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INDUSTRY FOCUS: Ports of Success

Hyundai and Kia use Foreign Trade Zone status to handle and process auto cargoes arriving at the port.

Hyundai and Kia use Foreign Trade Zone status to handle and process auto cargoes arriving at the port.

By Dominique Cantelme
From the May/June 2012 issue

The United States is the largest trading nation in the world for goods and services. Its 327 official ports of entry, including seaports, airports, and land border locations, provide the link for getting goods to consumers and transporting U.S. made products overseas for export.

According to U.S. International Trade in Goods and Services by the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, U.S. exports of goods and services rose by 16.6 percent in 2010 and 14.5 percent in 2011. 2011 exports reached $2,103.1 billion and imports $2,661.1 billion. For goods, exports were $1,498 billion and imports were $2,235 billion. For services, exports were $604.9 billion and imports were $425.9 billion.

2011 exports of goods were up $202.4 billion from 2010. Increases occurred in industrial supplies and materials ($107.7 billion); capital goods ($44.8 billion); automotive vehicles, parts and engines ($20.5 billion); foods, feeds and beverages ($18.4 billion); consumer goods ($10.4 billion); and other goods ($0.5 billion). Imports of goods were up $293.8 billion from 2010. Increases occurred in industrial supplies and materials ($153.7 billion); capital goods ($61.8 billion); consumer goods ($30.4 billion); automotive vehicles, parts and engines ($29.0 billion); foods, feeds and beverages ($15.7 billion); and other goods ($3.2 billion).

2011 exports of services were up $56.0 billion from 2010. Increases occurred in other private services ($20.8 billion), royalties and license fees ($14.2 billion), travel ($12.2 billion), passenger fares ($5.8 billion), other transportation ($2.6 billion) and transfers under U.S. military sales contracts ($0.3 billion). 2011 imports of services were up $22.8 billion from 2010. Increases occurred in other private services ($10.3 billion), passenger fares ($3.9 billion), travel ($3.8 billion), other transportation ($3.5 billion) and royalties and license fees ($2.2 billion).

The U.S. Foreign Trade Zone (FTZ) program has been a critical tool in helping U.S. ports remain a strong economic force in the global community. The program was created in 1934 with the goal of helping businesses in the U.S. stay competitive with foreign manufacturers and suppliers. According to the National Association of Foreign Trade Zones, a not-for-profit trade association, there are currently 256 General Purpose Zones and 498 Subzones in the United States (including Puerto Rico). They handle almost $500 billion worth of merchandise annually.

Located in or near a U.S. Customs Port of Entry, FTZs benefit companies in many ways. Regardless of proximity, foreign and domestic merchandise in these areas are considered to be outside of “Customs territory”. This means that if the final product emerging from a FTZ is exported, no U.S. customs duties or excise taxes are levied. The FTZ program directly supports hundreds of thousands of U.S. jobs. And while the U.S. government incurs a reduction in Customs duty revenue by the use of FTZs, it more than makes up for it by the income tax gained from direct and indirect jobs FTZs help to create and retain. In addition, local governments benefit from sales and property taxes.

Look no further than the following ports and FTZ locations to position your business for success.

Philadelphia Regional Port Authority: Port On A Mission

The mission statement for the Philadelphia Regional Port Authority is as follows: The Philadelphia Regional Port Authority (PRPA) is an independent agency of the Commonwealth of Pennsylvania charged with the management, maintenance, marketing and promotion of publicly owned port facilities along the Delaware River in Philadelphia, as well as strategic planning throughout the port district. PRPA works with its terminal operators to modernize, expand and improve its facilities, and to market those facilities to prospective port users. Port cargoes and the activities they generate are responsible for thousands of direct and indirect jobs in the Philadelphia area and throughout Pennsylvania.

Concise words, solid message. But what does it all mean to you and your business? More specifically, what does the mission mean to your business if you decide to expand its operations to the Philadelphia region?

Dynamic things are happening at the almost four centuries-old seaport, developments that are combining the Philadelphia Regional Port Authority’s long history and unsurpassed experience with the efficiencies of the new. Thanks to the support of state and federal governments, the PRPA’s single biggest piece of news these days is the Philadelphia Regional Port Authority overseeing the deepening of the Port of Philadelphia’s main channel in the Delaware River from 40 to 45 feet. Projected for completion in about three years, the new deeper Delaware River will allow the industry’s new larger containerships to deliver and take on cargoes at the port, cargoes that companies in the region eagerly await or are eagerly sending outward.

Coinciding with the channel-deepening project is the Southport initiative, which is the construction of a brand new container-handling facility in South Philadelphia, adjacent to PRPA’s Packer Avenue Marine Terminal. Between deeper water and this new marine terminal complementing existing facilities, the already efficient, economical port will be able to serve area businesses better than ever before—exactly what they’d like to do for you.

PRPA’s marketing team stands ready to assist private businesses like yours in the development of effective logistics plans. Their even ready to help companies that aren’t including waterborne commerce as a major part of its operations, or even companies that do generate waterborne commerce but ship it through non-PRPA cargo terminals in the region. Why is this?

As Grantee of Foreign Trade Zone No. 35, PRPA has the ability to grant FTZ Zone or Subzone status to manufacturers operating in the FTZ jurisdiction. Having existing companies operate more successfully or attracting new companies to the region is good for everyone, whether or not PRPA’s public port facilities directly benefit.

Those that consider making the Port of Philadelphia part of their logistics chain will find that PRPA and its terminal operators are ready to serve the nation’s businesses. The Port of Philadelphia is proud of all the businesses they’ve helped to attain Zone or Sub-Zone status in the region, whether or not their cargoes are seen on their docks.

Yes, so much is happening at the Port of Philadelphia these days: deeper water; expanded cargo capacity, a vibrant FTZ program and much more. Why not take a moment to visit the Philadelphia Regional Port Authority’s web site, at www.philaport.com, to learn more about the news briefly touched on, as well as other exciting projects and initiatives. It might be your first step toward a profitable decision to make your business operations a productive member of the Philadelphia region’s stable and growing economy.

Port Freeport: 100 Years In The Making

Port Freeport came into being more than 100 years ago when the first jetty system was built in Freeport, Texas. Since that time, Port Freeport has become one of the fastest growing ports on the Gulf Coast and currently ranks 16th among U.S. ports in international cargo tonnage handled. With a current channel of 45-foot depth, soon to be widened and deepened, just three miles from open Gulf of Mexico waters, Port Freeport offers more than 7,500 acres for future development. Port Freeport serves its customers and stakeholders through development and marketing of competitive world-class navigational capabilities, technically advanced marine and multimodal terminal services and port-related industrial facilities while achieving profits and creating jobs as a leading economic catalyst for the Texas Gulf Coast.

Port Freeport offers the following benefits: rail, highway, vessel and/or barge transportation can be seamlessly utilized; direct access to the Gulf Intracoastal Waterway, Brazos River Diversion Channel, State Highway 36, State Highway 288 and Union Pacific Railroad; only a few minutes commute from quality schools, housing and medical care and just 59 miles south of downtown Houston, Texas—the nation’s fourth largest city; surrounded by a highly qualified, technical labor pool; available existing water supply, wastewater collection, electrical distribution, gas and telephone; existence of adjacent properties that could support future growth and development; air freight service by all national carriers from multiple surrounding airports within 60-mile radius; availability of local, high-quality trainable workforce and close proximity to universities and technical colleges; ability to manage inventory and/or manufacture duty deferred, inside its Foreign-Trade Zone; Texas is a right-to-work state, which leaves you the right to choose between union and non-union labor; the state of Texas, Brazoria County and Port Freeport offer competitive incentives, tax credits and exemptions.

Recent developments at Port Freeport include the construction of the first phase of its Velasco Terminal, which will add further cargo-handling capabilities at the Port. The construction of a new 800-foot-long dock and 20 acres of backlands promise an eventual offering of 2,400 feet of berthing and more than 90 acres of supporting land.

Meanwhile, Port Freeport continues to work in conjunction with federal and state authorities to advance the project to deepen the Port’s channel to 55 feet from its present 45 feet, plus substantially widen the channel as well. The Port is hopeful that the feasibility study will indicate, as have preliminary analyses, that benefits of the channel project should exceed its $300 million cost.

With so many developments pointing toward growing diversified activity at Port Freeport, there is much anticipation for the Port to expand upon its already impressive status as an economic cornerstone of the community and region—a dynamic force directly and indirectly responsible for more than 55,000 jobs and having an overall annual economic impact in Texas of $10.2 billion.

Unlike many ports, which are running out of available land, Port Freeport boasts more than 7,500 acres of currently undeveloped tracts, all proximate to the waters of the Gulf of Mexico. The Port is a mere three miles—45 minutes by ship—from the open sea.

The Foreign-Trade Zone Program adds to Port Freeport’s appeal. Since established in 1988, Port Freeport’s Foreign-Trade Zone No. 149 has helped American companies involved in global commerce to save money on the products they import into the U.S. through deferral, reduction and/or elimination of Customs duties assessed on foreign merchandise. In 2012, Port Freeport submitted an application to the Foreign-Trade Zones Board to reorganize FTZ No. 149 under the Alternative Site Framework offering FTZ benefits to companies located in Brazoria and Fort Bend County.

Those seeking additional information about Port Freeport are encouraged to check out Port Freeport’s web site at www.portfreeport.com or contact Mike Wilson at 1-800-362-5743, ext. 4325, or by e-mail at [email protected].

Newark: World-Class Logistics

“It is not just about infrastructure, access is key,” said Lyneir Richardson, CEO, Brick City Development Corporation. “No other city in America offers access to Wall Street and global trade, just fifteen minutes apart. Manhattan is only minutes away,” said Richardson.

Newark boasts some of the finest infrastructure in the U.S. and indeed the world. With an international airport, seaport, state-of-the-art rail system and network of highways converging on the city, Newark also has become a global transportation hub. More than 620 million tons of freight—valued at over $850 billion—move through New Jersey’s ports every year. Newark is also one of the most connected domestic markets, with over six forms of transportation converging in one hub.

Access is what is fueling Newark’s competitiveness. Ongoing investments in access and infrastructure, including sustainable initiatives such as a bio fuel terminal (2011) and the raising of the Goethals Bridge—which will allow access to the Panama Canal—all help to strengthen access to global markets for the long-term.

Major corporate icons such as Panasonic, Prudential, Bonita Banana, Standard Chartered and United Airlines have selected Newark as their U.S. Headquarters, attracted by the city’s business advantages:

  • Access to markets: Port Newark is the principal containership facility for goods entering and leaving the New York metropolitan region and the entire Northeast U.S.
  • Access to talent: Newark’s fully developed transportation network allows easy access to an educated workforce in and near the city. Newark’s large multilingual population and six universities add to the value proposition. More than 40,000 college and university students attend school in the city, within a half mile of the central business districts.
  • Access to Investment Incentives: A toolbox of tax credits, tax abatement, bond financing and loan programs incentivize businesses locating in Newark.

Mimeo.com, an online and on-demand document production and shipping firm, has a 75,000-square-foot data center and print production and distribution facility in the city. Mimeo.com’s products need to be packaged and shipped for just-in-time delivery around the world, and that’s only possible via cities like Newark, with access to a world-class transportation infrastructure.

The Portugal-based medical genetics testing company, CGC Genetics, located its first American outlet in Newark’s University Science Park.

Newark recently hosted the U.S./Portugal Business Development Trade Mission with Nuno Brito, Ambassador of Portugal to the USA, and Ambassador Allan J. Katz, Ambassador of the U.S. to Portugal.

The International Trade Administration (ITA) recently announced new data that shows that New Jersey’s merchandise exports increased 19 percent in 2011 compared to 2010, growing from $32.2 billion to $38.2 billion, exceeding the national average for merchandise export growth for the same period. New Jersey’s 2011 merchandise export sales increased to many top destinations, including the Netherlands (up 84 percent), Brazil (81 percent, Turkey (46 percent), Mexico (39 percent), and China (34 percent). Key merchandise export categories include: chemicals, petroleum products, computer and electronic products, transportation equipment and primary metal manufacturers.

“The companies that locate here, whether in downtown or our FTZ are selling truly innovative products and services to world destinations,” said Dudley Ryan, Vice President, CB Richard Ellis. According to Ryan, these companies are helping to advance the regional economy by creating high paying jobs and initiatives such as the U.S. National Export Initiative.

“Newark offers international companies access to the best transportation nexus on the East Coast and a gateway to the U.S. and Europe. Our infrastructure and distribution system are unrivaled. These, combined with the Foreign Trade Zone and proximity to New York and Washington D.C., makes Newark a truly attractive location for international companies seeking to invest in the U.S.,” said Richardson.

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