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The Foreign Trade Zone is defined as a geographical location where the importation and exportation of good between two states in free of custom charges.  It is also commonly known by its other name, the Free Trade Zone.  Conducting trade through FTZ brings about a wide range of benefits.  These are advantages that come with trading through the FTZ.

 

 The exemption from paying duties is a major benefit that comes with trading in the FTZ.  Companies that use the Free Trade Zone avoid the length and cumbersome Customs duty process.  Companies that usually deal with goods that are easy to break or manufacturing processes that result in a large amounts of scrap will stand a good chance when working in the FTZ.  The custom duty for these good is not paid for hence making it easier to handle any losses.

 

 When importing goods through the use of warehouses or bonding programs for import, there is a wide range of challenges that arise.  For instance, the amount of time in which you can maintain a hold onto your goods is limited.  When importing goods in the FTZ, the merchandise will be able to remain within it for as long as need be.  This is due to the duty deferrals on imported goods until they leave the FTZ.

 

 There is a fee attracted by the processing of merchandise referred to as MPF or Merchandise Processing Fee.  For FTZ users, the only time when they have to pay their MPF for their goods is when the goods are entering US Customs territory.  There is a significant reduction of these charges when you are operating from within the FTZ.  Find more details on this topic on this link. Check out the ISCM Supply Chain to learn more. 

 

The users of FTZ can also avoid Quota.

  For example, the inputs that have the restrictions

 and regulations that come with being subject to Quota, can be manufactured into

 some that don't need it.  The users of he FTZ can get access to discounted inputs subject to quota that had been retained therein.

 

 One of the perks that come with trade within the Foreign Trade Zone is the availability of inverted tariffs. When finishing a production using FTZ manufacturing authorisation production has a lower US harmonized Tariff rate than the rates on foreign inputs;it may enter US customs territory at the duty rate that applies to its final condition.

 

Amongst other cash flow benefits are such as the quarterly payment of Harbor maintenance fee.