Are you looking for ways to save money on your export and import activities? You might be able to save on duties, MPF fees, and more by operating in an FTZ.


In the relentless pursuit of cost reduction and operational excellence, more and more businesses are turning to a powerful tool born from the Foreign-Trade Zones Act of 1934: the Foreign-Trade Zone (FTZ).

An FTZ is a specially designated area adjacent to U.S. ports of entry, providing a competitive edge (“leveling the playing field”) for importers and exporters operating within the U.S. Within these zones, goods can flow in and out of the U.S. while reducing, or even eliminating customs duties, taxes, or fees. This unique environment is crafted to help U.S. companies remain globally competitive by treating them as though FTZ merchandise is outside the U.S. Commerce for duty purposes.

But what makes an FTZ truly appealing? It’s an operational advantage, a cost-saving strategy, and a key player in the modern global commerce game. In the world of foreign-trade zones, businesses find a streamlined approach to logistics, enhanced control over inventory, and a path to minimize the complexity of foreign-trade zone regulations.


Within the boundaries of a Foreign-Trade Zone (FTZ), a multitude of value-added activities can take place, opening a wide array of possibilities for businesses. From repackaging and relabeling to testing, grading, mixing, manufacturing, kitting, or even salvaging goods, the opportunities are extensive. You can even destroy merchandise in the FTZ without the payment of duties if needed (an advantage not afforded to traditional imports). The freedom of operation is vast, with one primary caveat: engaging in retail trade within the FTZ is off-limits. Beyond that, once your zone is established and approved, the opportunities to optimize your business processes and receive zone benefits become available now and for future business growth. Whether you’re looking to distribute, manufacture, assemble, or warehouse merchandise, the FTZ program allows for a unique set of benefits through this long-standing and proven trade mechanism.

One standout perk that sets FTZs apart, particularly in comparison to customs bonded warehouses, is the ability to store goods indefinitely within an FTZ. This provision aligns perfectly with modern supply chain needs, offering the flexibility and control that businesses require. Unlike other bonded storage solutions, an FTZ warehouse does not impose time limitations on storage, allowing for a more strategic approach to inventory management and strategic inventory positioning. The FTZ provides an opportunity to have goods on hand, ready for action, without the pressure of time constraints. Coupled with the foreign-trade zone advantages, it’s a unique benefit that can be a game-changer for companies engaged in international trade. It’s a place where goods are not just stored but poised for the next strategic move, giving you the freedom to make decisions based on market demands and not storage deadlines.

Although both FTZ warehouses and bonded warehouses serve as advantageous storage locations, they differ in critical ways. While bonded warehouses provide secure storage for dutiable goods with a five-year limit, an FTZ warehouse operates outside U.S. Customs commerce, offering more flexible control over goods and the unique advantage of indefinite storage. This distinction allows goods to move without standard Customs procedures within the FTZ. Foreign and domestic goods may also be stored together in the FTZ.
Instead of filing multiple Customs entries per week, file as little as one per week, capping the MPF payment to $538.40 per week or approximately $28k per year.

FTZs open doors to numerous cost-saving and compliance opportunities that can transform the way you conduct business internationally. From reducing or eliminating duties to enhancing supply chain integration, zones offer invaluable competitive cost advantages. More than just a financial benefit, they are a valuable strategic tool, uniquely designed to elevate your global trade operations, positioning your business at the forefront of the international market.

An FTZ also offers the advantage of reduced Merchandise Processing Fees (MPF). While businesses outside an FTZ must pay MPF fees for each shipment, those within can consolidate these into weekly entry filings with U.S. Customs. By consolidating entries into weekly filings, MPF fees are capped, which can lead to substantial annual savings depending on the volume of entries. Even for high volume importers with low to no duty associated with their products, MPF savings can be significant. It is important to note that weekly entry filing will not impact your shipping flexibility and supply chain, as you can ship continuously from the zone while filing weekly entries.

FTZs enable duty elimination on goods that are re-exported, destroyed, or scrapped. This exemption from customs duties on such goods eliminates unnecessary costs, promoting operational efficiency and strategic inventory management.

One unique benefit of operating within an FTZ is the ability to utilize inverted tariff relief for many finished goods. With approval from the Foreign-Trade Zones Board, this provides companies the choice to pay duty on either the finished product or its individual components, depending on which is lower. For instance, an automobile manufacturer within an FTZ could pay duty on the value of imported components but at the duty rate of the completed vehicle rather than on every part, leading to substantial reductions in overall duty payments. When exporting the finished vehicle outside the U.S., no duties are paid at all.

FTZs enable streamlined operations by enhancing inventory management, reducing processing times, and improving turnover rates. These operational efficiencies can greatly reduce overall costs, making FTZs integral to efficient global trade strategies.

Utilizing an FTZ can foster a competitive advantage through the integration of supply chain operations. By moving goods in-bond without paying duties, as demonstrated by an automotive manufacturer working with a tire supplier, significant cumulative cost advantages can be achieved across various industries.

FTZs offer flexibility in inventory management, facilitating the transfer of goods to satisfy export requirements. This ability to simplify the export process and potentially reduce associated costs aligns with the broader cost-saving strategies inherent to FTZs.


  • Understanding FTZ Designation: Obtaining FTZ designation involves distinguishing between general-purpose zones and subzones. General-purpose zones cater to multiple users, whereas subzones are specific to one company. Knowing the difference is crucial for aligning with your business’s unique needs.
  • FTZ Board Regulations: The FTZ Board oversees and mandates the requirements for FTZs. It necessitates the appointment of a grantee in each port of entry (usually a public corporation) to manage the zone, ensuring structure and compliance.
  • Customs and Border Protection (CBP) Involvement: CBP plays a vital role in maintaining oversight of regulatory compliance and security within FTZs. A CBP-approved activation request is required before merchandise can be admitted into the zone, enhancing accountability and control.
  • Attracts offshore and increases domestic activities in the U.S.
  • Inventory Control and Recordkeeping Systems: Operating in an FTZ demands a robust system to track the flow of goods and maintain essential records. Compliance is key, and efficient tracking systems are indispensable. Many FTZ operators find that utilization of the FTZ increases their data visibility, leading to increased strategic decision-making ability.
  • Mandatory Reporting: Regular reports to the FTZ Board and CBP are non-negotiable. These must detail operations and inventory, providing transparency and alignment with foreign-trade zone regulations..
  • FTZ Security Requirements: Security within FTZs must meet specific standards, including secure storage, restricted access, and vigilant monitoring. Adhering to these foreign-trade zone warehouse requirements safeguards both goods and operations, making FTZ security requirements an essential aspect of FTZ management.


Foreign-Trade Zones (FTZs) present a golden opportunity for companies looking to optimize their global trade operations and “level the playing field” vis-a-vis overseas competitors. But understanding that FTZs aren’t a one-size-fits-all solution is paramount. They hold the potential to save organizations substantial amounts of money, but the key lies in aligning their unique structure with your business’s specific needs.

That’s where the role of an FTZ consultant comes into play, and this is where Copper Hill shines. With expertise and a tailored approach, Copper Hill can conduct a free feasibility study to ascertain if FTZs are the right fit for your organization. This in-depth evaluation goes beyond mere surface understanding and delves into your business’s particular requirements and potential savings.

Request Your Free Feasibility Study Today!

Copper Hill – Your FTZ experts!

If you are looking for ways to save money on your import and export activities, a Foreign-Trade Zone may be the solution for you. FTZs can help businesses defer or eliminate duties related to these activities, which can save you a lot of money in the long run. Contact the experts at Copper Hill today to learn more about how an FTZ can benefit your business. We would be happy to answer any questions you have and help get you started with this valuable business resource.

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