UPS Foreign Trade Zone Solutions

A physical, secure area within U.S. Boundaries, often located in or adjacent to a Port of Entry. For U.S. Customs purposes, an FTZ is considered outside of the Customs territory of the United States, for purposes of paying U.S. customs duties.

Utilizing an FTZ can create a competitive advantage within different industries. Companies who are seeking benefits of duty deferral, duty elimination, inverted tariffs, supply chain efficiencies, and consolidating entries would be great candidates for the FTZ Program.

Both foreign and domestic merchandise which are not prohibited by law or the FTZ Board may be admitted into a foreign trade zone. Foreign trade zones may also admit certain merchandise which would typically not be allowed until proper approval is in place. For example, a company waiting on FDA approval may admit their non-FDA approved goods into the FTZ while they obtain/wait for FDA approval.

An FTZ can be used in the same manner as typical warehouse and manufacturing operations. Typical activities allowed in an FTZ include: product assembly, testing, sampling, repackaging and relabeling, manufacturing, storage, consolidation, sorting, scraping, processing, destroying and other activities as approved by CBP and the FTZ Board.

There are two types of FTZS – General Purpose Zones and Subzones. The type of zone a company would establish is dependent upon multiple factors and should be vetted prior to selecting.

A Gateway FTZ is a standard FTZ located at a port that allows shippers to process multiple shipments from multiple origins as a single weekly entry to help minimize time in transit, specifically for air freight. The main advantage in a gateway FTZ is a single merchandise processing fee covers the entire week’s worth of shipments, and the shipments are prepared and processed as one customs entry.

UPS Zone Solutions is a full-service consulting group for FTZs. UPS can provide feasibility reviews, consulting services to help designate and activate facilities for FTZ, support on Notification of Production Authority Requests and general FTZ advice. UPS can also provide FTZ-specific audits for zone operators/users which look at the process, facilities, security, and documentation/recordkeeping of the FTZ. Additionally, UPS can provide managed services to FTZ operators/users through the systematic administration of their FTZ.

Whenever a shipment is moving within the US but has not yet cleared customs, it needs to travel in-bond. This allows goods to move between ports of entry and to US FTZs without entering into US commerce (no filing a Customs entry or paying import duty or fees).

In-bond shipments are a standard part of most supply chains, but to maximize the effectiveness of your duty delay and mitigation strategy with FTZs, consider coordinated in-bond management across carriers and transportation modes.