Flexport recently spotlighted how technology can help unlock larger duty drawback refunds, urging companies to rethink how they manage claims.
In a recent webinar, Tim Vorderstrasse, Flexport’s head of drawback, and Alex Nederlof, director of customs, outlined how importers and exporters can maximize recoveries while staying compliant.
Vorderstrasse noted that while drawback programs are often slow, Flexport’s technology aims to help streamline the process by preparing applications, collecting documentation, and setting up ongoing programs covering up to five years of transactions. Flexport is a global solutions provider based in San Francisco.
“I think it’s important to know the drawback, it’s not a fast thing,” Vorderstrasse said. “It can be faster and we’re working very hard to make it even faster and more efficient and more complete, more compliant.”
Flexport’s software automatically optimizes across multiple provisions, accounts for tariff complexities, and flags errors in import and export data. Through its “instant drawback” option, companies can access 70% of their refunds within days, instead of waiting the four to six weeks usually required for U.S. Customs to pay out, Vorderstrasse said.
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A duty drawback is a U.S. Customs and Border Protection (CBP) program that allows exporters to recover up to 99% of the duties, taxes, and fees they paid on imported goods when those goods are later:
- Exported (in the same condition or after manufacturing), or
- Destroyed in the U.S.
It’s essentially a refund program designed to reduce the cost burden of tariffs and encourage U.S. exports.
There are 27 categories, including unused merchandise drawback; manufacturing drawback; and ejected merchandise drawback.
For companies with significant import/export volumes, drawbacks can mean millions of dollars in refunds annually.
The Government Accountability Office has pegged annual drawback refunds at about $1 billion, while transportation industry providers such as C.H. Robinson estimates recoveries have climbed to nearly $4 billion a year.
Leading logistics and trade firms like Flexport, C.H. Robinson, UPS, Expeditors, are frequently named in industry reports as major participants in the duty drawback space.
Nederlof said Flexport’s technology was built to solve limitations in legacy drawback software, which often relies on manual workarounds. Using proprietary algorithms, Flexport’s system analyzes vast combinations of import and export data to maximize compliant matches.
“Some of the results have been mind-blowing — up to four times what competitors could do with the same claims,” Nederlof said.
Case studies shared by Flexport during the webinar showed apparel, consumer, and automotive brands boosting recoveries by 14% to more than 40%. One apparel brand increased its claim by $230,000 after Flexport helped optimize its calculations
“Drawback does not discriminate — whether you’re in apparel, automotive, cosmetics, or aerospace, there’s likely an opportunity,” Nederlof said.
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