U.S. Foreign-Trade Zone Activity in Gulf States Leads to a Record-Breaking Year
Over 90 years after the Foreign Trade Zone Act of 1934 was first established and subsequently introduced the nation’s first FTZ in Staten Island, New York, in 1936, a robust network of activity continues to flourish.
In August 2024, the 85th Annual Report of the Foreign-Trade Zones Board to Congress of the United States was released, showing that Texas, Louisiana, California, South Carolina and Tennessee remained firm in their respective top five ranks for overall FTZ economic impact since 2022.
Fresh data from the report, including aspects such as value of merchandise received, value of exports and number of employees in the zone, helped guide Site Selection in cultivating its own top 20 U.S. FTZs. In 2023, FTZ No. 124 located at the Port of South Louisiana (PortSL) took the lead, followed by FTZ No. 28 in Spartanburg County, South Carolina. Port Arthur’s FTZ 116 in Texas come in at No. 3, followed by fellow Texas FTZ No. 84 overseen by Port Houston. Tied at No. 5 are Puerto Rico’s FTZ No. 7 in Mayaguez and FTZ No. 122 at the Port of Corpus Christi. Three Texas FTZs in the top six provide ample evidence of which state leads the way in overall FTZ impact (chart).
- There were 200 active FTZs during 2023, with a total of 374 active production operations.
- More than 550,000 persons were employed within 1,300 active FTZ operations during the year.
- Value of shipments into zones totaled nearly $949 billion (down $62 billion from more than $1 trillion the previous year).
- About 68% of shipments received involved domestic merchandise.
- “The levels of domestic status merchandise used by FTZ operations — 80% for production operations and 48% for warehouse/distribution operations — indicates that FTZ activity tends to involve domestic operations that include significant domestic inputs alongside foreign inputs.”
- Warehouse/distribution operations received nearly $364 billion in merchandise while production operations received nearly $585 billion (62% of zone activity).
- The largest industries accounting for zone production activity include the pharmaceutical, oil refining, automotive, electronics and machinery/equipment sectors
