New 3PL FTZ services at Capitol Warehousing will enable companies of all sizes to access FTZ benefits; new economic development service to the region.

Capitol Warehousing announced its opening of a new 3PL Foreign Trade Zone warehouse in Belvidere, IL. With Capitol Warehousing now offering FTZ services to third parties, companies of all sizes and inventory volumes can access FTZ benefits, without needing to activate their own FTZ operations. The new warehouse will expand the economic impact of the FTZ program, and the increase the number companies benefiting from this critical economic development program in our region.

The facility, located at 2091 Tripp Road in Belvidere, is making history as being the first of its kind to offer FTZ as a warehousing service, within the region. Carrie Zethmayr, representing FTZ#176 stated, “By managing inventory in an FTZ, a company defers its customs clearance process, thereby improving cash flow by deferring tariffs and reducing supply chain risk.”

Josh Rodman, general manager for Capitol Warehousing foresees a great cooperative relationship with regional companies taking advantage of their FTZ warehousing service. “We expect companies across Northern Illinois and Wisconsin to benefit from this service, further placing the Rockford-Belvidere region at the center of trade and investment activity.”

Services at Capitol Warehousing include FTZ – Import Tariff Deferral, Warehousing, Transloading and Fulfillment. More information on Capitol Warehousing’s services can be found on their website at https://capitolwhse.com/ftz/.

FTZ#176 is a program of the GRAA. To learn more about this program, please visit https://ftzrockford.com/.

About Capitol Warehousing

Capitol Warehousing is part of the Valley Express Family of Companies. In 2016, they opened the Menasha, WI facility to service the Fox Valley and Northeast Wisconsin. In August 2021, they acquired the Windsor facility to service the Madison and southern Wisconsin market and in December 2021 they opened the Belvidere, IL facility to service the upper Illinois market. All three warehouse facilities now offer the ability for their sister companies to have drivers and equipment based at each facility in order to service their customers’ transportation needs better.

About Greater Rockford Airport Authority

The Greater Rockford Airport Authority (GRAA) is the Grantee of the National FTZ Board that Administers FTZ #176.  The GRAA is one of the oldest airport authorities in the United States. Formed in 1946, the Authority has four jurisdictions that appoint a seven-member Board of Commissioners. 2006 marked the 60th anniversary of the Greater Rockford Airport Authority and 2007 marked the 20th anniversary of our Main Terminal. The Board of Commissioners is responsible for setting policies and ordinances governing the operations at RFD, which are carried out or enforced by a professional staff.

2021 Indicators Show Explosive Growth in Total Shipments and Exports, Continued Growth in Employment

In 2021 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 (2016 – 2021):

• 19% increase in employment
• 1,570% increase in the total value of shipments from FTZs
• 1,075% increase in total exports from FTZs

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

• Often customers come to our company with a new product they are trying to bring to market that isn’t yet FDA approved. Because we have an activated FTZ, they are able to import their product ahead of time and have it packaged and ready to go upon approval. This can be a deciding factor with some customers on if we get certain projects.
• FTZ status has allowed us to sell at a more competitive price once converted to a finished product.
• Our FTZ status allows us to be competitive for both domestic and international customers.
• 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 parts and part kits 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 our company can elect to conduct the activity in the United States, as necessary, rather than rely on overseas providers of the kitted items.
• Relief from inverted tariffs has given our company the opportunity to remain competitive in the our industry.
• The cost savings have improved our company’s business through reinvestment in its employees and facilities.
• Our company also benefits from cash flow savings from duty deferral, reduced weekly merchandise processing fees, and entry fee savings.

In 2021, cargo numbers grew 25%, with over 3.4 billion pounds of landed weight traveling through RFD compared to 2.7 billion pounds in 2020. December was the largest single month ever for cargo, with more than 431 million pounds of landed weight. 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. Medical instruments/equipment, cell phones and computers were among some of the top imports and exports coming through RFD 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.

With a record number of activated foreign-trade zone sites, the program has been a “lifeline” to Northern Illinois companies

April 13, 2020 (Rockford, IL) – With a record number of activated foreign-trade zone (FTZ) sites in Northern Illinois, the Greater Rockford Airport Authority and Zethmayr LLC submitted the 2019 annual report on behalf of FTZ #176 to the U.S. Department of Commerce, which oversees the national program. While companies that are reliant on international trade consider restructuring their global supply-chains due to tariffs and the COVID-19 pandemic, the foreign-trade zone has become an increasingly important tool allowing companies to control aspects of their tariff payments, providing flexibility and improving cash flow. “The foreign-trade zone has been a lifeline to FTZ operators, allowing them to prepare and plan their cash flow in an ever-changing environment,” described Carrie Zethmayr, administrator of FTZ #176.   

There are many ways the foreign-trade zone impacts a company’s bottom line. Some companies use the foreign-trade zone to reduce tariffs through a special authorization which allows them to reclassify their domestic sales as the final product sold, rather than the imported components. In some cases, this allows for a significant reduction of tariff payment. Other FTZ operators benefit by deferring their tariff payments. In an era of 25% increases on tariffs on imports from China, the cash flow benefits can be significant.

Current FTZ operators in the Foreign-Trade Zone #176 service area include:

• Bergstrom, Inc. – Rockford, IL (activated in 2020)
• Brake Parts, Inc. – McHenry, IL
• Cellusuede Products, Inc. – Rockford, IL
• Chicago Importing Company – Huntley, IL
• Energizer Holdings, Inc. – Dixon, IL
• Leading Americas, Inc. – Hampshire, IL (activated in 2020)
• Packaging Coordinators, Inc. – Rockford, IL
• UniCarriers Americas Corporation – Marengo, IL

In addition to strong FTZ activity, exports from the Rockford MSA have grown significantly compared to the national and Illinois averages. According to data available from the International Trade Administration, total exports from the Rockford MSA grew 94% between 2008 – 2018 (most recent published), while nationally exports grew 29% and Illinois exports grew 22%. In the same time period, the Rockford MSA advanced from being the MSA with the 108^th highest value of exports to becoming the MSA with the 85^th highest value of exports. As FTZ #176 recently surpassed its record number of activated FTZ operators in 2020 and global supply chains continue to be impacted by tariffs, we are confident that the foreign-trade zone will continue to be an important “lifeline” to companies in our service area.

Learn more about the foreign-trade zone program in Northern Illinois at https://ftzrockford.com/, or contact Carrie Zethmayr, FTZ Administrator on behalf of the Greater Rockford Airport Authority at 312-221-1115 or carrie@zethmayr.com. 

FOR MORE INFORMATION
Carrie Zethmayr
FTZ Administrator
Contractor to Greater Rockford Airport Authority
312-221-1115
carrie@zethmayr.com