supply chain managenment Archives

Global supply chains have always been something of a high-wire act. For decades, companies have worked tirelessly to balance speed, efficiency, and cost while facing unpredictable challenges—everything from labor strikes and new tariffs to natural disasters and, more recently, global pandemics. Each disruption threatens to slow down or even break the flow of goods.

Traditionally, businesses responded with a familiar toolkit: better forecasting models, stronger relationships with vendors, and contingency plans designed to soften the blow of sudden shocks. These strategies were useful, and in many cases still are. However, the rules of the game have changed.

Today, technology is rewriting the playbook. Artificial intelligence (AI) and automation are no longer experimental tools tucked away in innovation labs. Instead, they’re actively transforming how supply chains operate. By offering speed, precision, and predictive insight, these technologies are helping companies turn uncertainty into an opportunity rather than a liability.

Let’s take a closer look at how AI and automation are reshaping the way goods move across the globe.

Improves Forecasting

Forecasting has always been at the heart of supply chain management, but traditional methods rely heavily on historical sales data. The problem? The past doesn’t always predict the future, especially in volatile markets. A sudden celebrity endorsement, a viral TikTok trend, or an unexpected storm can flip demand upside down overnight.

Fortunately, AI-powered forecasting relies on systems that ingest streams of real-time data, everything from social media chatter and online shopping behavior to weather reports and shipping updates. As a result, businesses can spot trends earlier and adapt quickly. In fact, research shows that AI-driven forecasting can reduce errors by up to 20 percent, which translates into major savings and better customer satisfaction. This could mean a retailer using this tech to know that a new sneaker is about to go viral, days before competitors catch on.

Transforms Warehousing

For years, warehouses were treated as simple storage facilities. Products came in, sat on shelves, and eventually went out. However, with e-commerce booming and customer expectations for speed at an all-time high, the old approach no longer works.

This is where AI and automation step in. Today’s warehouses are intelligent ecosystems. Robots glide across the floor, moving products faster and more accurately than human workers ever could. At the same time, AI-powered systems optimize layouts so items are stored in the most efficient spots, reducing the time it takes to locate and ship them.

Moreover, the benefits don’t stop at efficiency. When sudden spikes in demand hit, say, during holiday seasons or a global event that shifts buying patterns, automated systems can reconfigure workflows instantly. If a shipment is delayed, the system might reprioritize tasks, reroute goods, or spread workloads more evenly across teams. As a result, operations become more resilient, bouncing back quickly even under stress.

Maps Supply Chains

One of the biggest risks in global supply chains is the lack of visibility. Many companies know their direct suppliers but have little or no information about who supplies those suppliers, or where critical raw materials originate. That blind spot can be devastating when something goes wrong deep in the chain.

Fortunately, AI tools are helping to solve this problem. By analyzing invoices, customs records, freight bookings, and even scanning news reports, AI systems can piece together detailed maps of multi-tier supply networks. Consequently, businesses can see not just their immediate partners but the extended ecosystem they rely on.

This new visibility allows companies to diversify sourcing, identify potential choke points, and create contingency plans. Instead of being blindsided by a disruption, businesses can anticipate risks and take proactive action.

Simulates “What-If” Scenarios

Preparing for disruption is never easy, but AI makes it much more manageable by enabling digital simulations. Think of them as supply chain fire drills. Companies can model scenarios, such as a port strike, a cyberattack, or a sudden shortage of raw materials, and then see how those disruptions would ripple through their networks.

For instance, a simulation might reveal that if a supplier in Asia shuts down, inventory shortages in North America would occur within two weeks. Armed with that knowledge, leaders can reroute shipments, stockpile critical products, or prioritize certain customers. In this way, when the real disruption happens, the company isn’t caught off guard.

Optimizes Resources

Supply chains are resource-intensive by nature. They consume raw materials, energy, labor, and transportation capacity. However, AI and automation act like precision instruments, ensuring these resources are used wisely.

For example, routing systems powered by AI can calculate delivery routes that minimize fuel consumption by analyzing traffic, road conditions, and weather. Meanwhile, automated production lines cut, mix, and process materials with minimal waste.

Strengthens Decision-Making

At the heart of every resilient supply chain is decision-making. Leaders must make choices quickly, often with incomplete information, and under enormous pressure. Here, AI proves invaluable by analyzing thousands of variables that would overwhelm a human planner. For example, AI can recommend shipping routes that balance cost, speed, and reliability by factoring in fuel prices, port congestion, and real-time delays.

However, AI shouldn’t have the final word. Human judgment, especially when ethical, cultural, or reputational issues are at stake, remains critical. Ultimately, the strongest outcomes come when machine intelligence and human wisdom work hand in hand.

Capitalize on the Powers of AI and Automation

AI and automation are rapidly becoming the backbone of resilient operations. So, the question is not whether to adopt them, but how quickly. Forward-thinking companies are already proving their value. Moreover, they are using these technologies not only to withstand challenges but to turn volatility into opportunity.

If your company depends on suppliers (and let’s face it, nearly every company does), this is your wake-up call. The disruptions of the last decade won’t disappear. On the contrary, they’re likely to intensify. By embracing AI and automation now, you can prepare to weather the next storm while positioning your business to lead through it.

The Global Entry with Thomas Taggart — A bi-weekly column on navigating global trade, ecommerce, and compliance in a changing world

The end of the U.S. de minimis exemption for all countries on August 29 isn’t just a policy change — it’s a profitability shockwave. Every shipment, no matter how small, now needs a full customs entry and will incur applicable duties. For many ecommerce brands, that means higher landed costs, tighter margins, and a scramble to adapt before peak season.

But there’s an underused tool in the tariff survival kit — one that can put real money back in your pocket without changing your supply chain, product design, or market strategy. It’s called Duty Drawback, and if you’ve ever imported goods into the U.S. and then exported them again, you may already be sitting on a refund opportunity worth six or seven figures.

Why Duty Drawback Belongs in the Conversation Now

In Passport’s 2025 Peak Season Playbook survey with Drive Research, 99% of ecommerce leaders said tariffs and trade shifts are already affecting their Q4 planning. That’s not surprising when you consider how stacked the costs have become:

Section 301 tariffs on Chinese goods (7.5%–25%)
IEEPA emergency tariffs (20%) layered on China-origin goods
Reciprocal tariffs ranging from 10% to 41% on other origins, plus Merchandise Processing Fees and Harbor Maintenance Fees

For brands used to shipping low-value orders under de minimis, those costs hit hard — especially if returns, re-exports, or multi-market fulfillment are part of the mix.

That’s where duty drawback comes in. The U.S. government has offered this refund mechanism since 1789, but most ecommerce companies have never heard of it, much less used it. In essence, drawback allows you to recover up to 99% of duties, tariffs, and certain fees paid on goods that are imported and later exported in the same condition.

Duty Drawback 101: How It Works

Think of drawback as a “second chance” on duties you’ve already paid. If you import goods into the U.S. and then export them — to a customer overseas, to an international warehouse, or even back to the manufacturer — you can claim a refund on almost all the duties and fees for those units.

For ecommerce brands, the most relevant categories are:

Unused Merchandise Drawback – Finished goods imported and later re-exported unchanged (e.g., apparel shipped from a U.S. warehouse to a customer in Canada).
Rejected or Destroyed Merchandise Drawback – Goods that are defective, returned, or destroyed under customs supervision.
Manufacturing Drawback – Less common for DTC brands, but applies if imported inputs are used to make a product in the U.S. that is then exported.

Key rule: “Unused Merchandise” must leave the U.S. in substantially the same condition they arrived. Repackaging for shipping is fine; altering the product is not.

The Opportunity in Real Numbers

Here’s a simple scenario:

You import $500,000 worth of footwear from Vietnam into the U.S., paying 12% in duties plus a Merchandise Processing Fee and Harbor Maintenance Fee.
Over the year, 10% of that inventory ships to customers in Canada and the UK from your U.S. warehouse.
That 10% is eligible for drawback — nearly $6,000 in recoverable duties for just one product category, one year. Multiply that across multiple SKUs and multiple years (claims can be filed retroactively for up to five years), and the total refund can climb into the six or seven figures.

Why Brands Miss It

Despite the potential, most brands don’t file drawback claims. Common misconceptions include:

“We’re not big enough.” In reality, mid-market brands often see the biggest percentage boost to margins.
“It’s too complex.” While documentation and data matching are required, a licensed customs broker can manage the process.
“It takes too long.” Initial setup can take months, but once in place, refunds can be processed in as little as 3–6 weeks.
“We don’t export enough.” If you ship to Canada, Mexico, the UK, the EU, or Australia from U.S. inventory — even occasionally — you may qualify.

The Process at a Glance

Eligibility Assessment – Review your U.S. import data and outbound international shipments to identify overlap.
Privileges Application – File with U.S. Customs and Border Protection (CBP) to get authorized for drawback.
Data Matching – Match import entries to corresponding export shipments at the SKU level.
Claim Filing – Submit claims periodically (monthly or quarterly) with all required documentation.
Audit Readiness – Maintain records for at least five years in case CBP reviews your claim.

How Duty Drawback Fits a Post–De Minimis Strategy

Drawback works best when integrated into your broader U.S. fulfillment model. For brands shifting to in-country enablement — bulk importing into the U.S., fulfilling domestically, and shipping internationally from U.S. inventory — drawback is a natural fit. Those outbound international orders create an automatic stream of eligible exports.

It’s also powerful for:

High-return categories like apparel and footwear, where international returns can be refunded under drawback rules.
Hybrid fulfillment models that blend cross-border DTC shipping with in-country inventory.
Seasonal or promotional exports, like sending U.S. stock to an overseas warehouse for a holiday push.

Quick Self-Check: Is Drawback Worth Exploring?

If you can answer “yes” to any of these, it’s time to run the numbers:

Do you ship from U.S. inventory to international customers?
Do you have returns from international orders fulfilled in the U.S.?
Do you transfer U.S. stock to warehouses overseas?
Have you been importing the same products into the U.S. for several years?

Why Move Now

In our survey, 81% of ecommerce leaders said tariff costs are significant enough to impact pricing — and 7 in 8 are raising prices to cope. Duty drawback offers a way to protect your margins without passing the entire cost onto your customers. And because you can file retroactive claims for up to five years, waiting means leaving real money on the table.

The Bottom Line

Duty drawback isn’t a loophole — it’s a centuries-old program designed to keep U.S. trade competitive. In today’s post–de minimis, high-tariff environment, it’s one of the few levers that can immediately improve cash flow without disrupting your operations or your customer experience.

If you’re importing into the U.S. and exporting — even occasionally — you could be entitled to a substantial refund. The only wrong move is ignoring it.

Author Bio

Thomas Taggart is VP of Global Trade at Passport, a leading global ecommerce solutions provider helping brands like Ridge, HexClad, and Wildflower Cases scale globally with cross-border shipping, expert compliance support, and in-country enablement services. To learn more about Passport, visit passportglobal.com. The Global Entry with Thomas Taggart is a new bi-weekly column in Global Trade Magazine covering the strategies, regulations, and insights shaping the future of cross-border commerce.

How AI and Automation Are Helping Build More Resilient Supply Chains