Foreign trade zones (FTZs) are secure areas under U.S. Customs and Border Protection (CPB) supervision that are generally considered outside CBP territory upon activation. Foreign trade zones are the U.S. version of international “free-trade zones.”
What is a foreign trade zone (FTZ)?
Foreign trade zones (FTZs) are secure areas located in or near a US Customs and Border Protection (CPB) port of entry. Goods in these zones are considered outside U.S. customs territory, which allows businesses to eliminate, defer, or reduce duty payments on goods that are manufactured, assembled, or stored for import or export. Once goods leave the FTZ for distribution, applicable duties are paid.
What is the purpose of a foreign trade zone?
Foreign trade zones (FTZs) allow importers and exporters to remain competitive in a global trade market – especially entities that move a large volume of goods through U.S. ports. Businesses save money when they utilize FTZs as warehousing, manufacturing, assembly, or re-export hubs.
How do foreign trade zones benefit U.S. businesses?
Foreign trade zones (FTZs) provide flexibility for importers and exporters by providing a space to store and manage inventory. This allows businesses to streamline operations, manufacturing, warehousing, and finances. Overall, FTZs help businesses improve cash flow and streamline logistics.
Importers can utilize FTZs to:
- Defer or reduce import duties, fees, and taxes by holding and managing goods within the zone before sending into domestic or global markets.
- Simplify and speed up customs procedures through FTZ-specific processes that reduce paperwork and expedite the movement of goods.
- Reduce inventory storage and processing costs by providing a strategic location to hold, consolidate, deconsolidate, or manufacture products.
Exporters can utilize FTZs to:
- Eliminate re-export duties when commodities that use imported components are manufactured or assembled within an FTZ zone.
- Enhance operational oversight by providing a controlled environment to assemble, manufacture, and package goods meant for export into global markets.
What are the advantages of foreign trade zone warehouses?
Who can use foreign trade zones?
Foreign trade zones (FTZs) are utilized by manufacturing companies, retailers, distributors, customs brokers, logistics service providers (LSPs), freight forwarders, and transportation companies.
Where are foreign trade zones located?
Foreign trade zones (FTZs) are located in every state and several U.S. territories, typically near major U.S. ports of entry. To find an FTZ located in an optimal region, visit the CPB website, contact your local port authority or economic development group, or consult with a customs broker.
While there is no official free trade zone map available from the US CPB, the International Trade Administration provides a searchable database of FTZs here.
See How MercuryGate Streamline Customs Operations
How MercuryGate Supports Shipments Involving Foreign Trade Zones
With so many levels of complexity across the supply chain, leveraging MercuryGate technology and expertise streamlines customs clearance and compliance for imported goods and exports destined for international markets.
A transportation management system (TMS) is a powerful tool for importers and exporters as they navigate international shipping, manufacturing, and order fulfillment. MercuryGate TMS automates processes with expertly designed workflows that:
- Generate required documentation for filing and completing customs tasks.
- Estimate the cost of import and export duties and fees.
- Monitor compliance across inventory, transportation, and warehousing.
Utilizing FTZs for manufacturing, assembly, and inventory management is beneficial in many ways. Successful retailers, freight forwarders, and distributors integrate connected technology and end-to-end visibility across their supply chain – and especially in FTZ operations – to optimize inventory management and freight movement.
MercuryGate TMS drives business results by helping customers address visibility and planning challenges head on:
- Inventory visibility across all locations, including within FTZs.
- Transportation planning that streamlines compliance and clearance processes.
- Demand forecasting by location to help drill down into performance and build better strategies.
Start optimizing your international supply chain with expertise from MercuryGate.
