By Vedrana Milakovic, MBA, CCS
Administrative Research Analyst of Planning & Economic Development at Citizen Potawatomi Nation
When speaking about Iron Horse, I am often asked how a certified customs specialist can benefit a company manufacturing from one of the central United States’ most strategically placed industrial parks.
Each manufacturing company is unique and belongs to different chapters in the World Customs Organization’s Harmonized Tariff Schedule. This classified coding system informs the customs authorities just what kind of goods are being imported into their country.
Why does that matter and how can a foreign trade zone help your company? The FTZ is legally considered outside the normal commerce zone of United States despite its geographic location in the U.S.
The benefit of FTZ is that a company can admit raw material to the zone in Non-Privileged Foreign status. Such merchandise is evaluated by U.S. Customs and Border Patrol based on its condition when it is shipped from the FTZ to the U.S. market for consumption, or use. During the raw material’s production into a product while in the FTZ, money normally paid for duties is instead available as liquid capital. Even better, the finished product that we ship out of the FTZ that will be bought by our customers cost me less in duties then my raw material!
Consider a company that is importing resin at 6.5 percent per kg to Iron Horse to produce pipes. Importing the whole pipe to the normal commerce area inside the country, your company pays 3.1 percent per kg. By importing the resin to Iron Horse and producing the pipe inside Iron Horse’s FTZ, I lowered my duty rate by 3.4 percent. So, if my company produces thousands of kg per year, the cost savings can be used for other expenses. If the pipe gets exported to another country from Iron Horse, my manufacturing firm pays zero duties on the pipe or resin because it never left the foreign trade zone and therefore never legally entered the normal commerce area of United States.
If it saves so much money, why does everybody not do it? The perception is that getting started costs a lot of money. The administrative work such as applying for production notification, writing a procedure manual, get security established, have a bond in place, etc. can be overwhelming. Then, once manufacturing is up and running, you have to track all FTZ zone entries and admissions and submit annual reports to the Foreign Trade Zone Board. Large companies can afford the expensive administrative staff to manage these burdens, but small and medium sized enterprises may not have that option.
Here is where Iron Horse comes into play. With an established FTZ, there is no designation required for a company looking to use the zone at short notice. We have a certified customs specialist on staff that does all the foreign trade zone paperwork for you as part of your presence here. We have all security and clearances established to help assist your company with Custom Border Protection and audits. Iron Horse’s foreign trade zone also boasts a rail and transload facility on-site , meaning your merchandise can be processed at the park and reduce delays in customs. When located at Iron Horse, the staff is here to guide you every step of the way.
If you’d like to learn more about Iron Horse Industrial Park or how our numerous tariff, custom and tax incentives can help your firm cut your bottom line, please send me a message or visit ironhorsecpn.com .
The post Manufacturers, importers and exporters save money at Iron Horse appeared first on CPN Iron Horse Industrial Park .
This article first appeared on the Iron Horse Industrial Park site at https://www.ironhorsecpn.com/?p=569.