05/02/2024
Customs Case Study: Global Manufacturer Using FTZ
How GEODIS helped a global machinery manufacturer to implement and administer a compliant and efficient foreign-trade zone.
Key takeaways
- A large construction equipment manufacturer needed support from customs and trade services to setup a foreign-trade zone (FTZ) in the U.S.
- GEODIS provided foreign trade, customs brokerage, FTZ, and warehousing services for our client
- Our services resulted in $500K of annual savings in merchant processing fees, and a further $700K in savings on broker fees
- We helped our client to offer more competitive pricing in a global marketplace
Our supply chain case studies show how we use our logistics expertise to improve business outcomes for our clients.
Facts about our manufacturing client
- Global construction equipment manufacturer and distributor
- International manufacturing facilities around the world
- Products include vehicles for the mining and construction industries
- Robust spare parts product line for ongoing vehicle maintenance
Background with our manufacturing client
Our client originally worked with us on a strategic contract logistics solution, and we were able to exceed our client's expectations. As the coal industry has declined, our client decided to explore the benefits of a foreign-trade zone. We partnered with our client to create a strategic import and export solution to meet their challenges.
Manufacturing import and export challenges
Our client faced issues with market volatility on goods and materials, partly driven by unpredictable tariffs. Since they re-export 60–70% of their goods, they needed to turn around inbound and outbound shipments quickly.
This was compounded by increased competition in the market demanding faster delivery times. They also needed a customized crating and kitting solution to minimize shipping costs and keep products in good condition.
Foreign-trade zones and other solutions for our manufacturing client
GEODIS provided a complete, end-to-end customs and FTZ solution for our client, from import, through warehousing, to export. This enabled our client to closely manage inbound and outbound activities to minimize risk, eliminate unnecessary fees, and decrease delays.
GEODIS provided tailored, on-site woodworking and crafting services to develop and build custom-made shipping containers. This allowed our client to safely ship oddly‑shaped, industrial parts and products.
Finally, our client used our in-house customs and trade services expertise to improve compliance with customs regulations. We also helped them to reduce recurring consultant expenses so they could improve their pricing and better compete in the marketplace.
Manufacturing client results
Since we developed the FTZ program, our client has seen some significant improvements to their supply chain, together with substantial cost savings. These include:
- $500K in annual savings on Merchandising Processing Fees
- $700K in savings on broker fees
- Average of $97K in export duty savings per eight containers
- Elimination of duty on scrap
Our joint results and client partnership led to a renewed seven-year contract.
How GEODIS can help
GEODIS is one of the biggest logistics and transportation providers in the U.S. and around the world. Get in touch with GEODIS to see how we can meet your customs brokerage and trade service needs.