The Biden Administration has issued a 4-year extension of tariffs on solar panels. While this move is sure to have its share of supporters and detractors, it does complicate the supply chains of solar panel importers. In this article, we’ll look at the benefits of partnering with a 3PL provider to use a solar panel warehouse within a foreign trade zone (FTZ).
The extension of solar panel tariffs
The solar panel tariffs were originally implemented by the Trump Administration in January 2018. The Biden Administration extended the tariffs before they were scheduled to expire in February 2022, but eased some of the restrictions:
- Bifacial modules (panels that generate electricity on both sides) are exempt from the tariffs
- The tariff rate quota was raised to 5 GW annually
- The tariff for crystalline-silicon modules was reduced from 18% to 15%
Solar panel warehousing within an FTZ
With the extension of these tariffs, solar panel importers have a key ally in 3PL providers that offer warehousing within an FTZ.
Foreign trade zones are areas that are under U.S. Customs and Border Protection (CBP) supervision, but are considered outside of CBP territory. With an FTZ, product may enter the U.S. without a formal customs entry, without payment of duties or excise taxes, and without a thorough examination. It is only when the product enters the U.S. for distribution that these duties, taxes and tariffs are collected.
You can store your product within a 3PL-operated FTZ to offset the impact of tariffs and/or simply to pay taxes and duties over time rather than paying them all at once.
Additional benefits of FTZs include:
- Speedier customs clearance and lower fees. Product receipts can be logged weekly as a summary entry with Customs. This results in a less paperwork and a single processing fee, versus a fee for each individual entry.
- Ability to change/alter products quickly. Products can be sorted, cleaned, repaired, assembled, manufactured, exhibited, sold, repacked, and mixed with foreign and domestic goods. All are allowed within the FTZ.
- Stringent security measures. CBP security requirements provide protection against theft.
- No time restrictions. Merchandise may remain in a zone indefinitely, whether or not subject to duty.
- Transfer between FTZs. Products can be transferred between FTZs without duties being assessed.
Lean on Kanban Logistics for a solar panel warehouse within an FTZ
At Kanban Logistics, we have years of experience with solar panel warehousing and other elements of solar panel supply chains. We store solar panels and related equipment across our 7 warehouse facilities in Eastern North Carolina, which total over 1 million square feet of space. At these facilities, we can load and unload solar panels to and from trucks and rail cars; we can handle distribution of panels to local job sites or manage longer-distance moves; and we can handle container drayage from the ports of Norfolk and Wilmington.
Our Rocky Mount, NC warehouse – a rail-sided facility close to the brand new CSX Carolina Connector intermodal terminal – is located within a foreign trade zone. This gives you all the benefits described above along with the peace of mind you get working with a 3PL that truly knows solar panel logistics.
To learn more about solar panel warehousing with Kanban Logistics, contact us today.