Six months ago, the Savannah Airport Commission approved a resolution to transfer control of Foreign Trade Zone 104, which it has governed for nearly 30 years, to the World Trade Center Savannah, a division of the Savannah Economic Development Authority.
Last week, the Foreign Trade Center board made it official with the re-issuance of the license to WTC Savannah.
Both airport executive director Patrick Graham and WTC Savannah board chair Eric Johnson agreed the move was a smart one that would help grow the FTZ.
“Now that the World Trade Center Savannah concept is established, it’s a logical time to execute the transfer,” Graham told his board in October. “The FTZ will be better utilized by WTC Savannah, where it will be of greater value to the community.”
Johnson agreed.
“This makes a lot of sense,” he said Tuesday.
“As the World Trade Center Savannah works to attract foreign investment and expand area businesses into foreign markets, having a foreign trade zone is a wonderful tool.
“Not only does it enhance our mission, it will help provide revenue to further our goals.”
Foreign trade zones are federally designated sites licensed by the FTZ board — which is chaired by the U.S. Secretary of Commerce — in which special customs procedures may be used.
FTZ 104 was created in 1984 in Savannah to serve U.S. companies in the region that are engaged in international trade-related activities. For example, no customs duties are paid on items brought into a FTZ, processed and then re-exported. Customs duties are paid only when imported merchandise is shipped out of the FTZ to domestic markets.
For example, machine parts may be shipped into the FTZ and assembled there. When the assembled machine comes out of the FTZ for sale in the U.S. market, duties are paid then, rather than on each part as it arrived.
This helps to offset customs advantages of overseas producers who compete with domestic industry.
The transition, in the works for more than a year, has been made seamless with the move of trade zone director Ralph Magionni from the airport commission’s employ to WTC Savannah, where he has been contracted to help bring the WTC and new trade zone director Leigh Ryan up to speed on running a FTZ.
“The Savannah/Hilton Head International Airport has been an excellent steward of Foreign Trade Zone 104,” said Trip Tollison, World Trade Center Savannah President and CEO.
“The vision and leadership that Patrick Graham and the board of directors have shown should be commended, and we are grateful to them for entrusting us to guide the FTZ into the next phase.”
Ryan, director of trade services for WTC Savannah, said she is excited about the possibilities.
“Having the FTZ really fits our mission,” she said. “It’s completely aligned with what we do every day, which is helping companies in our region with international strategies.
“Whatever their needs for international growth — whether they are importing, exporting or just thinking about exporting — we can help them decide if being in a foreign trade zone would help.”
In the zone
While it sounds like a single entity, FTZ 104 actually encompasses a number of businesses and locations around the region.
Active foreign trade zone sites in the area include Nustar Energy, Tumi Luggage in Vidalia, Mitsubishi Power Systems’ Savannah Machinery Works and Firth Rixson in Liberty County.
Other designated zone areas include Crossroads Business Center, Tradeport East and West in Liberty County, Interstate Center in Bryan County, Fuji Vegetable Oil Co., Crossroads Business Center and Ocean Terminal and Garden City Terminal at Georgia Ports Authority.
Designated sites may or may not be currently active.
The primary advantage for companies utilizing an FTZ is cash flow savings, Ryan said.
“Imported goods can be held in inventory in the FTZ,” she said. “Customs duties are only paid when the merchandise is shipped into U.S. Customs territory.”
It’s a numbers game, she said.
“The larger the volume of imports, the greater the savings will be, although you don’t have to be a big box retailer or large manufacturer to take advantage of a foreign trade zone.
“Each case is different,” Ryan said. “Most businesses don’t have the time to wade through all the rules and regulations to determine if a foreign trade zone will work for them.
“That’s where we come in,” she said.
“We’re working with a company right now to make that determination.
“Hopefully, we can help them save money that will, in turn, help them grow their business.”
FTZ BY THE NUMBERS
• 200-plus — U.S. communities with foreign trade zones.
• 50 — states with zones.
• 60 — pending cases for new zones or expansions.
• $640 billion plus — value of merchandise handled in zones.
• 340,000 — number of people employed at zone facilities.
• $54.3 billion — value of exports.
• 57 — percentage of incoming zone shipments with domestic status.