Lloyds List Australia - Import reform at the border is required to support transport logistics

Source: https://www.lloydslistaustralia.com.au/lla/blogs/paul-zalai/INDUSTRY-OPINION-Import-reform-at-the-border-is-required-to-support-transport-logistics-557703.html

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INDUSTRY OPINION:

AT LAST week's NSW Ports Cargo Facilitation Committee, industry representatives indicated that an extraordinarily high level of containers are being "held" at discharge causing impediments to the timely movement of import cargo via rail and road.

While this practice is affecting operations at Port Botany, it undoubtedly has a similar adverse impact on operational efficiency at other container ports across the country.

Some of these held containers will be subject to customs' intervention including x-ray screening and physical examination. While this cannot be avoided, it is understood that the majority of held containers are the result of importers and customs brokers not completing formalities via the Integrated Cargo System (ICS) and / or have delayed finalising EFT payments of duty, GST and Import Processing Charges. 

This issue was magnified last week whereby ICS technical faults caused delays in message transmissions and intermittent user access. As per common practice, many importers and customs brokers had completed customs formalities, booked transport and withheld finalising EFT payments until shortly before the slot pick up time.

During periods when the ICS is humming along, this practice is not a problem. When the ICS fails, this practice generates futile transport costs, delays to import deliveries and terminal congestion.

The Department of Immigration and Border Protection (DIBP) responded to the ICS failure by enacting Business Continuity Plans (BCPs), however initial first phases focussed around facilitating release of export goods, airfreight and perishables, providing no relief to industry in the above circumstances.

A couple of issues flow from all of this.

1. The ICS failure followed a major systems upgrade that extended from the evening of Tuesday 13 June through to the morning of Wednesday June 14, 2017. Preliminary feedback from DIBP suggests that the issues were not related to the scheduled outage.  While a post mortem examination will no doubt reveal the actual cause, Freight & Trade Alliance (FTA) has also questioned why a major enhancement was conducted mid-week rather than minimising risks and scheduling changes over a lower demand weekend period (especially noting that the previous weekend had the additional off-peak "buffer" with Monday June 11 being the Queen's Birthday public holiday in most states).
2. While cash flow clearly remains a major issue for importers and customs brokers, serious consideration needs to be given to a change in practice with earlier finalisation of EFT payments to overcome circumstances of delays or failures in ICS processing and to facilitate efficient transport logistics processes. Perhaps the solution is for user software to be enhanced to automatically trigger EFT payments at selected milestone events, such as vessel discharge or stevedore declared cargo availability.

Looking into the future, DIBP deserve credit by providing a level of relief to industry via the Australian Trusted Trader program with one of the benefits being duty deferral. We understand that this benefit will be extended to approved importers at some stage during the upcoming 2017 / 2018 financial year. While this is a very important development, realistically it may still take several years until the uptake of this initiative expands to a wide section of importers. 

In the interim, the onus lies with importers and customs brokers to review their practices to improve immediate logistics processes at our waterfront.

Paul Zalai is an advocate for the Australian Freight and Trade sectors
www.FTAlliance.com.au