Propelling Margins: Turning Trade Compliance into a Strategic Asset in Aerospace

Client Profile: A Tier-1 Aerospace Innovator & Launch Provider

Industry: Aerospace & Defense

Challenge: Margin leakage via duty overpayments and operational friction.

Solution: A compliance-first program to optimize HTS classification and recover duties compliantly.

The Challenge: The Hidden Gravity of Trade Costs

Our client imports advanced components into the United States, integrates them into complex launch vehicles and spacecraft, and exports finished hardware globally. While their engineering is cutting-edge, their financial supply chain faced a silent drag: trade compliance inefficiencies.

The flows are complex involving multiple brokers, diverse manufacturing plants, and constant engineering changes. For years, duty and tariff costs were treated as "necessary friction", a cost of doing business buried in the COGS (Cost of Goods Sold).

However, a forensic review revealed that this friction was eroding margins:

• Inconsistent HTS Codes: Different brokers applied different HTS classifications to the same part, leading to systemic duty overpayments.

• Unclaimed Drawback: Duty was paid on high-value parts that eventually left the US, with no structured mechanism to recover those funds.

• Reactive Risk: Sanctions and trade risks were often identified too late, threatening launch windows and inviting regulatory penalties.

GingerControl’s brief was clear: Build a classification-first US trade compliance program that supports day-to-day customs entries, surfaces financial risks early, and saves duties compliantly.

The Solution: One Program, Multiple Levers

To shift trade compliance from a cost center to a margin driver, GC designed a unified service stack:

• Strategic HTS Classification: A definitive tariff strategy for complex aerospace assemblies to ensure accuracy and minimize liability.

• Duty Refunds & Drawback: A structured program to convert export flows into predictable cash recovery.

• FTA Optimization: An "FTA Review Agent" to identify underutilized Free Trade Agreements for further duty reduction.

• Supplier Risk & Advisory: Proactive screening of suppliers and lanes to prevent costly sanctions violations.

The goal was simple: Make sure every import and export decision contributes to margin lift.

1. Engineering the HTS Backbone

The foundation of savings is accuracy. Aerospace assemblies often combine materials, electronics, and proprietary software, making classification non-trivial. "Best guess" classification is a financial risk.

GC worked with the client’s engineering, supply chain, and finance teams to:

• Map the Lifecycle: Trace how key parts were designed, used, and integrated across launch programs.

• Standardize HTS: Eliminate conflicting HTS classifications used by different brokers, replacing them with a single, defensible "Tariff Playbook."

• Document Defense: Create technical reference files suitable for CBP review to preempt audits.

The Impact: By defining the correct HTS codes upfront, we stopped duty leakage at the source and ensured 100% compliant entry data.

2. Operational Reliability & Speed

With classification stabilized, we focused on protecting the launch schedule—because in aerospace, time is the most expensive currency.

Working with existing brokers, we:

• Aligned commercial invoices and entry data with the new HTS backbone.

• Flagged shipments with unusual duty profiles before they left the supplier.

• Built financial dashboards allowing the CFO to view customs status alongside launch costs.

Customs issues didn't just disappear; they became managed risks rather than expensive surprises.

3. Duty Drawback as Predictable Cash Flow

Many high-value components imported into the US eventually leave the country as part of exported spacecraft or payloads. This creates a natural opening for Duty Drawback—a refund of duties paid on imported goods that are subsequently exported.

Leveraging the new data backbone, GC helped:

• Link import entries to export bills of lading to prove eligibility.

• Prioritize claims with the highest dollar impact.

• Establish a repeatable monthly review cycle so new export programs automatically feed the duty recovery pipeline.

The Result: Duty refunds moved from sporadic "wins" to a predictable revenue stream that directly improved the program's gross margin.

The Results: Saving Duties Compliantly

Over the first cycles of the engagement, the financial impact was tangible:

• Margin Expansion: A structured duty drawback program converted past operational costs into new cash flow.

• Risk Reduction: A consistent, legally defensible HTS approach for high-value imports.

• Operational Velocity: Fewer customs-related delays on launch-critical imports.

• Strategic Visibility: Trade compliance is now discussed alongside legal and finance, ensuring sourcing decisions consider tariff impacts before contracts are signed.

Lessons for the Aerospace Industry

The lesson is straightforward: Treat trade compliance as a mission-critical financial system.

HTS classification, customs entry strategy, and duty refunds all influence both margin and launch reliability. By combining technical trade expertise with a focus on profitability, GingerControl turns compliance from a background headache into a competitive advantage.

The GingerControl Difference:

We don't just file paperwork. We deploy a classification-first strategy that aligns your supply chain with US trade rules to surface risks and protect margins. We save duties compliantly.

Would you like me to proceed with the next one (Walmart/Retail), applying this same CFO-focused, margin-lifting framework?