Case Study: How AI Saved $300K in Missed Duty Recoveries

Case Study: How AI Saved $300K in Missed Duty Recoveries

The Problem: Broker Blind Spots in a High-Stakes Industry

In global trade, even minor missteps can cost companies hundreds of thousands - sometimes millions - in overpaid duties, delayed shipments, or audit penalties. This is especially true in industries like chemicals, where shipments often involve complex materials, multi-country processing, and a shifting patchwork of trade rules.

One of our clients, a multinational chemical manufacturer with operations across North America and Asia, experienced this firsthand.

Despite working with well-regarded customs brokers, the company routinely overpaid tariffs on imported materials - materials that should have qualified for reduced or even zero-duty rates under existing Free Trade Agreements (FTAs). The problem? Their brokers were misapplying HTS codes or failing to cross-reference eligibility for FTA benefits based on origin documentation.

The result: a blind spot costing the company hundreds of thousands annually.

Like many large importers, the client had entrusted most of their classification work and tariff optimization to third-party brokers, assuming that years of experience guaranteed accuracy. Unfortunately, that assumption proved costly.

Digging Deeper: Why FTA Benefits Were Missed

FTA utilization is often trickier than it looks. A shipment of chemical compounds might involve:

• Raw materials sourced from multiple countries
• Processing steps that change country of origin mid-stream
• Region-specific rules of origin under FTAs
• Precise documentation such as certificates of origin, bills of materials (BOMs), or value-added assessments

Even a small error - like missing a component’s production step or misclassifying a compound - can disqualify a shipment from duty relief.

In this case, the client's internal team had limited visibility into how brokers classified each product and whether the proper FTA codes were applied. Their records were stored across disparate systems, and past shipments were rarely audited.

They suspected leakage but had no clear way to quantify the loss or where exactly it was happening.

The Fix: AI-Driven Duty Recovery Audit

That’s where SAIL stepped in.

Our AI-powered trade compliance platform launched a retrospective duty recovery audit - analyzing 24 months of the client’s historical shipment data using a combination of:

• Rule-based tariff engines that simulate how a product should have been classified under current and historical FTA rules
• Document parsing AI to extract and validate data from thousands of certificates, SDS files, and BOMs
• FTA eligibility models to determine which shipments should have received reduced rates based on origin, composition, and routing
• Discrepancy flagging algorithms to compare broker-assigned HTS codes with AI-predicted classifications and applicable FTA reductions

The platform also applied dynamic filters for Section 301 tariffs, country-of-origin tracking, and shifting duty rates, ensuring the audit reflected the reality at the time of each shipment.

In just two weeks, the system surfaced a list of discrepancies - shipments that were:

• Misclassified under higher-duty HTS codes
• Missing the appropriate FTA indicators
• Improperly marked as ineligible due to missing or mismatched documentation

After review by the client’s internal compliance team (with full document evidence and AI explanations in hand), they filed amended entries with Customs. Within 60 days, they had recovered $300,000 in overpaid duties.

Outcome: Financial Wins and a Workflow Overhaul

While the recovered funds were the immediate payoff, the bigger win was strategic.

The company used this event to revamp its compliance process:

1. Real-Time FTA Checks: SAIL now automatically checks every incoming shipment for FTA eligibility during the classification process not after the fact.
2. Document Validation Automation: The platform parses certificates of origin and compares them with BOMs and country-of-origin inputs - flagging errors or missing data in real time.
3. Audit Dashboard: The client now uses our compliance dashboard to monitor classification accuracy, FTA usage rate, broker performance, and duty savings - all in one place.
4. Bilateral Oversight: Brokers still play a role, but now their classifications are double-checked by AI and tracked over time for accuracy.
5. Internal Training: With AI-generated reports explaining why certain classifications or FTA statuses apply, the internal compliance team has leveled up its own expertise.

Key Metrics From the Engagement

Here’s what the client achieved in the first 90 days of using SAIL:

• $300,000 recovered in refunds
• 80% reduction in manual FTA document review time
• 95%+ accuracy in AI-led HTS classifications
• 24-month audit window covered in under 3 weeks
• Ongoing compliance reports feeding directly into senior leadership KPIs

These aren’t just process improvements. They’re business outcomes that impact cost structure, cash flow, and enterprise risk management.

Lesson Learned: Even the Best Brokers Miss Things

The most important takeaway? No broker or compliance team is perfect. Humans make mistakes - especially when processing high volumes of complex imports under constantly shifting trade laws.

What SAIL proved in this case was that AI offers more than just classification assistance. It provides:

• Audit-ready transparency showing the logic behind each classification
• Real-time document intelligence ensuring the right certificates and rules are applied
• Pattern recognition across thousands of shipments far beyond human capacity
• Predictive insights identifying emerging compliance risks and opportunities before they escalate

By embedding these capabilities into everyday workflows, our client turned a costly problem into a platform for strategic advantage.

Final Thought: Don’t Leave Money on the Table

This case isn’t unique. Across industries from electronics to automotive to pharmaceuticals companies are bleeding margin through overlooked FTA opportunities and classification errors.

But they don’t have to be.

With AI-powered tools like SAIL, companies can move from reactive compliance to predictive optimization identifying savings, reducing risk, and scaling smarter operations.

The real question isn’t whether you can afford AI in trade compliance.

It’s whether you can afford not to use it.

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