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Miami Airport Designated A Foreign Trade Zone

Miami Airport Designated A Foreign Trade Zone
The west cargo area of Miami International Airport

All 3,230 acres of Miami International Airport were designated a Foreign Trade Zone magnet site by the U.S. Department of Commerce this month.

Tenants who operate manufacturing, warehousing or distribution centers on the property can now apply for FTZ status, get their applications expedited and have their federal tariffs slashed or eliminated. The designation is expected to benefit companies that deal with highly trafficked goods like pharmaceuticals, electronics, clothing, machinery and car and aircraft parts.

FTZs are designated sites where special customs procedures are in effect. These zones are considered outside of U.S. Customs territory. The FTZ program was created to remove disincentives associated with manufacturing in the United States. Because products that are manufactured abroad and then imported into the U.S. are taxed only on the finished product, U.S.-based manufacturers can be disadvantaged if they have to pay higher rates on each individual component that is imported.

“The FTZ program corrects this imbalance by treating products made in the zone, for the purpose of tariff assessment, as if it were manufactured abroad,” according to U.S. Customs and Border Patrol. “At the same time, this country benefits because the zone manufacturer uses U.S. labor, services and inputs.”

Getting designated as an FTZ can provide a host of benefits for businesses. For example, if a company imports a lot of raw materials into an FTZ, builds something, then re-exports its product to another country, no tariffs will apply. Or, if a company imports raw materials, builds something and then forwards its product on the U.S. commerce stream for sale, it will pay duty only on the finished product, not all the raw materials and waste.

The airport's designation is an extension of the existing FTZ 281 that was granted to PortMiami six years ago and now encompasses 65 sites. Any business between SW 8th Street and the Broward County line is eligible to apply as a magnet site or FTZ under the port's designation, but that can be a long process. An airport spokesperson said it took years for the airport to be designated a magnet site. Now, under its umbrella, its tenants can qualify as FTZ operators by completing an application with PortMiami and then get expedited approval from U.S. Customs and Border Protection in about 30 days. The application costs $2,500.

“The magnet site removes some of the cost and logistics challenges faced by cargo handlers who want to expand their operations at MIA,” Miami-Dade Aviation Department Chief of Staff Joseph Napoli said. “Existing or prospective airport tenants can now receive, process and distribute merchandise immediately upon entry into the U.S. on MIA property, which reduces the need to transport materials off-site. Magnet site operators also have the benefit of deferred, reduced or eliminated federal tariffs, which provides additional expediency to our supply chain process."

Napoli said that the airport was aiming to become one of the world’s leading pharma hubs, as well as "the e-commerce hub of the Americas." 

The airport includes 8.7M SF of industrial buildings, including cargo warehouses, office space, hangars and maintenance shops. A real estate appraisal done last year found there was strong demand in the Airport West submarket, but that the airport itself had problems with deferred maintenance, so tenants might prefer competing, off-airport sites.