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Foreign Trade Zones


Some high-volume merchandise programs may benefit from the use of Foreign Trade Zone space. Kelly Direct works with three of these facilities.

What is Foreign Trade Zone Space?

Foreign Trade Zone space is an area of a country where typical trade barriers, such as duties, taxes, tariffs and quotas, are lowered to encourage new business and foreign investments.  Merchandise that lands at, and is stored in, an FTZ warehouse can typically save 3-10% or more on the cost-of-goods.

Most FTZís are located in developing countries (e.g. Brazil, El Salvador, Honduras, Kenya, Guatemala), making it difficult and risky for domestic corporations to benefit.  But, Kelly Direct now offers the cost reduction benefits of FTZ space right here in the United States ñ in Southern California, in fact!  

How Does It Work?

Duty Deferral:  Imported products admitted to the FTZ are not entered into the Customer territory until their withdrawal from the FTZ.  Therefore, users obtain a cash flow savings by deferring duties until the merchandise leaves the FTZ for consumption by the US consumer.

Duty Elimination:  Imported products admitted to the FTZ and subsequently destroyed in the FTZ or exported from the FTZ are not subject to Customs duties.

Duty Reduction:  Imported products admitted to the FTZ can be placed in a special status that allows the merchandise to be classified and appraised in its condition as withdrawn from the FTZ.  For manufacturers, this means that imported components with a higher duty rate can be classified and appraised in its finished product form, with a potentially lower rate of duty, thereby reducing the amount of duty owed.

Weekly vs. Daily Entries:  Brokers fees and merchandise processing fees paid may be significantly reduced by filing weekly entries as opposed to daily manifests or one per shipment.

Fast Track Your Containers:   Users may obtain permission from Customs to move merchandise directly from the port of arrival to the FTZ, avoiding delays at congested ports and minimizing inspection time at the ports.

How Do I Get Started?   

While the application and approval process for becoming a Certified Free Trade Zone space is a long (up to two years), and expensive ($100K+) process, Kelly Direct can provide you with access to the savings and benefits of a Certified FTZ facility without becoming one.  A simple application is all that is necessary to take advantage of this opportunity.