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When it comes to storing, moving, or manipulating cargo, most of this activity occurs in a regular commercial warehouse. However, when considering the myriad of regulations surrounding imports and exports, foreign trade zones (FTZ’s), Bonded Warehouses, and container freight stations (CFS) offer various benefits and advantages to manufacturers, importers, and exporters. Let’s take a look: 

Foreign Trade Zone 

A foreign-trade zone (FTZ) is a geographical area granted a special status by the Foreign Trade Zone Board. These areas are generally located next to or adjacent to a US Port of Entry—even though they are considered to be outside of Customs’ territory. The purpose of such zones is to help businesses be competitive in the global economy by reducing tariff burdens on the importation of foreign parts to be assembled into finished goods and exported.   

Corporations usually lease warehouse space within an authorized FTZ area and offer services to the public. These areas are known as sub-zones and are sponsored by a grantee. For example, FTZ 281 was granted to Miami-Dade County, which operates the zone encompassing a large portion of Miami-Dade County.  PortMiami will in turn sponsor individual warehouses to operate as sub-zones.  

An FTZ allows flexibility for importers and exporters to manufacture and assemble goods and thereafter export with no payment of duty, or import at a reduced rate of duty. Cargo is admitted to an FTZ and can be held in the Zone exempt of Customs duties and other ad valorem taxes paying only the Harbor Maintenance Fee (HMF) of 0.125% of the value. Cargo can remain in an FTZ for an indefinite period of time.   

In 2008, the FTZ Board adopted an alternative framework to manage FTZ sites, called the Alternative Site Framework (ASF). This allows for greater flexibility and responsiveness to serve single-operator/user locations. Under this framework, a grantee can establish an FTZ-activated site easily without being in a specific geographic area. For example, at the time of this writing, there are more than 150 active sites in Miami-Dade County, and collectively over 200 in the tri-county area in South Florida.

Bonded Warehouse  

A bonded warehouse is a type of warehouse authorized by US Customs and Border Protection (CBP) that allows the temporary storage of imported cargo for up to five years until a determination is made to import for consumption or export. Cargo in a bonded warehouse is under joint custody and supervision by the bonded warehouse administrator and CBP.  

Similar to an FTZ, a bonded warehouse allows for the storage of goods without the payment of Customs duties and taxes, although it also pays the MPF at the time of entry. Bonded warehouses are designated in eleven Class types which allow for various functions. For imports and exports, Class 2 – Importer’s Bonded Warehouse, Class 4 – Bonded Yard or Shed and Class 8 – Manipulation of Import Merchandise; are the most commonly used. 

The typical use of a bonded warehouse would be for the temporary (less than 5 years) importation of cargo to be stored in the US without payment of duty. The cargo is usually imported in partial importations with duty and taxes paid at the time of importation or exported without payment of duty and taxes. 

As opposed to an FTZ, cargo usually placed in a bonded warehouse is not manipulated, unless requested by special permission. Goods entered into a bonded warehouse are usually already fully produced and assembled.   

Container Freight Station 

 A container freight station (CFS) is also a type of warehouse that is authorized by CBP that allows for the consolidation and de-consolidation of international cargo. These types of warehouses are typically near a US Port of Entry, facilitating the incoming and outgoing transport of cargo.    

An importer or exporter would use a CFS when shipping less than a full container. Their cargo would be taken to a CFS to be combined with other shippers’ cargo until enough is compiled to fill a container. Inversely, cargo that arrives to the US in consolidated containers are taken to a CFS to strip and deconsolidate. This operation allows cargo to remain in storage only for 15 days and thereafter requires some other declaration to CBP. No duties or taxes are applicable while cargo is in a CFS.    


It’s important to know the conditions for the shipment and requirements of your importer. If the cargo being imported needs to be assembled, repackaged, or relabeled, and will be sold in a foreign market, a foreign trade zone is probably your best option. If no changes or modifications will need to be made to the cargo, and some of it will be exported to a foreign market, you can leverage a bonded warehouse to only pay taxes and duties on the goods that enter the US market. If the cargo only needs to be consolidated or de-consolidated, a container freight station will suffice. 

What rules do you follow when deciding where to store your cargo? 

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