2024 Indicators Show Continued Growth in FTZ Employment

In 2024 FTZ #176 included nine activated operators:

1. Bergstrom, Inc., in Rockford, Winnebago County
2. Brake Parts, in McHenry, McHenry County
3. Capitol Warehousing, in Belvidere, Boone County (new in 2024)
4. Cellusuede Products Inc., in Rockford, Winnebago County
5. Chicago Importing Company, in Huntley, McHenry County
6. Mitsubishi Logisnext Americas, in Marengo, McHenry County
7. PCI Pharma Services, in Rockford, Winnebago County
8. Rivian Automotive LLC, in Mount Morris, Ogle County (new in 2024)
9. Staal & Plast, in Sycamore, DeKalb County

In 2024 we welcomed two new FTZ operators: Rivian Automotive LLC and Capitol Warehousing Corporation, which offers third-party FTZ warehouse management services to customers expanding the range of FTZ services available in our region.

Economic indicators showed mixed year over year growth, however the 5-year Compound Annual Growth Rate (2019 – 2024) shows continued growth across all metrics:

• 13% increase in employment (5-year CAGR)
• 24% increase in the total value of shipments from FTZs (5-year CAGR)
• 12% increase in total exports from FTZs (5-year CAGR)

When compared year over year (2023 – 2024), while total employment increased 9%, the total value of shipments decreased 23% and the total value of exports decreased 34%. When speaking with FTZ operators, they attributed this decrease in the value of activity to three main types of causes:

• A supply chain shortage in the early 2020s caused companies to overstock inventory; in 2024, many companies and their customers decreased purchases to reduce inventory overstock, which led to a decrease in FTZ activity;
• A decrease in activity directly related to the decrease in need for COVID-19 related inventory in the pharmaceuticals industry; and
• Unique internal circumstances which led to a temporary decrease in activity for several FTZ operators.

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

• The FTZ helps us compete with other companies by offering unique capabilities that enable our customers to bring their product into the U.S. ahead of FDA approval, which cuts down on their processing time to reach the market faster.
• FTZ has enabled us to achieve a more competitive sales price for our finished product, maintaining American jobs and levelling the playing field against foreign competitors.
• Having this ability allows for greater flexibility and competitiveness, which means we can elect to conduct the activity in the United States, as necessary, rather than rely on overseas providers of the kitted items.
• The cost savings have improved our business through reinvestment in employees and facilities. We also benefit from cash flow savings from duty deferral and reduced weekly merchandise processing fees, and entry fee savings.

Looking forward, we are optimistic that the foreign trade zone will play an increasingly important role in the region as companies seek tools to mitigate cash flow impacts of increasing tariff rates.

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.