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Area added to Va. port's foreign trade zone

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A cargo ship loaded with containers is shown at the Port of Virginia in Norfolk, Va. The U.S. Commerce Department has announced that seven northeastern counties have been added to the port's Foreign Trade Zone.

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By Jon Hawley
Staff Writer

Thursday, December 8, 2016

Area officials say inclusion of northeastern North Carolina counties in the Port of Virginia’s Foreign Trade Zone is one more reason for manufacturers with international supply chains to locate in the region.

The U.S. Department of Commerce has approved seven counties in North Carolina to join the FTZ, the port announced on Monday. The counties include Pasquotank, Camden, Chowan, Currituck, Gates, Hertford and Perquimans.

Among other benefits, companies participating in an FTZ save money on duties paid to U.S. Customs and Border Protection, which helps their goods remain globally competitive while using American labor.

Wayne Harris, director of the Elizabeth City-Pasquotank County Economic Development Commission, welcomed the news on Tuesday. Being in an FTZ means big savings for companies whose manufacturing requires a lot of imports, he explained. In an FTZ, a “fairly typical manufacturer” with 50 employees and 250 customs entries a year could save over $30,000 a year just in reduced reporting on shipments, he estimated.

The FTZ expansion is also well-timed, Harris said, noting that Virginia has finally broken major traffic “bottlenecks” between Elizabeth City and the port. He cited the opening of the second span of Veterans Bridge and the opening of the overpass over Cedar Road. The improvements on U.S. Highway 17 give companies assurance they can locate in Pasquotank's Commerce Park and still only have a 45-minute drive to the port, he said.

Similarly, Camden County Economic Developer Charlie Bauman said the FTZ fits into a “convergence” of good news for the local economy. It's also another “tool in the toolbag” for Camden to recruit manufacturers, such as in the logistics and maritime sectors, he said. Bauman added Camden also has an abundance of available industrial land, including at its Eco-Industrial Park, which is on U.S. 17, just south of the Virginia line.

The FTZ expansion is an effort that started more than three years ago. State lawmakers and Gov. Pat McCrory enacted legislation in 2013 so the Port of Virginia, an out-of-state entity, could apply to add North Carolina counties to the zone. Virginia's attorney general also had to review whether the port had the legal authority to expand past the state line, and the U.S. Department of Commerce also spent about the last seven months reviewing the application.

State Rep. Bob Steinburg, R-Chowan, called the FTZ expansion on Wednesday a victory for the region — a victory long in the making. He said some lawmakers opposed expanding the Port of Virginia's trade zone. They wanted more commerce to flow to North Carolina ports, he said, despite northeastern North Carolina's close ties to the growing port. He noted the Port of Virginia can handle larger cargo ships than North Carolina's ports can.

"That was a bear getting through," Steinburg said of legislation he proposed, which ultimately had to be attached to an unrelated agricultural bill to pass.

Asked about Virginia's delay in expanding the FTZ, Steinburg said he didn't know the details of that. However, he noted Virginia changed governors, from Bob McDonnell to Terry McAuliffe, several months after the bill passed. McAuliffe didn't oppose the FTZ expansion, Steinburg said, but the change in administration meant many people had to be brought up to speed on the process.

Steinburg said county managers and economic developers he's spoken with are "ecstatic" about the FTZ expansion. Coupled with road improvements and state reforms to taxes and regulations, he said the region should be very attractive now to new companies. The FTZ expansion also gives the NCEast Alliance, a regional economic development agency, a tool to recruit businesses, he noted.

In an email to The Daily Advance, Port of Virginia FTZ Administrator Laura Godbolt said FTZ status helps companies of varying sizes. That means the region may appeal to companies supporting established manufacturers, she said.

“Northeastern North Carolina may see success in targeting suppliers of existing North Carolina and Virginia manufacturers,” Godbolt said. Large manufacturers like their suppliers to be close to provide “just-in-time services,” she added.

Godbolt also said some of the biggest manufacturing sectors in the FTZ include petroleum refining, automobile manufacturing, electronics and pharmaceuticals.

The Port of Virginia also estimates it generated $60.3 billion in annual economic impact to Virginia alone, based on 2013 numbers.

Godbolt said companies that want to participate in the FTZ must pay application fees and a yearly administration fee that's based on their square footage. Companies may also face costs for “inventory control, security upgrades and FTZ consultants.” Notably, companies in an FTZ are still under Customs and Border Protection supervision.

Companies interested in participating in the FTZ should contact her, she added. Her number is 757-683-2135 and her email is lgodbolt@portofvirginia.com.

 


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