Avnet secures Foreign-Trade Zone status in AZ

Editor: Lisa Lucke

Avnet has secured Foreign-Trade Zone authorization from the United States Bureau of Customs and Border Protection (CBP) for its McKemy Distribution Center in Chandler, Arizona, part of Maricopa County.

The designation reduces tariff recovery fees for both its international and domestic customers shipping abroad, the company said in a press release. Foreign-Trade Zone authorization also increases the company’s global logistics efficiency and improves its cash flow. Supervised by CBP, foreign-trade zones (FTZs) are secure areas under U.S. Customs and Border Protection (CBP) supervision that are generally considered outside CBP territory upon activation. Located in or near CBP ports of entry, FTZs are the United States' version of what are known internationally as free-trade zones. A major benefit of a FTZ is to help facilitate international trade and increase global competitiveness of American businesses. As an authorized and activated FTZ, Avnet can import products into the United States to the company’s McKemy Distribution Center and store them without incurring a duty tax, delaying payment of tariffs until products leave the FTZ for destinations inside the United States. “Avnet is focused on mitigating risk, minimizing costs, and avoiding supply chain disruptions that can pose significant challenges for our customers amid complex and changing international trade regulations,” said Vincent Cellard, vice president of operations and supply chain at Avnet. “Securing FTZ status for McKemy, our largest distribution center in the United States, better enables Avnet to navigate these conditions for our global customers.” The authorization contributes to Avnet’s logistics efficiency by ensuring that products no longer need to formally clear customs into U.S. commerce immediately upon receipt. This means that payment on duties and tariffs can be deferred until foreign products exit the zone, resulting in improved cash flow for the company. At 400,000 square feet, the McKemy Distribution Center is one of the largest FTZs in Arizona and can now serve as a duty-free hub for products bound for non-United States destinations. Products can transit through the facility to overseas destinations without incurring the same duties and tariffs as those entering United States commerce, benefiting Avnet’s international customers. There are approximately 300 FTZs on the U.S. Government’s current list (updated 7/2019). For more information click here.

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