- Consulting, management and fulfillment services create a turnkey Foreign Trade Zone (FTZ) solution
- UPS converts four major U.S. gateways into FTZs
- 42 UPS-operated distribution centers in U.S. available for FTZ
UPS (NYSE:UPS) today announced the recent integration and expansion of Zone Solutions* within its customs brokerage, warehousing, logistics and transportation business. The addition gives UPS a portfolio of Foreign Trade Zone (FTZ) consulting, management and fulfillment services.
UPS also converted four of its major U.S. international air freight (IAF) gateways into FTZs: Chicago (ORD), New York (JFK), Dallas (DFW), and Los Angeles (LAX). The expansion extends UPS’s FTZ-related capabilities beyond warehousing and distribution to create a comprehensive FTZ solution for helping clients manage the end-to-end process from dealing with customs to inventory control. Any of UPS Global Logistics’ 42 U.S. distribution centers can become FTZs.
“UPS is constantly searching for ways to add value while decreasing the cost and complexity of our customers’ supply chains,” said Jeff McCorstin, President of UPS Global Brokerage and Customs. “Adding FTZs enables customers to streamline compliance validations to mitigate risk and promote savings on their IAF shipments by leveraging FTZ-designated gateway facilities.”
The strategic utilization of the FTZ program provides opportunities for duty elimination on exports and scrap, as well as duty deferral on foreign status inventory in an activated FTZ.
According to the most recent data from the Census Bureau (2017), import duties totaled $33.1 billion – equal to 1.4% of the total value of all imported goods, and 4.7% of the value of all imports subject to duty. For businesses looking to grow and expand, proper management and payment of duties is critical.
Importers in industries such as consumer electronics, automotive, apparel, and footwear historically pay high duty rates when importing their products into the country. Foreign Trade Zones help reduce duties, import taxes and other fees by utilizing special regulations that provide potential cost-saving measures through duty deferral, duty elimination, tariff inversion, fee consolidation and streamlined U.S. Customs procedures.
Additional potential benefits of FTZs include:
- Duty deferral – store merchandise in an FTZ and delay paying duty until goods enter into U.S. commerce
- Duty elimination - pay no duty for goods not entered for consumption in the United States when exporting goods out of the zone or when destroying goods no longer needed
- Inverted tariff shift - the use of kitting or manufacturing techniques in the FTZ may result in a new tariff classification with a lower duty rate
- Fee consolidation - entries to U.S. Customs are consolidated into one weekly entry
- Time to market - goods that have not yet received FDA approval, or approval from another government agency, may potentially be housed in an FTZ in anticipation of approval, and ready for market
- Regulatory compliance - systematic monitoring of FTZ transactions helps drive consistent processes
UPS Global Customs Brokerage processes almost 25 million import clearances each year in the U.S. alone, making it one of the world’s largest customs brokers.In 2017, UPS acquired Zone Solutions, a 20-year leader in FTZ services, to bolster its global trade portfolio and provide a wide range of services for companies considering a FTZ program.
“This acquisition was in direct response to our customers’ growing needs,” McCorstin added. “Zone Solutions’ talent and expertise means UPS now provides leading FTZ solutions offerings.”
*Zone Solutions is a service offered by UPS Trade Management Services, Inc.
UPS (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including transporting packages and freight; facilitating international trade, and deploying advanced technology to more efficiently manage the world of business. UPS is committed to operating more sustainably – for customers, the environment and the communities we serve around the world. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. UPS was awarded America’s Best Customer Service company for Shipping and Delivery services by Newsweek magazine; Fortune magazine’s Most Valuable Brand in Transportation; and top rankings on the JUST 100 list for social responsibility, the Dow Jones Sustainability World Index, and the Harris Poll Reputation Quotient, among other prestigious rankings and awards. The company can be found on the web at ups.com or pressroom.ups.com and its corporate blog can be found at ups.com/longitudes The company’s sustainability eNewsletter, UPS Horizons, can be found at ups.com/sustainabilitynewsletter . Learn more about our sustainability efforts at ups.com/sustainability . To get UPS news direct, follow @UPS_News on Twitter. To ship with UPS, visit ups.com/ship.
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