• Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za
  • Facebook
  • Home
  • About Us
  • Services
    • Air Freight
    • Customs Clearing
    • Customs Consulting
    • Freight Forwarding
    • Transport Services
    • Warehousing
  • Blog
  • Contact Us
a picture of a truck next to a picture of a cargo ship
Different Types of Freight Services & Their Purpose
September 10, 2019
Truck with logs
The Environmental Impact of Eco-Friendly Logistics Practices
October 9, 2019

The Meaning & Benefits of Free Trade Zones

September 13, 2019
Categories
  • Uncategorized
Tags
  • meaning & benefits of free trade zones
  • New Horizon Freight Solutions
  • NHFS
Side view of container cranes in shipping yard

Free Trade Zones take up a unique space in the geography of the world, which we at NHFS are acutely aware of. As the planet becomes increasingly globalized, competition has become rife between countries and cities. This has meant that there is an exponential growth in terms of trade wars.

Why Free Trade Zones are Relevant

That is what lead to those destinations offering a variety of incentives that encouraged any potential investors or businesses to build bases within set boundaries. While these incentives can come in the form of tax breaks and waivers or a more streamlined process for buying property, this blog discusses the alternative option of the establishment of a Free Trade Zone.

What is a Free Trade Zone?

The meaning & benefits of free trade zones are very clear. However, many people are still unaware of what exactly a Free Trade Zone (FTZ) is.

“An FTZ is a geographical location where goods can be traded without the involvement of customs authorities.”

Additionally, an FTZ can also apply to a set location where trade barriers can be removed, allowing for a smooth bureaucratic process. Often, this means that the definition of an FTZ is as a labour-intensive manufacturing hub that imports either components or raw materials and exports produced goods. That means that the main benefit of FTZs is that companies can land, handle, manufacture, and re-export without having to file reams of paperwork with customs authorities. Only when goods are delivered to the country where the consumer will be, do the goods then become subject to any of the localized customs duties.

Also Read Now: HOW TO FUTURE-PROOF YOUR SUPPLY CHAIN

Locational Benefits

The reason that FTZs are so beneficial for companies is that they are generally located in places that are an advantage for trading. International airports and the surrounding areas are often turned into FTZs, as are seaports. These special economic zones are not subject to the usual immigration laws and the restrictions that are in place to prevent foreign investment. Countries often agree to a Free Trade Zone development to eradicate barriers to trade. With fewer tax considerations and less dependence on customs duties, businesses can streamline their shipping and manufacturing.

Operational Benefits

Free Trade Zones come with a variety of additional benefits that make them very attractive to business owners. Many FTZs come complete with indefinite storage, in-house security, and structured insurance coverage. Because FTZs are dependant on the businesses that use them, most will also have state of the art facilities as well.

Economic Benefits

The purpose of Free Trade Zones is economic development. They create job opportunities and provide businesses with more options. Due to the prevailing manufacturing element of FTZs, the supply of raw materials and well-trained skilled labour is vital. Overall, businesses benefit greatly from Free Trade Zones, because they can speed up their work processes and achieve a faster rate of turnaround for the import or export of vital goods and materials.

Maximise Profits by Partnering with a Professional Logistics Firm like NHFS

The point of national and international Free Trade Zones is to ensure the smoother development of cross-border trade. When these are impaired by customs regulations, then a business is slowed down. With the cost-effectiveness allowed by FTZ for both importers and exporters, Free Trade Zones are a vital component of the modern world. Get in touch with NHFS to find out more about us.

Also Read Now: BIG DATA’S INFLUENCE ON THE SHIPPING INDUSTRY

Share
2

Related posts

New Horizon Freight solutions discuss 5 Ways to Minimise the Threat of Theft During Shipments
May 1, 2022

5 Ways to Minimise the Threat of Theft During Shipments


Read more
New Horizon Freight solutions discuss shipping perishables
April 1, 2022

How to Successfully Ship Perishables


Read more
NHFS discuss freight forwarding
March 1, 2022

The 5 Stages of Freight Forwarding


Read more

Search NHFS:

Proud Member of

Durban Chamber of Commerce and Indusrty Logo

We Like You, Like Us!

Facebook Pagelike Widget

New Horizon Freight Solutions

Your trusted level B-BBEE accredited logistics provider in Kwa-Zulu Natal.

RSS LATEST NEWS: Logistics Industry Updates

  • Trucking and logistics SMEs on starting and managing a fleet business
  • Edgars makes big push into click and collect
  • UAE to build Red Sea port in Sudan in $6bn investment package
  • Massmart store presence on OneCart to double by December
  • CILTSA event to spotlight ESG and its impact on logistics industry
  • Acsa wins top three best airports in Africa
  • Expansion plans for Durban, Ngqura port terminals commended
  • Uber, Saps partner on safety sessions programme
  • Massmart opens new flagship distribution centre in Johannesburg
  • Amidst a rise in social unrest incidents, businesses need to prepare for supply chain disruptions
© Copyright NHFS. All Rights Reserved | Website design by Easy 2 Access
  • Facebook