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Zone win a highlight of year

AMS Fulfillment in Valencia earns foreign-trade-zone status, allowing companies in area to acts as a

Posted: December 27, 2012 2:00 a.m.
Updated: December 27, 2012 2:00 a.m.

AMS managing partners, President Jay Catlin, left, and CEO Ken Wiseman clap at a ceremony introducing their foreign trade zone status at AMS offices in Castaic on Oct. 25.

 

Editors Note: This series highlights and updates noteworthy business events from 2012.



As Santa Clarita and AMS Fulfillment of Valencia grew, the one thing both lacked was a foreign trade zone status — allowing companies to act as a U.S. port clearing merchandise through a local entity.

The area lacked this designation until AMS Fulfillment achieved that status Aug. 8 when it received a letter from U.S. Customs and Border Protection, notifying the third-party order-fulfillment, warehouse and shipping company that it had activated the foreign trade zone for AMS and the surrounding area – much of which is occupied by AMS warehouses.

AMS spent more than two years of its time, effort and money to pursue the designation, which was carved from dedicated acreage of the larger Foreign Trade Zone No. 191, located in, and managed by the city of Palmdale.

The status essentially allows AMS Fulfillment to act as a port, clearing its clients’ merchandise through U.S. Customs and Border Protection; all while creating significant savings, thereby improving cash flow for clients.

On Oct. 25, however, the company celebrated the newly earned status by opening the zone up to share the benefits with other companies in the Valencia Commerce Center.

Foreign trade zone

Bypassing Customs at the ports creates significant savings for clients of those companies by reducing the amount of time spent at port and the duties paid on merchandise, said Ken Wiseman, CEO and managing partner with AMS Fulfillment.

Foreign and domestic merchandise is not subject to duty fees or federal excise taxes until it leaves the zone for U.S. consumption. Deferring duties and taxes allows companies to save money while the goods are in storage, awaiting distribution to the customers at a later date.

Without the foreign trade zone, companies would have to pay duties once the goods arrived at a U.S. port, said Michael Klepfer, executive vice president of operations.

The U.S. Customs approval allows AMS to break the seals on containers of merchandise upon arrival at its warehouse and affix custom seals to containers of merchandise moving out of the zone without physical supervision by a customs official.

And by offering that service, it allows AMS Fulfillment to attract more business, which in turn will increase hiring, Klepfer said back in August.

Before AMS secured the approval, and aside from the seaports, the closest foreign trade zones were in Palmdale and Tejon Ranch. After approval, Wiseman said he believed AMS Fulfillment became the only company in Los Angeles County approved to provide the service.

Now that AMS has opened up the FTZ to other companies in the Valencia Commerce Center, some have expressed an interest in learning how to benefit from the status.

Sharing

There will be a foreign-trade-zone open house, question and answer meeting for surrounding businesses around the first quarter, said John Bevacqua, who worked with AMS to achieve approval.

Expanding access to other businesses benefits not only AMS, but also any other competitor or manufacturer in the business park that is importing goods, Wiseman said. It benefits economic development locally and it helps drive inland trade, he said.

The activation of the zone assignment benefits other importing business in the area that wish to leverage AMS’s efforts and benefit from being within a certified foreign trade zone, he said.

“This success is aligned with our mission that what is good for our business should also be an effort focused at supporting our community,” Wiseman said.

jana@signalscv.com

661-287-5599

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