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Customer Success

How K&N Boosts Cashflow and Stays Ahead of Competition with Duty Drawback Refunds

AEM Street Car

By The Numbers

15 minutes

time to complete a Duty Drawback claim (previously took a week)

7x

increase in Duty Drawback refunds

How K&N Boosts Cashflow and Stays Ahead of Competition with Duty Drawback Refunds

Since 1969 K&N Engineering has established itself as an auto industry leader. No stranger to moving fast, this veteran company continues to innovate and adapt to a changing landscape. With Flexport, K&N has implemented a duty drawback program that allows them to boost their cashflow and continue investing in new auto technologies.

True to their tagline “filtration for the future,” K&N produces innovative and high-quality air filters for millions of customers, including auto enthusiasts, experts, and the average car owner looking to upgrade their ride. As an official partner of NASCAR, K&N has helped crown notable racing champions. With 100 million disposable filters ending up in landfills each year, K&N’s reusable air filters are also simply better for the planet. Through the extra savings enabled by Flexport, K&N is able to continue innovating and investing in new technology and expanding their brand presence to engage with a new generation.

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Importing and exporting globally is a time-consuming and expensive process, with tariffs and duties quickly mounting in recent years. While this is a well-known fact for logistics and compliance managers, many are less aware of the financial savings associated with the duty drawback program, a federal program that allows U.S. businesses to receive reimbursements on these customs duties and taxes. It’s estimated that 78% of duty drawback refunds go unclaimed—simply put, a majority of businesses are leaving money on the table. Beyond this lack of awareness, the duty drawback process is arduous, time-intensive, and requires specific expertise. This combination presents a challenging barrier to companies who have a lot to gain.

A Tech Solution to Streamline The Duty Drawback Process

For K&N, it was both of these reasons—lack of awareness and additional capacity—that prevented the company from implementing a duty drawback program.

When Dan Strick, Corporate Compliance Manager, was brought on to oversee K&N’s trade compliance program, he quickly gained a sense for how much they were spending on customs duties—up to 30% from Section 301 tariffs alone—as well as the extent of the duty drawback opportunity they were missing out on. Dan’s drawback experience at Fortune 500 companies equipped him with the right questions to ask, but this would be the first time he was building a drawback program from scratch.

While K&N had partnered with Flexport on freight forwarding services, Flexport’s duty drawback program presented yet another winning solution. With Flexport, Dan found not only a tech platform to automate and simplify the drawback process, but also a dedicated team of drawback experts excited to lend their knowledge.

“With the expertise and guidance of Flexport’s duty drawback team, K&N was able to grow its drawback refunds seven times the expected amount.” – Dan Strick, Corporate Compliance Manager, K&N Engineering

With Flexport as K&N’s sole customs broker on the import side, all the necessary import and product-level details are readily available in the Flexport Platform, largely simplifying the data collection process. Dan explains, “I don’t have to upload any import information whatsoever. Everything is already handled through Flexport’s Platform.”

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At the end of the day, Flexport’s automation and centralized data saves Dan—a one-person team overseeing drawback, freight forwarding of international inbound shipments, ESG efforts, and K&N’s product compliance programs—much-needed time. At K&N, the duty drawback process now only comes up periodically throughout the year. As Dan explains, “With other companies, the drawback process was easily a week-long task. With Flexport’s system, it now takes a few minutes.”

Saving Time, Money, and Staying Stress-Free

Flexport’s team itself is yet another “draw” of the program. As Dan set out to create K&N’s duty drawback program, his Flexport team has served as “fantastic business partners” along every step of the way. While he quickly realized just how many steps were involved, Flexport has made it easy and stress-free by guiding him through each of the milestones—both big and small.

Through Flexport’s tech solution and team, Dan has built out a drawback program that not only saves time, but also money—and lots of it—which served to increase K&N’s cashflow, further demonstrating the value of the program to the company’s leadership.

Key Takeaways

1.

K&N was spending up to 30% on Section 301 tariffs alone, like many companies without duty drawback programs, that’s a lot of money left on the table.

2.

With Flexport as K&N’s customs broker on the import side, all the data for drawback filing was in one place, greatly simplifying the data collection process.

3.

Flexport’s tech platform and drawback team helped K&N’s logistics team of one save time and money, increasing their available capital.

  • My Flexport team’s knowledge, as well as their ability to translate that knowledge into easy-to-understand terms, has definitely been a significant driver of our success.

    Dan Strick
    Corporate Compliance Manager, K&N Engineering

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