US SHIPPERS are increasingly turning to foreign trade zones (FTZs) in search of relief from us tariffs, reports New York's Journal of Commerce.
FTZs are designated domestic locations, typically close to a port of entry, where shippers can store cargo that has not officially entered the US while deferring payment of tariffs and duties.
The sites, administered by US Customs and Border Protection (CBP), can also be used for processing or manufacturing.
Interest in the FTZs has increased dramatically since President Donald Trump implemented tariffs in April, with responses to inquiries for FTZ space surging by more than 500 per cent, according to FTZ consulting firm IMS Worldwide.
'The demand for FTZs is growing, so we're going to need to turn more warehouses into FTZs,' said IMS Worldwide CEO Curtis Spencer. 'The demand for FTZ space is going to increase, because people need more bonded space. The demand right now for bonded warehouses and foreign trade zones is off the charts.'
Shippers must have an established framework for FTZs to use the facilities, which means the shipper must have FTZ space booked months in advance or operate the FTZ themselves, a bureaucratic process that can take up to two years.
As bonded warehousing space becomes increasingly unavailable, FTZ's could offer importers longer-term solutions and savings if used correctly, said Mr Spencer.
'Foreign trade zones are just really the only way to mitigate and to manage tariff pain,' he said. 'You're going to feel some pain, but how do you get the silver lining on that pain? Foreign trade zones. They allow you to operate exactly like you do today without slowing your supply chain.'
SeaNews Turkey
FTZs are designated domestic locations, typically close to a port of entry, where shippers can store cargo that has not officially entered the US while deferring payment of tariffs and duties.
The sites, administered by US Customs and Border Protection (CBP), can also be used for processing or manufacturing.
Interest in the FTZs has increased dramatically since President Donald Trump implemented tariffs in April, with responses to inquiries for FTZ space surging by more than 500 per cent, according to FTZ consulting firm IMS Worldwide.
'The demand for FTZs is growing, so we're going to need to turn more warehouses into FTZs,' said IMS Worldwide CEO Curtis Spencer. 'The demand for FTZ space is going to increase, because people need more bonded space. The demand right now for bonded warehouses and foreign trade zones is off the charts.'
Shippers must have an established framework for FTZs to use the facilities, which means the shipper must have FTZ space booked months in advance or operate the FTZ themselves, a bureaucratic process that can take up to two years.
As bonded warehousing space becomes increasingly unavailable, FTZ's could offer importers longer-term solutions and savings if used correctly, said Mr Spencer.
'Foreign trade zones are just really the only way to mitigate and to manage tariff pain,' he said. 'You're going to feel some pain, but how do you get the silver lining on that pain? Foreign trade zones. They allow you to operate exactly like you do today without slowing your supply chain.'
SeaNews Turkey
