Businesses involved in importing global products to the United States and considering the use of a Foreign Trade Zone (FTA) in their operations may want to consult with a third-party logistics company for an in-depth review of access to a free zone. can mean to them and what a 3PL could offer in terms of benefits and efficiency while operating in a free zone.
According to US Customs and Border Protection (CBP), FTXs are secure areas under agency oversight that are generally considered outside of CBP territory upon activation. Located in or near CBP ports of entry, they are the US version of what are known internationally as free trade zones.
Imported products can be brought into the country through a free zone and no duty is paid on these products until they are moved to their destination in the United States. Products can remain or be stored in free zones for long periods of time and if it is determined that these products are no longer needed, they can be returned duty-free.
“Most importantly, the FTZ program is a compliance-driven US government program and is unique in that it covers the entire supply chain,” said Trudy Huguet, senior director of FTZ products at GEODIS in America, in an interview.
International company with a strong presence and operations in North America, GEODIS is a logistics company that offers services in several sectors of activity: supply chain optimization, transport commission, contractual logistics, distribution and express and transport road.
Huguet indicated that the expertise of 3PL which offers foreign trade services has many advantages but, more importantly, they can generally be used for compliance and efficiency. For example, she noted that a 3PL may have better access to “operational systems and data flows needed by multiple systems to run a free zone” or systems integrated into a foreign trade zone system. She said that a 3PL may also be able to cover some costs shared with the availability of facilities such as warehousing, for example.
“3PLs are driven by customer needs like customization and square footage, as well as the departments, staff and team members to manage this free zone for them,” she said. declared.
Meeting the needs of a business is extremely important, during or before the peak holiday season, Huguet said.
She noted that many years ago companies administered their own zones, but that meant expertise had to be in-house, necessitating the need to train employees. However, by contracting with a 3PL, “those risks with these programs go away,” Huguet said.
GEODIS has designed programs to meet customer needs “so we’ll be working with customers to figure out how they can get their money’s worth” and where they can find the biggest savings in the free zone, she said. .
Because the United States to the United States FTZ is a sister program of the Global Free Trade Zone, “We are unique in regulation and the way we operate and very strong in compliance and most industries and manufacturers, producers and distributors,” said Huguet. “If they import into the United States, they have the opportunity to take advantage of this program. “
Getting involved in a free zone is “kind of a three-step process” which, according to Huguet, involves consultation with the board of directors of the free zone where the designation is obtained. Activation with local customs and security is followed by construction of the operational side of the free zone to run alongside internal systems.
Paul Killea, senior vice president of cargo services compliance and security in America for GEODIS, oversees import and export compliance for the United States, Canada, Mexico, Brazil, Chile, l ‘Argentina and Colombia, in addition to managing an FTZ product. He stressed that “compliance is a very big part of the free zone”.
“Compliance is the process of ensuring that all of our services and the services of our clients are performed in a compliant manner and meet all (government) regulations” in and outside the United States, says Killea. “So we have a responsibility to make sure we have the right processes in place, the right tools for auditing and reporting, and in doing so, to create visibility with external parties, especially the government and our customers, to show them that we are compliant. “
GEODIS provides a range of services such as air freight, ocean freight, warehousing and trucking, and the main objective of the 3PL is to be itself compliant and to ensure that its customers are as well. “First and foremost, GEODIS must be compliant, but we obviously have to make sure that our customers are too. It is a world principle we have great esteem at GEODIS, ”he says.
Strict compliance would certainly be beneficial for a company examining the benefits of a 3PL with free zone access, he noted.
On the security side, GEODIS has a team that manages various aspects of security. The company is a member of Independent Air Carriers and a freight forwarder which adheres to United States Transportation Security Administration regulations. The company doesn’t just carry air cargo, “we are also a certified screening facility in six locations,” Killea notes. “So my team is handling all of this air cargo security, which is good for customers as well. “
Huguet points out that more and more companies are interested in free zones “so what we have seen is more and more companies trying to improve their supply chain by facing all the different supply chain challenges and bottlenecks with goods. Everyone is looking for a better solution and free zones will help.
In addition, they can help resolve some of the government trade issues that have been put in place, such as relations with China.
The challenges created by the COVID-19 pandemic and port congestion have created problems for businesses that 3PLs with access to free zones can help, such as creating additional warehouses in the free zone to store products for longer. .
“Because of port congestion and because of COVID, goods are sometimes delayed and do not move as fast as they should,” concedes Huguet. “The FTZ program has definitely helped. “