Atlanta, GA
- 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.”
For additional information, visit UPS Zone Solutions, and to learn more about potential savings, visit our FTZ Savings Estimator.
*Zone Solutions is a service offered by UPS Trade Management Services, Inc.
About UPS
UPS (NYSE: UPS), one of the world’s largest package delivery companies with 2019 revenue of $74 billion, provides a broad range of integrated logistics solutions for customers in more than 220 countries and territories. The company’s more than 500,000 employees embrace a strategy that is simply stated and powerfully executed: Customer First. People Led. Innovation Driven. UPS is committed to being a steward of the environment and positively contributing to the communities we serve around the world. UPS also takes a strong and unwavering stance in support of diversity, equity and inclusion. The company can be found on the Internet at www.ups.com, with more information at www.pressroom.ups.com and www.investors.ups.com.