Foreign Trade Zone

Congress created Foreign Trade Zones (FTZ) to promote American competitiveness in the global marketplace and encourage companies to maintain and expand their operations in the United States. The program is designed to lower the costs of U.S.- based operations engaged in international trade, and thereby create and retain the employment and capital investment opportunities that result from those operations.

FTZs are federally designated areas where domestic and foreign commercial merchandise of every description can be held without being subject to Customs duties and other some taxes. In essence, merchandise stored in a FTZ is considered to be outside the commerce of the United States, so US import duties do not need to be paid until the merchandise leaves the zone. Merchandise exported from FTZs (in most cases) does not have to pay US duty at all.

The Port of Cleveland is the Grantee of Foreign Trade Zone (FTZ) 40. As part of our mission to help local companies compete in the global market, the Port of Cleveland has partnered with Logistec USA, our general cargo terminal operator on Cleveland’s lakefront, to manage our active FTZ. The Port of Cleveland can also help companies interested in participating in the program to have their property designated as a Foreign Trade Zone for their exclusive use.

The Port of Cleveland’s FTZ program improves cash flow, increases logistics efficiency, helps reduce import duty costs and provides greater flexibility for companies engaged in international trade.

• Duty Deferral: Companies can delay payments on duties until the inventory leaves the Zone.
• Duty Reduction: Companies can pay a lower duty rate on assembled or manufactured finished products- and in some cases- reduce the duty rate to zero.
• Duty Elimination: Companies don’t pay duty on products that are rejected, scrapped, destroyed or exported from the zone.
• Direct Delivery: Companies can seek authority to receive product and clear Customs within the Zone and as a result, bypass congested ports.
• Weekly Entry: Companies can combine shipments on one entry filed weekly.
• No Import Quotas’ restrictions: Merchandise subject to quotas can be brought into a Zone even during periods when quotas are closed, and immediately entered for consumption when quotas open again.