Unraveling the Benefits of Foreign-Trade Zones and Customs Bonded Warehouse

Posted by Port City Logistics on May 11, 2023 2:21:53 PM

Shipping managers who work for U.S. companies and global manufacturers are probably familiar with Foreign-Trade Zones (FTZs). These facilities, which are under the supervision of the U.S. Customs and Border Protection (CBP), are located near ports of entry and are the U.S. equivalent of free-trade zones. FTZs were created during The Great Depression, under the 1934 Foreign-Trade Zones Act, which was designed to help protect U.S. business interests who suffered immensely from the collapse in foreign trade. FTZs facilitate the controlled movement of foreign and domestic commodities in and out of the United States. And since the 1930s, U.S. companies who import or export goods have received protections from FTZs in the form of trade exemptions like reduced taxes, fees, and custom duties. 

There are other major economic incentives provided by FTZs. For example, there are no limitations for how long U.S. companies can hold their stored commodities within FTZs, meaning that shippers can use these areas as holding grounds to offset volatile market forces, or to anticipate seasonal swings in consumer demand during peak shipping season. Global shippers benefit when they partner with a single source logistics provider with industry knowledge of how to effectively use FTZs. By using FTZs strategically, companies can streamline their operations, cut down on their transportation costs, and gain visibility over their entire supply chain. This article takes a look at the benefits of FTZs, custom bonded warehouses, and customs freight stations, showing readers how they can use these zones to their advantage.

Foreign-Trade Zones: A Closer Look

FTZs are located within a 50-mile radius at U.S. ports of entry. There are two different types of FTZs, a general purpose FTZ, which consists of warehouses and transloading facilities that companies can use for long-term or short-term storage. Special purpose FTZs serve as spaces that accommodate larger corporations like oil refineries and manufacturing plants. Companies who use special purpose FTZs are responsible for all costs used to operate and maintain these facilities. 

What are the Benefits of FTZs?

There are several advantages offered to companies who utilize foreign-trade zones. This section will list some of the protectionist measures that are designed to give U.S. businesses incentives for international trade. According to the Capital District Regional Planning Commission of New York, FTZs provide companies with:

Duty Exemption

Companies avoid custom duties when utilizing Foreign-Trade Zones. Companies can also use FTZs as places to safely destroy their products, and will avoid paying duties on goods deemed as spoiled.

Duty Deferrals

There is no limit for how long companies keep their commodities stored in FTZs, and the CBP will not levy any duties or taxes on goods until they leave the zone and enter U.S. territory. This gives shippers the advantage to warehouse their merchandise indefinitely and without penalty in doing so. There are also certain commodities that are exempt from state and local taxes


The Customs Border Patrol offers security protection against stolen merchandise, which provides companies with assurance that their goods will be protected against possible theft. This will reduce a shipper’s insurance costs, and contribute to a reduction in their overall transportation budget.

Merchandise Processing Fee Reduction

Companies who use FTZ only have to pay a merchandise processing fee on goods that enter U.S. territory. Zone users can file a single entry application for all commodities that enter within a seven day period, instead of having to pay a fee on every single container that arrives. This helps reduce custom brokerage fees.

The Advantages of using Port City Logistics for FTZ Services

When it comes to understanding the benefits of using FTZs, most small and large shippers turn to third-party logistics providers to help manage their transportation and navigate around some of the common disruptions that hamper the logistics industry. Particularly, it is important to partner with a transportation provider that offers a variety of value-added services that can accommodate the most basic and complex shipping requirements. Whether your company needs to pull a single pallet off a container and ship it LTL across the country, or provide long-term or short-term storage options, companies like Port City Logistics provide shippers with the flexibility needed to handle just about any transportation needs. 

Fully-integrated single source logistics providers are built to manage every single step within your company’s supply chain, with the ability to provide tracking updates on containers over water, port drayage, port-to-door, specialized transport, transloading, and over the road transportation. Instead of using multiple vendors, a single source company like Port City Logistics creates a single source of contact, helping to streamline communication and simplifying the daily tasks of shipping managers across the country.

Port City Logistics Warehouse and Distribution Services

Last week, we wrote about how the logistics industry is experiencing a widespread shortage of workers in warehouse and distribution centers, which is creating backlogs on customer orders, increasing loading and unloading times, and contributing to increased detention and demurrage fees. As a result of these labor shortages, many shippers are turning to 3PLs who own their own brick and mortar warehouse and distribution centers that are located within FTZs across the United States. Port City Logistics, for example, operates one of the largest warehouse and transloading facilities in the state of Georgia, and offers customers over 4 million square feet of space to fulfill long-term or short-term storage.

Distribution Services:

  • Cross-docking
  • Transloading
  • Bulk Transfers
  • Stretch Wrap and Palletizing
  • Labeling
  • Pick and Pack Services
  • Crating Services
  • WMS Web-Based Inventory System with Real Time Visibility

Warehouse Features:

  • FTZ and Custom Bonded
  • Food-Grade Warehousing
  • DOT/IMDG Hazmat Certified
  • EDI & Barcoding Equipped
  • Ramped Doors for Ground-Level Loading
  • Leveler Loading Docks for All Equipment Types

Customs Bonded Warehouse (CBW)

Global shippers are probably familiar with bonded warehouses as secure sites that are conveniently located near a port of entry that are regulated by the CBP. Shippers can use these spaces for the long-term or short-term storage of their commodities. They provide shippers with the type of flexibility they need to navigate around the market forces that create supply chain disruptions throughout the year. Port City Logistics offers customers CBW services, which provides a number of incentives for importers and exporters. For example, customers do not need separate accounts at separate warehouses to move their cargo from a restricted area to a loading zone for transport. With 11 different custom bonded warehouses, Port City Logistics provides customers with plenty of space for dutiable landed imports which can be securely stored before re-export or release.

Single source logistics providers like Port City Logistics own and operate their own fleet of trucks and equipment, meaning that customers are never left without a truck for their local and regional shipments. Upon arrival at the port, Port City Logistics will coordinate the collection of your container and transport it to their centrally located bonded warehouse as quickly as it clears customs. Port City Logistics’s bonded warehouse is secured, customs approved, and fenced with 24/7 security that is supervised by customs authorities. With their dedicated team of warehouse staff and operations representatives standing by, your shipments will be quickly cleared through customs and ready for storage or transloading. In 2022, Port City Logistics handled over 90,000 containers out of the Port of Savannah alone, demonstrating why customers turn to Port City Logistics for port drayage and their bonded warehouse needs.

Shippers Turn to Port City Logistics to Streamline Their Global Supply Chains

For over twenty years, Port City Logistics has built the reputation of being the trusted source to help shippers take advantage of FTZs located throughout the United States. Port City Logistics provides the type of value-added services that are designed to accommodate the unique operational requirements that each company has within their supply chain. As an asset-based provider that owns 11 different warehouse and transloading facilities strategically located near major ports of entry, Port City Logistics is built to streamline supply chains, and remove the hassle of working with multiple vendors. As a fully-integrated single source logistics provider, Port City Logistics provides customers with dedicated capacity, real-time visibility on all shipments from street to water, and the flexibility to store their products in their bonded warehouses. No matter what the job, Port City Logistics gets it done. Contact an expert at Port City Logistics today!

Topics: Warehousing