Foreign Trade Zone (FTZ)
Created in the 1930’s by the U.S government, a FTZ is an area within the United States, in or near a U.S. Customs port of entry, where foreign and domestic merchandise is considered to be outside the country. Certain types of merchandise can be imported into a Zone without paying import duties. Customs duties and excise taxes are due when the merchandise is transferred from the FTZ for U.S. consumption. If the merchandise is re-exported, then no duties or taxes are paid on those items.
The Port of South Louisiana serves as grantee of Foreign Trade Zone 124, which is now ranked #1 according to the FTZ Board’s Annual (2015) Report to Congress in the category of merchandise received into the zone. Foreign Trade Zone 124 subzones consist of companies such as Valero Refinery, Marathon Oil, Motiva, Louisiana Offshore Oil Port, Bollinger Shipyards, North American Shipbuilders, Candies Shipbuilding, M-I, LLC, Baker Hughes, Excalibar Minerals, Halliburton Energy Services, and Danos & Curole Marine Contractors. These companies, thanks to the FTZ program, are all able to compete on a level playing field with companies around the world due to the duty savings realized through this program. This, in turn, helps the local economies in terms of jobs, creating new ones and retaining the jobs already in place, as well as supporting the local vendors with supplies and services.
Part of our Alternative Site Framework (ASF) is Globalplex Intermodal Terminal, a port-owned site which encompasses 335 acres and located at Mississippi River Mile 138.5. Globalplex, a public facility, boasts two docks which allow for panamax-size vessels for bulk, break-bulk and container loading and off-loading; a 177,000 square foot paved open storage pad and an additional nine acres of paved open storage; over 240,000 square feet of warehouse space from seven warehouses onsite and 100,000 tons of cement storage in two cement domes. This site is approved and ready for FTZ use. Other ASF sites are Pin Oak Terminals, a crude storage facility currently under construction and permitted to construct up to 10 million barrels of storage of crude oil, refined products, and chemicals, and Castleton Commodities International, LLC.
Merchandise in a zone may be assembled, exhibited, cleaned, manipulated, manufactured, mixed, processed, relabeled, repackaged, repaired, salvaged, sampled, stored, tested, displayed and destroyed.
Production activity must be specifically authorized by the FTZ Board. (Production activity is defined as activity involving the substantial transformation of a foreign article or activity involving a change in the condition of the article which results in a change in the customs classification of the article or in its eligibility for entry for consumption.)