Foreign Trade Zones on the Boom
Foreign Trade Zones are “where it’s at!” Foreign Trade Zones are created to save you money and are becoming ever so popular these days. If your company is not currently involved in an FTZ, then you could tremendously change the way you import and export your product, leading to a big cost savings for your company.
Check out some statistics below from an American Shipper poll on May 14, 2014.
If you fall into any of these stats, it may be time to rethink the way you are managing your supply chain.
Benefits of a FTZ:
- Duty Exemption. No duties on or quota charges on re-exports.
- Delayed Payment. Duty Payment is delayed on goods that enter the U.S. market.
- Duty Deferral. Customs duties and federal excise tax deferred on imports.
- Inverted Tariff. Manufacturing-specific benefits – with case-by-case approval by the FTZ Board – that can include reduction of duties if a lower tariff rate applies to the finished product leaving the zone than the tariff rates that would have applied on foreign components (“inverted tariff”)
- Elimination of duties on waste, scrap, and rejected or defective parts
- Reductions in merchandising processing fees because zone users may be able to file a single customs “entry” (and pay a single fee) per week rather than making multiple entries during the course of a week
- Logistical Benefits. Companies using FTZ procedures may have access to streamlined customs procedures (e.g. “weekly entry” or “direct delivery”).
- Other Benefits. Foreign goods and domestic goods held for export are exempt from state/local inventory taxes. FTZ status may also make a site eligible for state/local benefits which are unrelated to the FTZ Act.
Luckily, Scarbrough has experts on staff to assess your current situation and tell you if and how you can save money by using an FTZ. Are you already using an FTZ? Scarbrough can also help you utilize it to its fullest, streamlining your processes and creating some substantial useful data.
To learn more about FTZ, please email Kevin Ekstrand at firstname.lastname@example.org.