Port of San Francisco enhances its Foreign Trade Zone

The U.S. Department of Commerce recently approved the Port of San Francisco’s request for reorganizing its Foreign Trade Zone (FTZ) #3 under the new Alternative Site Framework (ASF) program.

According to port spokesmen, this a more efficient process that requires less paperwork and streamlines the process for businesses to apply for a zone.

The program allows existing companies and new companies in San Francisco and San Mateo counties to secure FTZ status within approximately 30 days from when an application is accepted.  Without the program the process can take 8-12 months.

While San Francisco’s waterfront cargo operations are dwarfed by neighboring Oakland, it remains a viable “niche” gateway. Late last year, Secretary of Transportation Ray LaHood announced that the port would be awarded $2.97 million for rail improvements aimed at improving segments of its freight rail track in order to enhance safety, livability, and economic development.

A Foreign Trade Zone is a secured area in a designated customs “port of entry,”  and while physically located within the U.S. it is considered outside U.S. Customs territory. This allows for foreign goods to be
brought into FTZs without formal customs entry for manufacturing, testing, assembly, processing, storage, and distribution.  Duty payments on imported goods and materials can be reduced or eliminated, or deferred until they leave the designated area and enter U.S. commerce.

Goods not entering U.S. commerce, for instance re-exports, are not obligated to pay customs duties.

The Alternative Site Framework program expands upon the benefits already granted within the FTZ program in an efficient way.  Companies have the advantage to extend the FTZ benefits to their own already existing manufacturing, processing and distribution locations within San Francisco and San Mateo counties, yet outside of the Port of San Francisco.

“The new expedient process gives San Francisco and San Mateo companies a competitive advantage, especially when competing on a global scale,” said Peter Dailey, Maritime Director for the Port of San Francisco, grantee of FTZ #3.  “Foreign Trade Zones are one tool to reduce logistics costs, which translates into savings to a company’s bottom line.  More competitive companies translate into new economic opportunities and help create new jobs.”