FTZ BLOG

News, trends and best practices in the import/export and Foreign Trade Zone businesses

Advantages of Using a Foreign Trade Zone: Cash Flow

 

by Zachary Finnegan, International Trade Advisor

This post is the first in a series of posts about the benefits of doing business in a Foreign Trade Zone. Western New York Foreign Trade Zone Operators Inc. manage the Foreign Trade Zone in Lackawanna, NY, ten minutes from the Peace Bridge between the U.S. and Canada.  

For importers in the U.S., there are tremendous advantages to utilizing a foreign trade zone. Because of the way FTZs are regulated and bonded, entering a foreign trade zone is legally different than physically entering the U.S., from an import perspective. Which means that until your merchandise leaves the facility, it is still considered international freight.

This is an important benefit for a couple reasons:

For cash flow purposes, since customs duties are paid only when imported merchandise is officially entered into U.S. customs territory, you’re not paying out-of-pocket costs related to duties until the time when your customer or distributor is ready for the product.

Also, since merchandise may be held in inventory in an FTZ without customs duty payment until the time that it’s needed, utilizing an FTZ offer a significant advantage for just-in-time manufacturing. Your customers won’t have to stock inventory until they’re ready for it, and can bypass the frustrations surrounding long waits at the border.

There are many benefits to using a Foreign Trade Zone. For easy reference, check out our web site at www.wnyftz.com, and then give us a call at (716) 823-2142, and we’ll walk us you through how WNYFTZ can benefit your company specifically.