BORDER PROTECTION

HAPPY ANNIVERSARY – 15 years since the ICS implementation By PAUL ZALAI – Co-founder and Director, Freight & Trade Alliance (FTA)

COVID-19 is clearly having with COMPILE to generate electronic The associated Trade Modernisation devastating economic impacts. releases at terminals and licensed Legislation introduced new strict liability depots. The benefit that we had at the This being the most severe of offences and the Infringement Notice time was that the implementation of Scheme. From a technology perspective, many major business disruptions these systems was gradual as each dedicated COMPILE lines into customs faced by the international trade shipping line, airline and freight forwarder brokerage offices were replaced with sector over the last few decades. came on board as they were ready. modern Internet solutions and the use The result being that we had a hybrid of digital certificates to meet security of manual and electronic reporting in requirements. Australian importers, exporters and place giving us the benefit of a phased trade providers have built up implementation. Industry had serious concerns when resilience in dealing with trade wars, the complexity of the final design of This provided Customs with the luxury recessions, major industrial disputes and of “trial and error” to rectify systems and the reconciliation and failure to supply the like. processes until they were fit for purpose. diagnostics were revealed. It was One of the most significant events As a result, there were a lot of lessons evident that corporate and operational was the flawed implementation of the learnt about how to provide effective knowledge within Customs was missing, Australian Customs Service (Customs) diagnostics for online data matching at the same design flaws that had Integrated Cargo System (ICS). purposes and streamlining of data been corrected over time in the legacy Customs adopted a “big bang” reconciliation requirements. systems were being reintroduced within the ICS. approach, replacing import cargo Emergence of the ICS reporting, declaration and clearance The late 1990s saw Customs introduce Lloyds List DCN (now Daily Cargo News) systems overnight – out with the old the “Cargo Management Strategy interviewed me on 14 April 2005 in terms and in with the new on Wednesday 12 (CMS)” as precursor to the “Cargo of how I saw the ICS implementation October 2005. Management Re-engineering (CMR)” shaping up. My reference to it being Over the ensuing months, Australian project with the aim being to re-engineer a “recipe for disaster” was brilliantly import trade was significantly affected processes and technology platforms. captured in a cartoon that said it all. by problems in statutory processing and generation of electronic cargo releases. Importers experienced delays in receipt of Christmas stock and the freight logistics industry had an almighty battle to keep their businesses operating. Customs systems evolution Customs was a world leader in systems development creating COMPILE (Customs Online Method of Preparing Invoice Lodgeable Entries) in the mid- 1970s with enhancements over time including EDI transmissions and EFT payment of fees and taxes. During the 1990s manual cargo reporting of paper manifests and air waybills was replaced by the implementation of EDI applications in the form of Air and Sea Cargo Automation systems (ACA / SCA). Industry will recall only too well that the implementation of ACA and SCA came with its difficulties as it introduced complex matching of consignment data

68 I Spring 2020 I Across Borders The flawed implementation Unfortunately, our worst fears were realised. The initial impact was felt in the airfreight environment when the ICS went live on 12 October 2015 however issues quickly spread to our wharves as industry struggled to reconcile import declaration and cargo report data compounded by the diabolically poor response times in the interactive functionality. By this time, the mainstream media were also all over the issues with the problems headlining our daily news. I had appearances on Channel 9 (interviewed by the late Peter Harvey), ABC News, a string of articles in Financial Review, the Australian and featured on talk back radio including an in-depth interview with Alan Jones. Media reports suggested that ’s largest single importer at the time, Coles Myer, had around 4,000 containers delayed on the wharves and the talk of compensation for industry was being muted. order before the Tradegate contract for Trusted Trader programme and a trade managing the COMPLIE network expired modernisation focus. Whilst this got the message out to the on 3 February 2006. wider public, the industry remained The current ABF Commissioner, Michael desperately working around the clock The recovery Outram, is now at the helm of what is now an aging, but stable and reliable platform. searching for solutions. The IAG proved to be an effective Industry users of the system were not stakeholder group leading a steady level So where to from here? the only ones suffering. Customs officers of recovery, but by this stage much There has been much hype around the also worked night and day deploying damage was done. need for a “Single Window”, in essence, “workarounds” to keep a trickle of cargo Minister Ellison reported to parliament a mechanism for the trade sector to flowing. that Customs had received compensation deal with all of government through On the evening of 17 October 2005, I claims for $525,000 over ICS related a streamlined reporting mechanism. received a call at home from the office of delays from 171 parties including 117 Thankfully, there does not appear to Prime Minister and Cabinet asking what importers – of this $406,636 were for be an appetite for another “big bang” was needed to get this mess out of the container storage and detention fees. approach. Instead we are likely to see media spotlight. an evolution of integration between the In reality, this would have been just the tip ICS and government agencies combined I accepted an offer and flew to Canberra of a very large iceberg of the true costs. with alternate reporting mechanisms for the next day to meet with a prominent Trusted Traders. Prime Minister and Cabinet representative So what has happened since 2006? with our talks ultimately resulting in the Customs were significantly scarred by The key for Customs is to have close then Customs Minister Chris Ellison calling the ICS implementation and became engagement with industry, look to a meeting with key stakeholders. At the completely risk averse in terms of innovative reforms and not forget the ensuing meeting, the minister announced implementing revised processes. Michael corporate history and lessons learnt from the formation of the Industry Action Group Carmody replaced Lionel Woodward legacy systems’ implementation. (IAG) and that I would be the co-chair as Chief Executive Officer in December At the beginning of the year, I was invited of the group, alongside Phil Burns of 2005 taking an understandably focussed by Commissioner Outram to be an Customs, with the responsibility to see in approach on consolidation, with very few inaugural member of the newly formed the post implementation remedial action. enhancements to the ICS and limited Customs Advisory Board. review of cargo management processes. Ongoing access to COMPILE during Freight & Trade Alliance (FTA) looks this period was vital as a part of the It was not until Michael Pezzullo took forward to working with industry peers, workaround arrangements allowing some the reigns as CEO in 2012 and Roman members and government in managing users business continuity whilst waiting for Quaedvlieg as Commissioner of the newly ongoing reform in business models, completed ICS functionality. formed Australian Border Force (ABF) that significant growth in parcel e-commerce Customs was well and truly feeling we saw real innovation ultimately leading transactions and introduction of new the heat and a need to get things in to the initiation of the Australian technologies.

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