Consultant Insight: FedEx Logistics, Hellmann add FTZs to their US networks

[caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] This week, FedEx Logistics, the FedEx subsidiary that offers supply chain solutions, air and ocean cargo services, and customs brokerage services, announced the opening of its newest Foreign Trade Zone (FTZ) location in El Paso, Texas. FedEx Logistics FTZ Services include inventory tracking, quality control, security, and cross-docking and transferring of goods. Other FedEx Logistics FTZs are in Los Angeles, New York, Dallas and Chicago. El Paso is one of the biggest cross-border locations between the U.S. and Mexico. In July, DHL Global Forwarding expanded its U.S. FTZ presence with a new site at the El Paso International Airport (ELP). That same month, Amazon announced plans to build a 625,000-square-foot fulfillment facility in the city. With the United States-Mexico-Canada Agreement (USMCA) in effect as of July 1, El Paso is expected to see even more cargo traffic. However, through June, the total value of U.S. imports from Mexico has declined 24.3%, primarily due to the COVID-19 pandemic. UPS incorporated its FTZ capabilities in 2019 within its customs brokerage, warehousing, logistics and transportation business. In addition, it designated four of its U.S. gateway airports as FTZs: Chicago’s O’Hare International (ORD), Dallas/Fort Worth International (DFW), Los Angeles International (LAX) and New York’s JFK. The number of FTZs have lately increased because of global trade uncertainty. Viewed as a way to mitigate risk, FTZs can be beneficial in today’s environment of increased tariffs. Among the most recently established FTZs is located at the Port of San Diego, activated after approval by U.S. Customs and Border Protection and the city of San Diego. As noted on the website for the Germany-based Hellmann Worldwide Logistics, a business using an FTZ is treated as if it is located outside the United States. The company, which opened a new FTZ in Chicago, has a number of industry-specific logistics offerings — including automotive, fashion, health care and pharmaceuticals — that all benefit from using FTZs. Manufacturers operating in an FTZ typically do not pay duties on imports until goods leave the zone and are entered for consumption, according to Hellmann. According to a LinkedIn post on the opening of Hellmann’s Chicago FTZ by Stan Nephew, operations director for the North-Central U.S., the "facility already provides a variety of supply chain solutions, and the activation of the FTZ represents another key component in the value chain we are excited to offer our clients."

Consultant Insight: FedEx Logistics, Hellmann add FTZs to their US networks

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