Why are Foreign Trade Zones Making a Comeback?
Thursday, October 22, 2020
FTZs Are Making a Comeback
There was a double-digit growth in foreign trade zone use [in 2018], according to the federal government's report for that year. When the 2019 report comes out, that double double-digit growth will have increased even more. The reason is that these tariffs are a whole new way to save money, compared to before, when the most important things were speed to market, using direct delivery and weekly entry, cutting your supply chain time and lowering your cost of operations. Now it's cut your supply chain time, lower costs and mitigate the tariffs.
The number one thing we will see in the future is economic development professionals becoming more knowledgeable about foreign trade zones, so they add that one more thing to their toolkit. I work with several states that have low incentives compared to all 50 states. They may be down in the second half of states in terms of traditional incentives, but when they add the foreign trade zone in there, they jump right up to top 10. It's amazing.