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Foreign trade zone status gained in SCV

AMS Fulfillment to act as a clearinghouse in lieu of seaports

Posted: August 14, 2012 2:00 a.m.
Updated: August 14, 2012 2:00 a.m.
Vice President of Operations Mike Klepfer surveys the AMS Fulfillment warehouse in Valencia on May 24. Vice President of Operations Mike Klepfer surveys the AMS Fulfillment warehouse in Valencia on May 24.
Vice President of Operations Mike Klepfer surveys the AMS Fulfillment warehouse in Valencia on May 24.

After a nearly two-year certification process, AMS Fulfillment of Valencia has secured foreign trade zone status.

U.S. Customs and Border Protection, in a letter dated Aug. 8, notified the third-party order-fulfillment, warehouse and shipping business AMS that the foreign trade zone has now been activated for the company.

The status essentially allows AMS 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.

Los Angeles and Long Beach Port Director Carlos C. Martel advised AMS that it is now cleared to break the seals on containers of merchandise upon arrival at its warehouse and affix customer seals to containers of merchandise moving out of the zone without physical supervision by a customs official.

“We are excited about how the implementation of the FTZ status will assist our clients in reducing the upfront costs of port duties, and also reduce the costs and expedite the process of receiving inbound international freight,” said Ken Wiseman, CEO and managing partner.

The FTZ status allows AMS Fulfillment to attract more business, which in turn will mean increased hiring, said Michael Klepfer, executive vice president of operations in late May when the company was still working through the application process.

Companies doing business with AMS also reap benefits, said John Bevacqua of Deluxe Media Management, who worked with AMS to achieve FTZ approval. A business can reduce taxes and duties in an FTZ.

Foreign and domestic merchandise is not subject to duty fees or federal excise taxes until it leaves the designated FTZ 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 FTZ, companies would have to pay duties once the goods arrived at a U.S. port, Klepfer said.

Another benefit for clients is when products need to be relabeled or the packaging altered, resulting in merchandise processing fees which can affect the duty related costs for a company. In a FTZ, the fee is deferred initially and then a company only pays a maximum cap of $485, Bevacqua said.

AMS Fulfillment had to have square-footage allotted to it out of zone No. 191 in Palmdale. The Santa Clarita Valley is in Palmdale’s service area, granted in 1993.

A swatch of land was pulled out of the Palmdale areas and activated for AMS, said Kari Blackburn, senior economic development project manager with the city of Palmdale’s Community Redevelopment Agency.

AMS Fulfillment manages the inventory, order fulfillment and shipping for a number of brand-companies including Toms Shoes, Ironclad, Native, Umbro, C1rca and more.

For Los Angeles County clients, aside from the seaports, the closest foreign trade zones are in Palmdale and Tejon Ranch.

“We will be one of the only fulfillment providers in L.A. County that I am aware of that is providing this service,” Wiseman said.



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