If you import, chances are you have investigated the potential benefits of operating in a Foreign Trade Zone (FTZ).
JAXPORT is the host and driving force behind FTZ No. 64, Florida’s busiest zone by designated acreage and number of active sites. JAXPORT’s FTZ handles a variety of cargoes including food products, vehicles, over-dimensional cargo, leather goods, beverages, furniture, housewares and crafts, and more.
Along with room to grow, fast access to market, and a large, skilled workforce, FTZ No. 64 is one of the top factors attracting big retailer distribution centers to Jacksonville according to Lisa Diaz, JAXPORT’s Manager of Foreign Trade Zone No. 64 & Logistics Services.
With the opportunity to take advantage of the zone’s substantial savings and a grantee staff offering direct operational experience, the list of household names choosing Jacksonville continues to grow.
FTZ NO. 64
FTZ No. 64 is spread across 5,000 acres in Northeast Florida. About 400 of those acres are activated, leaving vast opportunities for more customers. Most of the activated space is located within distribution centers.
FTZ No. 64 is approved to operate under the Alternative Site Framework (ASF) which greatly simplifies the process for new site applications and extends the zone to include eight counties within Northeast Florida. Storage and distribution sites located within Baker, Bradford, Clay, Columbia, Duval, Nassau, Putnam and St. Johns counties can be approved in 30 days or less under the ASF. Manufacturing plants can be approved within about four months.
Merchandise imports subject to higher duties tend to find great value in an FTZ. Diaz said that the current era of antidumping/Countervailing Duty uncertainty is making the FTZ more attractive to some businesses. If a company is unsure of its product’s turn time, if it does not plan to usethe product right away or if a duty rate is likely to change, using an FTZ affords flexibility to stockpile for a while, or otherwise strategically time an entry, while still having control of the cargo. Diaz said that gives a company leverage and allows it to improve margins.
A number of new companies are anticipating approval of their FTZ applications.
Bacardi USA, Inc.
The liquor and spirits distributor is expanding its FTZ operation in Jacksonville following an increase in cargo volumes. Bacardi uses its zone space for kitting gift packs.
CIL Forwarding got its start in a small office at JAXPORT more than two decades ago. Now a full-service 3PL, it initiated an FTZ application to continue to deliver innovative solutions.
Bridgestone Americas, the global tire and rubber-related product giant, has been granted permission to operate in FTZ No. 64. Activation of their FTZ is expected before mid-year.
ESTABLISHED ZONE ENTERPRISES
jf moran moves Mercedes-Benz autos through JAXPORT. The company’s Vice President of Southern Operations Lynn Baltz said, “Our site located in FTZ No. 64 is a little different than your typical zone. We are set up to strictly handle vehicles that will be exported. We have seen an increase in FTZ activity and recently had to expand the site due to regulations that went into effect last November. Vehicles that move under Customs bond have to be exported within 15 days after arriving at the port. There are many trade lanes that only have a vessel once a month so the FTZ is very beneficial.”
Baltz added, “As a Customs Broker-Freight Forwarder, we have the opportunity to work with many ports and FTZs. JAXPORT actively promotes and educates the community on the advantages and savings of an FTZ. I believe there will be even more opportunities for companies to utilize FTZs in the future due to increased tariffs and Antidumping/Countervailing Duty cases.”
Rhonda Overton-Reilly represents Jacksonville’s Mazda FTZ operation. She said duty deferral and duty elimination (on re-exports) are
Overton-Reilly described the newly increased Merchandise Processing Fee (MPF), and the savings to be had by processing weekly rather than daily entries in the FTZ. The total savings equates to approximately $100,000 annually for the company.
As the MPF increases, the bottomline advantage of an FTZ site also increases.
North Florida Warehouse FTZ
Chris Sloope is Vice President of Sales and International Operations for North Florida Warehouse FTZ as well as FTZ administrator for the company. He said the FTZ program allows the company to provide additional services, beyond commercial warehousing. “Our clients benefit from the deferred taxes of the FTZ program, which allows them to store product in our facility,” said Sloope. The client can then distribute internationally, avoiding U.S. duties, or sell domestically, paying duties/taxes only on the product that has been sold. This improves cash flow and optimizes shipping costs.
North Florida Warehouse FTZ is thriving. “In the last year, we have grown our FTZ 3PL business to include a 3.7 acre outdoor foreign trade zone,” said Sloope. A 15-acre expansion is also in the works.
Scott Perry is President of Global Logistics for 3PL Suddath Global Logistics, a provider for both domestic and international clients. He said, “Our ability to offer FTZ activated space in our bonded warehouses not only increases our ability to reduce our client’s costs, but also enables us to offer more flexible import solutions to our customers.”
Perry said, “Suddath is currently in the process of expanding service capabilities for clients on all fronts, including FTZ offerings. As our customer supply chains globalize further, we are developing solutions to help them anticipate future needs, while also achieving their current business objectives. The relationship we have with JAXPORT,and the operation of multiple FTZs, are examples of our focus on innovative solutions that go beyond traditional logistics.”
“Another added benefit of our activated FTZ space is it expands the ability of Suddath Global Logistics to customize our 3PL services to our client’s specific needs,” said Perry.
THE MAIN ADVANTAGES
JAXPORT has put in place sophisticated programs to market FTZ advantages, and the successes of businesses within the FTZ are mounting. As those enterprises realize more and more benefits, and reinvest in their operations and assets, the results are additional jobs, economic spending and new business opportunities for all.
Story by Lori Musser
This article appeared in the Summer 2018 issue of JAXPORT Magazine.