(516) 872-5570 info@jmrodgers.com

Case Study

Maximizing Cost Recovery: Unlocking $2.5M in Duty Refunds Through an Integrated Customs Strategy
By integrating customs brokerage and duty drawback services, a multinational automotive manufacturer recovered an additional $2.5 million annually in duty refunds, improved compliance to 100%, and increased operational efficiency by 30% through automation and centralized data management.

Client

A multinational automotive manufacturer importing vehicle components and exporting finished products worldwide.


Challenge

The client faced increasing costs and inefficiencies due to unoptimized customs brokerage and duty drawback processes:

  1. Missed Duty Drawback Opportunities:
    • The company was not fully recovering eligible duties paid on imported components later exported as part of finished vehicles.
    • Lack of integration between customs brokerage and drawback teams led to missed claims and lost refunds.
  2. Complex Documentation Requirements:
    • Managing customs declarations and duty drawback claims required extensive, accurate documentation, creating administrative burdens.
    • Inconsistent data sharing between brokerage and drawback service providers increased errors and delays.
  3. Compliance Risks:
    • Incorrect filing of duty drawback claims posed the risk of penalties and audit scrutiny from U.S. Customs and Border Protection (CBP).
    • Misalignment between import/export data created reconciliation challenges.

Solution

The client partnered J.M. Rodgers to combine customs brokerage and duty drawback services under one integrated solution, creating operational synergies:

  1. Centralized Data Management:
    • Combined brokerage data (import entries) with duty drawback claims to create a single, comprehensive database.
    • Automated reconciliation of imports and exports to identify all eligible drawback opportunities.
  2. Integrated Workflow:
    • Customs brokers ensured accurate HS classifications, valuation, and duty payments during import declarations.
    • Duty drawback specialists accessed the same data to streamline and expedite drawback claim filings.
  3. Automated Duty Drawback Filing:
    • Implemented a technology platform that connected customs brokerage systems with duty drawback claims.
    • Real-time reporting allowed quick identification of eligible claims and faster submissions to CBP.
  4. Compliance Alignment:
    • Aligned drawback claims with import and export documentation to ensure compliance with CBP’s Part 191 drawback regulations.
    • Conducted proactive audits to identify errors and prepare for potential CBP reviews.
  5. Staff Training and Collaboration:
    • Trained internal teams to understand the connection between brokerage and drawback processes.
    • Established cross-functional collaboration between brokerage and drawback teams to improve data accuracy.

Results and Benefits

Outcome

  1. Increased Duty Refunds:
    • Recovered an additional $2.5 million annually in duty refunds by identifying previously missed opportunities.
    • Accelerated refund timelines by 40% due to integrated workflows and faster claim submissions.
  2. Operational Efficiency:
    • Reduced administrative workload by 30% through automated reconciliation and centralized data sharing.
    • Eliminated duplicate processes between brokerage and drawback teams, saving significant time and resources.
  3. Improved Compliance:
    • Achieved 100% compliance with CBP regulations for both customs declarations and drawback filings.
    • Avoided penalties by ensuring alignment between import/export documentation and claims.
  4. Cost Savings:
    • Reduced costs associated with manual reconciliation and missed claims.
    • Maximized cost recovery, improving the company’s bottom line.
  5. Enhanced Visibility and Reporting:
    • Real-time dashboards provided clear visibility into duty payments, eligible refunds, and claim statuses.
    • Improved audit readiness with consolidated and accurate data records.

Key Takeaways

  • Combining customs brokerage and duty drawback services under a single provider creates synergies that streamline processes, reduce errors, and maximize refunds.
  • Centralized data management and automated reconciliation ensure no eligible refunds are missed while maintaining full compliance.
  • Integrated workflows significantly improve operational efficiency and deliver measurable financial benefits.