Q: Duty inversion (which exists when the duty rate for the finished good is lower than the duty for the component parts) is considered a powerful benefit of an FTZ because it allows U.S. importers to manufacture in the U.S. while taking advantage of a lower duty rate. Yet it requires precise recordkeeping and a significant investment in traceability systems and resources. Has Blount captured benefits from duty inversion?

A: Blount is benefiting from duty inversion. Recordkeeping and traceability issues have been alleviated by using a "bolt-on" FTZ system supported by [FTZ software provider] Integration Point. Through extensive training, we have made every stakeholder—team leaders, line supervisors, managers, and the production employees—aware of the importance of maintaining accurate inventory counts, accounting for waste produced during the process, and minimizing the errors associated with "pulling" the elements used for production.

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Most companies involved in international trade can benefit from using a foreign trade zone.

Foreign trade zones (FTZ) are one of the more powerful tools available to companies involved in world trade, but they are also one of the least understood and misunderstood resources.

Amie Ahanchian, managing director of KPMG LLP, groups the benefits into four broad categories: duty deferral, duty avoidance, duty inversion, and other savings and benefits.

The benefits come with a price, but as many FTZ users will readily describe, that price is easily justified in an extended supply chain.

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Everybody has "tools of the trade” that they like to use to complete their job. Tools that make you feel like you've found the golden key, opened the secret door, or grabbed the golden ring are what make you good at what you do. They make you a subject matter expert on sourcing, procurement, supply chain, trade compliance or some combination of these.

The world of supply chain management is constantly changing, certainly. It's important to have the flexibility to adapt as these changes are being made, and have business processes and tools that can easily change as well. Companies today sometimes struggle with keeping up with all the regulatory changes in each of the countries in which they operate.

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U.S. Foreign-Trade Zones are an often overlooked option for companies that are importing for manufacturing purposes in the US. As more companies try to gain that “Made in the USA” competitive edge, they have to make sure they are being cost-effective and efficient.

FTZs provide countless benefits for the company and the community, including improved inventory management, reduction and elimination of duties or fees, potential tax reductions, improved cash flow and increased visibility of supply chain.

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Challenge: A large international apparel/footwear client needed to automate their export management and screening processes, without changing their business processes. The client had a very manual process and too much time was wasted deciphering export regulations and reporting requirements.

Results: The client was able to move to a completely automated export management and screening process that allows for standardization of business processes and workflows, thus reducing errors, increasing compliance and saving time.

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