The Port of Virginia is attempting to improve its trade through an expansion of Virginia’s Foreign-Trade Zone (FTZ 20) into North Carolina.
The move, approved yesterday (December 5) by the US Department of Commerce, is providing the port with further access to FTZ 20 — the most active zone within the Commonwealth — hosting 17 warehouse/distribution and production locations with 71 firms utilising the general purpose sites.
The Virginia Port Authority (VPA) believes that infrastructure improvements paired with the expansion of the Panama Canal will bring socioeconomic opportunities to the FTZ.
Governor of Virginia Terry McAuliffe said: “This development will encourage companies – current and potential port users – to choose to do business and create jobs within the Foreign Trade Zone that is primarily served by our port. The Port of Virginia is one of the Commonwealth’s strongest economic assets, and this expansion of the FTZ improves our ability to bring more business to the port and create more jobs along the way.”
FTZ Board Annual Report to Congress in 2015 revealed that Virginia is ranked 13th in production exports and 19th in warehouse and distribution exports and 20th in merchandise received for production sites.
VPA believes the decision will provide another means of attracting cargo, investment and jobs to the port.
Benefits of operating in a FTZ:
- Companies can defer, reduce or eliminate US Customs duties on imported products
- Customs duties are not paid on products exported outside of the US
- Duty is only paid on products entering US Customs territory
- Manufacturing operations receive the most benefit from the FTZ when the duty-rate on the raw materials is higher than the duty-rate on the finished product and when the volume of imported shipments is high
Virginia International Terminals, LLC (VIT), operates four general cargo facilities Norfolk International Terminals, Portsmouth Marine Terminal, Newport News Marine Terminal and the Virginia Inland Port in Warren County. The VPA leases Virginia International Gateway and the Port of Richmond.