Streamlined Foreign-Trade Zone will help lure cargo, jobs

By: | at 08:00 PM | Channel(s): Ports & Terminals  

New Orleans FTZ is one of the first to be approved for Alternative Site FrameworkThe Port of New Orleans will have more flexibility to use its Foreign-Trade Zone to lure new cargo and businesses because it has successfully applied for a program that streamlines the process for approving FTZ sites.
The announcement is expected to help promote the flow of several commodities, such as copper, aluminum, zinc, steel and coffee, which are already stored in FTZ warehouses and distribution sites in metro New Orleans. The new FTZ program can also be used by economic development officials to help attract new distribution and manufacturing operations to metro New Orleans.
The Foreign-Trade Zones Board, an independent agency housed within the Department of Commerce, has approved the Port’s FTZ for its new Alternative Site Framework program. The Alternative Site Framework allows existing companies and any new companies that locate within Orleans Parish, Jefferson Parish, and St. Bernard Parish to secure Foreign-Trade Zone status for warehousing and distribution operations within approximately 30 days from the time an application is accepted for filing. Without the Alternative Site Framework, increasing the size of an existing FTZ site or establishing a new one takes about 90 days.

“New Orleans is a great place for warehousing and distributing cargo because of the Mississippi River and the superb transportation network that is rooted here,” said Gary P. LaGrange, President and CEO. “Private industry has benefited from our Foreign Trade Zone for over six decades. With the Alternative Site Framework, we can be more responsive to the needs of businesses as they seek to take advantage of these benefits.”
The Port of New Orleans administers the second-oldest Foreign-Trade Zone in the United States. FTZ No. 2 was established July 16, 1946. It is now the first FTZ in Louisiana—and one of the first in the nation—to be approved for the Alternative Site Framework program.
“As a company evaluates sites for expansion or relocation, one important factor that it should consider is how to manage its supply chain from the new location,” said Michael Hecht, President and CEO of Greater New Orleans Inc., a regional economic development organization. “A Foreign-Trade Zone is one tool that can help reduce logistics costs and improve a company’s bottom line.”
The Port’s General Purpose FTZ is spread out on 63 sites throughout Orleans, Jefferson and St. Bernard Parishes. The New Orleans FTZ includes 824 acres of warehousing and distribution facilities. Additionally, there are six manufacturing FTZ subzones, including three refineries, two shipyards and an oil drilling materials manufacturer. FTZ designation is often required in order for a Port or warehouse to handle cargo traded on an exchange, such as the copper and aluminum traded on the London Metal Exchange that is shipped to the Port of New Orleans.
A Foreign-Trade Zone is a duty-free zone established by the Department of Commerce to spur business by eliminating or delaying duty collections. When cargo enters a Foreign-Trade Zone warehouse or manufacturing plant, it’s as though that cargo hasn’t entered the U.S. and it is not subject to the duties that U.S. Customs and Border Patrol would normally collect. The cargo can be warehoused or processed at the FTZ site and shipped to a foreign country or another FTZ site without ever incurring U.S. duties. If the products are stored in a FTZ and later distributed to another location in the nation, they enter U.S. commerce and are subject to duties at that time.

American Journal of Transportation