Have You Considered an FTZ for your Cross-Docking Operation?
For existing foreign-trade zone (FTZ) users, there may be FTZ benefits that are not being employed. One example of this is cross-docking. Cross-docking is the unloading of materials from an incoming truck or rail car and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage between them.
You may be wondering how cross-docking would work in an FTZ. In one scenario, all cargo is brought into the Zone and received using manifest quantities. Any damaged product is segregated and all other cargo is consolidated on trucks for transport. Then, a weekly entry is filed for all of the cargo by the importer of record (all importers of record must be identified as Zone users). The only function under a cross-dock FTZ that is different from today’s cross-dock is that the entry is pushed once per week, instead of individually for each shipment.
“Many foreign-trade zones are not taking advantage of all the benefits that are allowed and cross-docking is rarely thought of. In using cross-docking for a foreign-trade zone, all goods are moved straight through the Zone site. This means no delay and merchandise purchasing fee savings,” said Curtis Spencer, President of IMS Worldwide.
In addition to reduced handling and storage costs and improved turnaround speed, cross-docking also promotes cost savings. Rather than paying the MPF for each individual shipment, the importer can pay the MPF on a single entry summary filed once per week to report all goods entered into the US commerce during that week. Vendors/Importers using cross-dock FTZ save an average of $200,000 – $550,000 per year in MPF. For example, if your zone has 100 shipping containers cross-docked per week, this is approximately $9,500 (gross) MPF that is saved weekly. This will net approximately $350,000 saved per year. This amount could cover all of your zone operator fees, your cross-docking expenses and give you a bonus check to boot!
For more on the benefits of participating in an FTZ, click here.
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