Foreign Trade Zones (FTZs) are highly beneficial for businesses in a number of ways. FTZs are government-designated regions within the United States that are treated as if they’re outside of the country for customs purposes. These areas can help businesses with tariffs, fees, and more. It can seem too good to be true, but the savings and advantages are real.
STEWART Industries is excited to be opening an FTZ in Battle Creek, Michigan. Because of that, we wanted to share some of the advantages our FTZ will bring that will ultimately benefit your business.
1. Reduced Fees
Since FTZs are considered to be outside of the United States, they can help manufacturers and importers reduce or avoid fees on their goods. Items that come into the zone aren’t subject to fees until they leave it.
While components are in an FTZ, they can be manufactured into more complete goods. By working on imported items inside of an FTZ, businesses can greatly reduce, or in some cases completely remove, the import fees and tariffs they would otherwise have to pay.
Additionally, since FTZs can hold items for a business, the delay between importing the goods to the FTZ and exporting them to the business’ location can inherently reduce fees.
In the end, both of these features save businesses money and increase their bottom line.
2. Relief from Quotas
When some businesses import goods, they have to reach a quota before they can be officially imported. This can be difficult for companies, since it requires a large capital investment and the need for ample storage space.
Instead, FTZs allow organizations to store items until they reach a quota. That means, removing the burden of storage and allowing a company to spend smaller amounts of money over a longer period of time, instead of purchasing all at once.
Companies can also manufacture goods in FTZs into other commodities that might not be subject to quotas. This helps to keep the manufacturing process here in Battle Creek, instead of sending them overseas.
3. Simplified Logistics
Logistics costs can add up quickly for importers. Instead of sending goods from one port to another, businesses can have shipments delivered directly to FTZs after Customs approval.
Additionally, when businesses, FTZs, and customs work together, seven days’ worth of imports and exports can be filed under a single entry. This saves time, hassle, and money for companies who do a substantial amount of shipping and receiving.
Processes like these decrease logistics spend and enable businesses to use that money in a more impactful way.
FTZs enable domestic businesses to lower expenses and keep manufacturing jobs here in Battle Creek. By utilizing these regions, local organizations and companies can function more effectively and continue to bolster the local economy.
Do you have specific questions about how an FTZ can benefit you and your business? Contact us today to connect with a member of our FTZ Division. We’d love to talk.