Christmastime is crunch time for Diageo North America, Stamford, Conn. As a manufacturer and marketer of premium adult beverages, the holiday season is the time to sell. The window of opportunity is brief, so errors or delays are unacceptable. To help manage this most important time of year, Diageo relies on Evans Distribution Systems to provide custom packing, inspection, warehousing and transportation services for point-of-sale packaging programs of its Crown Royal product.
Evans, a full-service logistics supplier with a 75-year history in Detroit, brings the pieces together for final assembly: The whiskey comes in from Canada, the packaging arrives from New York, and the glassware is shipped from the Orient. The component pieces are brought together by Evans through packaging lines; they are custom assembled, warehoused onsite, and shipped to regional distribution centers according to a precise schedule.
To deal with various customs issues, Diageo has an onsite Foreign Trade Zone (FTZ) within one of the Evans warehouses. The FTZ is a secured area legally outside U.S. Customs territory. No duty is paid on imported goods until they leave the zone, and no duty is ever paid on goods that are re-exported. And there's no time limit on how long items may be stored inside an FTZ.
The advantages include:
• Cash flow savings by delaying payment of duties and excise taxes until goods leave the zone;
• Foreign and domestic goods can be intermingled;
• Goods can be released immediately, unlike bonded storage, which can require 48 hours.