FTZ 147: A Supply Chain Success Story

Thirty-five years ago, The Reading Chamber of Commerce filed an application with the US Foreign-Trade Zones Board resulting in the creation of Foreign-Trade Zone 147 (FTZ 147), the 147^th such zone established in the US.  For perspective, as of the end of 2020, there were 298 FTZ’s in and around the various U.S. Customs Ports of Entry.  The original Zone covered the land at the Reading Municipal Airport.  
FTZ 147 now covers eleven counties in Southcentral Pennsylvania:

• Adams County
• Berks County
• Cumberland County
• Dauphin County
• Franklin County
• Fulton County
• Juniata County
• Lancaster County
• Lebanon County
• Perry County
• York County

FTZ 147 got off to a slow start.  For various reasons no zone activity occurred until 1996 when Baker Refractories began to use the FTZ program to eliminate Customs Duties on imported magnesite.  That use was short lived as the United States eliminated the import duties on magnesite a year or so later.  While the zone grew by expanding the service area into additional counties, the use of the zone by companies stalled until 2005 when Clarks’ Shoe Company began importing footwear using FTZ procedures.  The next 15 years saw the explosion of zone use in FTZ 147.  The amount of merchandise moving thru foreign-trade zones in FTZ 147 went from $0.00 in 2005 to $14,073,059,437.00 in 2020.

In 2020, the most recent year statistics are available, FTZ 147 received over 10 times more merchandise in zone status than any other zone in Pennsylvania.  FTZ 147 ranks 5th in the nation, and 2nd for an inland port, for receipts of merchandise into warehouses in Zone Status.  FTZ 147 ranks 20th in the nation in terms of exports from warehouse zones.  Remember, FTZ 147 was last in the nation in 2005, just 15 years ago.

Companies can use foreign-trade zones to maintain the cost competitiveness of their U.S.-based operations in relation to their foreign-based competitors.  The fundamental benefit offered by the FTZ program to U.S.-based companies include:

• Deferral of Duties
• Reduction of Duties
• Elimination of Duties

For the U.S.-based companies involved in international trade, the FTZ program provides a means of improving their competitive position in relation to their counterparts abroad.

For more information regarding U.S. Foreign-Trade Zones, please contact Randy P Campbell at FTZ@CampbellTradeGroup.com

State of the Ports Address 2016

Posted by Emily Johnson, Intern

Last Thursday, we hosted our second annual State of the Ports Address. We had Dominic O’Brien from the Philadelphia Regional Port Authority and Marie Byers from the Harrisburg International Airport speak at the event.

The Philadelphia Regional Port Authority (PRPA) is located in the fifth largest metropolitan area in the United States. Something that you might not know is that the Philadelphia port is a global leader in food imports, which is due to their vast temperature controlled storage capacity. Additionally, the port has less congestion compared to other east coast ports, with a quick ship and truck turn times with multiple rail connections in the area. There are over 250 distribution centers that lie within the PRPA’s immediate hinterland. This year marks PRPA’s 6^th year of consecutive growth! 

The Philadelphia Port has exciting new updates to their port. They have been working on a channeling deepening project to allow for bigger ships to enter, which is influenced by the Panama Canal expansion. This is 80% complete and expected to be completed by 2017. They are doing upgrades on their Tioga Marine Terminal, Southport Marine Terminal Complex, and multiple other piers that they own. This will accommodate for bringing in more cargo to the port, which creates more jobs and more trade in the region. They also recently created a partnership with Sealand, which created a direct shipping line to Mexico. This new shipping line takes only six days for cargo to travel from Philadelphia to Veracruz. 

 

The Harrisburg International Airport (HIA) serves the central Pennsylvania region with residents who purchase nearly $1 million departing airline tickets annually. Something that you might not know is that the airport is actually a self-sustaining entity that does not rely on any state or federal subsidies to operate. Given this, HIA continues to provide growth to the central PA region, creating nearly $1 billion in economic activity. 

For passenger flights, Air Canada, Allegiant, American, Delta and United currently offers nonstop service to 11 destinations with connections worldwide. In 2015, an average of 3,290 passengers used the airport each day to fly domestically and 250 people used the airport each day fly internationally. The top five international destinations for 2015 included Toronto, Cancun, San Juan, London, and Shanghai. New this year, the airport is offering direct flights to Punta Gorda, Florida, and an all-inclusive vacation package to the Bahamas.

HIA ranks 76^th in the nation for cargo shipments, which is higher than airports such as San Jose, Oklahoma City, and Norfolk. At HIA, there is a FedEx hub for cargo coming from Williamsport and Scranton. UPS also recently built a “Hub in a Box” at HIA that created approximately 100 jobs and an expected $168,000 in new revenue each year. December 2015 was a record month for the airport with 5,722 tons of cargo flown to and from the region.

Although there have been some new challenges in the airport industry from mergers, low fuel prices, and less flights, the Harrisburg International Airport continues to make expansion and customer service their top priorities to deliver an altogether better flying experience. Looking to the future, Shaner Hotel Holdings will be developing a new hotel at the airport that will have 120 rooms, meeting spaces, a restaurant, and bar. This is to be open by 2017.  

Overall, the State of the Ports Address showed us how important logistics is to boosting trade in our region. It informed attendees of new growth that will help the local economy grow. For more details, please click here to download the Philadelphia Regional Port Authority presentation and click here to download the Harrisburg International Airport presentation.

For additional pictures from the event, click here to visit our Facebook album. 

Meet Your Local Customs Official Roundtable

Posted by Paige Diller, Intern

At our recent World Trade Center round-table event, we had the opportunity to meet with Michelle Stover, Port Director, and Scott Merlo, Officer, from the U.S. Customs and Border Protection's Port of Harrisburg office.  

They were able to share their mission as part of CBP's Field Operations and some of their personal experiences that they have had while protecting U.S. borders over the years. They also provided helpful advice for attending companies on various different aspects of travel and trade, including the best ways to seek help or information. They also touched upon the operational elements of trade, such our local Foreign Trade Zone.

The U.S. Customs and Border Protection's Mission

Within the U.S. Customs and Border Protection, the Office of Field Operations focuses on guarding the physical and economic security of the United States by controlling access to the country. In the words of our speakers, they keep the "bad people" and "bad things" out. Simultaneously, the office facilitates international trade and travel by not only sustaining an essential aspect of the U.S. economy but also by ensuring its integrity. The six enforcement authorities that fall under the Office of Field Operations' domain are anti-terrorism, facilitation of lawful travel, cargo security, seizing contraband, trade enforcement, and agriculture quarantine inspection.

Impact on Border Security

Michelle Stover and Scott Merlo's presentation provided numerous statistics showing the impact of border protection. In 2014, nearly 8,000 people wanted for serious crimes were arrested by CBP officers. The total number of arrests at the border was around 21,000 people. The CBP also plays a large part in preventing inadmissible aliens and high risk inadmissible travelers from entering the United States. In 2014, 224,000 inadmissible aliens and 11,494 high-risk travelers were denied entry to the U.S. Additionally, the CBP seized over 800,000 pounds of drugs in 2014 and seize $700,000 in counterfeit goods every day.

Central Pennsylvania's Foreign-Trade Zone

In our discussion following the presentation, attending business representatives had the chance to ask questions to the CBP officials. One topic that was explored in depth was the Central Pennsylvania Foreign-Trade Zone (FTZ #147). Foreign-Trade Zones are designated properties where U.S. based companies have the opportunity to defer, reduce, or sometimes eliminate Customs duties that are admitted and transported through the FTZ. The sites are intentionally located to offer convenience to businesses; typically there is easy access to on-site inter-modal transportation connections (including air, road, and rail). The Foreign-Trade Zones essentially facilitate international trade for the region's businesses, offering a competitive advantage ahead of other companies abroad. To learn more about the benefits of the Central Pennsylvania Foreign-Trade Zone (FTZ #147) and its effect on export duties, please visit their webpage. 

Of all the information shared, Michelle and Scott emphasized that the U.S. Customs and Border Protection works to not only protect the nation and its citizens from "bad", but to also enable "good". They are here to facilitate a thriving economy rooted in international trade and travel!

An Overlooked Aspect of Exporting……Packaging…

Guest Blogger Sara E Scarfo, Bentley World Packaging

There are many positive and rewarding aspects to exporting products overseas. However, many companies can find themselves in a costly situation if they have not considered the complete supply chain.  A largely overlooked cost in exporting overseas is the packaging of your product.  Failure to understand the importance of proper packaging can cause damage to the product, misrouting of the package in transit, and ultimately delay in delivery to your customer. We will discuss three areas of concern when shipping a product overseas whether by ocean or air.

The first area of concern is the rust and corrosion factor. The cost of damage through corrosion is estimated at $300 billion per year in the US. Of this 35% or $104 billion is avoidable. Of that, $20 billion occurs in the exporting of goods.  Causes of corrosion can be tracked to moisture contacting metal through salt spray, acid rain, and condensation from sudden changes in temperature or humidity.  Other contaminates contacting the metal from recycled corrugated or adhesives in plywood or other processed wood products also lend to creating a corrosion issue.  However, these can be avoided. There are multiple options in protecting a product from corrosion. These include permanent and temporary coatings, vapor corrosion inhibiting (VCI) films, VCI emitters, and desiccants. One of these options or a combination can safe guard a metal product from potential damage.

Through the actual movement of goods, the shock, vibration and multiple handling aspects of transit can cause minimal to severe damage of a good.  Care needs to be taken to properly package against repeat rough handling as well as stacking and storage in a warehouse, container, or plane.  If your product is travelling by ocean, a ship has the potential of travelling up to 70 feet with each complete roll; as often as 7 to 10 times per minute depending on the seas. Whether your product is packaged in a container or travelling break-bulk, extreme care needs to be taken to ensure the product is safe from outside damage as well as being secured inside the crate. Product that is not secured inside a crate properly can cause extensive damage by shooting out of the crate and damage anything in its path as a ship may be pitching, swaying, or rolling.

Lastly, shippers must be cognizant of wood packing material restrictions when shipping overseas. Wood packing materials consist of pallets, boxes, and container blocking and bracing. Lumber must be Heat Treated, only plywood, OSB, and processed wood is exempt. Boxes, skids, and container blocking (dunnage) have to be stamped with the IPPC Mark.  These stamps are an indicator that the packer is in compliance with the ISPM-15 regulations. These stamps can only originate from the packer.  This process is controlled so the lumber can be tracked and ensured to meet regulations.

The check off of the above considerations when shipping a product overseas can prevent delays or damage in the long run and ensure a safe and timely delivery to your client. Costs associated with packaging can vary greatly upon the weight and size of the product, types of parts/metals, type of transportation and expected storage time. It is best to consult an experienced packaging company to further understand a cost structure for packaging.

Quick Tips:

1.       Domestic Packaging and Truck loading Techniques are NOT adequate for Ocean Shipping and Container Loading

2.       Read your order carefully to understand if special packaging and markings are REQUIRED or if there is a requirement for long term storage.

3.       Keep accurate records of package contents for reference and correlation to exporting packing list

4.       Take photos to show professional packaging was employed should there be a damage or loss claim to be filed.

Contact Information: 

Sara E Scarfo

Business Development Manager

Cell: 443-977-7446

Office: 410-483-6250

Fax: 410-483-6254

s.scarfo@bentleywp.com

http://www.bentleywp.com/