Global Logistics and the Foreign-Trade Zone Program Steve Schellenberg IMS Worldwide 281 554 9099 [email protected].

Global Logistics and the Foreign-Trade Zone Program

Steve Schellenberg

IMS Worldwide

281 554 9099

[email protected]

Hong Kong, China

Singapore

Prince Rupert, Canada

CharlestonNorfolk

New York

Los Angeles

Colima, MexicoEnsenada, Mexico

Global Trade Routes

Source: Individual Port Websites

Port of Entry2012 TEU Volume

2012 TEU Growth over 2011

LA/LB 14,123,376 1.70%

NY/NJ 5,529,211 .30%

Savannah 2,966,221 0.7%

Oakland 2,344,424 0.1%

Houston 1,922,479 3.0%

Hampton Roads 2,105,887 8.92%

Seattle 1,869,492 -9.2%

Tacoma 1,711,133 8.62%

Charleston 1,514,585 9.6%

Port TEU Volumes

Seattle/Tacoma

Los Angeles / Long Beach

Lazaro Cardenas

Oakland

Houston

Savannah / Charleston

NorfolkColumbus

Prince Rupert

Mexico City

Intermodal Routes to Major Inland Ports

Dallas/FW

Atlanta

Memphis

Chicago

Kansas City

NY/NJ

Cent. PA

Jacksonville

Vancouver

What Is an FTZ? An area inside the United States that is

designated as being outside Customs Territory. Where items are brought into the Zone

duty free.

Where Customs duty is determined when the merchandise leaves the Zone.

What is a Zone Site?

An Industrial Park

An Industrial Development Inside a Port or Airport

A Company’s Facility

What Can I Do in an FTZ? Distribute Store Test and Inspect Repack Assemble Repair Manufacture

Duty Deferral

Duty is not paid when an item enters the Zone An item enters the Zone in January

Duty is paid when the item leaves the Zone The item leaves the Zone in April

Four months of duty deferral

Duty Elimination

Testing and inspection is conducted in the Zone duty free All rejected and destroyed items are duty

free Exports are duty free

All items exported from the Zone are duty free

Duty Reduction

For manufacturing Zones The Zone allows a company to choose the

lowest duty rate associated with its components and finished product(s)

A company imports 3 components A has a duty rate of 10% B has a duty rate of 9% C has a duty rate of 8%

Duty Reduction The company’s finished product has a 5%

duty rate

The company will pay for the value of the components at the finished product rate A from 10% to 5%

B from 9% to 5%

C from 8% to 5%

This reduction means a savings of 5% to 3%

Merchandise ProcessingFee Savings Each entry into the United States is

assessed a Merchandise Processing Fee (MPF)(valorem fee of 0.3464 percent)

Foreign-Trade Zones are allowed one entry per week

The MPF is collected on that one entry

How to Become an FTZ? Application

For manufacturing For land associated with the site

Activation Approval by Customs

FTZ Activation Package Background Investigation Concurrence Letter from Grantee Procedures Manual Security Survey Blue Print Drawing of Activated Area Operator’s Bond

FTZ Operations SOP Development Operational Training Audit Program Zone Administrative Training Inventory Control and Record Keeping

System