Inside Logistics

Avnet wins FTZ certification in Arizona

Imported products no longer need to clear Customs until they are shipped to customers

August 22, 2019

Avnet’s DC is one of the largest FTZs in Arizona.

PHOENIX, Arizona – Technology products supplier 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.

The designation reduces tariff recovery fees for its international customers as well as for domestic customers shipping abroad. Foreign-Trade Zone authorization also improves cash flow for the comany.

With the McKemy Distribution Center as an authorized and activated FTZ, Avnet can import products into the United States 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 centre 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.

Cellard added, “We’re focused on reducing time to market for our customers, and leveraging the McKemy Distribution Center as an FTZ further improves efficiencies in our distribution network.”