Highlights from the 2021 Foreign-Trade Zone Annual Report

Released in August 2021, the 82 nd Annual Report of the Foreign-Trade Zones Board to the Congress of the United States outlines major industry shifts and statistics from the 2020 calendar year. In this week’s QAD Precision Report, we offer a handy guide to this year’s report.

No matter the industry, 2020 was a year of transition. Disruptions like the COVID-19 pandemic, on-site worker shortages, and port entry blockages made waves for companies around the globe. Unsurprisingly, this also impacted companies using the US Foreign-Trade Zones program. These unprecedented times made for a highly anticipated Annual Report from the US FTZ board.

We’ve collected the most important data from this year’s report, so you don’t miss out on leading industry trends.

Key Data Collected: 2020 Calendar Year

There were 195 FTZs active during the year, with a total of 347 active production operations. Highlights include:

• 470,000+ persons employed at 3,400 firms in FTZs

• Shipment value totaled nearly $625 billion, down from $767 billion in 2019

• 59% of shipments received at zones involved domestic status merchandise

  • 74% production operations ($341 billion)

  • 42% warehousing/distribution operations ($283 billion)

• Top zone production: pharmaceutical, oil refining, automotive, electronics, and machinery/equipment sectors

• Exports to foreign countries amounted to over $94 billion

Consumer Electronics & Pharmaceuticals are #1

Warehouses and distributors and production operators saw a wide variety of foreign-status products received in U.S. FTZs. Here are the top products for each sector:

• Top Warehouse & Distributor Products:

1. Consumer electronics

2. Electrical machinery

3. Vehicles

4. Consumer products

5. Other electronics

• Top Production Operator Products:

1. Pharmaceuticals

2. Oil/petroleum

3. Vehicle parts

4. Consumer electronics

5. Machinery/equipment

The States Leading the Way

The report outlined the top states by FTZ activity for 2020. The key takeaway? Texas, Louisiana, and California are leading the way across the board:

• Warehouse/Distribution Activity: Merchandise Received

1. California

2. Illinois

3. Texas

4. Tennessee

5. Louisiana

• Warehouse/Distribution Activity: Exports

1. Texas

2. South Carolina

3. Florida

4. Louisiana

5. California

• Production activity: Merchandise Received

1. Texas

2. Louisiana

3. California

4. Indiana

5. Alabama

• Production activity: Exports

1. Louisiana

2. Texas

3. California

4. Puerto Rico

5. Alabama

Is an FTZ Right for You?

Global trade regulations and foreign policy relations are constantly evolving. New duties, tariff changes, and compliance rules are added each year. This can be challenging for businesses that rely on international trade. By leveraging the FTZ program, manufacturers and distributors can benefit from:

• Simplified import procedures

• Inverted tariff relief - A company that finishes production within an FTZ can pay the duties only on finished goods if this is lower than the duty rate for the parts or raw materials

• Reduced Merchandise Processing Fees - Importers can file one entry every week with customs authorities instead of needing to file every single shipment

• Zero duties on waste, scrap and yield loss, and/or damaged or non-conforming goods

Simply put, FTZs streamline international supply chain movements and costs. This gives zone users a competitive advantage on a global scale. The bottom-line result: cost savings, enhanced compliance, and fewer headaches.

Moving the Market Forward

It’s no surprise that 2020 caused many obstacles in global trade. As expected, due to the pandemic, the report showed a decrease in shipment value from 2019 to 2020. However, exports to foreign countries still amounted to more than $94 billion. The industry is strong, even amid turbulent times.

How can companies adjust to these market demands and disruptions? Having a reliable global trade and transportation provider can solve even the most unexpected challenges through:

• Automating import and export processes

• Simplifying FTZ inventory tracking and reporting

• Trade compliance checks, trade management, and Free Trade Agreement Management integrated into the workflow

• Integrating export management and logistics

• Accessing a global multi-modal, multi-carrier network

• Automating and managing increased demand to ship via parcel

• A configurable and flexible engine for automated rating and routing demands

• 360° post dock shipment visibility

• Automated freight invoice audit for all associated costs/carrier accounts

• Uniform transportation processes for all modalities

QAD Precision helps enterprises simplify their global supply chain by integrating end-to-end global trade management and multi-carrier transportation from your supplier’s supplier to the end customer—all in a single solution.

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Further Reading

FOREIGN-TRADE ZONES: Q&A WITH FTZ EXPERT GREG JONES

7 WAYS ENTERPRISES CAN SAVE MONEY WITH FOREIGN-TRADE ZONES (INFOGRAPHIC)

US PRESIDENTS, TARIFFS & THE BENEFITS OF FOREIGN-TRADE ZONES