Foreign Trade Zones Explained: Benefits, Setup, and Strategy

Choose an FTZ if:

• You manufacture, kit, or assemble goods using imports

• You’re seeking inverted tariff benefits

• You want to consolidate customs filings (weekly entries)

• You need long-term storage and operational flexibility

Choose a bonded warehouse if:

• You only need short-term storage for re-export

• You’re not adding value to goods (no processing)

• You want faster setup with fewer regulatory hurdles

Many companies use both: bonded warehouses for overflow and FTZs for core operations.

Why FTZs Are Taking Off in 2025 (Especially for CPG & DTC Brands)

With today’s freight volatility, tighter margins, and global fulfillment demands, fast-moving brands are using FTZs to stay competitive.

1. Tariff Volatility Is Real

FTZs let you defer duties or avoid them entirely if goods are re-exported. That flexibility matters when global trade policies shift on a dime.

2. Better Cash Flow

No upfront duties means more working capital for marketing, talent, and growth—crucial for scaling brands.

3. Ideal for Assembly, Bundling, and Kitting

CPG and DTC companies often assemble kits or bundles from imported components. FTZs allow that without triggering immediate duties.

4. Supports International Growth

Shipments re-exported from an FTZ aren’t taxed by the U.S., reducing landed costs for global fulfillment operations.

5. You Don’t Have to Go It Alone

You can work with 3PLs or FTZ operators already certified under the Alternative Site Framework (ASF) to avoid long setup times. Some sites can be activated in as little as 30 days.

What It Takes to Set Up an FTZ (At a Glance)

The process takes planning, but the benefits are worth it. Here's a simplified overview:

1. Pick the Right FTZ Type

   • Magnet site: Pre-approved industrial zone for multiple users

   • Usage-driven/subzone: Single-operator, often faster approval (30–60 days under ASF)

2. Analyze Benefits

   • Estimate duty deferral or elimination (e.g., 67% duty on some brass products)

   • Factor in inverted tariffs and reduced filing costs

3. Apply to the FTZ Board

   • Submit a Letter of Transmittal, executive summary, and supporting exhibits

   • Coordinate with your local CBP port

4. Secure CBP Activation

   • File CBP Form 214

   • Implement inventory controls, fencing, security

   • Pass audits and maintain compliance

5. Operate and Report

   • Store, manufacture, and ship as approved

   • Submit annual activity reports to the FTZ Board

Tip: You can often partner with a grantee (such as a port authority or 3PL) instead of applying from scratch.

Let's Map Out Your Strategy

Whether you're a manufacturer, importer, or fast-growing CPG brand, FTZs offer a powerful way to reduce costs, increase flexibility, and future-proof your global supply chain.

They’re not just for enterprise giants anymore—brands of all sizes are using FTZs to gain a competitive edge in 2025.

Need help evaluating FTZs or exploring bonded options? We help importers and manufacturers navigate FTZ setup, customs compliance, and third-party partnerships every day. Reach out to learn how we can support your duty-saving strategy.