In today’s economy, Free Trade Agreements (FTAs) play a vital role in reducing costs and optimizing supply chains for businesses. In this blog we will explore what FTAs are and how they can benefit your company.

What are Free Trade Agreements (FTAs)?

FTAs are treaties between two or more countries designed to minimize tariffs and trade barriers. They allow countries to exchange goods and services with little to no tariffs, establishing rules for how countries conduct business together. In manufacturing, this typically affects the importing and exporting of goods. The United States currently has fourteen FTAs with 20 different countries. According to the International Trade Administration, “For the United States, the main goal of trade agreements is to reduce barriers to U.S. exports, protect U.S. interests competing abroad, and enhance the rule of law in the FTA partner country or countries.”

How FTAs Can Save You Money and Prevent Supply Chain Disruptions 

When your company utilizes FTAs, it can save money in several ways, including: 

  • Lower Costs: With reduced or eliminated tariffs, your company can expect to pay less for imports and exports, leading to significant cost savings. 
  • Material Sourcing: By removing trade barriers, your company has opportunities to source materials from other countries at a lower cost. 
  • Fewer Restrictions: FTAs remove restrictions on what can and cannot be traded. 
  • Improved Supply Chain Optimization: With materials more readily available due to a more stable trading environment, you can expect a smoother flow of goods and materials. 

Kem Krest’s Success with FTAs: In October 2023, Kem Krest built a plan to manage new tariffs on aluminum on short notice. We acted quickly and notified the customers who might be affected. We worked with suppliers to gather the newly required information. This not only saved our customers time, as we fully managed the declaration process, but also saved them money.

To learn more about our process click here to read our case study.

Outsourcing FTA Management vs. In-Sourcing 

While FTAs reduce barriers, there are some limitations depending on the country and their standards. For example, some countries may have restrictions on certain medicines or drugs. A lot of checks and balances go into verifying what the supplier says the good is and if it is applicable to the FTA. You may have items that aren’t falling under an FTA but should. It is important to have an expert in Free Trade Agreements working with your company to make sure you are utilizing them to their full benefit. 

At Kem Krest, we have a logistics team with on-staff customs brokers. We can bring in an audit process to ensure your imports and exports are falling under the appropriate FTAs. While conducting this audit, we can suggest moving supplies to countries with FTAs or utilizing a supplier we already have in place in those zones. 

We already have experts who can do the work for you, so your company doesn’t need to have anyone on staff skilled in this area, saving even more on top of the FTA savings. We are here to do the FTA work while you reap the benefits of cost savings as well as supply chain optimization.

Conclusion

Free Trade Agreements (FTAs) offer significant benefits for companies looking to reduce costs and optimize their supply chains. By minimizing tariffs and trade barriers, FTAs provide opportunities for lower material sourcing costs, fewer restrictions on trade, and improved supply chain stability. However, navigating the complexities of FTAs requires expertise to ensure your company fully leverages these advantages.

At Kem Krest, our logistics team, including on-staff customs brokers, is equipped to handle all aspects of FTA management. We conduct thorough audits to ensure your imports and exports comply with relevant FTAs, and we can recommend strategic adjustments to maximize your savings and efficiency.

Work with Kem Krest

Don’t let the complexities of Free Trade Agreements hold your company back. Contact Kem Krest today to learn how we can help you save money and streamline your supply chain through expert FTA management. Let us handle the details so you can focus on what you do best—growing your business.

Subscribe To Our Newsletter

In today’s economy, Free Trade Agreements (FTAs) play a vital role in reducing costs and optimizing supply chains for businesses. In this blog we will explore what FTAs are and how they can benefit your company.

What are Free Trade Agreements (FTAs)?

FTAs are treaties between two or more countries designed to minimize tariffs and trade barriers. They allow countries to exchange goods and services with little to no tariffs, establishing rules for how countries conduct business together. In manufacturing, this typically affects the importing and exporting of goods. The United States currently has fourteen FTAs with 20 different countries. According to the International Trade Administration, “For the United States, the main goal of trade agreements is to reduce barriers to U.S. exports, protect U.S. interests competing abroad, and enhance the rule of law in the FTA partner country or countries.”

How FTAs Can Save You Money and Prevent Supply Chain Disruptions 

When your company utilizes FTAs, it can save money in several ways, including: 

  • Lower Costs: With reduced or eliminated tariffs, your company can expect to pay less for imports and exports, leading to significant cost savings. 
  • Material Sourcing: By removing trade barriers, your company has opportunities to source materials from other countries at a lower cost. 
  • Fewer Restrictions: FTAs remove restrictions on what can and cannot be traded. 
  • Improved Supply Chain Optimization: With materials more readily available due to a more stable trading environment, you can expect a smoother flow of goods and materials. 

Kem Krest’s Success with FTAs: In October 2023, Kem Krest built a plan to manage new tariffs on aluminum on short notice. We acted quickly and notified the customers who might be affected. We worked with suppliers to gather the newly required information. This not only saved our customers time, as we fully managed the declaration process, but also saved them money.

To learn more about our process click here to read our case study.

Outsourcing FTA Management vs. In-Sourcing 

While FTAs reduce barriers, there are some limitations depending on the country and their standards. For example, some countries may have restrictions on certain medicines or drugs. A lot of checks and balances go into verifying what the supplier says the good is and if it is applicable to the FTA. You may have items that aren’t falling under an FTA but should. It is important to have an expert in Free Trade Agreements working with your company to make sure you are utilizing them to their full benefit. 

At Kem Krest, we have a logistics team with on-staff customs brokers. We can bring in an audit process to ensure your imports and exports are falling under the appropriate FTAs. While conducting this audit, we can suggest moving supplies to countries with FTAs or utilizing a supplier we already have in place in those zones. 

We already have experts who can do the work for you, so your company doesn’t need to have anyone on staff skilled in this area, saving even more on top of the FTA savings. We are here to do the FTA work while you reap the benefits of cost savings as well as supply chain optimization.

Conclusion

Free Trade Agreements (FTAs) offer significant benefits for companies looking to reduce costs and optimize their supply chains. By minimizing tariffs and trade barriers, FTAs provide opportunities for lower material sourcing costs, fewer restrictions on trade, and improved supply chain stability. However, navigating the complexities of FTAs requires expertise to ensure your company fully leverages these advantages.

At Kem Krest, our logistics team, including on-staff customs brokers, is equipped to handle all aspects of FTA management. We conduct thorough audits to ensure your imports and exports comply with relevant FTAs, and we can recommend strategic adjustments to maximize your savings and efficiency.

Work with Kem Krest

Don’t let the complexities of Free Trade Agreements hold your company back. Contact Kem Krest today to learn how we can help you save money and streamline your supply chain through expert FTA management. Let us handle the details so you can focus on what you do best—growing your business.

Subscribe To Our Newsletter

ABOUT KEM KREST

Kem Krest, a certified minority business enterprise (MBE), is the nation’s leading provider of supply chain optimization solutions to automotive, powersports, and heavy-duty OEMs. Through our dedicated team members, lean operating system, and streamlined technology, Kem Krest ensures a resilient and uninterrupted supply chain for the programs we manage.

Through customized end to end solutions that address every facet of the supply chain—from inventory management, fulfillment, warehousing, kitting, packaging, logistics, and transportation management, Kem Krest enables companies to increase operational efficiency, deliver superior customer and employee experiences, focus on growth initiatives, and achieve cost savings.

Kem Krest partners with companies to virtualize their supply chains through a growing network of 12 facilities in the US and Canada, featuring 1.75M sq. ft. of warehouse space and 600+ full-time team members. For more information, please visit Kem Krest’s website at www.kemkrest.com.