Avnet secures foreign trade zone authorisation

Avnet fiscal results for Q4 2020 were $4.2bn, compared to $4.7 in Q4 2019; whereas yearly sales dropped to $17.6bn, from $19.5bn in 2019.

Avnet has secured Foreign Trade Zone authorisation from the United States Bureau of Customs and Border Protection (CBP) for its McKemy Distribution Centre in Chandler, Arizona. The designation reduces tariff recovery fees for its international customers as well as for domestic customers shipping abroad. Foreign Trade Zone authorisation also increases the company’s global logistics efficiency and improves its cash flow.

Supervised by CBP, Foreign Trade Zones (FTZs) help facilitate international trade and increase global competitiveness of American businesses. With the McKemy Distribution Centre as an authorised 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.

The authorisation 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 sq ft, the McKemy Distribution Centre is one of the largest FTZ 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.

“We’re focused on reducing time to market for our customers and leveraging the McKemy Distribution Centre as an FTZ further improves efficiencies in our distribution network,” said Vincent Cellard, Vice President of Operations and Supply Chain at Avnet.

Source: Avnet