3LINX offers Free Trade Zone (FTZ) services from its fulfillment locations.

FOREIGN TRADE ZONE ADVANTAGES

1. CASH FLOW
Customs Duties are paid only when merchandise is shipping into the customs territory. The inventory on-hand can be held in the FTZ without customs duty payment – a temporary but often significant savings of carrying costs.

2. EXPORTS – No customs duties are paid on merchandise exported from an FTZ.

3. DEFECTS/DAMAGE/OBSOLESCENCE/WASTE/SCRAP – CUSTOMS DUTIES ARE NOT PAID ON
MERCHANDISE SUBJECT TO THESE ACCOUNTABLE LOSSES (EXCEPT FOR LIMITED TYPES WHERE THE DUTY IS SUBSTANTIALLY LESS).

4. INVERTED CUSTOMS DUTY SAVINGS
IN AN FTZ, UNIQUELY, THE IMPORTER MAY ELECT TO PAY THE DUTY RATE APPLICABLE TO EITHER THE PARTS OR THE FINISHED UNIT, DEPENDING UPON WHICH IS LOWER. MANY ARTICLES HAVE DIFFERENT DUTY RATES FOR PARTS AND FINISHED UNITS, OFFERING SUBSTANTIAL CUSTOMS DUTY SAVINGS.

5. QUALITY CONTROL – THE FTZ MAY BE USED FOR QUALITY CONTROL TO INSURE THAT ONLY MERCHANDISE THAT MEETS SPECIFICATIONS IS IMPORTED AND DUTY PAID. ALL OTHER MATERIALS MAY BE REPAIRED, RETURNED TO THE FOREIGN VENDOR, OR DESTROYED UNDER CUSTOMS’ SUPERVISION.

6. INVENTORY CONTROL – OPERATIONS IN AN FTZ REQUIRE ACCURACY OF RECEIPT, PROCESSING AND SHIPMENT OF MERCHANDISE. FIRMS HAVE FOUND THAT THE INCREASED ACCOUNTABILITY CUTS DOWN ON INACCURATE INVENTORY AND REQUIREMENTS FOR EMERGENCY AIRFREIGHT SHIPMENTS FROM OVERSEAS OF NECESSARY MERCHANDISE. IT ALSO ALLOWS FOR IDENTIFICATION OF PARTICULAR PROBLEM AREAS IN PRODUCTION.

7. ZONE-TO-ZONE TRANSFER – AN INCREASING NUMBER OF FIRMS ARE MAKING USE OF THE ABILITY TO TRANSFER MERCHANDISE FROM ONE ZONE OR SUB-ZONE TO ANOTHER. IF THE TRANSFER OF THE MERCHANDISE IS IN-BOND, CUSTOMS DUTY IS NOT OWED UNTIL THE PRODUCT IS FINALLY SHIPPED INTO THE U.S. CUSTOMS TERRITORY. A NUMBER OF SUPPLIERS OF COMPONENTS AND ASSEMBLIES STORE OR PRODUCE A PRODUCT IN ONE ZONE AN SHIP IT TO THEIR CUSTOMER THAT INCORPORATES THE MERCHANDISE INTO A FINAL PRODUCT. IN MANY INSTANCES, HAVING A LOWER DUTY RATE THAN THE DUTY RATE OF THE COMPONENTS OR SUBASSEMBLY PRODUCED IN THE FIRST FTZ. IT IS ALSO POSSIBLE TO PAY DUTY ON THE PRICE OF THE COMPONENT TO THE FIRST FTZ USER AND NOT ON THE TRANSFER PRICE TO THE SECOND USER.

8. CHANGING CIRCUMSTANCES – AS U.S. LAWS AND ESPECIALLY CUSTOMS LAWS CHANGE, LOCATION IN AN FTZ ALLOWS A FIRM GREATER FLEXIBILITY IN ADDRESSING THESE CHANGING CIRCUMSTANCES.