Tariff relief offered by SKU Distribution Center in Chandler designated as a Foreign Trade Zone
SKU Distribution Center in Chandler offers a different way for companies to work around international tariffs.
Designated as a Foreign Trade Zone, or FTZ, the company has the ability to defer tariffs to help local companies manage cash flow.
The company is gaining widespread interest as businesses work to stabilize operations amid the new rules.
CHANDLER, Ariz. - Among the chaos of tariffs, one Valley business is turning heads.
It's a local distribution center that offers something different than most.
What we know
Customers of this distribution center are from all across the globe and deal with the impacts of tariffs just like everyone else.
However, SKU Distribution Center in Chandler is marked as a Foreign Trade Zone, or FTZ.
"We've gotten [quite] a bit of interest," said James Peacock, founder and CEO of SKU Distribution.
It puts them in a unique position.
It means international goods parked there don't have to pay tariffs until they leave the warehouse and are sold.
What they're saying
"It comes into the zone, you defer all those duties and taxes until those pieces actually leave the zone" Peacock said.
Businesses from all over are taking notice of the federal FTZ sign stamped in the warehouse.
Founder and CEO James Peacock says his industry is turned upside-down following the Trump administration's international tariffs.
While businesses are trying to figure out how to pass along cost increases from the tariffs, it's different at Peacock's warehouse and fulfillment center.
"I mean everyone in the market is freaking out, I don't think that's an understatement," he said.
Big picture view
SKU has become a desirable option for many businesses.
"Really the only way to manage that portion of your line item cash flow is to use something like this," he said.
Cash flow could become invaluable as the market learns to try to adjust to these new tariffs, offering savings and supply chain efficiencies for importers.
"It's a way for them to continue their supply chain, and kind of park the stuff in a Foreign Trade Zone so they can defer those taxes, take a deep breath, and wait for the dust to settle until everyone figures out exactly what's going on here and can go from there," Peacock said.
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