FedEx will begin passing refunds on now-defunct tariffs back to customers that originally paid them starting in August, EVP and Chief Customer Officer Brie Carere said in an earnings call Tuesday.
FedEx started receiving government-issued refunds for International Emergency Economic Powers Act tariffs on May 11, per the company's website. The refunds are being sent to FedEx as the importer of record. At the end of the month, FedEx had $800 million in IEEPA tariff refunds slated to go back to customers that originally bore the charges, according to the company's Q4 earnings report.
However, FedEx said on its website that it is still awaiting refunds for all shipments covered under the first phase of the refund process, noting that the U.S. Treasury is sending refunds on a rolling basis. Phase 1 of U.S. Customs and Border Protection's refund system is designed to handle entries liquidated in the previous 80 days.
"FedEx remains fully committed to remitting all applicable duties — along with any accrued interest received from the U.S. Treasury — as quickly as possible," according to FedEx's website. "At the same time, we are managing over 20 million entries with IEEPA duties across hundreds of thousands of accounts."
Amid the refund wave, FedEx said it is currently unable to offer reports of refund entries for each customer. That's because the information "would be incomplete and would not provide an accurate refund estimate or a determination as to who ultimately bore the tariff charges," the company said.
To address the issue, FedEx said it will launch a portal by July 10 that will allow customers to verify whether a refund for a shipment has been received by the company, along with the refund's value. Shippers who allow for "sharing limited shipment and refund data with trusted vendor partners" within the portal will be prioritized for disbursement, with initial refunds beginning to be disbursed around Aug. 10, per FedEx.
"Customers who decline data sharing will still receive refunds, though on a longer timeline based on available internal resources," FedEx said.
FedEx is one of several logistics providers that served as the importer of record for various IEEPA-eligible shipments and are now managing the flow of refunds back to customers.
UPS is applying for tariff refunds totaling "a little under $500 million" on 2.5 million eligible entries, CEO Carol Tomé said on an April 28 earnings call. Although UPS expects it will take time for the U.S. Treasury to deliver the refunds, the company will "remit it right back to our customer" as soon as the refund is received, she added.
UPS will first apply refunds to customers' open account invoices, with any remaining funds disbursed 60 to 90 days after UPS first received the funds, per its website.
For refund-eligible shipments in which DHL served as the importer of record, the company estimates it will take 30 to 90 days after it receives the refund to process payments to the customers that originally paid the duty, per its website.
For U.S.-based customers, DHL will issue checks to the party originally paying the duty. For shipments with a duty billed back to the shipper or a third party, DHL "will credit those funds to the applicable country for distribution to the appropriate account holders."
