FTZ #176: Our History and our Partners

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Foreign Trade Zones tend to be pictured as warehouses on airport property, a third-party warehouse where companies can store imported inventory to defer and reduce import tariffs.

While FTZ #176 was first established by the Greater Rockford Airport Authority, its growing number of partners now span industries and manufacturing across an 11-county region in northern Illinois. 

For the past 31 years, FTZ #176 has encompassed the Northern Illinois region that spans Stephenson to McHenry Counties from West to East, and the Wisconsin Stateline to Lasalle/Peru from North to South. Businesses within that zone are able to activate their facility, at their current location, as an FTZ site or subzone and access the tax benefits that come with it.

That’s a boon for manufacturers, who are struggling with global supply chain holdups due to congestion at ports of entry, high tariff rates, inflation and instability in Eastern Europe. By operating within the FTZ, companies can bring the customs clearance process in-house and in doing so, offset some of that ongoing uncertainty and cost.

The Greater Rockford Airport Authority was on the ground floor of establishing FTZ #176 back in 1991, in an effort to help local manufacturers who utilize the airport for transporting goods. At the time, Chrysler’s Belvidere Assembly plant was among the first approved FTZ operators in the region. It maintained that status until 1997, and the zone was dormant until 2003.

Since that time, zone operators across Northern Illinois have begun taking advantage of FTZ opportunities in growing numbers. They’ve found it leads to improvements in their inventory management systems, such as reducing inaccurate inventory and improving product tracking. Likewise, they can save between one and three days’ worth of holdup at the port of entry as their product waits on processing and inspection. With prior customs approval through the FTZ, no one needs to wait for a customs inspector to break the seal or open a package. Instead, inventory gets moved along the process quickly.

At present, FTZ #176 has a collection of partners throughout Northern Illinois, including:

  • Bergstrom Inc.
  • Brake Parts Inc. LLC
  • Cellusuede Products Inc.
  • Chicago Importing Company
  • Leading Americas Inc.
  • Mitsubishi Logisnext Co., Ltd.
  • PCI Pharma Services
  • Schenker
  • Staal & Plast USA, Inc.

Activating your facility as an FTZ can you save your company both time and money. Learn more about how FTZ #176 can impact your bottom line and improve delivery times by contacting Carrie Zethmayr, FTZ Administrator at (312) 221-1115, emailing at carrie@zethmayr,com or visiting https://ftzrockford.com/ and https://flyrfd.com/.

2022 ANNUAL REPORT SUBMITTED TO NATIONAL FTZ BOARD

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2022 Indicators Show Continued Growth in Employment, Shipments and Exports

In 2022 FTZ #176 included nine activated operators:

  • Bergstrom Inc., in Rockford, Winnebago County
  • Brake Parts, in McHenry, McHenry County
  • Cellusuede Products Inc., in Rockford, Winnebago County
  • Chicago Importing Company, in Huntley, McHenry County
  • Leading Americas, in Hampshire, Kane County
  • Mitsubishi Logisnext Americas, in Marengo, McHenry County
  • PCI Pharma Services, in Rockford, Winnebago County
  • Schenker, Rockford, Winnebago County
  • Staal & Plast, in Sycamore, DeKalb County

Economic indicators across all FTZ sites show continued growth across a 5-year period (2017 – 2022):

  • 19% increase in employment
  • 1,104% increase in the total value of shipments from FTZs
  • 59% increase in total exports from FTZs

Operators report these zone benefits (edited to remove company identifying information and for clarity):

  • As the competition in our industry is greater each year, our FTZ status has allowed us to be competitive with our overseas competition by eliminating taxes and duties.
  • The benefits realized from having FTZ status has helped our company to maintain American jobs and helped level the playing field against foreign competitors.
  • The re-boxing and breakdown of our products allows the company to conduct this activity in the United States using domestic facilities and workforce.
  • Having this ability allows for greater flexibility and competitiveness, which means the company can elect to conduct the activity in the United States, as necessary, rather than rely on overseas providers of the kitted items.
  • Our company is able to produce lower cost, high quality products due to the inverted tariff rate. The duty rate assigned to finished product is 0%, while component parts have duty ranging from 0% to 9%.

In 2021 (2022 data is not yet released), cargo numbers grew 25%, with over 3.4 billion pounds of landed weight traveling through RFD compared to 2.7 billion pounds in 2020. The leading driver of cargo growth was the increase in the number of cargo flights, in addition to the new international cargo operations at RFD. For the 5-years between 2016 – 2021, exports from the Rockford MSA saw a 11% CAGR with Rockford now the 72nd largest metropolitan exporter in 2021.

Companies in the FTZ 176 Service Area use the foreign-trade zone in traditional ways, including inverted tariff benefits and cash flow savings. In addition, we have several operators that specialize in FDA regulated products, conducting research and development operations and providing specialty packaging for imported products that are pre-FDA approval.