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Port Helps Firms Save and Grow with Trade Zone

July 25, 2013

FTZ Warehouse

If you’re relaxing with a glass of wine on an airplane somewhere between catching your flight and catching your breath, chances are Tri-Link U.S.A. helped make this moment of tranquility possible.

Tri-Link, a global logistics provider specializing in getting wines and liquors from vintners to commercial airlines, is growing its business – thanks to the Port of Long Beach.

Earlier this year, the Port helped Tri-Link obtain status as a Foreign Trade Zone (FTZ) operator in Southern California, positioning the company’s new facility in Carson to prosper.

“I can’t say enough wonderful things about the team at the Port of Long Beach,” said Tri-Link President Stuart Spikerman, who credits the Port with convincing him to expand his company’s East Coast operations to Southern California.

Trade Development services at the Port include a dedicated program to help importers, exporters and logistics companies apply for FTZ status. The designation saves businesses money by reducing and or eliminating duty and excise taxes on goods entering the U.S. In Tri-Link’s case, FTZ status will enhance the company’s ability to store and ship wines and liquors to airlines with routes serving the Asia-Pacific region and the Americas.

While there are costs associated with obtaining FTZ status, the Port doesn’t charge for helping applicants navigate the process. “A consultant would charge about $40,000 to $50,000 to clear the first hurdle,” Spikerman said.

An FTZ is a designated site considered outside the country for customs purposes where companies can store, process, sort, label, assemble and exhibit imported parts or goods. This sovereign business zone allows companies to defer duty on foreign goods, eliminate duty on imports shipped out of the U.S. or destroyed, and lower duty on goods finished on the premises and bound for U.S. markets.

“FTZs were created to facilitate international trade, make U.S. manufacturing more competitive and create jobs,” said Gina Barro, Business Development Manager of the Port’s Trade Development Division. Barro runs the program with the trade division’s FTZ Administrator, Diana Lam-Brandt.

Nationwide, more than $640 billion in merchandise is handled within FTZs and some 2,800 firms that use them employ about 340,000 people.

Other benefits include greater cash-flow flexibility, expedited customs clearance, weekly entry processing instead of fees for each shipment entering the U.S., and unlimited storage time. FTZ-approved operators also qualify for additional customs benefits as a result of having to meet higher security requirements for FTZ approval, and they can increase revenue by making their FTZ space available to other companies or “zone users” seeking to operate on FTZ-sanctioned property.

The Port of Long Beach is a “grantee” organization, which allows it to administer FTZ programs in a designated region. The Port’s area is FTZ-50, a large swath of Southern California that takes in most of Los Angeles County, all of Orange County and western San Bernardino County and offers companies FTZ advantages in the heart of one of the nation’s busiest logistics hubs.

As a grantee, the Port helps companies with the application process, which involves numerous steps and averages six months. The sequence requires vetting and approval by the federal Foreign Trade Zones Board, U.S. Customs and Border Protection (CBP), and the Long Beach Board of Harbor Commissioners.

“We’re definitely the starting point,” said Barro. “We also work with the FTZ Board and CBP to streamline the process by putting applications on parallel tracks.”

Maintaining active FTZ status involves meeting certain reporting requirements, added Barro. “Companies need to know what it means to operate as an FTZ. We help with that, too.”

Port and SEREC StaffIn 2012, the Port of Long Beach helped SEREC of California, a third-party logistics firm, obtain FTZ status for 200,000 square feet of warehouse space at its City of Industry facility. The designation is a must-have for many shippers, said SEREC Vice President Jimmy Duggan, whose company handles goods for many of the nation’s largest retailers.

“It’s a beautiful relationship we have with the Port of Long Beach,” Duggan said. “We’ve probably gained a dozen new clients we wouldn’t have without the FTZ. It’s made us a much bigger fish in a very populated sea.”

To learn more about the Port of Long Beach and FTZ-50, visit www.polb.com/ftz or contact Gina Barro or Diana Lam-Brandt at (562) 283-7750.

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