Foreign-Trade Zone Case Study 1
The Challenge
A manufacturer of small-scale farming equipment and tools wished to set up a national distribution center located in the Midwest. The company was exploring how the establishment of a Foreign-Trade Zone might benefit its operations. The secure, designated areas within the U.S. allow goods to be imported, stored and processed without being subject to the typical duties and taxes until they hit the market. Locating operations within an FTZ could significantly reduce operational costs for the company by allowing it to defer, reduce or even eliminate costly duties.
Our Solution
The company turned to Elaine Boch, Manager of Specialty Services at Springline. With decades of experience establishing FTZs and counseling clients regarding ongoing compliance, the Springline team first performed a cost-savings analysis to determine if an FTZ was advantageous. Next, the team completed a formal application to the U.S. Foreign-Trade Zone Board and then proceeded to work with the company to implement the necessary tracking processes related to inventory compliance and Customs reporting. The company also needed to implement a new software tracking system and hire a new employee to run and manage the software.
Client Impact & Results
After completing the year-long process of applying and preparing the company for the required process changes, the Springline team activated the zone with U.S. Customs & Border Protection. Since opening the distribution center in the newly established Foreign-Trade Zone, the company is now realizing $1.5 to $2 million a year in savings.
