Foreign Trade Zone (FTZ) Benefits
There are many foreign trade zone benefits that we will highlight, but lets begin with the definition. Foreign Trade Zones are secure areas under U.S. Customs and Border Protection supervision that are generally considered outside the commerce of the United States. Located in or near ports of entry, they are the United States’ version of what are known internationally as free-trade zones.
These designated locations are where companies can use special procedures that help encourage U.S. activity by allowing delayed or reduced duty payments on foreign merchandise. There are also other benefits such as savings to be found in utilizing a FTZ. Some examples of these savings are:
- Pay Weekly Entry Fees instead of by container of imported goods
- Harbor Maintenance Fees are now paid quarterly
- No Duty on Waste, Scrap or Re-Exported goods
- Higher security of FTZ often leads to lower insurance rates
- Goods flow through FTZ faster than non-zone entries, increasing speed to market
Manage Cash Flow Better
Not to be overlooked in any Total Cost of Ownership calculation is the affect on cash flow that duty deferral can have. For instance, if you have a large Minimum Order Quantity or gain a price break by Buying in Bulk, duty deferral in a FTZ allows you to save operating capital you need to run your business.
JBE, Incorporated is proud to run a FTZ that has helped its customers manage their supply chains and costs. Let’s discuss the savings we can offer your company and the exact benefit our FTZ can bring your bottom line.