If you are involved in international product imports to U.S., it might be worth speaking to a 3PL to learn more about Foreign Trade Zone access. A 3PL can also offer benefits and operational efficiency in FTZs.
FTXs are designated areas that are under U.S. Customs and Border Protection's (CBP) surveillance and are usually considered to be outside of CBP territory after activation. They are close to CBP entry points or ports and represent the U.S. equivalent of what is internationally known as free trade zones.
Foreign Trade Zones (FTZ), allow import products to enter the country. There is no duty until the products arrive at their destination in the United States. FTZs are able to store products for longer periods. If products are not needed anymore, FTZs can be returned.
Trudy Huguet is the senior director of FTZ Product for GEODIS Americas. She stated that FTZ was an American government program that focuses on compliance. She stated that the program can be applied to all supply chains.
Huguet stated that, while foreign trade services can be great, 3PLs could also be a benefit for compliance and efficiency. 3PLs may have greater access to the data flow and operational systems required for multiple FTZ system. A 3PL might be able to service shared costs, such as warehouses and other facilities.
She explained that 3PLs are driven primarily by customer requirements such as customization and square footage. FTZ managers need services, staff, and team members in order to manage them.
According to US trade data it is crucial to respond to company needs during peak holiday season. She pointed out that companies used to manage their own departments in the past, but that meant that the company had to provide expertise. This made cross-training necessary. Huguet stated that 3PLs can be contracted to eliminate the "inherent risks" of these programs.
Huguet stated that the U.S.a U.S.FTZ program was a sister program of the global free trade zone. She stated that the U.S.a U.S.FTZ is unique in its operation and has a strong track record of compliance with all industries, producers, distributors, manufacturers and other stakeholders. They can benefit from this program if they import to the U.S.
Huguet stated that there are three steps required to join an FTZ. Consultation with the FTZ board is required for designation. After activation local customs and security, and construction of an operational section of the FTZ that runs parallel to in-house systems.
Paul Killea is the senior vice president for Freight Services Compliance & Security for Americas, GEODIS. He is responsible for the compliance of import and export regulations in the U.S. and Canada, and managing FTZ products.
Killea explained that compliance is the ability to ensure that customers and services are provided in a compliant way and adhere to all applicable regulations, domestic and international. It is our responsibility ensure that we have the correct processes and tools to audit, report, and make it visible to all parties, including the government, in order to show compliance.
Huguet says FTZs are more popular than ever because companies want to improve their supply chain and fix bottlenecks. FTZs offer a better solution to all problems.
They can also assist with government trade issues, such as China. US import data shows how companies dealt with the COVID-19 pandemic as well as port congestion. 3PLs that need help with storage or warehousing have access to FTZs.
Huguet admits that port congestion and COVID can sometimes make merchandise not move as quickly or take longer to get there. FTZ certainly has helped.