News Column

Miami Port Wins Foreign Trade Zone Status

Aug. 10, 2012

Mimi Whitefield

The U.S. Department of Commerce has approved PortMiami's bid to be a Foreign Trade Zone, a move that port officials hope will help create jobs and increase international trade flowing through the downtown Miami port.

In a ceremony at the port on Thursday, Assistant Commerce Secretary for Import Administration Paul Piquado announced the creation of Foreign Trade Zone No. 281. There are 500 active zones and sub-zones across the United States that generate 330,000 jobs and export around $30 billion worth of goods, he said.

Following a new model for FTZs, the port plans to establish satellite zones that will allow individual companies to have the benefits of an FTZ at their own secure warehouses.

"This approval is something the port will be able to leverage not only at its site but throughout northern Miami-Dade County,'' said Piquado. The PortMiami FTZ stretches from north of SW Eighth Street to the Broward County line.

Under a new streamlined application process, companies that want to set up satellite sites could be up and running within 60 to 90 days, said PortMiami Director Bill Johnson. The port serves as administrator and marketer of the new zone and doesn't plan to have extensive FTZ facilities on its own site.

"The purpose of the port is not to be a warehouse. We want to save space for containers,'' said Johnson. "This is a way for us to foster and grow trade. We want more boxes -- containers -- flowing."

The FTZ designation allows imported products to enter a zone warehouse without paying U.S. Customs duties if they are eventually shipped out to another country or to pay the duties only when the imports actually enter the U.S. market. Light manufacturing and assembly also is allowed within a zone with duties payable on either the imported components or finished product, whichever is lower, if the products enter the domestic market.

"Miami's reputation is as a center for importing and then exporting south so this is a very good fit for our community," said Kevin Lynskey, assistant port director for business initiatives.

"Establishing this new FTZ is crucial in helping our local businesses create jobs, stay competitive and stimulate our economy,'' said Miami-Dade Mayor Carlos Gimenez. "It gives an edge to American businesses as they compete in the global marketplace.''

Key pieces of Miami-Dade's international sector -- airport expansion, deep dredging of the port to accommodate larger ships that will traverse an expanded Panama Canal, the port tunnel project, improved rail links and now the new FTZ -- are coming together in a way that "adds up to a business-friendly environment," he said.

"We hope the port FTZ will create hundreds and thousands of new jobs,'' said Gimenez, who was excited by the prospect the new zone will attract companies interested in manufacturing and assembly.

As administrator for the zone, the port will charge application fees -- as well as annual fees that could range from $5,000 to $25,000 depending on the size of the satellite zones. "It won't be a profit center," said Johnson. "We're not looking to gouge but we have to cover costs.''

The three other FTZs in Miami-Dade County haven't generated the spinoff zones that PortMiami envisions. There is a zone in Homestead, an FTZ in Wynwood that never really got off the ground, and the largest, the Miami Free Zone -- an 850,000 square foot complex of warehouses, showrooms and offices in Doral that serves multiple tenants.

The port is currently in conversations with the operators of the Homestead zone to fold it into the port FTZ, Johnson said..

The Greater Miami Chamber of Commerce holds the license for the Miami Free Zone, but it is owned and operated by a private company.

Lynskey said there should be room for all the zones. "Currently there are about 150-million square feet of warehousing in Miami-Dade County. Yet I'm not sure we have a million square feet of FTZ space,'' he said.

"The biggest players want their own warehouses, they don't want to give away their secrets to potential competitors,'' he said.

Under the old FTZ rules, it was cumbersome and time-consuming to set up satellite zones for national companies, although there are customized zones in Miami-Dade for Sysco Foods and DHL.

Liane Ventura Guerra, executive director of the board that oversees the Miami Free Zone, said she didn't see the port zone as direct competition for the Miami Free Zone.

"Absolutely not," she said. "Now people can have a choice -- private or public. It means trade is growing. Now virtually the whole county is a Foreign Trade Zone."

Source: (c)2012 The Miami Herald Distributed by MCT Information Services

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