“The Port of Oswego Authority (POA) is now also a Foreign Trade Zone (FTZ) for goods arriving by boat, truck or rail,” said William Scriber, POA executive director and CEO. FTZs are land areas within the United States that are legally considered outside of the United States Customs and Border Protection Agency’s authority. Merchandise can be imported to these zones and allow companies to save time and money on duties, tariffs and production costs.
“As an FTZ, we can offer additional benefits to businesses working with us at the Port,” Scriber said. “Businesses pay no duty while in an FTZ until products are released for consumption. This helps cash flow because there is no outlay for duty while they are being stored, and in most cases, when goods are sold after FTZ storage, the seller will have cash in-hand before releasing them. FTZs allow for no duties and federal excise taxes to be paid until a finished product is brought from the FTZ to the domestic market territory or a North American Free Trade agreement ( NAFTA), country.
“But that’s only the beginning. Goods can be stored in an FTZ indefinitely, as opposed to a bonded warehouse that has a time limit. Those goods are not subject to quota restrictions and can be entered into U.S. commerce at any time. In addition, if goods become obsolete or pass expiration while in an FTZ, they can be destroyed without paying any duty on them.
”Other advantages include streamlining logistics. After merchandise has been approved from Customs, imported goods may be directly delivered into the zone. Also, FTZs give a company the opportunity to closely track their inventory. When goods are brought into a FTZ warehouse like the Port, the company is able to identify and manage them instead of being under Customs control.”
Scriber also explained that for businesses that haven’t been able to justify the upfront costs for applying for an FTZ, there would now be a savings by using the Port’s FTZ and bypass those costs.
“With Micron entering the picture, there would be an advantage for them to store imported raw materials or equipment at the Port’s FTZ and defer the duty,” Scriber said. “Hypothetically, if Micron also established itself as an FTZ, the Port and Micron could do a zone-to-zone transfer of equipment without paying any Duty. Duty would only be collected once the equipment is actually manufacturing product. Again, this defers upfront costs and helps cash flow.”
The Port’s FTZ is under the umbrella of Onondaga County’s Foreign Trade Zone 90, said Leonard Rauch, senior economic development specialist, Onondaga County Office of Economic Development. FTZ 90 serves the counties of Oswego, Onondaga, Cayuga and Madison.
Rauch explained that another advantage FTZs offer is that companies can also establish manufacturing operations within an FTZ, and any scrap or byproducts would not be subject to duty fees. Businesses can use the FTZ 90 savings calculator to do analysis at: https://www.ongoved.com/foreign-trade-zone-90/. “We want to be a conduit to the Port of Oswego and other zone partners for business growth and expansion,” Rauch said.
According to the National Association of Foreign-Trade Zones, there are 191 active FTZs in all 50 states and Puerto Rico. More than 3,200 companies currently utilize the program.
The Port of Oswego set a record year in 2022, with shipping alone up over 300% compared to 2021, Scriber said. It’s strategic location at the crossroads of the Northeastern North American shipping market, puts them less than 350 miles from 60 million people.
Contact:
William Scriber
Executive Director
315-343-4503 ex. 109 or 115
