viewed in the types related to other items.”
One fee, he said, is to build a system to track all imported goods entering the facility to meet reporting requirements.
More: Ingersoll Avenue Chocolate Palace feels the weight of tariffs on imported Easter snacks
“Sometimes, these things can be front-end barriers to doing this because it has some time and cost, but ultimately, long term, strategically, if you’re importing something unless we have a free trade agreement with everyone,” he said.
Ralston said margin warehouse space is at its highest price twice as high as a regular warehouse, and the latest demand due to tariffs pushes those prices somewhere, which are four times as high as a typical warehouse.
But he said both bond warehouses and FTZ offer some different advantages for companies relying on imports.
More: Dongcun Outdoor Clothing Hedge, preventing tariffs by adding used goods to stock
“For me, the huge advantage in bond warehouses or foreign trade zones is that it creates more cash flow and maybe more cost certainty,” he said. “It provides companies with opportunities to stock without having to pay tariffs on fees that are still in the warehouse. This provides more cost certainty. I’m not saying cost benefits, it’s cost certainty, it just helps to be more certain in your cash position.”
He said owning the product, but not having to pay the tariff immediately, also gives companies the opportunity to manage market volatility, just like Trump’s inappropriate tariff policies. He pointed to the steel tariff, which has been reduced for some time recently.
“So if you have steel in a bonded warehouse or FTZ, you might (wait) and pay a lower tariff rate,” said Ralston.
More: New report says tariffs in April lost $90 million in April, raising interest rates by 304% starting in 2024
For companies that manage supply chains, market uncertainty may be more disturbing than actual tariffs, Larston said.
“When I talk to businesses in Iowa, it’s not necessarily the interruption of their tariffs, it’s the uncertainty behind supply chain decisions,” he said. “Supply chains are eager for certainty, and what we have now is a weird time of uncertainty.”
If tariffs are not changed frequently, companies will be in a better position to manage their effectiveness, Larston said.
“If it was just announced that this is the price of the tariff rate and that's what it will move forward and we won't change it, then manufacturing the supply chain can figure out the best way to deal with it,” he said. “But there is so much uncertainty and so much volatility that the supply chain is working very hard. Now, the uncertainty behind so many different decisions is causing huge harm to the supply chain.”
He said Iowa's economy could be affected by tariff policies.
More: Chicago Fed Chiefs: Iowa's manufacturing and agricultural work is greatly affected by tariffs
“Iowa is a state of production, not a state of consumption, so usually we will generate more production capacity than consumption,” he said. He added that the state “has suffered from tariff policies from both parties” because tariffs on raw materials and parts required to manufacture are required, but also hurt in agricultural product exports.
Tax flafation.org's latest report states that tariffs paid by Iowa importers increased by 304% from April 2024 to April 2025, the 11Th The biggest growth of all states.
Reuters contributed to this article.
Kevin Baskins covers the work and economy of the Des Moines Register. Contact him at kbaskins@registermedia.com.
This article originally appeared in the Altoona binding warehouse of Des Moines Register: JT Logistics, please customs
