Autumn 2018 across borders

First roro service to AustrAliA From us GulF

Contents Across 2 Moving Australia’s Ambitious Trade Agenda borders 4 What a diference a year makes! 6 First RoRo service to Australia from US Gulf AUTUMN 2018 7 Women’s International Shipping and Trading Association – WISTA 8 Evolution becomes revolution 12 Interview - Geof Crowe, Chief Executive Ofcer, Port of Newcastle 14 Australian shippers remain in the dark about international shipping emissions. 16 Interview - Stewart Lammin, Chief Executive Ofcer, Flinders Ports. 18 Foreign Exchange and the impact on the Freight and Customs Industry 20 Charting a clear course in a rapidly changing world 22 The Trans-Pacifc Partnership – issues for the trade community 24 Launch of BorderWise Single Window Tarif (AU) and ofer to new FTA members 26 Trade facilitation and its impact on customs brokers 28 GST on low value imported goods 29 2018 customs compliance priorities Global event to be hosted for 30 Global Shippers Forum & ICHCA International Conference & Megatrans Exhibition the frst time in Australasia 34 FTA takes a lead on cross-border e-commerce issues 36 Infringement Notices soar with depot operators under the You are invited to the Global Shippers Forum (GSF) and ICHCA compliance spotlight International Conference and Exhibition. 38 Boost for Trusted Trader exporters The Australian Peak Shippers Association (APSA) and Freight 38 Trusted Trader boosting Australian organics & Trade Alliance (FTA) are Australia’s representative to the GSF 40 Import changes for better biosecurity which represents shippers’ interests and that of their respective organisations from Asia, Europe, North and South America and 42 Sct Group Shaping Its Business To Changing Market Africa. Dynamics And Client Needs The primary focus of the GSF is to infuence commercial 44 Interview - Colin Speechley, managing director, developments in the international freight transport industry and the Wholesale Logistics policy decisions of governments and international organisations as 46 Tasmanian Logistics Committee Update they afect shippers and receivers of freight. 47 Bespoke ransomware, targeted attacks – the hacker’s GSF works in close cooperation with International Cargo Handling new arsenal Coordination Association (ICHCA) to provide a focal point for 49 How to Protect Your Business in the Age of Cyber informing, educating, networking, shaping and sharing industry Criminals views to help improve cargo handling throughout international supply chains. 52 Managing Risks And Improving Safety Along The Chain Of Responsibility Both GSF and the ICHCA International will be hosting their respective Annual General Meetings in Melbourne followed by a 54 WiseTech Global acquisitions and integration of global combined open conference on 10 and 11 May 2018. technology solutions The conference will address the themes of Trade Facilitation; 58 Electronic Payments Fraud - Five things you should know Innovation; Regulation & State of the Market; Global Reform; E-Commerce; Safety and Supply Chain Security. Licenced customs brokers will also be delighted to know that each day also attracts CPD points. Across Borders is published by Conference delegates will also have complimentary access to Freight & Trade Alliance (FTA) a 500 strong trade display hosted by MEGATRANS2018 at the impressive Melbourne Convention and Exhibition Centre. 68 Brooker Avenue Beacon Hill NSW 2100 These events will bring the worlds’ most senior shippers, trade logistics providers and government representatives to our shores

T: 02 99751878 to meet with local delegates. E: [email protected] We are delighted to advise the large number of the registered and invited businesses and release of the draft program (please refer to www.FTAlliance.com.au the centre pages of this edition of Across Borders, pages 26 to 29 – further event details are available at FTAlliance.com.au Across Borders is produced We look forward to you joining us and sharing a truly global by Ontime Publications. For industry event experience. advertising rates please contact Steve Moxey on 0400 473 200 By PAul ZAlAi, Co-founder and Director, Freight & Trade Alliance (FTA) Front cover – image courtesy of Hoegh Autoliners and Seaway Agencies Autumn 2018 I Across Borders I 1 MINISTERIAL ADDRESS

MOViNG AuSTRAliA’S AMBiTiOuS TRADE AGENDA

gain unprecedented access and certainty us closer to achieving this objective. I am through consistent trade and investment also looking forward to the ratifcation of rules across markets spanning Asia, Australia’s FTA with Peru, launching a new Oceania and the Americas. As it will no chapter in economic relations between By ThE hON STEVEN CiOBO, Minister doubt interest Freight and Trade Alliance Australia and Latin America. members, the TPP-11 will go a long way I’m also focused on working towards high- for Trade, Tourism and investment to streamline and simplify trade between quality trade agreements with Hong Kong, its member countries – enabling greater Indonesia and India. We will commence transparency and consistency. The Turnbull Coalition negotiations on an FTA with the European Government is pursuing the Across Borders readers will know the Union this year, and with the UK after it TPP-11 started as TPP-12. We were has left the EU. most ambitious trade agenda in disappointed, but not surprised, when the The text of the TPP-11 was made public Australian history. On the heels United States chose to withdraw last year. in February, and I encourage Freight & I have made it clear we would welcome of our North Asian free trade Trade Alliance members to look at the the US coming back to the TPP table - but explanatory material on the DFAT website agreements, the Trans-Pacifc the TPP is too important to Australians about what it might mean for you and your Partnership is now set to open and our future prosperity to wait for that to business. In addition to the full legal text happen. up new trade and investment you can fnd ‘outcomes at a glance’ and opportunities for business - and, The TPP-11 stands alone as a ‘myth-busters’ overviews to gain a better most importantly, create more comprehensive, high-quality trade insight into the wide-ranging benefts of jobs for Australians. agreement. But it also has value beyond this agreement. itself. It is a central pillar of the Turnbull The TPP-11 will soon be tabled in Government’s longer-term vision to bring Parliament, along with a National Interest together the major Indo–Pacifc economies I signed the Comprehensive and Analysis. The Joint Standing Committee under one set of trade and investment Progressive Agreement for Trans-Pacifc on Treaties will then undertake a public rules. Such an arrangement would make a Partnership (TPP-11) alongside my enquiry and report the results back to tangible diference to lowering transaction counterparts from Brunei Darussalam, Parliament. I encourage Freight and Trade costs and enabling Australian businesses Canada, Chile, Japan, Malaysia, Alliance members to contribute to this to better access lucrative supply chains Mexico, Peru, New Zealand, Singapore process. that can loop them in to ongoing demand. and Vietnam on 8 March in Santiago, The TPP-11 shows we are pursuing the Chile. Our focus is now on bringing the Another stepping stone is the Regional most ambitious trade agenda in Australia’s agreement into force as soon as possible. Comprehensive Economic Partnership history. This agenda will grow our exports This will occur when more than half of (RCEP) we are negotiating with the ten and create new jobs across all sectors, the TPP-11 members have ratifed the countries of ASEAN, China, India, Japan, from agriculture, to manufacturing, Agreement. the Republic of Korea and New Zealand. mining and services – as well as those This agreement would partner us with The TPP-11 is a great deal for Australia, that support trade, including transport seven of our top 10 trading partners, and and will complement our existing trade and fnance. The TPP is a central pillar almost half of the world’s population. agreements. TPP-11 countries account in a longer-term vision to provide the for nearly a quarter of Australia’s two-way A future FTA with the Pacifc Alliance, best possible environment for Australian trade in goods and services. The involving the Latin American trading bloc businesses. It also demonstrates the agreement will eliminate more than 98 of Mexico, Chile, Colombia and Peru, Coalition’s unwavering commitment to per cent of tarifs in these Indo-Pacifc and home to some of the fastest growing achieving a safe, secure and prosperous economies. Australian businesses will economies in the world, would also bring future for our country.

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agreements, which operate on a take it or leave it basis, breaks the traditional commercial model at the port interface and as such requires an in-depth review by the What a diference ACCC to establish how the changed model can be re-aligned to ensure that shippers are not being disadvantaged. APSA has engaged with the ACCC on this a year makes! matter and will continue to liaise with the Commission to ensure that the shipper position is well understood and some By PAul BlAKE, Chairman, Australian Peak Shippers Association resolutions can be formulated. As per previous advice, APSA lodged a submission to the National Freight and This time last year we were in the competitiveness of Australian shippers, Supply Chain Priorities inquiry and recently midst of dealing with the ripple we see the Department of Agriculture met with the expert panel to review the and Water Resources unilaterally impose draft report. efect of the largest grain harvest increases in document production and in many a year combined with a inspection costs post 2017 peak season A number of key omissions in the report, dramatically changing shipping when the department failed to meet its which sit as priority issues for the members landscape. own internal KPI’s month after month of APSA, were provided to the panel for causing massive costs being incurred by consideration in the fnal report and these shippers unable to execute commercial matters include: transactions. Food quality container shortages, 1. A national framework or guiding blank sailings, changes in shipping line Surely the push to control costs in supply principles for the regulation of Australia’s consortia arrangements and long delays chain starts with the Federal Government? ports and terminals in Government quarantine compliance 2. Minimum principles for open access services all conspired to deliver the perfect We have container terminal operators and for key port-rail facilities storm for exporters and set up 2017 as depots simply “turning the money tap on” and imposing “infrastructure access a year of change and awakening in the 3. Certainty of supply in liner services shipper world. levies” to make up claimed shortfalls on investment and to compensate for rental 4. Standard gauge rail and axle loads 2018 ofers just as many challenges increases imposed by newly privatised Port 5. Proposed amendment to for exporters with the continuation and leaseholders. escalation of some of the changes efected Recommendation 1.8 relating to “Vertical in 2017 causing concern and frustration. There are no caps on or Government Integration” oversight to the imposition of these “levies” There is no doubt that much of the growth and as such stevedores and depots APSA has also been active in engaging in the membership of APSA in 2017 can charging them are, at the moment, free to with 1-Stop to better understand the be attributed to the interest by shippers continue to increase them as their mood mechanics of the Pre Receival Advice in coming to grips with a surge in supply suits. (PRA) system which operates at all chain costs which have almost overnight container ports in Australia. Recovering these levies via carrier access impacted on their competitiveness in the This engagement comes out of the global market. Shippers are bewildered by both the level of the increase in costs and the feeling of helplessness which surrounds the imposition of these costs by not only supply chain entities but also by Governments at State and Federal level across the international supply chain. APSA continues to advocate at all levels of government and with the Australian Competition and Consumer Commission (ACCC) to highlight the immediacy of the need for their intervention to call to account the legitimacy of the charges being imposed and to increase the oversight and governance of the commercial activities of stevedores, privatised ports, critical asset owners/managers and internationally owned shipping lines so that Australian exporters can continue to be competitive in the global economy. At a time when the Federal Government has commenced an inquiry into supply Paul Zalai (FTA / APSA), Travis Brooks-Garrett (FTA / APSA), Rod Sims (Chairman ACCC), chain cost as a barrier to international Paul Blake (Chairman APSA), David Cranston (Director Infrastructure & Transport – Access and Pricing, ACCC)

4 I Autumn 2018 I Across Borders extraordinary costs being incurred by a number of shippers to rectify minor clerical errors on PRA’s where, for instance, containers have been PRA accepted and delivered to terminals only to fnd that a tranship port may have changed or signifcantly an expired Export Declaration (EDN) has been used to transact the PRA. Our discussions have unearthed the fact that the 1-Stop ofering has levels of service for delivery and data verifcation with only a minority of shipping lines opting for the highest level to ensure that containers cannot be PRA accepted until signifcant Michael Lamperd (APSA board member and Group Transport Manager, Bega Cheese) cross referencing takes place (ie booking ref/ sets the scene at the APSA / FTA briefng with the expert panel on the Inquiry into quantities/disport/tranship port/EDN). National Freight and Supply Chain Priorities Disturbingly, many of the major lines opt for the lowest (cheapest) service ofering which Port security is also a major concern. During In closing, I would be remiss in not has no, repeat no, cross referencing of data this process APSA has discovered that there acknowledging the retirement of one of the and is simply an electronic rubber stamp is no active link with Australian Border Force allowing any container to be received at the shipping industry’s living legends, John Lines (ABF) and 1-Stop which enables expired terminal. from ANL. or inappropriate EDNs to be identifed and Clearly this situation leaves shippers highly rejected before a container can access the John has been a powerful advocate for exposed and based on the fndings of the port. the Australian shipping industry and more recent ACCC stevedore monitoring report is potentially a major contributor to the growth APSA continues to work with 1-Stop and importantly for his beloved ANL over a long of “other” revenue for the terminals and also the ABF to rectify this signifcant gap in and distinguished career. shipping lines who add a margin (some as the port interface process and reduce much as 100%) to the already extravagant shipper exposure to unnecessary cost and The board and members of APSA wish John charges of the terminals. inconvenience. a long and healthy retirement.

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Autumn 2018 I Across Borders I 5 ShIPPINg REfORMS

“The development is mainly driven by customer demand and the recent growth in vehicle sourcing to Oceania from USA. First RoRo service Adding the resurgence in the Australian mining and construction segment, we have good reasons to now invest in the new service”, says Brendan Wallis. Brisbane receives the longest rail to Australia from cargo ever carried on a RoRo vessel Höegh will service the Australian market with a mix of its traditional RoRo vessel and the New Horizon Class vessels, uS Gulf which the company took delivery of during 2015-2016. These are specially designed to take big and heavy cargo, with their 6.5 metre high door opening Höegh Autoliners steps up its direct service to Australia and New and a ramp capacity of 375 tonnes. Zealand from the USA and Mexico, now ofering two sailings per month. Recently, one of the New Horizon vessels The service started as a monthly service earlier this year, and gives was used to transport 43.5 metre long Höegh’s customers up to 30 days shorter transit-time from USA and trams bound for Brisbane to supply Mexico to Australia. the Gold Coast Light Rail. This was the longest rail cargo carried on a RoRo vessel. As Höegh Autoliners saw an increased And, it is not only importers that can demand in the market, for a direct sailing applaud the new product, also Australian Brendan concludes that; “Investments in from the US to Oceania, the company exporters have something to celebrate, new high specifcation vessels, innovative decided it was time to act. Early 2018 as the new service ofers a very fast cargo handling equipment such as they performed the frst sailing and with a connection via Singapore to Africa, ultra-long, ultra wide and heavy weight positive response, they are now stepping Middle East, South East Asia and capacity roll trailers, and dedicated port up the frequency to two sailings per European destinations. captains has allowed us to become a month. preferred choice of many of Australia’s Höegh meets market demand major infrastructure projects.” The new service makes Höegh the frst Höegh is not new to the Australian carrier to ofer a direct service between If you want to know what Höegh market; the company has served the US Gulf and Freeport on a monthly Autoliners can do for your cargo, Australian customers for 15 years, basis. the best way is to contact Seaway beginning with a monthly sailing from Agencies, Höegh’s dedicated Fastest service in the market North Europe, around Africa to Australia. representatives in Australia and New The service is still running with three Brendan Wallis is Höegh’s representative Zealand. Seaway Agencies have ofces vessels a month, in supplement to the in Australia and he is proud to announce; in Fremantle, Adelaide, Melbourne, two vessels that will now trade in the new “Australian customers importing from Sydney, Brisbane and Auckland. service. the US can now save more than 30 days Contact: [email protected] transit time, using the new direct service.” According to Höegh Autoliners, the new set up will allow them to meet all of the Australian companies importing from space and transit time demands from Mexico, should also welcome the new their European customers, while also service, as it gives them the quickest ofering great opportunities to customers RoRo connection available in the market shipping from the US East Coast and Gulf from Lázaro Cardenas to Australia and area. New Zealand.

6 I Autumn 2018 I Across Borders WISTA would also like to congratulate committee member, Alison Cusack – ANL, Women’s international awarded “Highly Commended” at the annual DCN Awards Night (formerly Lloyds List Awards Night) and committee member, Shipping and Trading Naraya Lamart, for being listed as a Rising Star for Transport in Doyle’s Guide.

Association – WiSTA 2018 is looking to be a very exciting year for WISTA Australia, with many events for By liSA STYRuD – WiSTA Australia President our members and in particular our AGM in Brisbane later in the year where we will be joined by our WISTA International President Women’s International Shipping and Trading to our membership base across Australia. Despina Theodossiou who has recently been Association, WISTA is the international listed as the 96th most infuential person in network for women in shipping, trade and Our membership has great diversity across the Global Shipping Industry by Lloyds List supporting industries. the broader maritime industry, trades and UK. professions, and includes seafaring women WISTA Australia was established in 2011 as well as portside, logistics and trading and has been growing rapidly ever since. professionals and women in support function We are active in four states, QLD, NSW, VIC roles. We bring together women new to and WA where we hold regular educational, networking, professional and personal the industry and women with decades of development events. We have recently experience for a great mix of knowledge, launched our mentoring program in NSW, mentoring and networking; all of which makes soon to be adopted in the other States and WISTA a platform for sharing interests and which we anticipate will be a major value add ideas.

2018 WISTA Events

New South Wales Victoria Personal Finance speaker / learning event, June May Port of Melbourne Tour Sydney CBD 8 August Mercure Hotel Sydney 2018 Women In Logistics Forum July Industry Trivia Night Airport

3 October Port Tour DP World Port Operations August Fun with Flags – Semaphore Training Port Botany December Christmas Function October Shipping Australia Limited (SAL) Ball November Breakfast Seminar Mentoring Group catch ups throughout the year December Christmas Function Queensland Western Australia May Movie Night May Border Force Breakfast July Trucking Tour August Breakast/Sundowner Networking Event August AGM November/December Christmas Function October SAL Ball November Breakfast Seminar Note: Further WA networking events still to be announced December Christmas Function

We would also like to recognise and thank the following WISTA Sponsors and association partners:

Gold Sponsor DP World Silver Sponsor ANL, Victorian International Container Terminal (VICT), Fremantle Ports & Mediteranean Shipping Company 2018 WISTA Mentor Program Sponsor Freight & Trade Alliance (FTA) Association Partners Australasian Supply Chain Institute (ASCI) & Freight & Trade Alliance (FTA)

Interested in becoming a WISTA member or sponsor – please contact [email protected] and a state representative will contact you. ShIPPINg REfORMS

Evolution becomes revolution

By DAlE CRiSP*

The latest concentration of Last December the Registrar of Liner the termination of the TFA and TFG shipping line power is not new to Shipping, within the Department of agreements as “a pretty monumental Infrastructure and Regional Development change to liner shipping in Australia”. Australia, but the abandonment in Canberra, notifed the Australian Peak “The decision to terminate these selected of carriers’ registered co- Shippers Association (as the designated Discussion Agreements (not consortia peak body under Part X) that the operation mechanisms is. The agreements) is signifcant given that Australia and New Zealand-United States changing commercial and conferences/DAs serving the North East Discussion Agreement (northbound) was and South East Asia markets have existed regulatory environment will to be terminated as of January 1, 2018. require heightened vigilance. for many decades so we are moving into Within weeks came two similar a new era for those trades,” Mr Nairn notifcations, heralding the closure from wrote. February 1 of the Trade Facilitation “The core reason for the decision to Agreement, covering the Australia-North & terminate these agreements is their In this part of East Asia trade, and the Trade Facilitation declining membership caused particularly Group, active on the Australia-South East by industry consolidation that impacted the world the Asia route. upon their market infuence and the conference Thus in little over a month three key local perceived value of membership. system has discussion agreements ceased to exist. “In December 2017, the number of In this part of the world the conference members had declined to only three played a vital system has played a vital role for shippers for TFA and two for TFG which clearly role for shippers (as well as for lines) as it has helped brought into question their efectiveness.” guarantee minimum levels of service, Mr Nairn said the reasons for the declining (as well as for ensured some discipline in the setting of memberships of the DAs were a bit freight rates and surcharges, and ofered more difcult to pinpoint but one factor lines) as it has exporters some visibility into the often was the increasing attention by national helped guarantee murky world of liner shipping. It’s also competition regulators on liner shipping provided a mechanism by which carriers activities globally. minimum levels can legitimately co-operate to pursue reasonable returns in typically long, thin “Rightly or wrongly this had created of service, trades. the impression that members of DAs are more likely to be targeted for anti- ensured some Writing in Daily Cargo News (formerly competitive investigation. Consequently, a Lloyd’s List Australia) Commodore number of them have made global policy discipline in Rod Nairn, AM, the CEO of Shipping decisions to withdraw from all discussion the setting of Australia Limited, accurately described agreements,” he wrote. freight rates and surcharges, and ofered exporters some visibility into the often murky world of liner shipping

8 I Autumn 2018 I Across Borders “Another is the growing size of individual lines through the recent spate of mergers and acquisitions. The larger shipping corporations are less dependent on the cooperation of other lines in the various trade lanes and therefore see less value in DAs. “A third and signifcant reason is the repeated threat over a number of years, by the ACCC in particular, to remove the protections of Part X. This has caused uncertainty in the industry and lines may well have withdrawn from the DAs now rather than hold on until the rug is pulled from under them, so to speak. Lines have seen the withdrawal of competition protections for DAs in other jurisdictions, most recently New Zealand in mid-2017.” Mr Nairn noted that in the immediate future the terminations are not expected to have an impact upon capacity or sailings from Australia, with the services of the various consortia continuing unafected and underpinned by agreed minimum levels of service negotiable with APSA. both owned by CMA CGM anyway – along Soren Skou, continue as weaker lines “Additionally, I should point out that new succumb to market forces. DAs may be created should some of the with OOCL. With the TFG, just ANL and above uncertainties be clarifed and trade OOCL remained. From ANZUSDA, Maersk CMA CGM’s acquisition of APL, Hapag- conditions show this to be benefcial to the was long gone, Hapag-Lloyd resigned at Lloyd’s absorption of UASC, Maersk’s industry. the end of 2016 and MSC mid-2017 – purchase of Hamburg Süd and the leaving only ANL (again) once Hamburg pending takeover of OOCL by COSCO “There is still a lot going on in liner shipping Süd pulled the pin. Shipping Lines, as well as the combination policy and despite the current withdrawals of the three leading Japanese shipping from DAs, shipping lines are still strongly Coincidentally, the TFA/TFG news was companies’ container businesses under supportive of retention of Part X of the followed by that of the demise of the the ONE banner, all signal, at face value, a CCA. last remaining east-west liner group, the reduction in choice for local exporters and “Shipping Australia is preparing for Transpacifc Stabilization Agreement (TSA), importers. negotiations with the ACCC and Shipping which had been in existence for almost 30 However, carriers appear to have learnt Regulator over the content of a potential years. As recently as early 2016, the group some of the lessons of past acquisitions: block exemption for liner shipping that the had 15 members that collectively carried one plus one does not equal two when ACCC is now empowered to provide under nearly all of the container cargo between it comes to customer retention, indeed the legislative changes passed near the end the Far East and the United States, but this losses from some deals have been very of last year.” number had more than halved when time substantial. The specifc prompt for the dissolution of was called. As a result the new owners of APL and ANZUSDA, the TFA and the TFG has been It’s pertinent to consider this shift in the Hamburg Süd have committed to retaining the resignation of Hamburg Süd, which has and empowering those brands, even if back been withdrawn from all such agreements context of the current rising level of concern ofce, procurement and other functions are worldwide by new owner Maersk Line after over consolidation in the worldwide combined to achieve desirable efciencies. competition authorities in a number of container shipping industry, and what it COSCO SL has fagged a similar intent for jurisdictions imposed this as a condition of means to shippers in Australasia. OOCL. Only Hapag-Lloyd’s incorporation the takeover. Maersk decided to make it a To some extent we are shielded from the of UASC involves a signifcant diminution blanket withdrawal, having removed itself of the latter’s identity, an interesting from DAs some time ago. impact of the increasingly powerful global alliances, because these (for now) operate approach given not only the former owners’ And of course Mr Nairn is right: for almost exclusively in east-west trades – and shareholding in the merged entity but example, at one stage there were said to formal expansion to north-south routes Hapag-Lloyd’s own experience with its be 22 diferent carriers competing in the will surely trigger intense scrutiny from earlier takeover of CP Ships. North & East Asia-Australia trade, as vessel competition and regulatory authorities in Can shippers rely on multi-brand strategies operators or slot-charterers, though not all many jurisdictions. to preserve a range of service options and were simultaneously (if ever) members of genuine competition in Australasia? After the TFA or the southbound equivalent, the But Australasia is not immune from the all, according to UK consultancy MDS Asia Australia Discussion Agreement. spate of mergers and takeovers that’s Transmodal, the top ten container carriers But with Hamburg Süd’s departure, occurred over the last 18 months and in 2018 will control 86% of global container according to SAL’s published list, only ANL which will, according to analysts and key capacity – a share that has risen from 68% and APL remained in the TFA – and they’re players such as Maersk Line chief executive in just four years. ShIPPINg REfORMS

concept is locally extinct. Lines will do their own thing. It can be argued that the disappearance of conferences (or their successors) worryingly reduces the level of scrutiny of performance and behaviour – which could impact rivals as it does shippers. But as SAL’s Rod Nairn suggests, further evolution is possible. Over the years APSA has waxed and waned in membership, strength and infuence but has fought crucial battles with shipping conferences and their various incarnations – and it’s likely a resurgent peak body’s importance The question will only be answered in an operating consortium, the Australia to shippers will increase if and as the the medium-to-long term. But a truism Europe Container Service. These concentration of carriers seeks to fex of international shipping is that whenever ownership groups, in one way or another, market muscle. market domination occurs, challengers progressively extended their collaborative Given the rapidly and recently changing inevitably arise. “There’s always another participation to containerise other trades, seascape the delayed transition from fool prepared to lose millions”, as one including New Zealand, North America, Part X governance to ACCC supervision seasoned observer wrote in a blog post. North & East Asia and Southeast Asia. of liner trades – resisted by exporters/ What else does history teach us? The concentration of shipping line power, importers and shipping lines, though not through the consortiums and conferences, necessarily for the same reasons – may, Well, for Australian shipping services was enormous. ironically, prove more than valuable. previous consolidations have been even more seismic. In 1972 the Australian Shippers Council Footnote: Relevant historical material has was formed under the provisions of Part been drawn from ‘The Homeward Trade – The most earth-shattering came with XII of the Restrictive Trade Practices Act, a brief history of the conference shipping the advent of containerisation in the and comprised nine statutory commodity service from Australia to Europe 1912 to late 1960s. In advance of the physical boards and 20 national associations 2006’ by former SAL executive Martin transformation of cargo handling whose members were producers, Orchard. methods, and in order to bear the manufacturers and exporters. Thereafter enormous costs involved, virtually all the *Shipping writer Dale Crisp also provides conferences and individual shipping lines shipping companies involved in in what FTA/APSA with communication and were forced to negotiate freight rates with was then Australia’s premier trade (prior content advice.(Copyright) Images ASC and to provide “efcient, economical to the UK joining the European Common provided by Dale Crisp and adequate shipping services”. Market in 1973) formed themselves into consortiums. The ASC was disbanded in 1989, replaced briefy by the Australian Export Established in 1965, Overseas Containers Shippers Association (APSA), and then Ltd (OCL) brought together P&O (including in November 1990 the newly-formed Federal Steam Navigation Co and New Australian Peak Shippers Association Zealand Shipping Co), Ocean Transport became the designated peak body - and and Trading (Blue Funnel Line), British remains so to this day. & Commonwealth Group (Clan Line and it’s likely a Scottish Shire Line) and Furness Withy Over the decades ‘shipping conferences’ (Shaw Savill & Albion). The following year were feared, despised and disparaged - resurgent Cunard (Port Line), Vesteys (Blue Star sometimes unfairly. For the last 25 years peak body’s Line), Ben Line and T & J Harrison formed they’d worked to re-invent themselves, a rival group (with ANL, later), Associated often to meet changed legislation importance to Container Transportation, and by 1970 in diferent jurisdictions, or to meet Hapag-Lloyd, Messageries Maritime, members’ evolving requirements and, just shippers will Nedlloyd and Lloyd Triestino had joined perhaps, to rehabilitate their reputations as Seabridge, while Scandinavians Wilh and image. increase if and as Wilhelmsen, East Asiatic Co of Denmark New, user-friendly titles appeared, such as the concentration and Rederi A/B Transatlantic merged their discussion agreements, liner associations local trade interests as ScanAustral (and and trade facilitation groups. (This writer of carriers seeks chose ro-ro rather than containers). remembers the excitement of certain to fex market Thus at least ffteen carriers – all the carrier executives upon coming up with major players on the Australia-UK/Europe the label ‘forum’ for what was, in most muscle. trade lanes – had consolidated to four respects, another conference: “That’s very consortia. All the container lines became positive and non-threatening,” one said members of the Australia to Europe triumphantly.) shipping conference (OSRA) and all their For now at least, with the exception of the sailing schedules were co-ordinated by Australia/Fiji Discussion Agreement, the

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Autumn 2018 I Across Borders I 11

APSA Autumn18 fullpg.indd 1 16/02/2018 11:07:31 AM ShIPPINg REfORMS

Interview Geof Crowe, Chief Executive Ofcer, Port of Newcastle

Paul Zalai, Director FTA and APSA Secretariat, speaks to Geof Crowe, Chief Executive Ofcer, Port of Newcastle.

The Port of Newcastle is the largest port on the east coast by trade volume and has the capacity to more than double its current trade. It is undertaking an ambitious diversifcation program to grow and diversify all trades, including containers. Last year Port of Newcastle joined other port corporations as an afliate member and sponsor of the Australian Peak Shippers Association (APSA) and Freight and Trade Alliance (FTA).

1. PAUL ZALAI - Geof, thank you achieved since then? for speaking with Across Borders. Our shareholders, China Merchants Group What sets the Port of Newcastle apart and The Infrastructure Fund, have global from other ports? expertise in the infrastructure sector Our connectivity, capacity and capability. including ports. We are one of the best connected ports In 2016 China Merchants Group had in Australia with national road and rail $1,000 billion in global assets under links to the berth and plenty of capacity management across 18 countries to grow all of our trades. We are therefore including 35 port-related investments. well placed. The Infrastructure Fund is one of Our shipping channel is only 50% utilised Australia’s top performing infrastructure and can accommodate the largest bulk funds with an asset portfolio of more than vessels as well as container vessels $2.4 billion. Geof Crowe, Chief Executive Ofcer, up to 10,000 TEU along with some of Port of Newcastle the largest cruise ships. It’s not just the We have a strong and motivated team channel capacity, we’ve got 792 hectares who are driven and motivated to see of land including 200 hectares of key trade grow at the port. Highlights include portside land available for the right trade investing $30 million for a new bulk and development. terminal facility, delivering services to the Mayfeld Site, optimising the shipping Our connectivity is unrivalled in terms of channel via vessel scheduling, survey both road and rail. Newcastle is currently and dredging to reduce the customer revitalising and reinventing itself to impact of weather events etc, securing become a true global city and it has the the import of 140 plus wind turbines enviable geographic location that ofers a including the largest to enter Australia, fantastic lifestyle for people who live and welcoming a record 1.3 kilometre long work in and around the city with great grain train directly into the port, securing educational facilities like the University Thales Australia to establish a new east of Newcastle, afordable housing and coast maritime hub, and achieving $13.5 Newcastle Airport. million in Government funding for a cruise terminal and new mooring bollards to 2. PAUL ZALAI - The Port of attract more and larger cruise ships to Newcastle transferred to private Newcastle and the Hunter region. sector ownership in May 2014. Can you provide an overview of your During this time the port has continued ownership and what the company has to handle large volumes of coal, bulk fuel

12 I Autumn 2018 I Across Borders imports and wheat. This has all been achieved while maintaining a strong safety, environmental and social record. 3. PAUL ZALAI - Geof, you have been CEO of Port of Newcastle for nearly three years now. What is your vision moving forward? In 2015 when I started with Port of Newcastle we committed to grow our port through a strategy of diversifcation by design. We are on that journey which means that we want to further develop and design a port that has a very diversifed trade base - to be a port that’s operating in the future at full capacity. Paul Zalai, Director FTA and APSA Secretariat, speaks to Geof Crowe, Chief Executive Ofcer, Port of Newcastle. Currently we are only operating at half our capacity and we have a great opportunity to grow existing trades within the port as well as develop containers further, more bulk fuel imports, motor vehicle imports, more coal, to expand agricultural products and mineral concentrates from population growth and congestion that 6. PAUL ZALAI - How will you grow upcountry and to continue to contribute is occurring in the capital cities. Being containers alongside a huge coal signifcantly to the local and state only 160 kilometres from Sydney we are export operation? well positioned to provide that solution economy. We have the vacant land, we have through our port’s superior connectivity Currently we trade in over 25 diferent the channel capacity and we have the and ample available capacity. port capacity to double current ship cargoes including coal. We want to grow movements. The coal industry already existing trades and fnd new trades. Our 5. PAUL ZALAI - What are the demonstrates a world class Hunter Valley vision is to work with our existing and new advantages of a Newcastle Container coal chain model and that is delivered by customers to support and to fnd ways to Terminal for the market? collaboration from the load points to the improve the service that we deliver and It gives the market a choice on where coal terminals and all the infrastructure optimise the benefts from load points to import and export their product, e.g. providers and producers in between. A and the farm gate to the port in terms of growers, shippers, logistics providers collaborative approach can be applied supply chain efciencies and costs, and etc. A Newcastle container terminal could to the movement of other trade including to provide a competitive choice for both deliver cost savings for exporters in the containers and within the port non coal export and import. central west and northern NSW of more trade already co exists with the coal 4. PAUL ZALAI - Port of Newcastle’s than 30% - that’s a huge saving for a trade. Given our connectivity advantages intent to develop a container terminal farmer from Narrabri or Tamworth and and ample port capacity, there is opportunity for all trades to grow along is on the record. A Newcastle goes a long way towards making our with new trades. container terminal has been fagged industry and our NSW exporters more several times over the years. What internationally competitive. PAUL ZALAI - On behalf of APSA, makes it diferent now? We can build one now – Government and FTA and our members, thank you for taking the time to participate in this Port of Newcastle is the commercial industry don’t need to build new road and rail infrastructure – we are already interview. We look forward to working operator of the port. It has embarked closely with you and your executive on an ambitious trade diversifcation connected to national road and rail networks which have huge capacity for team in the years ahead strategy. Whilst seeking to protect growth. existing trade we can see the great potential to grow new trade including We are the closest port to the major NSW containers. The market, everyone from export production areas, which are major the local government areas, growers to regional centres that also require a lot the logistics providers and shippers and of imports. The inland rail project is an stevedores, are telling us that they need a opportunity for regional areas. The Port container terminal. of Newcastle already has up country rail connectivity through the Hunter Valley It is clear that the capital city ports Network which we can leverage of and are now reaching capacity in terms of works closely with the ARTC on realising connectivity and a huge investment is the benefts that this provides. required by the Government to service some of these ports, whereas we have Our port has been in operation since existing and unconstrained road and rail 1799 so we have learnt a thing or two infrastructure that can already service about trade and the importance of the that increasing demand. The Port of port, and the connectivity and using it in Newcastle can be the solution to the the right way as a gateway for trade.

Autumn 2018 I Across Borders I13 ShIPPINg REfORMS

Australian shippers remain in the dark about international shipping emissions. By MIcHAEL BLAkE, Scope 3

Understanding and reducing is now how will these markets interact is the recent law passed by the state of international freight with each other whether it be goods California – the Buy Clean California Act. moving across borders, or the actual This act sets a maximum acceptable emissions has historically trading of carbon credits internationally? carbon value (amongst other metrics) for been an area of “early How do we efectively defne boundaries products imported into the country. For adopters”, however it is now – and how far into the supply chain can example, steel imported from Europe becoming a key focus for a carbon market reach? with a lower embodied carbon would be selected over cheaper steel from other the leading global shippers Launching in 2018, the China Emissions parts of the world (i.e. China) that has a and logistics providers. The trading scheme is a ftting example and higher carbon intensity. The bill signals names of these shippers discussion point. How will this scheme that imported goods will be scrutinised develop, and will it seek accountability based on the lifecycle carbon impacts. and logistics providers are from suppliers outside its borders – I.e. consistent and represented will shippers from Australia be assessed 3. Global Policy Developments - at the key discussion groups on the carbon intensity of their products IMO internationally, however, to in procurement decisions? Australian The IMO is currently reviewing what date, Australian shippers and exporters are largely unprepared for any policies it adopts to infuence vessel such changes in buying methods from logistics providers appear to owners and industry to directly lower China or any other international buyers emissions and bring the maritime be asleep at the wheel. for that matter. industry in line with global objectives 2. Procurement Principles - drafted under the Paris Climate Sustainability Agreement. Whilst there are more So what’s driving these companies to discussions to be had, this reform could look into this part of their supply chain This is not new a new practice but its come in several forms; sustainability? Previously it was only the gaining momentum - sustainability is leading sustainable brands, passionate a core principle in global procurement • A market price on carbon in the sea about quantifying and lowering their strategies. We are seeing this extend shipping industry emissions with their core motivator being into the realm of carbon, as companies o Efectively a tax on emissions that sustainability. This is now changing as look deep into their supply chain could be passed through to shippers we see other market infuences forcing performance for answers. action; • Incentives for cleaner ships Already today large multinational buyers o Incentivising investment and 1. Development of global carbon are infuencing their suppliers’ behavior. operation of cleaner ships markets – The China Emissions A notable example of this is the Carbon Trading Scheme Disclosure Project (CDP), which now • Changes in fuel types allows companies to engage their From the 196 countries that are o Modifcation of existing vessels, and suppliers to disclose their environmental signatory to the Paris Agreement, 174 building new vessels that move away performance – and ultimately benchmark have ratifed and 96 nations are either from traditional diesel fuel them. currently using or have announced they • Operational changes will be implementing carbon markets into Another fascinating example of carbon their national program. The big question being a factor in procurement strategies, o Slower steaming

14 I Autumn 2018 I Across Borders o Portside actions for more For many businesses trading Scope3 will be keeping a close eye on sustainable practices internationally, this area remains very global policy development to ensure shippers are equipped with the latest Whilst these are macro policy changes much of the radar due to the perceived information. that may not be easily infuenced by complexity or lack of understanding of shippers, its important that they stay “why”. About Scope3 informed and understand potential Australian shippers What is evident after the sessions Scope 3 is a consulting and IT company impacts on both service and cost. we have attended in Europe under that was born out of the growing So, with the emergence of more drivers GLEC Consultee status is that we acceptance that change is required in for companies to understand their are in on the ground foor, and that the way we transport goods, to counter remain in the dark international supply chain footprint, globally we still have some way to go to the rapidly mounting efects of climate where do we start? getting acceptance of a standardised change. We believe in supporting Transparency is key. framework for multimodal international Australian businesses to understand trade. Meaning, we can play a role in their supply chain emissions, and use about international There is a growing interest internationally shaping this and leading the way. technology to help limit the impact of into creating a universal standard climate change, by giving them accuracy for how countries, industries and There are tools available now to develop in energy and emissions calculations so businesses will deliver on emissions a better understanding of supply chain they can make decisions with greater shipping emissions. reporting (and sustainability goals) emissions, without being put of by confdence. but until recently it’s been difcult chasing the goal of perfection, small WANT TO KNOW MORE to compare apples with apples – as steps still mean progress. companies were using varying methods Michael will be presenting at the Importantly for Australian businesses - to calculate and report. Global Shippers Forum (GSF) and we also see this (emissions) area a key The GLEC Framework was developed iChCA international Conference and area for risk mitigation with companies by The Global Logistics Emissions Exhibition (10-11 May 2018, Melbourne having a large international supply Council to establish the global standard - www.FTAlliance.com.au) in emissions calculation methodology chain foot print. Changes and more for sea, road, rail and air transport. The accountability are inevitable - whether it Framework provides standardization and be via the IMO, global carbon markets a universal method for companies to or the push by businesses for lower start their journey with confdence they emissions in their supply chain. Global will line up with their peers shippers will be forced to take stock.

Representing the next generation of business leaders

Autumn 2018 I Across Borders I15 ShIPPINg REfORMS

Interview Stewart lammin, Chief Executive Ofcer, Flinders Ports.

Travis Brooks-Garrett, Director FTA and APSA Secretariat, speaks to Stewart lammin, the recently appointed Chief Executive Ofcer, Flinders Ports.

Flinders Ports is South Australia’s leading port operator with seven ports located at Port Adelaide, Port Lincoln, Port Pirie, Thevenard, Port Giles, Wallaroo and Klein Point. Last year Flinders Ports joined other port corporations as an afliate member and sponsor of the Australian Peak Shippers Association (APSA) and Freight and Trade Alliance (FTA).

1. TRAVIS BROOKS-GARRETT- to continue to foster the culture that I Congratulations on your appointment spoke about earlier. I want this to be a to the role of Chief Executive Ofcer business that our employees are proud Flinders Ports. What is your vision for to be a part of and most importantly an the company? organisation that places safety and well- being of its employees on top of the list of The Flinders Port Holdings Group has priorities. constantly developed since privatisation in 2001 where today we have approximately We are continuing to see evolution in our 750 employees across the three business industry, whether it be work practices and units, Flinders Ports, Flinders Adelaide behaviours or technological advances. Container Terminal and Flinders Logistics. Successful businesses will be those The success of the business has been that are fexible and dynamic and able built around a clear strategy, the quality to embrace and see opportunities that and dedication of its employees and the changes in our sector will provide. I a culture that values working with and would like Flinders Ports to be a business respecting all our stakeholders including that continues to encourage and fosters the communities within which we operate innovation amongst its employees. and responsible management of the marine environment. 2. TRAVIS BROOKS-GARRETT- Flinders Ports has seen steady My vision for the organisation is to growth in cargo volumes, what do you continue to grow the business, both attribute that to? geographically and the range of services that we provide our customers. To build This has been a combination of natural on the legacy which I have inherited and State growth (particularly relevant to the

16 I Autumn 2018 I Across Borders container trades), a growing resource containerised and bulk trades will have Opportunities across the Flinders Ports sector and favourable weather conditions port options. There has always been Holdings Group include leveraging of for agricultural exports. The growth in South Australian containerised cargo the increased buoyancy in the South trade also needs port capacity to handle that has moved via Melbourne dictated Australian economy, particularly the the increased demand so considerable more by the ship than the origin or resource sector. Flinders Logistics is planning has gone into improving destination of the cargo but this has a business that is constantly growing efciencies at the Flinders Adelaide certainly diminished over the years. The in South Australia and now has a Container Terminal and the bulk berths. infrastructure available in Adelaide and presence outside of the State with the The Berth 29 facility in Port Adelaide is the ability to access all markets should recent acquisition of Townsville Bulk a prime example of planning to meet ensure that the loss of trade continues to Storage and Handling (TBSH). This will demand, a single, handy size berth that shrink. Flinders Ports is also conscious improve both its reach of clients on a was underutilised some years ago now of maintaining a pricing regime that will local and national level but also increase facilitates over a million tons of trade ensure Adelaide stays competitive. the range of services in can provide. It across a number of customers. is an operation that has continued to 5. TRAVIS BROOKS-GARRETT- develop over the years, concentrating 3. TRAVIS BROOKS-GARRETT- There has been signifcant on safety, environmental best practice Flinders Ports is often seen as a case controversy regarding the and innovation and we are extremely study for good privatisation. What do Infrastructure Fees and the lack of optimistic in the growth potential of the you think are the benefts and risks of Government regulation in landside business. port privatisation? terminal charges. Do you think we 7. TRAVIS BROOKS-GARRETT- Firstly a couple of caveats, I have never will see similar increases in landside The Victoria International Container worked for a Government run organisation charges in South Australia? Terminal (VICT) has entered the and the Flinders Ports model is the only Ports and Terminals are constantly Australian market and is one of the privatised port operation I’ve worked under pressure to improve efciencies world’s most automated container within and I’ll avoid the productivity and and increase capacity on land side. The terminals, is Flinders Ports looking efciency arguments. The major beneft reality is that there are costs involved in to increase investment in automation of the Flinders Ports privatisation is that achieving the requirements of industry and technology? the South Australian ports are owned and capital projects tend to be expensive and operated by infrastructure owners particularly in respect to civil infrastructure It is no secret that with constantly rising who are able to take a long term view of labour costs at container terminals and Travis Brooks-Garrett, Director FTA and APSA Secretariat, speaks to Stewart lammin, the recently appointed Chief and you then have to combine this with the assets. Ports are long life assets that increasing operating costs including in real terms, reductions in revenue Executive Ofcer, Flinders Ports. have constant maintenance requirements constantly rising land values. Flinders per TEU, operating margins are under and high and lumpy capital requirements. Ports has, and will continue to invest in pressure. Automation is one of the few Governments, understandably often think improving the efciency and safety of its levers operators have to control costs & in terms of the next election cycle with landside infrastructure and up to now Flinders Adelaide Container Terminal is a potential for capital restraint on assets has been able to minimise any additional certainly looking at the automation option. that by and large don’t garner great voter costs to users, however there will need to It is a lengthy process to identify what is appeal or support. It would take a brave be appropriate increases in charges in the the most appropriate form of automation, Government to spend $100m on a wharf future to recover costs. timing and how to minimise impacts asset at the expense of upgrading its on the labour where possible. Clearly roads, trains or trams. 6. TRAVIS BROOKS-GARRETT- there are risks involved in having an What do you see as the biggest risks automated terminal and getting the right Pricing and access are often raised as and opportunities for 2018? balance between costs and productivity is the major risks to the industry however essential. these risks can be easily managed by The key risk for 2018 for South Australia having an appropriate regulatory regime. is the channel widening project that TRAVIS BROOKS-GARRETT - An appropriate regime provides comfort is currently in the hands of the State On behalf of APSA, FTA and our to all parties, ensuring port services Government Planning Minister to approve. members, thank you for taking the can be competitively priced and access The project involves widening the channel time to participate in this interview. available but also give gives infrastructure to 170 metres, enabling us to handle, We look forward to working closely investors certainty that investment can unrestricted the larger liner, cruise and with you and your executive team in be underpinned by achieving appropriate liquid fuels vessels that will be arriving the years ahead. returns on the investment. The regime on the Australian coast. Hopefully this also needs to be light handed and project will get the sign of shortly and be facilitates healthy negotiation between the concluded towards the latter half of 2018. counter parties. Other key risks for 2018 are no diferent to risks that ports and stevedores have 4. TRAVIS BROOKS-GARRETT- NSW face in any other year, managing safety, Ports and the Port of Melbourne the environment and the community. have seen increased competition for Safety will always be viewed as the key contestable trade since privatisation, risk to be managed, we have employees are we seeing similar competition in challenging work environments and between the Port of Melbourne and we aim to ensure those employees get Flinders Ports? home safely after every shift. We have a In most instances cargo located in the record that we are proud of across the Adelaide/Melbourne corridor has a natural Group but we will continue to look at port gateway but there will always be ways to improve our safety processes and a catchment area where trades, both practices, it is a work in process.

Autumn 2018 I Across Borders I17 fINANCIAL REfORMS

Foreign Exchange and the impact on the Freight and Customs industry

By PAul BETTANY, Collinson Forex

By defnition the freight and The Economic Cycle and the Impact on Jerome Powell (a new trump appointee) customs industry is exposed to Currencies has testifed to this, recognising the fscal stimulus tax cuts are having on the US Currency markets are the most liquid in the foreign exchange (FX) risk, as it economy. Tax cuts will bolster corporate world. Interest rates drive currencies and deals with foreign currency receipts earnings which may well sustain the bull- and payments. There are ways Infation and growth impacts interest run in equity markets. The recent share to mitigate this risk and the goal rates. The Global economy is in a growth market correction (of 10%), sparked by period, with a full economic cycle (post- a spike in US Bond Yields, only lends should be minimisation, allowing GFC) behind us. The post-GFC economic credibility to the bull market! Companies to concentrate on core cycle was a period of historically expansive The rising interest rate environment business. monetary policy employed by most Central Banks. puts upward pressure on the US Dollar, which should be refected in most other These Central Banks bloated balance currencies, as it operates as the reserve. Forecasting foreign currency cash fows sheets, kept interest rates at record lows The ECB, RBA, BoJ and RBNZ are all still allows a business to realise the exact and expanded the money supply. The operating in the previous, accommodating exposure a company has over a specifed monetary stimulus was necessary to economic cycle, thus putting a downward period of time. The further out we forecast encourage growth in benign and static bias on the respective currencies. ECB cash fows the less accurate they become economies. This has largely succeeded President Draghi has warned that the and Central banks now look to a return to a and therefore hedging becomes less EU is not in the sustainable growth more normalised period of monetary policy. precise. The elimination or minimisation paradigm that the US is in, committing of risk, allows each business to lock in The US (and to a lesser extent the UK) to an extended period of ‘Quantitative Easing’. The RBA, BOJ and RBNZ are in expenses/receipts in AUD dollars, therefore has moved on to a new economic cycle, with strong growth manifesting itself in similar circumstances. All the respective allowing accurate projection of revenues for infationary pressures and rising interest Central Banks have indicated rate will costing and pricing purposes. rates. The Federal Reserve has recognised not commence in this calendar year. The Financial instruments are readily available to this and has been raising interest rates performance of each economic zone will throughout 2017, with plans to continue determine the relative value of the cross- all businesses and enable the management this policy in to 2018. The Fed Chairman rates between these currencies. of FX risk.

Having a policy is essential and this can be from taking no action, which is a strategy, to hedging all currency exposures. It is somewhere in between these extremes where most businesses operate, depending on the economic cycle and individual propensity to take risk.

It is therefore extremely important to know your exposure and how to manage that risk over an economic cycle. Forecasting FX cash fows establishes exposure and then adopting the desired strategy considering the economic cycle and ability of individual companies to absorb FX gains and losses.

Hedging mostly involves fnancial instruments including Forward Contracts, Swaps and Options.

18 I Autumn 2018 I Across Borders The Trump administration has embarked resulted in a very infexible system that pushing interest rates higher. on a pro-Growth economic strategy. One has seen massive trade defcits with major Debt servicing then becomes a global threat. of the key points is deregulation, which is trading nations. China and Mexico have unleashing business growth and allowing both been major benefciaries. Trump is now Geo-Political risks are always a clear and the massive expansion of the energy sector re-negotiating the Multi-Lateral agreement present danger to markets. North Korea within the USA. The increased sourcing into more fexible and ‘fair’ bi-lateral trade has become a nuclear threat, while China of energy, through both new and old arrangements. The result should see a threatens Asian borders in the South China technologies, has enabled the US to become massive turnaround in the trade balance sea. The Middle East remains in turmoil not just energy independent but a global between the US and her trading partners. while international terrorism is an ever- exporter. Gas, coal and oil development ‘Ofshoring’ may become a phenomena of present threat. ‘Black Swan’ events are not combined with pipeline transportation the past. predictable, by defnition, therefore requiring improvement have created a boom. contingency plans. The core strategies of trade, tax and The next key point was tax cuts. Tax cuts deregulation have unleashed a pro-growth Summary are fowing through into corporate earnings, economy that will allow the US to expand thereby sustaining the stock market and fght growing defcits and debt. Central Banks and their respective Monetary rally, while putting more dollars into the Policy will continue to dominate currency Threats to Global Markets consumer’s pocket. The tight labour market and equity markets. The US and the UK are in a growth cycle and their expansionary has seen record low levels of employment, Global debt is a growing threat to developed fscal policies have allowed the return to allowing upward pressure on wages, further economies. The GFC was a crisis of leverage normalised monetary. This should give improving the position of the consumer. and debt, which drove global economies upward momentum to the associated Consumer confdence is a multi-year record in to the worst recession, since the Great currencies. The freight and customs industry high, boosting consumption and demand, Depression. The solution was Government must be prepared for all developments in an economy that is 70% dominated by bailouts of banks and the record expansion through considered FX risk-management consumption. Tax exemptions have been of Central Bank balance sheets. This policies. Accurate foreign currency cash given to corporate earnings held ofshore extra-ordinary monetary policy reduced fow forecasting and appropriate hedging (estimated to be up to US$5 Trillion), while interest rates to historically low levels. This strategies will ensure companies can then simultaneously allowing 100% depreciation allowed national economies to continue concentrate on core-business. of repatriated funds if reinvested in business. to run massive defcits, adding to already This is an enormous stimulant to US signifcant national debt levels, which are a economy. growing threat to global economic stability. As the global economic situation improves, Trump has also embarked on an overhaul infationary CPI growth emerges, thus of US trade policy. Multi-lateral trade has

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Autumn 2018 I Across Borders I19 TRADE REfORMS

Charting a clear course in a rapidly changing world

By ThE hON STEVEN CiOBO, Minister for Trade, Tourism and investment

The Federal Government’s Foreign Policy White Paper 2017, the result of the frst major consultation with the Australian people on foreign policy and trade in over a decade, sets out a roadmap for advancing and protecting Australia’s international interests and our engagement with the world. Importantly, for those who are the backbone of Australia’s trade: exporters, importers, customs brokers, freight forwarders and logistics services providers, the White Paper afrms that an outward-looking Australia, fully engaged with the world, is essential to our future prosperity.

The Turnbull Government has committed to opportunities to improve productivity and America and the Middle East. delivering more opportunities for Australian harness new sources of growth. To reap the widest possible benefts from businesses globally and stand against The White Paper makes clear that Australia these changes our policy settings and our protectionism. The Foreign Policy White should approach this period of change with industries will need to be competitive and Paper outlines an agenda to achieve this. confdence. We begin with advantages agile, responsive and determined. The White Paper provides a strategic that many other nations do not enjoy. An agenda for opportunity framework to guide Australia’s international Our outlook is global; our democracy is engagement over the next decade. It is strong; our economy has broken records Resisting protectionism and supporting focused on the promotion and protection for developed nations by growing for more the rules to promote open trade and of Australia’s national interests – the than 27 consecutive years; and we live in investment will remain the cornerstone of prosperity of Australia, the independence the most economically dynamic region of our trade policy over the coming decade. of our decision-making and the security, the world. Australia will remain a vocal advocate safety and freedom of our people. Seeking opportunity and protecting our for international law, free societies and The logistics and freight forwarding industry interests open economies, underpinned by strong will continue to play an essential role in Over the next decade, rapid urbanisation, independent institutions and the rule of law. contributing to Australia’s strong economic demographic shifts, digitisation and Engaging internationally on the benefts performance. By connecting our substantial emergence of new middle classes will of open trade recognises the incredible mining, agricultural, and manufacturing drive exports of Australian goods such advancement trade has brought to the exports to international, regional and as premium produce and vitamins, and world, including its role in lifting hundreds local markets, revenue is drawn back services in education, tourism and fnance. of millions of people out of poverty. to Australia, boosting our economy and creating jobs. The middle class in our region is predicted This approach also refects the benefts to increase fve-fold to three billion by 2035. trade liberalisation has brought us, with Powerful drivers of change Traditional trading partners such as the research showing progressive trade The White Paper’s policy framework United States and Europe will remain liberalisation over the past 30 years has rests on an analysis of some of the most important as expanding export markets, given Australians more choice, better important trends shaping the world and but also as gateways to global value services and lower prices. what they might mean for Australia. chains and as sources or destinations for Importantly, the research concludes these It asserts Australia will have great productive investment. benefts would continue even if other opportunities to prosper but makes clear countries chose to close themselves of these will need to be pursued in a more At the same time, we are seeing new with higher tarifs and trade barriers. competitive world. opportunities opening up in markets that warrant fresh approaches. The roadmap for prosperity Anti-globalisation and increased protectionist sentiment are identifed as Latin America, for example, is increasingly The rules embodied in the WTO continue to signifcant trends currently impacting the attracting the attention of Australian be of fundamental importance to Australia’s businesses as a result of its economic international environment. interests. reform, population growth and natural Other drivers of change, such as resource endowments. As a result, we are Australia was instrumental in achieving technological developments, are driving expanding and diversifying our commercial recent WTO outcomes, such as the Trade further innovation and present signifcant interests beyond mining services in Latin Facilitation Agreement, which will reduce

20 I Autumn 2018 I Across Borders red tape and compliance costs for exporters (Australian Peak Shippers Association) market information. Australia’s export credit and potentially boost global trade by up to ofered face to face events and webinars agency, EFIC, assists frms to secure fnance US$1 trillion a year. to its members after receiving a Free Trade for export and to invest overseas. Agreement Training Provider Grant from The White Paper acknowledges that broad- the Australian Government in 2017. The logistics and freight forwarding industry based multilateral liberalisation, through the facilitates the movement of our goods WTO, would deliver the biggest economic These activities complement our broader to overseas markets and is an important gains for Australia. eforts to reduce the costs of trading partner in achieving the White Paper’s goal and make Australian businesses more of a safe, secure and prosperous Australia. However, divergent views within the competitive. 164-member strong Organization has meant Shifting demand patterns, increasingly a more fexible and pragmatic approach is These include establishing a ‘single window’ complex sourcing relationships and new needed. Australia is taking a leading role for trade and a new non-tarif measures digital tools will be central to the industry’s strategy to tackle regulatory and other in the WTO to develop new negotiating ongoing success. frameworks that can succeed in this barriers impeding exports. challenging environment. The White Paper is the result of an And, with more than 99 per cent of unprecedented level of consultation, Supporting our commercial interests Australian goods exports reliant on sea including with industry stakeholders transport, we are working to ensure throughout 2017. We cannot sit on the sidelines while other international laws that protect freedom of countries secure better access to our key navigation are respected. We do not want the conversation to stop markets. Leveraging our assets there. We are at the forefront of developing Ongoing engagement with customs modern, comprehensive FTAs that maximise We are working from the grassroots to the tarif reductions for Australian exporters, highest possible levels to promote Australian brokers and freight forwarders helps us to open up services markets and set rules to trade. get the frameworks and rules right for our businesses to thrive internationally. enhance trade and reduce regulatory risk. Australia’s network of overseas posts and Australia already has FTAs with ASEAN our in-country diplomatic presence provide Let’s work together to chart Australia’s and nine individual countries (Chile, China, a vital layer of engagement to advance our course ahead and pursue our agenda of Japan, Republic of Korea, Malaysia, New commercial interests in foreign markets. opportunity, security and strength. Zealand, Singapore, Thailand and the United At the same time, Austrade provides a range For more information and copies of the States), which together account for 64 per of support, from business introductions to paper see: dfat.gov.au cent of our total trade. We will expand our network of agreements to ensure by 2020 we have FTAs with countries that account for over 80 per cent of our trade. Australian businesses, especially our 45,000-strong small business contingent, are already benefting from targeted education and training to realise the benefts ofered by new FTAs. We encourage more Australian businesses to use DFAT’s FTA Portal to obtain tarif information or attend an FTA training seminar, and speak to a customs broker or freight forwarder to get specifc advice relating to their goods. The Government is working to ensure businesses know about our FTAs, and take full advantage of them. The award-winning FTA Portal of tarif and rules of origin information will expand to cover new FTAs as they come into force, and will also widen to encompass services trade. Nearly 100 North Asia Free Trade Agreement Seminars have been held in locations all over the country since 2015, providing direct support to Australian SMEs. Seminar dates for 2018 will be announced shortly. The private sector is complementing these eforts with sector-specifc seminars. For instance, Freight & Trade Alliance

Autumn 2018 I Across Borders I21 TRADE REfORMS

vast number of assumptions and the reality is that a multilateral FTA has not existed that The Trans-Pacifc is as modern and fexible as the TPP. Any modelling will involve a degree of guesswork. Interestingly, previous modelling found that the TPP without the US makes better economic Partnership – issues for sense for Australia than the version of the TPP that included the US. The additional concern is that even if modelling showed that there could have been a better outcome the trade community for Australia, how exactly would Australia go about renegotiating what is now a concluded agreement? By RuSSEll WiESE and lYNNE GRANT, hunt & hunt lawyers. Despite all the above concerns, commencement by the end of 2018 is possible. There are some disadvantages There is no doubt that the TPP worsens the FTA noodle bowl. Australia will now have 3 diferent FTAs with New Zealand, Singapore and Malaysia and 2 diferent FTAs with Japan, Vietnam, Peru, Chile and Brunei. The impact of this overlap will be more pronounced by the fact the TPP is relatively diferent to Australia’s existing FTAs. An example of the diferences are the rules of origin around both textiles and automotive goods. These rules are much more complex than standard rules of origin under Australia’s existing FTAs. Few free trade agreements have received red tape. the attention given to the Trans-Pacifc The TPP may also weaken the advantage Partnership (TPP). Originally hailed by 3. Improved outcomes with Australia’s Australia had gained over other countries President Obama as the gold standard or existing FTA partners – while it will depend on by aggressively pursuing bilateral FTAs. For free trade agreements (FTAs) it was famously the product, there are a number of instances instance, not all TPP members had existing abandoned by President Trump on his frst where the TPP outcome is an improvement FTAs with Japan. The concessions in the day in ofce. Now that agreement has been on Australia’s position under existing FTAs. Australia Japan FTA were hard won. However, reached on the terms of a TPP that does The best examples are agricultural goods with the entry into force of the TPP, Australia not include the US, it is time for importers, exported to Japan and various improvements will again be on level pegging with the other exporters and their advisors to start preparing. on exports to Malaysia and Vietnam. TPP members. Why is this FTA important? 4. Outcomes in areas such as services, Certifcates of origin investment and government procurement will The terms of the updated TPP have now represent improvements over the positions Certifcates of origin (COO) under the TPP will been released and the benefts, especially negotiated under existing FTAs. be self-certifed. This means that they can be for agricultural exporters, appear to be completed by the manufacturer, exporter or substantial. It is true that there is signifcant 5. The TPP partners are not fxed. New importer. While there will be specifed data overlap between this FTA and Australia’s countries can join the TPP and Taiwan, felds, there will be no set format. Additionally, existing FTAs. We already have existing FTAs Thailand, Indonesia and the Philippines have the document can be in paper or electronic with 8 of the 10 other TPP members. In all expressed interest. The more countries form. fact, the TPP will represent Australia’s third that join, the more likely it is the TPP could FTA with each of New Zealand, Singapore become the default FTA, with other FTAs only Adding more fexibility, the COO will be able and Malaysia. Nevertheless, there are the considered if the TPP outcome is not duty to cover multiple consignments of identical following signifcant benefts associated with free entry. goods. the TPP: When will it start? While self-certifcation does make FTA use 1. Opening up of the Canadian and easier, it places a lot of responsibility on Mexican markets for the frst time. Neither The agreement was signed in Chile on 8 the exporter or other party issuing that country currently demands a large amount of March. Following this, the TPP will commence document. The need to have checks and Australian trade. Mexico is very US focused 60 days after 6 countries have completed their balances in place to ensure FTA compliance and Canada, being a major agriculture domestic ratifcation. When it commences, is heightened. This is not a reason to avoid and minerals exporter, sufers from being the TPP will only apply to those countries that the TPP or self-certifcation, but it is a risk that too similar to Australia. However, with US have completed domestic ratifcation. needs to be managed. trade becoming more difcult, Canada and In respect of Australia, the ratifcation process Relatedly, there will be increased compliance Mexico may view trade with Australia as more involves parliamentary review into the FTA and pressures on Australian customs brokers. attractive, despite the obvious geographic enabling legislation is required to be passed Where there is a set template COO, the constraints. through parliament. While the TPP originally customs broker can easily review the 2. Easier certifcation requirements – it will had support from both major parties, the paperwork to assess compliance. However, be easier to qualify for lower duty rates under Labour party is now requesting economic in the absence of a template, ten diferent the TPP than Australia’s existing FTAs. This modelling of the impact of the agreement. exporters could provide 10 diferent may mean that importers/exporters will use Such requests may slow down the ratifcation certifcates of origin. Customs brokers the TPP in circumstances where they would process and are unlikely to yield any will need to carefully check whether all the not have used an existing FTA that has greater conclusive results. Any modelling relies on a required data felds have been completed.

22 I Autumn 2018 I Across Borders Hopefully industry will develop an optional with the terms of the TPP. It will be especially important to be prepared template COO that gains wide acceptance and for the commencement of the TPP as the text leads to more consistency amongst exporters. These are easy issues to manage, but it is of the agreement leaves it unclear whether (1) also the case that alignment will not occur by it will be possible to issue retrospective COOs, Alignment accident. and (2) whether a retrospective COO could With so many diferent FTA’s it is important that What to do now? even cure a problem. the exporter and importer are aligned about Given the publicity the TPP has received there which FTAs the parties wish to use. The frst If they haven’t already, companies should start to take the TPP outcomes into account is no doubt that most importers and exporters consideration should be which FTAs do the will want to know how it benefts them. goods actually qualify for. For goods that have when developing supply chain strategies and some third country content, it is possible the undertaking long term planning. As with other FTAs, the TPP will present an good will qualify under one FTA but not another. The TPP documents as amended are opportunity for proactive service providers and As an example, Australian juice made from publically available and set out all of the tarif exporters to stand apart from their competitors. Australian oranges and Malaysian pineapples commitments of each country. Customs However, with its fexibility and lack of and exported to Japan may qualify under the brokers can access this information and model governance by an authorised issuer of COOs, TPP, but may not qualify under the Japan the TPP outcomes for their clients. it also carries compliance risks. Importers Australia FTA. and exporters are encouraged to prepare for Now is also the time to review instances where and use the TPP, but they must also ensure Once the potential FTAs are identifed, the there has been an underutilisation of existing that they have systems in place to ensure parties should determine which of the available FTAs with TPP members. If the reason for this compliance. FTAs provides the importer the best duty underutilisation relates to documentation, plans outcome. can be made for how to remedy this position Following this, the parties will know which under the more fexible TPP. FTA they wish to use. It is then crucial that Once enabling legislation is introduced, the parties apply the rules of origin under brokers should start to plan for transitional that particular FTA and comply with the arrangements concerning the start of the TPP. documentation requirements for that particular Attention needs to be paid to which shipment FTA. will be covered given that that text of the TPP Even if a good could qualify for the TPP, it will provides that it will apply to goods that “arrive” not qualify for the TPP if a COO for a diferent in a country after the commencement of the FTA is provided. This is because that COO will TPP. The term “arrives” should be contrasted contain a declaration that the goods comply to the term “imported”. Usually, the Australian with the rules of origin for that FTA but will not legislation provides that a new FTA applies to contain a declaration that the goods comply goods entered for “home consumption” after commencement of the TPP.

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Autumn 2018 I Across Borders I23 bORDER REfORMS

launch of BorderWise Single Window Tarif (Au) and ofer to new FTA members

By PAul ZAlAi, Director, Freight & Trade Alliance (FTA)

Supporting the Freight & Trade last year, 48 cases have been closed PLEASE NOTE - CargoWise One Alliance (FTA) vision “To establish resulting in demands for unpaid duties customers, who are also FTA members, will have access to a global benchmark of efciency of $9.6 million. It is worth noting that apart from unpaid duties, border BorderWise Single Window Tarif in Australian border related non-compliance can also result (AU) included in the CargoWise One security, compliance and logistics in infringement notices and other Customs module at no cost. activities”, WiseTech Global and sanctions. Growing the Alliance FTA are delighted to announce BorderWise Single Window Tarif While this is a signifcant and immediate a valuable member beneft in (AU) sets the benchmark in bringing member beneft, this is only the start of a the form of BorderWise Single together a range of critical “whole of much broader vision. Window Tarif (AU). government” border compliance data, law and regulation, and advanced In line with the FTA “Mission, Goals & Strategy”, we are undertaking an search functionality to help customers aggressive growth strategy to achieve As outlined in the January 2018 Goods to efectively minimise customs duty economies of scale which are necessary Compliance update, the Australian and mitigate the risks associated with to deliver ongoing cost efective member Border Force (ABF) has increased its import and export non-compliance for benefts and increased advocacy focus on complex audits. Since July themselves and their customers. representation. As a part of this approach we will be launching one in a series of campaigns to increase membership. New members will be provided the following until 30 June 2018: • FREE FTA membership - efective immediately; • FREE BorderWise Single Window Tarif (AU) from 1 April 2018; and • FREE access to Online CPD and CBC from 1 April 2018 New members that continue membership beyond 1 July 2018 will continue to receive free Online CPD and CBC for the remainder of the licensing period until 31 March 2019. We look forward to your assistance in spreading the word. Please do not hesitate to contact me direct on 02 9975 1878 or on [email protected]

24 I Autumn 2018 I Across Borders bORDER REfORMS

Trade facilitation and its impact on customs brokers

By RuSSEll WiESE, principal, hunt and hunt lawyers

Over the past 120 years we have progressed from physical inspection of The Australian Trusted Trader all goods by the customs authority prior to import, to a system of complete Programme is another example. A goal self-assessment where only a very small percentage of goods are physically of this programme is to identify those inspected. however, in this same time the rules relating to duty evasion supply chains that act in a compliant and prohibited imports have not materially changed. What has changed is manner and direct Governmental that the practical responsibility for trade compliance has shifted from the customs compliance activities primarily at the supply chains that have not been border authority to the customs broker. This has resulted in greater levels of risk assessed. There is nothing wrong trade facilitation for importers and exporters, but has put customs brokers with this as a goal. However, it needs in the unexpected position of both service provider and the primary defence to be acknowledged what is occurring. against non-compliance with the Customs Act. Trade compliance is efectively being outsourced. The agreement is that the This is a system that can work, but it requires each of the Australian Border Government will provide importers and Force (ABF), customs brokers and their clients to appreciate the role being exporters with trade facilitation benefts carried out by customs brokers. provided that the ABF can be confdent that it does not need to audit the Trusted The role of customs brokers as and a lower duty rate can be claimed? Trader. safeguards against trade non- It will be the customs broker completing For this trade of to occur each party compliance may seem at odds with the the import declaration. With previous needs to acknowledge and adapt traditional role of a customs broker. That free trade agreements the customs to the change in roles. This means role generally involved acting in the best broker merely had to ensure that a that clients need to acknowledge interests of their client and representing certifcate of origin in the prescribed form that customs brokers are not merely their clients’ interests in disputes with was supplied. In most instances this performing a procedural role in the the border authority. However, the was provided by an authorised body and clearance of goods. Rather, they are current duality of roles (service provider was easy to assess. Under the TPP the assessing the import for compliance and de facto trade compliance body) customs broker may well receive 100 with the Customs Act and are doing has been developing slowly over time diferent certifcates of origin from 100 so to such a standard that the ABF is and seems to be gaining momentum. diferent exporters and it will be up to prepared to trust this assessment and As an example, consider the recently that broker to assess whether the goods focus their compliance activities on agreed terms of the Trans-Pacifc qualify for the TPP. other importers. In this environment, Partnership (TPP). To enjoy preferential If the customs broker gets it wrong, the client needs to understand that the duty rates under that agreement the this error of judgement will only be customs broker may not simply accept importer must hold a certifcate of origin identifed following an audit by the their claims at face value and may need that contains all of the mandatory data border authority. Only a small number of to ask for supporting documentation. felds set out in the agreement. There goods will be subject to this treatment. The customs broker should also remind will be no template document and the The vast majority of goods will only the client that it owes duties to the system is one of self-certifcation. That Government that may be in confict with be subject to review by the customs is, the exporter, producer or importer the broker’s duties to the client. broker. The customs broker carrying prepares the certifcate of origin out this responsibility faces the prospect The ABF needs to appreciate that themselves. of fnes from the ABF and a negligence customs brokers are thrown into the Who then is left to assess whether the claim from its client in the case of non- extremely difcult position of being the requirements of the TPP have been met compliance. primary auditor of customs compliance

26 I Autumn 2018 I Across Borders while also having to maintain a customs brokers. defence of reasonable mistake of fact. commercial relationship with its client However, before a corporate customs Lastly, customs brokers need to (in what is the most competitive of broker can rely on this defence, it must acknowledge the evolving nature of markets). While the ABF can easily be shown that the mistake was not one their role. No longer is it the case that question the veracity of what an that could have been avoided by the they owe duties only to their clients. importer says to them, it is harder for exercise of due diligence. On many occasions the ABF has said a customs broker to politely require that customs brokers are in a privileged It is a difcult transition period with clients to prove the correctness of position. It is only customs brokers expectations and roles evolving. At information provided. Customs brokers that can lodge import declarations for the same time, industry pricing remains cannot put holds on good and inspect third parties. Additionally, it is only cut throat. Customs brokers are them. Customs brokers cannot serve customs brokers that have access to the enabling seamless trade and bearing the their clients with a notice to produce Integrated Cargo System. This comes responsibility of full compliance. This documents. Customs brokers do at a price. That price includes: valuable role needs to be recognised not have access to the Government by all stake holders if trade facilitation intelligence. In short, while the ABF is • an obligation to inform the ABF if improvements are to continue. giving customs brokers the primary role the customs broker becomes aware of of protecting the borders from revenue false information having been provided WANT TO KNOW MORE evasion and prohibited imports, it needs to the ABF; Russell will be presenting at the to be acknowledged that customs • being strictly liable for the provision Global Shippers Forum (GSF) and brokers do not have the same tools to of any false information provided to iChCA international Conference and perform that role as those available to the ABF (even if there was no intent to Exhibition (10-11 May 2018, Melbourne the ABF. The ABF can still expect high provide false information); and - www.FTAlliance.com.au) standards from customs brokers, but it is unrealistic to expect a customs • being equally liable as the importer broker to identify every instance of non- for any underpaid duty. compliance, or all instances that could be identifed by the ABF. Acknowledging the increased importance of the customs broker in If the limitations on a customs broker trade compliance means that customs to ensure customs compliance are brokers also have to accept that accepted, then the ABF needs to more is expected of them. The ABF take this into account when its own will expect a customs broker to take compliance activities identify a breach of reasonable steps to assure itself that the law. Where there is a breach, often the information provided by its clients the customs broker is just as legally is correct. What steps are reasonable liable as the importer. The ABF elects will depend on magnitude of the risk who to penalise. Not every breach and the ease of taking those extra will be the fault of the customs broker. steps. For example, if the importation The easiest example is where the is of aluminium profles which could client provides false information to the potentially attract dumping duty of 50%, customs broker regarding the goods. the broker may be expected to take greater steps to verify the information In these instances, should the customs than if the import was of duty free broker be expected to have a greater mobile phones. ability to detect the provision of false information that the ABF? While it is As another example, the steps required a self-assessment regime, it is still the by a customs broker before declaring a ABF that elects to release the goods goods is asbestos free will be diferent from customs control based on the for a consignment of fresh fruit than it information provided. If the ABF could will be for a consignment of brake pads. not detect false information without an inspection of the goods, should the Essentially customs brokers need customs broker be held to a greater to ensure that they are exercising a standard? level of due diligence that refects the responsibility imposed on them. This If the Government wants to place the due diligence starts with initially verifying bulk of the compliance burden onto the identity of the client and extends customs brokers, then it would help if to all aspect of the communication the ABF provided brokers with tools provided to the ABF. to help identify non-compliance. For instance, the ABF will have internal This due diligence is important not only resources to help their auditors identify from the perspective of performing the non-compliance. There will be key role expected of customs brokers by the red-fags that the ABF ofcers will be ABF, but also as a means of providing trained to look for. Where it does not a legal defence where there is a breach compromise Government security, of the law. Where false information has these learnings should be shared with been provided to the ABF, the customs broker may be able to rely on the

Autumn 2018 I Across Borders I27 bORDER REfORMS

From 1 July this year, low value goods Please refer to External Release Notes imported from overseas by consumers in 17.4.02, which set out the additional GST on Australia will attract Goods and Services information to report depending on Tax (GST). the relevant import document and the This means that vendors—including information provided by the vendor. merchants, electronic distribution Providing the additional information, low value platform operators and re-deliverers— with sales subject to GST of AUD75,000 particularly the GST-paid exemption or more each year will need to register code, helps prevent GST from being with the Australian Taxation Ofce (ATO), charged at the border when it has imported collect GST at the point of sale and remit already been charged at the point of that GST to the ATO. sale. If GST is charged a second time at the border, refunds will not be available As this is a tax measure and not a border measure, the ATO is responsible from the Department of Home Afairs and goods for implementation and all compliance must be sought from the supplier. activity. What is not changing? What does this mean for my import The AUD1000 threshold for GST, duty reporting requirements? and reporting at the border will remain, While border processes will not change, and there will be no changes to current the Department of Home Afairs advises border clearance processes. The you to consider whether changes to your changes will also not impact the fow of business processes are necessary. goods across the border. Vendors registered for GST need to Further, these changes do not apply to ensure that relevant tax information is included on import documents for low tobacco, tobacco products, or alcoholic Vendors value goods. Vendors can face penalties beverages. These goods will continue if they fail to take reasonable steps to to be taxable importations at the registered for meet their reporting requirements. border (where customs duty and GST is payable) regardless of their customs GST need to To help vendors meet their reporting value. ensure that requirements, the Integrated Cargo System will allow, where necessary, Find out more relevant tax the reporting of additional information, including Vendor ID, Importer ID and For more information visit Home Afairs information the use of a GST-paid exemption code. and www.ato.gov.au/ausGST. is included on import documents for low value goods. Vendors can face penalties if they fail to take reasonable steps to meet their reporting requirements.

28 I Autumn 2018 I Across Borders 2018 customs compliance priorities

The Australian Border Force (ABF) is While we’ll focus broadly on supply a level playing feld for industry, and an operationally independent, frontline chain integrity, this year, all customs contributes to the protection of body in the newly created Home licences will be ready for renewal, so Australia’s border. As we progress Afairs portfolio. Working alongside we’ll be checking that our licensees are this important work in 2018, we will us in the portfolio are our colleagues compliant with their licence conditions continue to work closely with industry to from the Department of Home Afairs, and continue to be eligible to hold their achieve better outcomes for you and the Australian Federal Police, Australian licence. We have increased resources Australian community as a whole. Crime Intelligence Commission, and allocated to this important task. We acknowledge there is more we the Australian Transaction Reports and Our continued focus on regulated and can do to improve the ways we work Analysis Centre. The Australian Security restricted goods aims to protect the together. For example, we are currently Intelligence Organisation will also Australian community from items that assisting with the Commonwealth form part of the portfolio following the pose a risk—preventing the importation Ombudsman’s own motion investigation passage of legislation. of illicit frearms and weapon parts, into our use of legislated powers under The ABF is and will remain Australia’s asbestos and illicit tobacco, alongside the Customs Act 1901 in relation to the customs service, with trade facilitation emerging threats in prohibited processing of inbound containerised a key priority. Keeping trade facilitation substances such as opioid drugs. sea cargo. We have welcomed the and traditional customs functions opportunity to demonstrate our In relation to the protection against together, alongside Australia’s national operational processes in relation to economic harm, we will be looking security agencies, has enhanced our trade and goods border facilitation and carefully at revenue evasion through ability to identify and focus our eforts intervention and look forward to the misclassifcation, undervaluation and on those consignments and people who fndings of the review. non-declaration of goods; false claims represent the highest risk. This, in turn, for GST exemptions; or improper It is a shared responsibility to protect the has meant we are able to ensure the application for preferential treatment border and facilitate legitimate trade with seamless facilitation of legitimate people under free trade agreements or duty minimal intervention. In the near term, and goods, particularly with record refunds and concessions. we will look to how our processes can numbers of trade and travellers crossing be further streamlined and how voluntary the border last year and projected to Businesses that have worked closely compliance can be more readily achieved continue into 2018. with us to become Trusted Traders will so that interventions are minimised. In continue to reap tangible benefts as Throughout 2018, we will continue to the longer term, initiatives within the we welcome new Mutual Recognition work closely with industry to facilitate expansive trade modernisation agenda Arrangements, and adopt their trade and reduce illegitimate and non- will deliver higher levels of automation suggestions for improvements to the compliant imports and exports. The ABF and pre-importation compliance that programme. Last year we signed an will identify and address non-compliance will greatly enhance facilitation and exciting arrangement with China, which issues and undertake education and strengthen border protection measures. gives Trusted Traders a competitive enforcement action where necessary edge with better access and speed to For more information visit www. to improve voluntary compliance. We market. We also launched consolidated homeafairs.gov.au or contact encourage businesses to codify their cargo clearance reporting, which allows [email protected]. compliance processes and to take Trusted Trader importers to lodge a advantage of the benefts of becoming a single import declaration for consolidated Trusted Trader. cargo for all sea cargo types and for air The ABF will maintain its intelligence- cargo, which is already saving business led, risk-based approach to the broad an average of 10 per cent in import spectrum of non-compliance across charges at the border. supply chain integrity, regulated and While we will continue to work with restricted goods, and economic harm. Trusted Traders to help ensure their Throughout the year, particular areas of supply chain security remains strong, focus may arise based on intelligence our focus continues to be on trade that we receive at the time or through is not accredited and poses an unknown analysis of information, incidents and risk. behaviours, but our overall approach of risk assessing all importations and Increased compliance by industry, prioritising intervention against highest brokers and the whole supply chain threats remains the same. facilitates legitimate trade, ensures

Autumn 2018 I Across Borders I29 Global shippers Forum & IcHcA International conference & Megatrans exhibition

8-10 May 2018 Melbourne convention & exhibition centre

HeAr FroM THe World cusToMs orGAnIsATIon (Wco), unITed nATIons councIl For TrAde And developMenT (uncTAd), World bAnk, MAersk AsIA pAcIFIc ceo And oTHer IndusTry leAders.

The worlds’ most senior gathering of shippers, trade logistics providers and government representatives will be meeting in Melbourne, Australia on 10 and 11 May 2018 - to be hosted for the frst time in Australasia, Freight & Trade Alliance (FTA), the Australian Peak Shippers Association (APSA) and the International cargo Handling coordination Association (IcHcA) Australia warmly welcome you to the Global shippers Forum (GsF) and IcHcA International conference and exhibition. early bird rate $385 per day to $550 for the two day conference

To register go to www.ftalliance.com.au/upcoming events. enquiries please contact caroline Zalai 0n 02 9975 1878 or [email protected] drAFT proGrAM - dAy 1 - Thursday 10 May 2018

MC – Travis Brooks-Garrett – Secretary Australian Peak Shippers Association / Director Freight & Trade Alliance (FTA) 8.30am Opening Chris Welsh, Secretary-General, Global Shippers Forum John Warda, Chairman, ICHCA Australia 8.50am - TRADE Moderator - Travis Brooks-Garrett – FTA / APSA FACILITATION Session Sponsored by Expedient Software Jan Hofman - Chief, Trade Logistics Branch “Priority Trade Initiatives” of the National Trade 9am Division on Technology and Logistics, United Facili-tation Committees – the role of shippers’ FACILITATION Nations Conference on Trade and Development participation (UNCTAD) Ana Hinojosa - Director- Compliance and Trade Global Trade Facilitation and Compliance Update 9.20am Facilitation, World Customs Organisation (WCO) – WCO Perspective Michael Outram – Commissioner - Australian 9.40am Trade facilitation: An Australian perspective Border Force 10am PANEL SESSION and Q&A MORNING TEA 10.30am Sponsorship - available Moderator – Tony Paldano - Founder, 11am INNOVATION Containerchain Future of customs compliance technologies and 11.10 Richard White – Founder, CEO WiseTech Global a vision for single window for trade

Automation, Roboticisation and the New 11.30am Peter McLean – Head of Kalmar Asia-Pacifc Industrial Revolution

11.50pm Julian Smith – Founder, CEO Blockfreight Blockchain and Beyond

12.10pm PANEL SESSION and Q&A

LUNCH 12.30pm Sponsored by Insync Personnel

1.30pm Moderator – Dr Hermione Parsons - Director REGULATION and Centre for Supply Chain & Logistics (CSCL) SESSION SPONSOR - available STATE OF THE Deakin University MARKET 1.40pm Marika Calfas - CEO, NSW Ports TBA Chris Welsh - Secretary-General, Global Global Alliances and Shipping Line Market 2pm Shippers Forum Consolidation Bill Gain - Global Lead, Trade Facilitation & 2.20pm Impacts of statutory reforms on world trade Border Management, World Bank Group Robbert Van Trooijen - Vice President and Asia 2.40pm Pacifc Chief Executive & Gerard Morrison – Shipping Market Outlook Managing Director, Maersk Line 3pm PANEL SESSION and Q&A 3.30pm AFTERNOON TEA Sponsorship - available 4pm Moderator - Travis Brooks-Garrett – FTA / APSA SESSION SPONSOR – available Carbon emissions in the international supply 4.10pm Michael Blake, Managing Director of Scope 3, chain – are shippers prepared for what lies GLOBAL REFORM Con-sultee to Global Logistics Emissions Council ahead Trade facilitation – is it shifting the 4.30pm Russell Wiese – Principal, Hunt & Hunt Lawyers compliance role from Government authorities to trade professionals Lisa McAuley - Global Trade Professionals An international standard for certifying trade 4.50pm Alliance (GTPA) professional drAFT proGrAM - dAy 2 - Friday 11 May 2018

Travis Brooks-Garrett - MC 8.30am Opening Secretary - Australian Peak Shippers Association / Director Freight & Trade Alliance (FTA) 8.40am Keynote Brendan Bourke, CEO, Port of Melbourne address

9am - E-COMMERCE Kai Lincoln - Moderator Seko Global Logistics

Maggie Zhou, Managing Director for Australia Trade in China and the evolving e-commerce 9.10am and New Zealand Alibaba Group opportunity Ana Hinojosa, Director- Compliance and Trade WCO e-commerce framework of standards – 9.30am Facilitation, World Customs Organisation (WCO) implementation and ac-tion plan Rosie Cicchitti, Director – International and Collection of GST on low value internet trade 9.50am Cross – Border Indirect Tax, Australian Taxation commencing in Australia from 1 July 2018 Ofce (ATO 10.10am PANEL SESSION and Q&A 10.30am MORNING TEA Sponsored - available Neil Chambers – Moderator – Director, Transport 11am SAFETY SESSION SPONSOR – available Alliance Australia (CTAA) Sal Petroccitto, CEO, National Heavy Vehicle 11.10am Role of the NVHR – Chain of Responsibility Regulator Richard Brough OBE, Director, ICHCA Safety and accountability in global container 11.30am International and IMO Maritime Safety Committee movements (Still to be confrmed)

11.50am Lawrence Jones, Global Risk Director – TT Club CTU Code

12.10pm PANEL SESSION and Q&A

12.30pm LUNCH Sponsorship - available

1.30pm SECURITY Paul Zalai – Moderator, Founder & Director FTA SESSION SPONSOR – available Sachi Wimmer, First Assistant Secretary, Ofce Global security environment and logistics risks – 1.40pm of Transport Security, Department of Home extending air cargo reforms Afairs

2.00pm Jonathan Sharrock – CEO Xlerated Assets Cyber-Security and Logistics Risk

Lyn O’Connell, Deputy Secretary & Indigenous 2.20pm Champion, Department of Agriculture & Water Balancing Biosecurity Risk with Trade Facilitation Resources

2.40pm PANEL SESSION and Q&A

3pm AFTERNOON TEA Sponsorship - available

3.30pm GLOBAL Moderator – Peter Van Duyn – ICHCA Australia SESSION SPONSOR – available REFORM

3.40pm Michael Bouari - CEO 1-Stop Communications Integrated supply chains

Bob Ballatyne, Chairman, Freight Management 4pm Association of Canada/Chairman Global North America Update Shippers Forum

Huang Feng (Simon) - Director General of Asia Logistics and trade reforms across APEC 4.20pm Pacifc Model E-port Network (APMEN) – Asia economies Pacifc Economic Cooperation (APEC)

4.40pm PANEL SESSION and Q&A

5pm Close – followed by networking drinks & canapes A unique opportunity for Australian delegates to meet with industry peers, international guests and representatives from across commerce and government – at the time of print the following businesses are registered to attend - we look forward to also welcoming you to this important event

1-Stop connections compliant customs kotahi AcA International containerchain Maersk Line ADM Global crowe Horwath Magellan Logistics A.H. Beard cSL Behring (Australia) Pty Ltd Manildra Group of companies Alibaba (Australia) company Pty Ltd cT Freight Melbourne convention Bureau Anchor Logistics Pty Ltd Deakin University Mondelez International Asaleo care Limited Dean World cargo Mondiale Freight Services Asia Pacifc Model E-port Network Department of Agriculture & Water National Heavy Vehicle Regulator (APEM) Resources National Industrial Transportation Australian Border Force Department of Home Affairs League (NITL) Australian cotton Shippers Association Department of Infrastructure NSW Ports Australian Grain Link Pty Ltd DHL Global Forwarding Patrick Stevedoring Australian Horticultural Exporters DSV Air & Sea Port of Melbourne Association (AHEA) Emerald Grain Riordan Grain Services Australian International Movers Enirgi Metals Group Pty Ltd Salta Properties Association (AIMA) Expedient Software Santova Logistics Australian Meat Industry council Fletcher International Exports Scope 3 (AMIc) Freight & Trade Alliance (FTA) Seaway Logistics Pty Ltd Australian Paper Freight Management Association of Seko Global Logistics Australian Peak Shippers Association canada Sunrice Australia Australian Taxation Offce Freight Transport Association Uk Tasmanian Logistics council Axima Logistics GEFcO Forwarding Tomax Logistics Barrett Burston Malting co Ltd George Turner customs Forwarding Trade consultants BcR International Glencore Agriculture Pty Ltd Trusted Trader International Bega cheese/Tatura Milk Industries Global Shippers Forum TT club Bell Total Logistics Global Trade Professionals Alliance United Nations conference on Trade & Biarri Optimisation (GTPA) Development (UNcTAD) Blockfreight Henning Harders Valley Pack Pty Ltd Bowen’s customs & Logistics Hunt & Hunt Lawyers Visy Industries Braid Logistics Australia Pty Ltd HW Greenham & Sons Pty Ltd Warrnambool cheese & Butter Factory Braidco IcAL Holdings Ltd Bunnings IcHcA Australia WH Dyson & Sons cargill Australia Limited IcHcA International and IMO Maritime Wilmar Gavilon Pty Ltd cargo Line Safety committee WiseTech Global casella Family Brands IcHcA Japan World Bank Group cHS Broadbent Pty Ltd Insync Personnel World customs Organisation city of Melbourne International cargo Express Wridgways – A Santa Fe company cloud Global Logistics kalmar Asia - Pacifc Xlerated Assets

PLATINUM SPONSORS

BRONZE SPONSORS LANYARD SPONSORS

SESSION SPONSORS

Sponsorship Prospectus available at www.FTAlliance.com.au/Upcoming Events Enquiries Travis Brooks-Garrett on 0434 105 145 – [email protected] bORDER REfORMS

FTA takes a lead on cross- border e-commerce issues

By TRAViS BROOKS-GARRETT, Director Freight & Trade Alliance (FTA)

In Australia alone, e-commerce The intent being to ensure that imported Furthermore, the new rules remove revenue is expected to show goods with a value under $1,000 face an exemption for consignments from an equivalent GST treatment to goods outside the EU worth less than €22. The an annual growth rate of 8.8 % sourced in Australia. Importantly, the Council claims that around 150 million from 2018-2022, resulting in an legislation will also generate a signifcant small consignments are imported free of estimated market volume of over quantum of GST revenue for our state VAT, and the current system is open to US$16BN by 2022. governments. abuse. “Whilst EU businesses have to apply VAT regardless of the value of the It looks like Australia is not going alone goods sold, imported goods beneft from with this approach on taxing internet the exemption and are often undervalued Inevitably, this growth has led to trade with the Council of the European in order to do so”. several emerging regulatory reforms. Union also introducing new rules to These reforms include the collection comply with value-added tax (VAT) The new rules set out the following of GST on low value imported goods, obligations. timeline: which will take efect on 1 July 2018, and the proposed new levy on low As a part of the EU’s “digital single • introduction by 2019 of value imported goods currently being market” strategy, the proposals are simplifcation measures for intra-EU considered by the Department of Home aimed at facilitating the collection of sales of electronic services; VAT when consumers buy goods and Afairs and the Department of Agriculture • extension by 2021 of the one-stop services online. Most goods that are and Water Resources. shop to distance sales of goods, both imported for distance sales currently intra-EU and from third countries, as well In light of these changes, Australia’s enter the EU VAT-free. The Council sees as the elimination of the VAT exemption major e-commerce stakeholders have this as resulting in unfair competition for for small consignments. joined together to form an E-Commerce EU businesses. Working Group (ECWG) as a peak The global developments do not end “This revamp of the rules will make our industry committee addressing cross- there. border e-commerce issues. Founding VAT system ft for the digital economy”, members include Alibaba, Ebay, Seko said Toomas Tõniste, Minister for The WCO established e-commerce sub- Omni Channel Logistics and Australia Finance of Estonia, which currently holds groups that held face-to-face meetings Post. The group will seek to represent the Council presidency. “By reducing red in Brussels from 23 to 25 January a unifed voice of key e-commerce tape, we will achieve both cost savings 2018, bringing together more than 125 stakeholders to Australian regulators and for businesses and increased tax delegates from Customs administrations, policy makers, wherever appropriate, revenues for the member states.” other government agencies, international organisations, e-vendors/platforms, with a view to support the growth of The new rules extend an existing EU- express service providers, postal cross-border e-commerce in Australia. wide portal for the VAT registration of operators, freight forwarders, customs distance sales. Following the Australian FTA is proud to have been appointed as brokers and academia to discuss and style model, the EU is making the online the Secretariat for the ECWG and we develop a ‘Framework of Standards on platforms liable for collecting VAT on the look forward to supporting the group’s Cross-Border E-Commerce’. advocacy priorities in the years ahead. distance sales that they facilitate. This ‘Framework of Standards’ is A “one-stop shop” will relieve online GST on low value imported goods expected to be a comprehensive traders of having to register for VAT in instrument for assisting WCO Members Efective 1 July 2018, the Treasury Laws each of the member states in which in developing E-Commerce strategic Amendment (2017 Measures No. 1) they sell goods. Again, similar to the and operational frameworks. It will Bill 2017 introduces a requirement for Australian model, the Council provides be equally useful for Members who overseas vendors, electronic distribution a concession for start-ups and SMEs. are seeking to enhance existing platforms and re-deliverers to account Below €10 000 in yearly cross-border frameworks in order to efectively meet for Goods and Services Tax (GST) on online sales, a business will be able to the requirements of new and evolving sales of low value goods to consumers continue applying VAT rules used in its business models. in Australia if they have GST turnover of home country. $75,000 or more.

34 I Autumn 2018 I Across Borders Proposed levy on low value goods consignments has only grown by 3 per and therefore have not determined the cent to 3.7 million.” proposed levy amount. In addition to the new GST legislation, in March 2018 the Department of - Discussion Paper: Trade and Cargo Some e-commerce stakeholders have Home Afairs released a discussion Activities- Cost Recovery expressed concern that if the proposed paper proposing a new cost recovery A levy on low value goods would levy is too high it could constrain the model that will apply a levy to low represent a signifcant re-distribution growth of cross-border e-commerce in value imported goods, including Self- of customs cost recovery for the Australia. Assessed Clearance (SAC) declarations. international trade sector, and some Any such levy must also comply with the Until today, customs and quarantine observers have suggested that it could Federal Government’s Cost Recovery activities relating to low value goods pave the way for a diferentiated IPC for Guidelines (2014). have been cross-subsidised by Import accredited Australian Trusted Traders Processing Charges (IPC) on Full (ATTs). The World Customs Organisation in Import Declarations (FIDs) for goods Australia that exceed the $1,000 threshold. The Under the proposed model, the levy proposal is based on the 2014 Joint would be remitted by the cargo reporter FTA and the Australian Peak Shippers Review of Border Fees, Charges and on a monthly or quarterly basis. Association (APSA) are proud to Taxes. Entities that would be subject to the host Ana Hinjosa (Director of Trade Facilitation for the WCO) on 10 May The Department of Home Afairs proposed levy include those that: and 11 May in Melbourne as part of has suggested that these changes 1. make SAC declarations on behalf of the Global Shippers Forum (GSF) and are necessary because the current importers of low value consignments ICHCA International Conference – refer cost recovery arrangements are not (e.g. freight forwarders and express sustainable with the signifcant growth of couriers); and www.FTAlliance.com.au e-commerce volumes. The Department Ana will be joined by Maggie Zhou (CEO notes the following: 2. make more than 1,000 SAC declarations in a fnancial year. of Alibaba ANZ) and Rosie Cicchitti “The number of low value consignments (Director, International and Cross- The Department estimates that there are imported into Australia was 38.7 Border, Australian Taxation Ofce) to 67 entities that fall under this category. million in 2016-17, an increase of 22 discuss statutory reforms and the future per cent on 2015-16. In contrast, over At the time of writing the Department of e-commerce within the context of the same period imports of high value has not completed the fnal modelling international trade.

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Autumn 2018 I Across Borders I35 bORDER REfORMS

infringement Notices soar with depot operators under the compliance spotlight

By PAul ZAlAi. Director Freight & Trade Alliance (FTA)

Australian Customs and Border Protection increasingly looking to deliver benefts • Firearms and other high-risk goods are Notice 2013/56 (condition 28) states depot to “Trusted Traders”, it is essential for stored inside the deadhouse licence holders must provide adequate importers, exporters, customs brokers and • The ABF is notifed of new staf members training to make staf aware of their freight forwarders to contract compliant within 30 days of commencement. obligations in dealing with goods subject to and qualifed depot operators as a part of a the control of Customs. secure supply chain. A breach of a licence condition may lead to administrative action, including In order to support members, Freight & Depots are licensed under the Customs Act infringements, prosecution, suspension or Trade Alliance (FTA) has received input (section 77G) and are subject to statutory even cancellation of the licence. from the Australian Border Force (ABF) in conditions (section 77N) and additional producing a training package titled “SEC conditions (section 77Q). Putting this into perspective, the Goods 77G DEPOTS - Obligations in dealing with Compliance Report – January 2018 The ABF conducts visits to licensed depots goods subject to ABF control”. highlighted the value of Infringement and warehouses to check that these Notices from the period 1 July to 30 This e-Learning course takes approximately conditions are complied with. This includes, November 2017. Breaches against Sec 1.5 hours to complete - upon passing but is not limited to, checks to ensure that: 33(6) of the customs Act 1901 “failure to the online assessment a certifcate with • Visitor logs are in the approved format keep goods safely or failure to account for two years validity will be automatically and completed correctly goods” topping the chart. generated. • CCTV systems are fully operational While deliveries without authority remain Importantly, the course provides a serious concern for the ABF, the report operational staf with learning outcomes to • Fencing is structurally sound also provides the following case studies be able to complete day to day activities addressing non-compliance by depots with confdence that they are compliant • ABF signage is displayed correctly (NOTE: content reproduced verbatim from with legal requirements. • Deadhouse/cage is being used the Goods Compliance Report – January In an environment where the ABF is appropriately 2018)

36 I Autumn 2018 I Across Borders subsequently located the item and re- exported it on the next fight, despite the consignment having a status of ‘held’ in the ICS. Under section 77Q of the Customs Act, the holder of the licence must not facilitate transhipment or export of goods where there is a ‘held’ status on the import declaration or cargo report to which the goods are subject. As a result, the depot was issued with an infringement notice for $8,100*. Case study 3: Temporary fencing ABF Ofcers visited a Cargo Terminal Operator (CTO) to assess the status of permanent fencing surrounding the CTO. They identifed that permanent fencing had Case study 1: Unauthorised changes to Licensees who seek to make substantial not been installed and there were holes in licenced premises changes to the existing licensed site the temporary fencing. must be granted approval to ‘vary’ their ABF Ofcers conducted an onsite licence This is an ofence under section 102CK licence before any changes are made. check of a depot. They identifed that of the Customs Act and a warning was unauthorised modifcations had been Modifcations without permission are in issued to the CTO. During later visits, made, including the relocation of the breach of the Customs Act. ABF Ofcers found minimal progress on deadhouse cage and changes to the car In this case, the ABF issued the depot with the installation of permanent fencing to park. a warning letter for two breaches. address this and an infringement of $8,100 was issued*. Under section 77N of the Customs Act, Case study 2: Unauthorised export the holder of a licence must not cause or *note - as of 1 July 2017, there was an permit a substantial change to be made in ABF Ofcers assessed the status of held increase in penalty units - the same breach a matter afecting the physical security of cargo at a depot. Depot staf were unable now would result in an infringement of the depot. to locate the particular item. The depot $9,450).

Autumn 2018 I Across Borders I37 bORDER REfORMS

Boost for Trusted Trader exporters

Australian Trusted Trader is building Kong. Australian exports to Hong Kong on Australian business and improving momentum and boosting its suite of were worth $12.9 billion in 2017 and access to the market for exporters. benefts for businesses exporting around this arrangement will help boost trade Australia also shares Mutual Recognition the world. throughout the Asian region. Arrangements with Republic of Korea, Last year a landmark arrangement was Additionally, in February, the Department Canada and New Zealand, and is signed with China, Australia’s largest signed a plan to progress a Mutual also currently negotiating with other trading partner, providing faster and Recognition Arrangement with the United signifcant trading partners. more efcient access for Trusted Traders States of America that will be worth $540 With new benefts becoming available, into the market. million to Australia’s economy, benefting traders and strengthening supply chain Trusted Traders are seeing more tangible The Australia–China Mutual Recognition security. cost and time savings. As the Trusted Arrangement is expected to bring a Trader community grows, businesses are beneft of $440 million to Australia’s These international arrangements give seeking out service providers they know economy over 10 years. businesses unprecedented access are trusted in the international trade to trade facilitation benefts and are community. Earlier this year, the Department of reducing costs for businesses, while Home Afairs operationalised a Mutual ensuring the integrity of our border. They Want to know more? Visit Recognition Arrangement with Hong are also reducing the regulatory burden www.homeafairs.gov.au/TrustedTrader

Trusted Trader boosting Australian organics

Australia produces some of the highest would complete our whole-of-supply quality organic food in the world, and chain program,’ Mr Kennedy said. “I’d one of the businesses leading the way recommend ATT to other small exporters is Kialla Pure Foods. The Australian as it closes the fnal gap in the whole Certifed Organic grain processor began supply chain.” in Toowoomba in 1998, and is now a The Australian Government’s Trusted leader in the industry, exporting to nine Trader program works by accrediting countries. businesses which have compliant trade Kialla Pure Foods prides itself on its practices and a secure supply chain— quality assurance, which until recently once a business has become accredited, had been focused on food safety and they are able to access a range of manufacturing processes, explained tangible fnancial and time-saving benefts we’ve needed it,’ Mr Kennedy said. Managing Director Quentin Kennedy. as well as simplifed customs processes. For exporters like Kialla Pure Foods, it’s ‘We run many quality assurance One of the key benefts for businesses important to gain reach into international programs across our business, but who sign on to become Trusted Traders is markets, which is made easier for Trusted there was a gap in the import-export that they have direct access into the ABF Traders through the mutual recognition protocol side of the business,’ he said. through a dedicated account manager. arrangements. These allow exporters So when the Australian Trusted Trader This beneft is only available to those who diferentiated treatment at international approached him, he knew it could beneft have joined the programme. borders due to their trusted status the business. ‘The ABF has been very supportive through the program. Australia shares ‘We saw that Trusted Trader was a good throughout the whole process and has these arrangements with China, New ft in amongst our other QA program and been able to give us guidance where Zealand, Korea, Canada and Hong Kong.

38 I Autumn 2018 I Across Borders Discover how Australian Trusted Trader can make business Shaping easier for you the

As our Trusted Trader community grows, businesses are seeking providers they know are trusted in the future international trade community. Be amongst the businesses that are leading the way in a new service delivery model and join Australian Trusted Trader today. of trade www.Homeaffairs.gov.au/trustedtrader bIOSECURITy REfORMS

import changes for better biosecurity

By lYN O’CONNEll, Department of Agriculture and Water Resources

The Department of Agriculture and (Amendment Bill), which is expected to be Import condition changes introduced to Parliament this year, is an Water Resources is continually The last import condition changes example of this work. looking for ways to improve supported by updates to the goods Australia’s biosecurity system to If passed, the Amendment Bill will allow determinations occurred on 21 December 2017. These included new import remain efective and sustainable us to update import conditions quickly and efciently in response to changes in conditions for fresh cut fowers and into the future. There are a number biosecurity risk. This includes details like foliage that commenced on 1 March of proposed changes to legislation the countries we accept particular goods 2018. We now require these goods to be treated prior to export and certifed by the and import conditions on the from, and the species of animals or plants National Plant Protection Organisation that may be imported into Australia. agenda that enhance our ability to of the exporting country. If you are an These details are captured in a series of respond to changing biosecurity importer and want to learn more about risk, support Australia’s economy lists published to our website, which are these new conditions: referenced in the goods determinations. and ability to trade internationally, • visit agriculture.gov.au/import/ and make participation in the The proposed changes will allow us goods/plant-products/cut-fowers-foliage/ biosecurity system easier for our to update the lists on our website as importing-fresh-cut-fowers-into-aus- required. This ensures more timely and safely industry partners. efective management of biosecurity risks, • subscribe to our Import Industry and allows us to more rapidly reduce the Advice Notices service at agriculture.gov. regulatory burden for importers when we au/subscribe Legislative changes deem that import permits are no longer • consult the Biosecurity Import Since the Biosecurity Act 2015 (the Act) necessary for particular goods. As is Conditions System (BICON). took efect on 16 June 2016, we have our current practice, we will continue to continued to implement its transitional let stakeholders know about changes Import condition reviews and delayed provisions such as new to import conditions before the lists are Before we make the decision to change domestic ballast water measures which amended. import conditions we conduct exploratory took efect on 8 September last year. Thank you to industry and our state and work known as risk analyses to consider Another recent milestone is successful territory governments, who provided the level of biosecurity risk that might transition of all Approved Arrangement feedback on the draft Bill during our be associated with importing goods that operators from temporary to ongoing public consultation period which ran from have not been brought into Australia Approved Arrangements by the legislative December 2017 to January 2018. The before, or have not been imported into deadline in December 2017. majority of submissions were positive, Australia from a particular country or We are also progressively enhancing and we made one minor change to the region. These can be non-regulated, the Act and its subordinate instruments, Amendment Bill to clarify the intent of or they can be biosecurity import including the goods determinations which a measure in response to feedback risk analyses (BIRAs) conducted in accordance with the Biosecurity Act 2015 set out risk management measures that received during this process. If all goes to and the Biosecurity Regulation 2016. importers must meet to bring goods into plan, the Amendment Bill will have been Australia. The Biosecurity Amendment introduced to Parliament just before this We also routinely review existing import (Miscellaneous Measures) Bill 2017 article went to print. conditions to make sure they continue

40 I Autumn 2018 I Across Borders to support Australia’s appropriate level of protection in accordance with the “The NCCC and AEPCOMM have delivered signifcant benefts to importers Sanitary and Phytosanitary Measures (SPS) and customs brokers moving selected low risk biosecurity tasks from the Agreement. department to an Approved Arrangement self-assessment program. We have recently conducted a risk analysis The expansion of the program to new commodities will no doubt increase for importing fresh dragon fruit from uptake and save industry processing times and costs. Indonesia, and a review of existing import conditions for cucurbitaceous crop seeds We applaud the department for their industry engagement, not just with peak for sowing with funding provided under industry bodies, but also involving respected industry professionals in the the Australian Government’s Agricultural co-design of the program. import changes for Competitiveness White Paper. The associated Continued Biosecurity Competency (CBC) training program These reviews form part of a wider has been an efective means of keeping participants up to date with changes program of business-as-usual and White and to assist in maintaining compliance. Paper-funded plant, animal and biological The department coordinates CBC activities through a truly collaborative better biosecurity import condition reviews occurring over working relationship including Freight & Trade Alliance and other recognised 2018-19. You can read more about this training entities. work at agriculture.gov.au/biosecurity/risk- analysis. As both export and import volumes grow, we see an expansion of Approved Arrangements as a progressive and essential trade reform.” Seasonal changes to respond to pests Mr Paul Zalai, Director and Founder of Freight & Trade Alliance September to April is the peak season for brown marmorated stink bugs. This pest poses a great threat to Australia as it eats scheduled for mid-2018, will allow for 300 types of plants including nuts, grains, their import clearance decision-making and berries, cotton and citrus. This season has the expansion of the number of eligible documentation assessment. Accredited seen an increase in detections on imported commodities, by enhancing our IT systems, brokers can refer to the BICON task goods arriving from Italy. In response, we and refning our verifcation regime to make cards for assistance in setting up BICON have strengthened controls requiring all it more compliance-based. AEPCOMM User Access. goods arriving from that country to be Enhancements to our IT systems will We are also implementing changes to our treated onshore or prior to export. remove system limitations, streamline verifcation regime so that demonstrated Even though this will decrease the chances lodgement information and provide compliance is rewarded with reduced of the stink bug making it past our borders, greater support to industry for document intervention. Brokers will qualify for a it is important that you keep an eye out assessment. These changes will be reduced inspection rate once they have for them if you transport or work around facilitated through upgrades to the established a history of compliance. They Agriculture Import Management System imported goods – particularly if you unpack will remain on the reduced rate until a non- (AIMS) and updated reference data in the containers. If you see dead or live pests compliance is detected. These changes will Integrated Cargo System (ICS). like the brown marmorated stink bug, provide the department with the necessary phone the See.Secure.Report hotline on Changes to AIMS and ICS will enable assurance to expand the volume of 1800 798 636 for advice about how to accredited brokers to address non- commodities processed under AEPCOMM. respond. commodity concerns through nominated To ensure a smooth transition to the new Improvements for our industry partners concern types alone (no additional code required) and commodity concerns through AEPCOMM model, we’ll be providing The department is constantly looking at more intuitive, outcomes based codes further information and support over the ways to further streamline the biosecurity (i.e. INS- inspection, FUM- fumigation, coming months including: importation process and this year we will REL- release), allowing them to determine be rolling out improvements to simplify the • information sessions at FTA the most efcient way to manage their conferences (April – June) import declaration lodgement process, consignment. thereby providing more fexibility for • updates to the AEPCOMM webpage accredited brokers. We will also be removing system on the department website restrictions so that multiple outcomes and Automatic Entry Processing for commodity groups can be processed in • Continued Biosecurity Competency Commodities (AEPCOMM) and Non the same import declaration. For example, (CBC) sessions and activities Commodity for Containerised Cargo in an entry that contains three lines, line • a dedicated AEPCOMM contact Clearance (NCCC) are well established one may be able to be released, while line Approved Arrangements (AA) which both two and three and may be ordered for number and email address (to be advised use the Automatic Entry Processing (AEP) inspection (as long as they are not part of through an industry notice). system. the one commodity group). For further information on AEPCOMM, visit These arrangements enable industry Additional functionality is already available agriculture.gov.au/aep participants, such as Customs Brokers, in BICON with the new AEPCOMM to perform documentary assessments WANT TO KNOW MORE User Access. AEPCOMM accredited and direct specifed goods using AEP in brokers can view onshore assessment Lyn will be presenting at the Global accordance with biosecurity requirements questions and obtain the appropriate Shippers Forum (GSF) and ICHCA without submitting documents to the codes to enable the clearing of goods International Conference and Exhibition department. through the department’s systems. This (10 – 11 May 2018, Melbourne – Improvements to the AEP model, information is now helping industry with www.FTAlliance.com.au

Autumn 2018 I Across Borders I41 LOgISTICS REfORMS

SCT GROuP ShAPiNG iTS BuSiNESS TO ChANGiNG MARKET DYNAMiCS AND CliENT NEEDS

By MATT ERYuREK, General Manager, Ports Development, SCT logistics

Background The SCT Group now employs 1,500 WCL Dooen staf nationally with 40% of personnel The SCT Group has been operating In January 2015, the SCT Group located in Regional locations. The SCT now for over 40 years and sits as the assumed ownership of the Wimmera Wimmera Container Line (WCL) business largest privately owned Rail operator in Container Line (WCL) business and in Horsham, and SCT Logic business Australia. SCT is now a national, multi- subsequently the Wimmera Intermodal in Wodonga, are two sites that directly Freight Terminal (WIFT) in Horsham modal transport and logistics company employ more than 70 permanent staf in operating three rail services a week operating the largest interstate freight Victorian Regional areas. trains, regional rail services, and ofering during the 2015 and 2016 period. A direct rail connectivity into our major The SCT Group is Australia’s largest strong harvest and improved service ports. independent rail operator, privately levels have seen an increase in the owned and has the management team number of services which saw daily SCT started life as a rail freight forwarder and staf to be responsive, innovative services 7 days a week, in the peak of in 1974 using National Rail rolling stock. and fexible to changing market and 2017, running directly into the Port of In 1993, an ultimatum was given by client requirements. Melbourne. National Rail that it would no longer haul rail wagons for SCT, and other SCT Penfeld, Adelaide Supported by the Victorian Governments ‘Modal Shift Incentive Scheme’, the freight forwarders, as they moved to Having developed the Penfeld success of the Horsham operation a container only model. On the back Intermodal Terminal in 2012 for its resulted in 23,500 TEU export containers of that decision SCT began its own Interstate rail operations, the facility has being transported by Rail in 2017, rail services and in 1995 become the now evolved to incorporate major import directly into the DP World on Dock frst rail competitor to the Government and export activities. Having developed Rail Facility, providing a streamlined monopoly, in operating rail services on a major Export facility for Treasury competitive solution for local industries the main interstate corridor between Wine Estate, SCT now operates daily in the Wimmera. Melbourne and Perth. This event altered rail shuttles into the Port of Adelaide the landscape of the Australian rail servicing TWE’s overseas exports Establishing a direct rail link into the industry and resulted in SCT becoming markets. Port of Melbourne has certainly assisted the world class business that it is today. in improving our service levels and our As well as the reliable service being competitiveness against road options, SCT has subsequently developed provided, TWE is able to load its export whilst assisting the Government in their the most modern and progressive containers directly onto the train allowing initiative of decongesting our highways Intermodal Rail Terminals throughout them to maximise product loadings free and metropolitan road networks. major capital cities and major Regional of road loading limitations. SCT is also Centres, throughout Australia, which able to reload trains from the Port with The Victorian Government’s MSIS are now being integrated to incorporate empty containers ensuring a reliable initiative has also been a key factor in Regional import/export Rail Hubs rail supply of containers and reducing box the success of the WIFT. This rebate services. handling and associated costs. is capped to 12,000 TEU but has

42 I Autumn 2018 I Across Borders gone partway towards of-setting Rail Access charges between Horsham and Melbourne. SCT Logic Wodonga In 2016, SCT also completed the development of the SCT Intermodal Hub at the Logic Centre in Wodonga. The Victorian Government and the Local Council had for many years been endeavouring to see this project come to fruition. There are a number of major manufacturing companies located in the Albury Wodonga Region, some of whom SCT have held partnerships with for close to 40 years. Like a lot of regional centres, the Albury Wodonga area has predominantly been serviced by the road industry. Having commenced its The infrastructure investment will also access to daily rail services to Perth, Melbourne to Brisbane rail services in facilitate additional hubbing for import Adelaide, Brisbane as well as the Port of January 2017, SCT are now able to and export containers from Wodonga, Melbourne in to the future. provide rail services to the Region on Horsham and Penfeld, SA. SCT a daily basis. Like the results we’re The SCT Rail Freight Centres are Intermodal Hub in Altona is the next achieving in Horsham, in 16 months designed to accommodate such stage of development. SCT Logic has now transitioned companies and users of our unique rail 110,000 tonnes, or 3,600 B Double SCT Intermodal rail terminal in Altona is service oferings. loads, to depart the Wodonga region via focused in delivering PortLink Project. rail rather than along our highways. PortLink Project proposal comprises critical infrastructure investment at Consistent with its other Intermodal Altona and Horsham, linking regional Freight Centres, moves are underway and metropolitan rail freight into the Port for SCT to introduce rail services of Melbourne (the Port). The Project for the Import Export market in the has the capacity to deliver expanded broader Albury-Wodonga Region. logistics capability, and supporting the Signifcant interest has been received Governments initiative of increasing from a number of regional exporters, the proportion of rail freight moving in particular seeking a more efcient through the Port of Melbourne. This will and cost efective way of getting their transform the long-term capacity of the containers to the Port. Highlighting the Port and open export markets for the opportunities at Wodonga, in 2017 SCT Western regions of Victoria. ran over 400 cotton containers from the region to Port of Melbourne with 100% The SCT’s goal is to work with road on time vessel delivery success. carriers in establishing a drop of and collection point for containers at the SCT Intermodal Hub Altona SCT Intermodal Hub in Altona. It is In 2000, SCT completed the not our plan to compete with road development of the SCT Intermodal Hub carriers, but support them and industry in Altona. This site sit’s on approximately considering the future Coode Road, 100 hectares of land and is one of western distributor and increased our oldest Intermodal designs. It was trafc congestions to and from Port of designed to receive and despatch freight Melbourne. As well as servicing metro from its 15,000 sqm cross dock facility carriers, particularly around the West to and from Perth. of Melbourne we also see some real opportunity for regional carriers from Moves are underway for a signifcant areas such as Geelong seeking to investment and expansion of the SCT improve their truck turn around times. Intermodal Rail Hub at Altona. Having experienced signifcant growth in its SCT Intermodal Hub in Altona proudly Melbourne to Perth rail activity and the houses major centres for Heinz and commencement of daily rail services Owens Logistics. A major expansion to to Brisbane early in 2017, expansion the Heinz national distribution centre has of its rail infrastructure, which includes commenced and set to be completed increasing on site sidings from around in October 2018, reportedly making the 12 kilometres up to 16 kilometres, facility one of the largest warehouses in as well as capacity increases to its Melbourne’s western suburbs. No other intermodal areas and container storage facility in Australia captures the unique capacity. benefts that SCT can ofer than the Heinz distribution Centre with its direct

Autumn 2018 I Across Borders I43 MEMbER PROfILE

Interview Colin Speechley, managing director, Wholesale logistics

Travis Brooks-Garrett, Director FTA and APSA Secretariat, speaks to Colin Speechley, Managing Director, Wholesale logistics

1. TRAVIS BROOKS-GARRETT- competitors. positive impact, keeps our customers What was the reason you started buying, helping us to develop and grow Staf is a key element to our success, Wholesale Logistics? into the future. This also assists to we pride ourselves on having the best achieve growth in their organisations I started my career in NZ, working at people in the industry on our team. creating success for us all. Auckland Airport, commencing my It is very important to keep them frst role as Export Operations on 01 updated with relevant qualifcations 3. TRAVIS BROOKS-GARRETT- How August 1983. Moving to Melbourne and information, provide a positive has the industry changed in the last in June 1999, and after some working environment, and rewarding 10-15 years? minor shareholdings in two logistics remuneration. I encourage our team to Wow what a ride to date – I remember companies, I gained the experience and be professional, friendly and build strong pre 1990, before the internet, we would confdence to have a crack at my own relationships with our customers. have typists employed to produce company. I wanted to prove to myself With all the IT technology these days, MAWBS, and we were busy licking and the industry that I could own and it can be easy to send emails, and lose stamps and addressing envelopes, run a successful logistics business. touch. Our job satisfaction comes with mailing invoices and original documents Wholesale Logistics commenced having fun with our customers and to our customers. operating in July 2012, I cannot believe trying to exceed their expectations. I it has been nearly 6 years since we We would send messages and enjoy listening to our wholesale team started. Wholesale Logistics specialise in correspondence around the world using interacting with our clients, and making International Airfreight Logistics, operate a Telex machine. a diference, in their various roles a 77G Customs Bonded Warehouse, throughout the day. It wasn’t long before the Fax Machine are IATA accredited, AACA approved, was introduced – I remember having to operate a Quarantine Approved 1.3 I believe Wholesale Logistics has found go down the corridor and using Owens Depot, and are a proud member of an important niche in todays’ logistics International’s fax machine to send Border Watch, FTA, The Cargo Club of environment. We are proud to ofer important export docs to Destination. Australia, and AFIF. We are located in a true Wholesale Experience to over They charged NZD 10.00 / page. our ofce / Warehouses at Units 16 and 250 freight and logistics businesses 17, 1 International Drive, Cargo Park, throughout Australia and the world. Our Logistics Industry is forever West Meadows VIC 3049. changing and evolving and we must I work in the business as efciently as embrace this as a challenge. Legislation 2. TRAVIS BROOKS-GARRETT- I can supporting my team, however it and compliance is everywhere as Describe the growth of Wholesale is vital to step back and work on the we strive to improve on efciencies Logistics and how you have business, visualising future growth and throughout logistics worldwide. We sustained that growth? maximising opportunities. No one is have to stay focused, informed, and perfect – we have had our challenges, From humble beginnings and a team help develop these changes into you have to be prepared to think on of 4, we are now a team of 13 busy opportunities. Free Trade Agreements, your feet and handle the pressure of working towards a 7 million turnover Brexit, cost increases, politics, GST a fast paced environment. Problems for 2018. We have enjoyed substantial on scanning, Government Agency can become opportunities if handled growth, which has not come easy. Penalties, Supply Chain Security, efciently and with integrity. This has been achieved through hard Australian Trusted Trader, ACCC work and a determination to make our We need our clients feeling happy Investigations, ATO investigations, mark, and perform for our customers and confdent in utilising our services. Globalisation, it is very easy to become and service providers. We strive to Keeping our fnger on the pulse, being overwhelmed. A positive, common be the preferred choice amongst our courteous, competitive, and making a sense, compliant approach is required

44 I Autumn 2018 I Across Borders by us all to enhance and protect our Industries future. “The Only Constant in Life is Change” 4. TRAVIS BROOKS-GARRETT- Where do you see airfreight volumes in the next 5 years? Airfreight volumes are on this rise and we are looking forward to 2018 and beyond. The world is fnally moving past the 2008 GFC. IATA are announcing positive growth in Airfreight numbers, and most of us enjoyed a busy Oct, Nov, Dec, Christmas peak. Our industry needs to get the balance right, with Travis Brooks-Garrett, Director FTA and APSA Secretariat, speaks to Colin Speechley, Managing Director, trained operators, providing professional Wholesale logistics and on time performances each time, whist our Sales and Marketing professionals need to be resilient, competitive and out amongst the opportunities appearing. 5. TRAVIS BROOKS-GARRETT- Is our road and infrastructure keeping up with the growth in cargo volumes? Trafc locally around Melbourne is congested and getting more expensive. Road Tolls are high and have recently increased. However once the major 7. TRAVIS BROOKS-GARRETT- focused, and identify weakness within roadworks are completed, I think we How has the Known Consignor our Industry, so as to iron out risks in will see a huge improvement in travel programme and other regulation our own companies to ensure ongoing time and efciencies. The Ring road and afected air freight movements? success. Tullamarine Freeway are progressing well. It was disappointing to see the East The Known Consignor programme and 9. TRAVIS BROOKS-GARRETT- West Link project shelved, but hopefully Security enhancement around the World What advice would you give to we can redeem ourselves and complete in logistics, has made us all a lot more young people wanting to join the aware of what cargoes we are actually the train to the airport extension. industry? handling and the risks associated. It is Melbourne Airport has an excellent another change we have to embrace My advice to young people wishing to location, we have the land to develop although difcult, expensive, and time forge a career in logistics is, it is up to to enable us to handle future growing consuming, we have no choice. It is you – be patient, work hard, be loyal, volumes – we need to be smart and plan extremely important we all work together have fun, and enjoy your environment. accordingly. to keep our industry safe, whilst making Aspire to make a diference and ensure our companies even more specialised. you participate often amongst your 6. TRAVIS BROOKS-GARRETT- peers and relevant organisations / 8. TRAVIS BROOKS-GARRETT- What CTO infrastructure / changes functions to learn your trade, and What other risks and opportunities do we need to keep air freight achieve your goals. moving? do you see for the air freight sector? The issues we are seeing within There is no substitute for hard work – Our three major CTOS in Melbourne Seafreight Logistics in Australia should the harder you work the luckier you get. are Qantas, Menzies and Dnata. There have a positive and growing infuence on is more work required by all to improve Airfreight now and in to the future. We cargo handling times and efciencies. have to ensure we are giving customers They have to be seen and developed value for money, along with the capacity as the integral piece of the supply chain and routes they require. We have to be they are. They must be accountable, conservative and build our companies to enable the handling of increased from a position of strength, enabling volumes in the future. It is a big us to manage unforeseen issues when challenge, with difcult obstacles, but they arise. We have to have a good our Logistics Future depends on them customer base, and not rely on one getting it right. client, commodity, or trade lane. Stay

Autumn 2018 I Across Borders I45 MEMbER PROfILE

Tasmanian logistics Committee update

By BRETT ChARlTON, Chairman, Tasmanian logistics Committee

It must be unusual to see a report about “that other island” down near Forum on the 6 July 2018 (look it up – it the bottom of the planet, but we do like to let the rest of our great is a Friday – leaving the weekend to country know what we are doing down here, so from the perspective explore our beautiful island…..PS…it of where you would rather be, Tasmania, please know that the sun is may be a bit chilly, but still totally worth visiting). The forum was a sell out last out, the crops look good, there are cranes in the skies, exporters are year with presentations from the CEO’s predicting growth, tourists are aplenty – it is a great time to be fghting of Melbourne and TAS Ports as well gravity on our blue bubble (perhaps not for 40 minutes in Hawaii recently as senior shipping lines on the state of when they accidently sent out a thermal nuclear destruction text by the Nation with a Tasmania bend to the error, but nevertheless….). discussions. This year the forum will be bigger and better with a format to inform shippers and industry alike. The forum From a shipping point of view, in with a healthy competition evolving will be held at the Australian Maritime Tasmania we are still in the enviable on some trade lanes between the big College (AMC) in Launceston Tasmania position of having a small market players. Importers ex Asia however are and end with a showcase of Tasmanian serviced well domestically and unfortunately caught in the capacity produce over networking drinks – pencil internationally. By all accounts the issues ex these regions and as a result in the date now! For further information movement of goods to and from should expect more pain points around go to www/ftalliance.com.au/upcoming Tasmania has been well catered for with space and price until after Chinese New events. our capacity over the traditionally busy Year – we are not expecting that the period of Christmas and perishable freight levels will drop to the low prices season. The announcement by TT that importers enjoyed for many years Line of extra capacity for freight in the and we are advising traders to consider future as well as the new Toll vessels very early planning for next year’s critical is welcomed news that is also met volume periods (September – February). with some caution – an oversupply of I am personally interested to see how capacity questions sustainability and 2018 plays out in the technological increased government run enterprises world. I fnd myself both excited and competing in the private sector has frustrated at the same time by the raised some eyebrows. Hopefully advances and the possibilities. I often any questions of surplus capacity are feel that behind the shiny façade, things countered by investment and growth are still held together by sticky tape and in our trading businesses to fll any baling twine (imminent thermal nuclear empty spaces. Internationally we are destruction messages being a case in still serviced by the major shipping lines point). Last year we had a cyber-attack that closed down the largest shipping line on the planet from someone opening a link on an email, but during that same time I could put on a headset and instantly be underwater watching a whale swim by. “These are the days of miracle and wonder” said someone that most people past Gen X wouldn’t have heard of! Readers of “Across Borders” should prepare their golf clubs, pinot tasting note book, favourite whiskey glass, and fy fshing gear in preparation for the joint Tasmanian Logistics Committee and FTA Tasmanian Freight & Logistics

46 I Autumn 2018 I Across Borders bUSINESS REfORM

Bespoke ransomware, targeted attacks – the hacker’s new arsenal

By JONAThAN ShARROCk, CEO, Xlerated Assets

Cyber security is a hot topic in board company’s stock and make a huge for communicating with your logistics meetings. Management wants, and fnancial gain in the process. This is a low partners. This will cause the system to slow down or even crash. These DDOS needs, to know how cyber security risk and attractive option as companies are now paying the ransom. A recent attacks can be purchased for as little is being controlled and monitored. If cyberattack that hit Maersk, the world’s as US$2 per hour as they are available you are the person responsible it is largest container shipping company, is as-a-service, in the cloud. This makes essential that you can demonstrate estimated to have cost up to US$300 for a very afordable option for attackers efective management of this vital Million. wanting to take a logistics company issue ofine. Imagine thousands of employees Risk three is a distributed denial of unable to access systems, causing a service ‘DDOS’ Attack. This attack melt-down in the supply chain. This type Although it may appear to be good news is multiple compromised computer of attack undermines your company’s that a competitor is receiving negative systems attacking a server, network reputation and may lead your partners to publicity due to a cyberattack this news resource, or system that is responsible consider alternative partnerships. should be an alert that your organisation could be next! Contrary to popular belief, there isn’t a silver bullet. No company can be 100 percent protected against a cyberattack. Anti-virus systems can easily be evaded, and security software can be misconfgured leaving your company at risk. Logistics businesses nowadays operate in “real time” and need to exchange vast amounts of data but your “real time” tracking information may be out of date and vulnerable to attacks. Risk one is a legacy systems targeted attack. Hackers often go after legacy systems that were built decades ago when security was less of an issue. Often companies decide to take on ‘Technical Debt’, with a lack of proper security controls in place. These legacy systems remain a vital part of the supply chain process. However, the messages that are sent between the logistics partners are often unencrypted and an attacker with a limited amount of knowledge can disrupt the supply chain process and cause huge costs to an organisation. Risk two is ransomware. This malicious software can infict the maximum amount of damage on the supply chain because the attacker knows that causing major disruption will provide a good opportunity to short sell the logistics

Autumn 2018 I Across Borders I47 bUSINESS REfORM

left the customers network vulnerable to understanding, in layman’s terms, of the exploitation. risks to your business and the steps you need to take. The time to act is now A fnal point to consider: More and more If your business is in Australia, you will organisations are seeing the wisdom of soon be required to report any ‘eligible’ investing in cyber insurance. If you invest data breaches to the Australian Privacy now in cyber insurance you will have a and Information Commissioner and far better conversation later with your notify your customers that may have insurer when asked: “Did you engage a been afected. improving your security security consultant at any point?” stance will require time. WANT TO KNOW MORE You need to install appropriate controls immediately and adopt a roadmap to Jonothan will be presenting at the identify and address any gaps in your Global Shippers Forum (GSF) and system. iChCA international Conference and Exhibition (10-11 May 2018, Melbourne We know that hackers are methodical, - www.FTAlliance.com.au) Risk Four is the Shared Responsibility organised and they have automated of security in the cloud. You need a systems. clear understanding of what your cloud provider does and does not provide. Fighting against an automated hacker and fghting back manually is not a fair For example, AWS will patch and fght. Using Automation helps even out fx faws within their infrastructure, the balance against the hackers and customers are responsible for patching there ARE defences available against their guests Operating Systems ‘OS’ cyberattacks even though hackers are and Applications. This sounds straight constantly striving to stay ahead of forward, but it is often an oversight, security measures. where the customer is unaware that there is any patching required Security is all about layers or ‘defence- and critical systems are left open to in-depth’. Even if the attacker can vulnerabilities. penetrate the frst layer of security there will be multiple additional layers to The Amazon Virtual Private Cloud (VPC) counteract and report the threat. is categorised as Infrastructure as a Service (IaaS) as such the customer It is therefore, vitally important to receive is responsible for all the security security advice, not only to understand confguration and management tasks. the likelihood of a security event, but to understand the next steps and what What this efectively means is the level of investment will reduce the customer needs to provide this work risk and improve your overall security and might not be aware this was a posture. problem when moving to the cloud. A useful report to read is the Australian Microsoft states Data Classifcation and Signal Directorate’s (ASD) Top 4 protection controls are the responsibility Strategies to Mitigate Targeted Cyber of the customer. Intrusions: Mandatory Requirement Amazon breaks down the responsibility Explained. This is easy to follow advice into two main categories: security in that will give you an initial strategy to the cloud and security of the cloud. implement the most efective security Amazon is responsible for protecting the controls to prevent over 85 percent of infrastructure that runs all the services intrusions. ofered in the AWS Cloud. The Customer The big four – Deloitte, EY, KPMG is responsible for ‘Security in the Cloud” and PwC accounting frms ofer a It is common that software developers consultancy-based approach to either leave security until the end of solving these questions. Many systems the project or neglect it all together. integrators (SI’s) will ofer a similar These developers with little or no service and can help with the security understanding of security, make the assessment. customer believe that they have this Using consultants to assess your security under control, but in reality, organisation’s cyber security risk does they have interpreted the Shared present an advantage: Although the Responsibility Model incorrectly, or assessment results can be highly have not included Security in their initial complex and technical in nature, the development costs and as a result have consultancy can provide you with a clear

48 I Autumn 2018 I Across Borders how to Protect Your Business in the Age of Cyber Criminals

By JAMES COTiS, logical insurance Brokers

Unless you’ve been sleeping under a So, what is exactly is “Cyber Crime”? Ransomware rock, you’d be aware of the fact that Cyber Crimes include cyber-stalking, How it works: industrial espionage and information theft, Cyber Crime and related incidents Simply put, the means of infection is fraud, extortion, identity theft, phishing are on the increase. It is a global typically an email distribution that includes scams and cyber terrorism. Often digital a malicious link, usually from an unknown phenomenon and no organisation (more recently called Crypto) currencies, sender. The unsuspecting person is appears to be immune or able to such as Bitcoin and Ethereum, have tricked into clicking on the attachment, played a role in advancing Cyber Crime stop it. Customers’ personal and which could be a link saying “Please click due to the ability of cyber criminals to other data held by businesses (large here for the latest shipping information move money around the world on an from China” or a CV attached to a job and small), government secrets and anonymous and almost untraceable application. Once launched inside an even celebrity social media accounts basis. organisation’s network, the ransomware have been subjected to theft, Cyber-attacks are usually multi-faceted can quickly spread and infect other ransomware and other attacks. and can result in loss of data, damage vulnerable devices, servers and systems. to information technology equipment It acts to release a virus which encrypts such as PCs and servers, business (or locks) all fles such as MS Ofce interruption, fnes imposed by regulators, documents, images and backups within According to IBM, around 65% of brand damage and legal action by the user’s network. A ransom demand is cyber-attacks (an astonishing 4,000 per customers. The costs of Cyber security received soon after, demanding money day) are now targeting SMEs because breaches in Australia alone has recently (often $10s of thousands) for the code(s) apparently, they are easier to penetrate. been estimated to be an eye-watering to unlock the encrypted fles. There is no Tell that to Maersk, Sony, FedEx, Reckitt, $17 billion annually. And the average way to decrypt (restore) the fles without Equifax, Uber, British Airways and many direct/indirect costs and timeline for an the decryption key held by the attacker, other larger global companies though SME to clean up after being hacked? A meaning the data will be rendered who have all also sufered well-publicised staggering $690,000 and 65 days. useless if the payment isn’t made. No recent attacks, costing them hundreds payment, no fle access…it’s that simple. Cyber Criminals: Who are they and Unfortunately, the victim may not always of millions of dollars plus unknown brand What to Look Out For receive the decryption key even if they damage and customer trust. We do not have the space to discuss make the payment. In some cases, the The truth of it is, no organisation is safe. the potential issues arising from all decryption simply doesn’t work and Not even yours. In fact (and we don’t Cyber-related attacks, so we will focus even the attacker does not know how to mean to scare you) it is quite probable on the more prevalent ones, namely decrypt the fles. that your business has already been Ransomware and Phishing/Spear The damage: hacked. You just don’t know it yet. Phishing. Many of you will be aware of the widespread and much publicised ransomware attacks last year, including Want to learn more about Cryptocurrencies and Cryptocurrency mining? NotPetya & WannaCry. The WannaCry Have a read of this introductory paper prepared by our sister company, Logical attack hit 200,000 victims in 150 Financial Management: https://www.logicalfnancial.com.au/wp-content/ countries. NotPetya also hit 100s of uploads/2017/12/introduction-to-cryptocurrency-december-2017.pdf thousands of businesses, including Maersk, where it knocked out selected

Autumn 2018 I Across Borders I49 bUSINESS REfORM

business units around the world. In These types of industry-specifc Phishing and servers running in so-called cloud August last year, Maersk revealed this emails have proven to be efective in computer networks. attack could cost as much as US$300 attacking small and medium businesses The simple conclusion is that criminals million in profts. and as such, have been one of the are exploiting IT weaknesses across the trending cyber-attacks. No doubt about it, Ransomware is here board, and they appear to easily extort to stay. And with its growth, there’ll The damage: money and cause signifcant disruption. be new variants, new techniques and There have been numerous reports The Privacy Amendment (Notifable increasingly larger campaigns developed where criminals have gained access Breaches) Bill 2016 by the cyber criminals to target your to company email accounts, set up business. Many readers will be aware that the bogus email accounts and then emailed Federal Government passed the Privacy Phishing/Spear Phishing emails requests for cash transfers (usually to Amendment (Notifable Breaches) Bill overseas destinations) to SME accounts How it works: 2016 in February 2017. Mandatory departments purportedly sent from data breach notifcation requirements These emails pretend to be from your CEOs, Directors and Senior Managers. commenced in February this year. IT administrator or your bank websites, Subject to accounting reporting cycles, perhaps asking you to reset your these bogus transfers may not be picked To comply with the new privacy laws, password in the hopes that you will click up and/or reconciled for over a month. organisations need to ensure that they on the link provided and enter your login By the time the deception has been have reviewed and updated their Privacy credentials or personal details on the recognised, the moneys are long gone. procedures to document what needs malicious website. to be done in the event of an eligible Added to the virus and ransomware type data breach including giving notice to A more severe form of Phishing email is attacks, it has been recently reported afected individuals as well as notifying called “Spear Phishing”, which targets that two major security faws have been the regulator. single individuals or a group/sector. For discovered in the microprocessors inside example, those in the logistics industry nearly all the world’s computers. The two This legislation applies to businesses will be far more likely to open an email issues (called Meltdown and Spectre) that: that claims to provide the latest shipping could enable hackers to expose crucial • Have a turnover of $3 million or information from what appears to be a data and secrets, such as passwords more; reputable source than a random email and encryption keys, from any vulnerable with little relevance to their industry. computer, including mobile devices • Trade with client’s personal

Making your next Freight or Clearance move? Think Logical(ly)

Logistics is a risky game but luckily, Logical Insurance Brokers is on your team. We specialise in providing insurance advice for freight forwarders, customs brokers, and transport operators.

Steady your hand; protect your business against freight and clearance liabilities.

Call James on 02 9328 3322 or email [email protected].

www.logicalinsurance.com.au/logistics

50 I Autumn 2018 I Across Borders information (for example, disclosing or 7 Ways to Protect Your Business from all your fles often. It’s a simple, efective receiving personal information to a third Cyber Criminals way to ensure that if ransomware thieves party for proft or as a service). steal your fles and hold them hostage, Given the electronically interconnected the thieves have no leverage against you. Organisations can expect to face infrastructure on which global business increased scrutiny and auditing from the relies is inherently insecure, it is not 6. Passwords: Many people use regulators. Failure to comply with the surprising that Cyber Crime related “default” passwords or passwords with notifcation scheme can result in fnes of activity is on the rise. A further indicator patterns that are easy to remember, $360,000 for individuals, and $1.8M for statistics recently released in NSW, which such as 12345678, Welcome123, their businesses. We encourage you to visit note that burglary and armed robbery name, the name of the business and even the Ofce of the Australian Information related crime is trending downward, Password or Password1. These are all whereas Cyber Crime is trending Commissioner website to learn more too easy for a hacker to crack. If you use upwards. These days, criminals do not (https://www.oaic.gov.au/). these types of passwords, change them need to rob you at gun point, but take immediately. Develop and follow a proper Although this legislation has the potential a less risky and far more rewarding password policy in your organisation. Try to increase the regulatory burden on approach with a computer and access to organisations, it is partly designed to the internet. using a password manager for storing prevent companies from hiding signifcant passwords. data breaches that impact the general Here are some relatively simple and 7. Insurance: High quality Cyber public, such as this incident that landed efective ways to stop them in their Insurance policies are designed to tackle Uber in some trouble. tracks: potential exposures arising from a major Case Study: An Uber Mistake 1. Prepare a robust cyber incident breach, including business interruption, response plan: SMEs should develop a forensic costs, additional labour costs In the case of the USA-based ride sharing cyber incident response plan to report (overtime to remedy issues), regulatory giant, Uber, it is alleged that they actively on cyber-attacks as quickly as possible. fnes, litigation costs, crisis management concealed a massive breach where This will assist in adhering to the new costs (customer communications, public sensitive personal data of around 57 Mandatory Data Breach Notifcation relations / brand damage). Many high- million of their customers was stolen. legislation mentioned above. It should quality insurers have specialist quick They managed to cover it up for around also include upgrading hardware & 12 months. If the allegations are correct, software, building a business continuity response teams on standby to assist and Uber are likely to be subjected to class plan, plus consider purchasing cyber manage claims, delivering much needed actions and a variety of investigations insurance protection. The plan needs to guidance and expertise at a critical time. by USA (and other jurisdictions) federal be regularly reviewed. Who we are and state authorities which will probably 2. Update your software: Speak with result in substantial fnes and penalties. James and the team at Logical your IT service providers and develop The fallout from the reputational damage Insurance Brokers provide specialist risk a regime of which options to accept in arising from such a cover-up and the management and insurance solutions to relation to software updates and patches associated undermining of customer trust the logistics industry. Logical is delighted for your operating systems and other key remains to be seen. to be associated with the Freight and applications immediately updates are Trade Alliance (FTA) and is proud to be Cyber Risks and the Logistics available. Updates are often designed to their appointed insurance adviser since Industry strengthen cyber security. its inception in 2012. James is also a We believe that the intermodal supply 3. Install antivirus software: Regular regular presenter at FTA professional chain is particularly exposed, since it is software updates alone do not ensure development events. increasingly reliant on information and your systems are protected. Viruses are If you would like more information about communications technology linking still a threat because they constantly how a carefully constructed Cyber ofces between diferent countries in evolve. Guard against them by running a each individual organisation, dependent reputable antivirus tool and remember to insurance program can help protect your on interactions with multiple third-party update your software immediately when business, please feel free to contact stakeholders. updates are available. James on 02 9328-3322, email [email protected] or visit 4. User education: There is no We are aware that many businesses the Logical Insurance Brokers website at substitute for teaching yourself and your within the logistics industry often operate www.logicalinsurance.com.au/logistics. on custom-built/proprietary applications staf how to spot suspicious emails, and security protocols may not be because even defence like anti-virus Disclaimer: This article is designed to alert to ever changing cyber threats, software or email spam flters can’t provide helpful general guidance on some potentially leaving those applications catch all malicious emails. You should key issues relevant to this topic. It should vulnerable in the event of an attack. have some mechanism of email fltering not be relied on as legal advice. It does Furthermore, many businesses may not on your network, including keeping up not cover everything that may be relevant to date with the latest phishing email prioritise scarce resources to manage to you and does not take into account campaigns. Be smart about not exposing Cyber risks because they believe it is your particular circumstances. It is only yourself to cyber-attacks. Think before low on their list of risks. In fact, it is our current as at the date of release. You you click on unfamiliar links and don’t view that in the future, it is more likely must ensure that you seek appropriate open strange email attachments. Delete that an organisation will sufer a Cyber- professional advice in relation to this topic all emails that look suspicious. attack rather than a fre at their ofce or as well as to the currency, accuracy and warehouse. 5. Backup your fles: Create backups of relevance of this material for you.

Autumn 2018 I Across Borders I51 bUSINESS REfORM

MANAGiNG RiSKS AND iMPROViNG SAFETY AlONG ThE ChAiN OF RESPONSiBiliTY

By AlEXiS CAhAlAN, Principal lawyer, Thomas Miller law

Amendments to the Heavy Vehicle ensure “so far as is reasonably practicable” for a corporation; and the safety of their transport activities National Law (HVNL) expected • Category 1: breach of the duty with related to the vehicle. This difers from the recklessness – fve years imprisonment or to enter into force in September current regime which refers to taking “all $300,000 (or both) for an individual and 2018 and in particular, the Chain reasonable steps” and brings the language $3,000,000 for a corporation. of Responsibility (CoR) provisions in line with current work health safety laws. will mark an important shift in the What is “reasonably practicable” is likely to Broadening the duty of executives depend on: philosophy underlying the existing The new CoR laws will expand the liability HVNL. The current CoR framework • the likelihood of the hazard or risk; of executive ofcers to impose a due diligence requirement on them to ensure which applies to all participants in • the degree of harm that might result; the transport chain, is centred on that parties in the chain of responsibility • what the person knew or ought to comply with their legal requirements. prescriptive legislation to ensure have known about the hazard or risk and Where a legal entity has a duty as set out compliance with vehicle dimensions, the way to eliminate or minimise that under the HVNL, that duty will extend load restraints, driver fatigue and hazard or risk; toan executive of that legal entity. This means that anyone who takes part in the speed laws. The amendments will • the availability and suitability of ways management of the business must exercise extend the shared responsibility to eliminate or minimise the risk; and due diligence to ensure that the legal entity for heavy vehicle safety to include • the cost associated with eliminating or complies with the duty. vehicle standards and maintenance minimising the risk (including whether the Due diligence means taking reasonable costs are grossly disproportionate to the and will allow more fexibility for steps including: businesses to introduce their own risk). • to acquire and keep up to date, procedures, or to follow an industry Unlike the current regime, which in the knowledge about the safe conduct of the event of a prosecution requires the code, in order to comply with the transport activities; HVNL. The amendments also contain defendant to prove they have not breached the HVNL, the amended HVNL will reverse numerous changes to the compliance • to gain an understanding of the nature the burden of proof. It will be up to the of the legal entity’s transport activities; and requirements of parties involved prosecution to prove that the HVNL has the hazards and risks, including the public in the transport supply chain. This been breached. Increased investigative risk, associated with those activities; powers will, however, facilitate this process. article aims to highlight some of these • to ensure the legal entity has, and signifcant proposed amendments. There are also signifcant penalties for uses, appropriate resources to eliminate breaches of a primary duty. Breaches and minimise those hazards and risks; and of the new primary duty attract penalties Primary duty of all parties • to ensure the legal entity has, and in three categories which are calculated implements, processes to eliminate or The amended HVNL will introduce a according to the severity of the risk which minimise those hazards and to verify that general primary duty on all parties in the the ofence poses, the three categories are the resources and processes are being supply chain involving road transport to as follows: ensure safe practices and heavy vehicle used and implemented • Category 3: breaches safety duty - safety. This means all entities such as It is clear from this provision that the term $50,000 for an individual or $500,000 for a depots, terminals, exporters and importers “due diligence” and what is expected corporation; as well as vehicle operators, will have a of the executives is set at quite a high duty to ensure the safety of their transport • Category 2: risk of death/injury - standard. Executives will be required to activities. The duty of a person will be to $100,000 for an individual or $1,000,000 have considered all aspects of the chain

52 I Autumn 2018 I Across Borders of responsibility requirements and to have Firstly, a registered industry Code of $10,000. It should be noted that making procedures in place to ensure that the Practice is admissible as evidence as to the undertaking is not an admission of organisation is compliant with the HVNL whether or not a duty or obligation under guilt by the person ofering to make the and that those procedures are being the HVNL has been met. Whilst the Code undertaking. followed. would not be defnitive, the Court may have Preparing for the introduction of the regard to it as evidence of what is known HVNL amendments Powers of authorised ofcers about a hazard or risk and may rely upon Authorised ofcers will have increased the Code in determining what is reasonably Queensland is the host jurisdiction for the powers to investigate business practices practicable in the circumstances to which new legislation and the amending bill was to review how efectively legal obligations the Code relates. The NHVR has produced introduced into Queensland Parliament on under the HVNL are being managed. guidelines for preparing and registering an 15 February 2018. Once commenced in They will have increased powers to obtain industry Code of Practice. The adoption Queensland, which is tipped to be around evidence extending even to third party of a Code, which is by its nature, industry September 2018, the HVNL will apply in providers outside the supply chain. In agreed, is a good starting point for an all states and territories except Western Australia and the Northern Territory. addition, these powers do not need to be organisation to demonstrate that its triggered by a roadside inspection or an obligations have been met. The list of parties in the chain of incident. Instead they can be used in a Secondly, there is the introduction responsibility has not been altered by proactive way to enquire so as to ensure of enforceable undertakings as an the upcoming amendments. If you are a safe practices across the supply chain. intervention option. If a person contravenes party in the transport supply chain now, By AlEXiS CAhAlAN, Principal lawyer, Thomas Miller law you will be a party after the changes Accordingly, businesses should be or is alleged to have contravened the have come into efect. Businesses and careful to retain documents and all HVNL, the regulator or an authorised ofcer may accept an undertaking made by most importantly their executives and forms of electronic records which might management should become involved in demonstrate that an entity has done all that person, provided the undertaking will ensure that the person thereafter complies implementing the HVNL amendments, things reasonably practicable to comply review contracts with parties up and with the CoR laws. with the HVNL. Once the undertaking is accepted by the regulator or authorised down the supply chain, revise employee Defences and penalties ofcer, they must use reasonable diligence training protocols and workplace practices to have any proceedings against the and oversee the business is equipped to The changes to the legislation bring in two person discontinued as soon as possible. accommodate and implement the changes new processes in relation to the defence in the HVNL which are designed to manage or prosecution of a matter by the National Failing to comply with the accepted risk and improve transport safety along the Heavy Vehicle Regulator (NHVR). undertaking attracts a maximum penalty of supply chain.

The transport & logistics specialists for Australasia Legal services for the real world

Thomas Miller Law Pty Ltd, Level 10, 117 York Street, Sydney, NSW 2000 Australia Tel: +61 (0)2 8262 5850 [email protected] www.tmlawltd.com SYDNEY - LONDON - NEWCASTLE - PLYMOUTH - GENEVA

Autumn 2018 I Across Borders I53 bUSINESS REfORM

WiseTech Global acquisitions and integration of global technology solutions

Join us at the Global Shippers Forum areas such as freight forwarding, customs Express Logistics, and many other leading and ICHCA International Conference clearance, warehousing, shipping, land supply chain organisations. & Exhibition (10 and 11 May 2018) at transport and cross border compliance WiseTech Global CEO, Richard White, the Melbourne Convention & Exhibition and to manage their operations on one said “With the impact of ecommerce Centre to hear Richard White, founder database across multiple users, functions, and advances in automation, warehouse countries, languages and currencies. and CEO of WiseTech Global , deliver management is an increasingly complex a presentation “Future of customs MEDIA RELEASES and specialised part of the international compliance technologies and a vision supply chain. The combined strength of DECEMBER 2017 – WiseTech Global for single window for trade” – further WiseTech’s global innovation capabilities acquires warehouse management details at www.FTAlliance.com.au and our CargoWise One supply chain solutions provider, Microlistics WiseTech Global is a leading developer execution platform integrated with and provider of software solutions to WiseTech Global announced the acquisition Microlistics’ powerful warehouse solutions the logistics execution industry globally. of Microlistics, a leading provider of for enterprise, express, third party logistics Customers include over 7,000 of the warehouse management solutions and cold storage will provide signifcant beneft to logistics providers.” world’s logistics companies across encompassing enterprise, express, cold more than 125 countries, including 32 storage and third party logistics. “WiseTech is uniquely well-placed to deliver of the top 50 global third party logistics Microlistics provides its warehouse the technology convergence and deep providers and 23 of the 25 largest global management solutions to customers across integration necessary to facilitate omni- freight forwarders worldwide. The fagship Asia-Pacifc, North America and the Middle channel, multi-modal movements across product, CargoWise One, forms an integral East, including Linfox, Mitre 10, ESAB, the supply chain — of which warehousing link in the global supply chain and executes Thomas Foods International, Berli Jucker is a critical component. Ultimately the over 44 billion data transactions annually. Logistics, Spotlight Retail Group, Brand native embedding of Microlistics leading The software enables our customers to Collective, Concept Logistics, Nick Scali, WMS solutions into our integrated execute highly complex transactions in Russell Corporation, TT Logistics, TNT CargoWise One platform operating across 125 countries will substantially increase productivity for local and global logistics providers and their customers.” Microlistics’ leading-edge software development, its deep domain knowledge of warehousing, rapid deployment, data analytics and reporting capabilities signifcantly improves customers’ warehouse and business operations. In 2017, Gartner recognised Microlistics WMS in its selection of leading systems worldwide. Microlistics Founder and Managing Director, Mark Dawson, said “Joining the WiseTech Global group, is a key part of our evolution. With the global strength and powerful innovation capability of WiseTech, and our WMS expertise, together we will accelerate development of high productivity WMS to bring signifcant new benefts to the logistics industry. Microlistics will remained focused on warehouse management solutions and we can leverage WiseTech’s global reach, resources and the CargoWise

54 I Autumn 2018 I Across Borders One platform, which for our customers will mean the opportunity for end-to-end execution, control and visibility of the supply chain.” Remaining under the leadership of Mark Dawson, Microlistics will continue to develop and deliver its warehouse management solutions directly to its worldwide customers, and potentially to the 7,000 logistics providers across 125 countries who utilise WiseTech’s integrated supply chain execution solutions. Along with our recent acquisitions in Brazil, Germany, Italy, Taiwan, North America and the Netherlands, the addition of Microlistics to the WiseTech Global group is in line with our stated strategy of accelerating long-term organic growth through targeted, valuable acquisitions across new geographies and larger, globally capable adjacencies. WiseTech’s global integrated platform, CargoWise One, enables logistics service providers to execute highly complex transactions in areas such as freight forwarding, customs clearance, warehousing, shipping, land transport and cross-border compliance and to manage their operations on one database across multiple users, functions, countries, Stewart Bourke, Managing Director and Tony O’Grady New Business Director of ABM Data languages and currencies. Systems, and Vlad Bilanovsky, WiseTech Global DECEMBER 2017 - Global logistics software group, WiseTech Global, WiseTech Global CEO, Richard White, all our customers. acquires two leading European said “With the potential for increased “We have worked with the ABM Data team customs solutions providers, ABM complexity as Brexit and EU trade changes Data Systems (pan-Europe) and evolve, WiseTech’s ability to provide for years and now is the right time to bring CustomsMatters (Ireland) deeply integrated customs clearance them into the WiseTech Global family. Their solutions ultimately reduces risk and costs technology capability, deep pan-European WiseTech Global announced two while improving productivity, security and customs knowledge and agile product acquisitions of European customs compliance at the borders. Together, development team will be applied to our solutions providers, both headquartered these transactions provide WiseTech with Universal Customs Engine to accelerate in Dublin. ABM Data Systems, a leading market leadership and execution ability and facilitate rapid customs localisations developer and provider of customs across Ireland and further insights into and next-generation development.” clearance solutions accredited for the European customs – a key foundation for UK, Belgium, Ireland, the Netherlands, the challenges ahead. Regardless of ‘hard ABM Data Managing Director, Stewart Switzerland, Sweden and Germany, and borders’, or how ‘frictionless trade’ plays Bourke, said, “We have a shared vision CustomsMatters, the leading customs out, our speed to market for automated with WiseTech for a deeply integrated solution provider in the Republic of Ireland and integrated customs solutions and global customs solution, and by joining and Northern Ireland. highly scalable capacity will ensure we the WiseTech group, we can leverage the ABM Data provides advanced solutions can help logistics providers across Europe global strength and powerful innovation across customs clearance, bonded meet the regulatory challenges and warehouse and point of delivery exponential volume growth to come.” management. ABM Data customers “Customs clearance management needs include Expeditors, UPS, DSV, Yusen, rich software, efective integration and JAS, Tigers, Heavey RF, and many other a deep understanding of regulatory exporters, customs brokers, freight requirements to enable on-time, on- forwarders, distributors and logistics budget, accurate compliance. As volumes, service providers. complexity and compliance requirements CustomsMatters provides e-customs increase across the global supply chain, solutions through its cloud-hosted customs efective customs clearance solutions that compliance platform, myCustoms, and can ease the burden on logistics providers, customs brokerage and consulting mitigate risk and boost productivity, services to customers including DHL, UPS, become critical. Our continued expansion OAG Cargo, SwissPort, WFS, Aramex, of our European footprint, by adding Sisk Healthcare, G&J Distillers, Dairygold, customs market leadership in Ireland and Stephen Tracey, Managing Director Geodis and many other organisations and broader pan-European capability, will, over CustomsMatters and Vlad Bilanovsky, logistics providers. time, substantially increase productivity for WiseTech Global

Autumn 2018 I Across Borders I55 bUSINESS REfORM

capability of WiseTech, to accelerate CargoWise One. The Intris product range includes TRIS development opportunities across Europe. Forwarding and Warehouse solutions which WiseTech’s global integrated platform, ABM Data and WiseTech Global will ofer customers integrated data fows from CargoWise One, enables logistics together focus on delivering signifcant order through to invoice, and the TRIS and far-reaching improvements in customs service providers to execute highly Customs Management System, which declarations management and cross-border complex transactions in areas such as ofers full customs compliance functionality, compliance.” freight forwarding, customs clearance, direct customs and port interfaces to warehousing, shipping, land transport and European inland terminals. Their solutions WiseTech Global CEO, Richard White, said, cross-border compliance and to manage provide process efciency, productivity and “Customs clearance is a complex process their operations on one database across improve risk mitigation for logistics services with growing transaction volumes, rapidly multiple users, functions, countries, providers. changing legal requirements, and signifcant languages and currencies. potential penalties. With CustomsMatters’ WiseTech CEO, Richard White, said, deep historical experience in Ireland and Along with our recent acquisitions in “Bringing Intris into the WiseTech Global the UK, and their award-winning customs Australia, Brazil, Germany, Italy, Taiwan, group is another step in deepening our management solutions, we are looking North America and the Netherlands, the reach and capacity in Belgium, one of forward to working together with both addition of ABM Data and CustomsMatters Europe’s largest and most important EU and the UK authorities to enable our to the WiseTech Global group is in line with trade gateways. We welcome the Intris customers in the region to efectively WiseTech’s stated strategy of accelerating team and management, as we value their manage cross-border operations during and long-term organic growth through deep industry experience and product after Brexit.” targeted, valuable acquisitions across new development knowledge. We understand geographies and larger, globally capable CustomsMatters Managing Director, the complexities and challenges borne adjacencies. Stephen Tracey, said, “Becoming part of by logistics providers facing EU trade the WiseTech Global group with its vision FEBRUARY 2018 - Global logistics changes, growing transaction volumes and extensive reach across the global solutions group, WiseTech Global, and increasing cross-border compliance supply chain is an exciting step forward acquires Belgian logistics solutions requirements. This transaction, as part of the for CustomsMatters. We will be able to provider, Intris continued expansion of our global footprint develop more powerful, integrated and and broader pan-European capability, will, automated functionality for our customers. WiseTech Global today announced the over time, build further capabilities and With CargoWise One’s signifcant customs acquisition of Intris, the leading Belgian productivity for all our customers.” provider of freight forwarding, customs and capabilities our brokerage and compliance Intris Managing Director, Patrick Van warehousing management solutions. team will be able enhance our service De Looverbosch, said, “This is the ofering in Ireland and elsewhere.” Headquartered in Antwerp, Intris provides logical next step for Intris, as we are Remaining under the leadership of respective its integrated software and cloud-based currently transforming our operations and Managing Directors, Stewart Bourke and solutions to customers including Panalpina technologies to better support the market Stephen Tracey, the operations of both ABM World Transport, Bollore Netherlands, and our customers, with whom we will Data and CustomsMatters will be integrated Rhenus, Gosselin Support Services, continue to partner closely. With WiseTech’s within the WiseTech Global group and AML and many other logistics services global strength and signifcant innovation each business will continue to deliver their providers in Belgium and, more recently, capacity invested locally, we will accelerate customs management solutions directly the Netherlands. In addition Intris is the our drive to improve our customers’ to their customers, along with WiseTech’s only Belgian integration partner for INTTRA forwarding, warehousing and customs powerful global logistics platform, eVGM. management capability.” Remaining under the leadership of Patrick Van De Looverbosch, Intris operations will be integrated within the WiseTech Global group and Intris will continue to deliver its powerful logistics software solutions directly to its own customers, along with WiseTech’s integrated global logistics platform, CargoWise One. CargoWise One, enables logistics service providers to execute highly complex transactions in areas such as freight forwarding, customs clearance, warehousing, shipping, land transport and cross-border compliance and to manage their operations on one database across multiple users, functions, countries, languages and currencies. This transaction follows WiseTech’s other recent acquisitions in Ireland, North America, Australasia, Brazil, Taiwan, and the Netherlands, and is in line with WiseTech Global’s stated strategy of accelerating long-term organic growth through targeted, valuable acquisitions across new geographies and larger, globally capable Patrick Van De Looverbosch (Managing Director) and Tony Vertenten (Chief Technology adjacencies. Ofcer), Intris

56 I Autumn 2018 I Across Borders MARCH 2018 - Global logistics administration, contract logistics and easier customs compliance and warehouse solutions group, WiseTech Global, warehouse management. LSP provide management.” acquires logistics solutions to customers including Remaining under the leadership of Damco, GEODIS, JCL Logistics, Vos Marco Pieplenbosch and Erik Wilting, Netherlands-based logistics software Logistics, Hitachi Vantara, and many other LSP operations will be integrated within provider, LSP Solutions organisations. the WiseTech Global group and LSP WiseTech Global today announced the WiseTech CEO, Richard White, said “With will continue to deliver its powerful acquisition of LSP Solutions (LSP), a Europe’s largest port and a well-established logistics software solutions directly to its leading provider of customs and warehouse and dynamic trade fow, the Netherlands own customers, along with WiseTech’s management solutions in the Netherlands. is a critical transport hub. Bringing LSP integrated global logistics platform, CargoWise One. Headquartered in Ede, the LSP into the WiseTech group now deepens ofering includes customs compliance our reach in this important market which CargoWise One enables logistics management solutions, bonded warehouse will beneft from the combined strength service providers to execute highly of WiseTech’s innovation capabilities, our complex transactions in areas such as CargoWise One supply chain execution freight forwarding, customs clearance, platform, and LSP’s customs and warehousing, shipping, land transport and warehouse management solutions.” cross-border compliance and to manage LSP Solutions Managing Director, Marco their operations on one database across Pieplenbosch, said “For more than 20 multiple users, functions, countries, years we have worked closely with our languages and currencies. customers to provide highly efective, This transaction follows WiseTech’s other fexible products rich in functionality. With recent customs and logistics solutions WiseTech Global’s powerful development acquisitions in Belgium, Ireland, North capacity and global reach we look forward America, Australasia, Italy, Germany, Brazil, to accelerating our capabilities and better and Taiwan, and is in line with WiseTech supporting our customers’ logistics Global’s stated strategy of accelerating operations with increased automation, long-term organic growth through Erik Wilting (Head of R&D, LSP Solutions), Richard improved productivity and mitigation of targeted, valuable acquisitions across new White (CEO, WiseTech Global), Marco Pieplenbosch risks. Ultimately, our vision is that our geographies and larger, globally capable (MD, LSP Solutions) customers will beneft from faster, safer and adjacencies.

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Autumn 2018 I Across Borders I57 bUSINESS REfORM

ElECTRONiC PAYMENTS FRAuD Five things you should know

By ED ElliFF, General Manager, EFTsure

Cybersecurity ofences are Payments fraud typically occurs when EXAMPLE BANK DISCLAIMER: a business instructs its bank to make Australia’s number 1 economic “Important: You must enter the correct Electronic Funds Transfer (EFT) payments BSB and account number of the intended crime and cost an afected business, to suppliers and individuals. In Australia, payee. on average, $276,000. One of a key vulnerability exists because banks the fastest cybercrime growth do not match payee names to account In processing payments, the bank does categories is payments fraud which numbers. Although it may look like not verify that account name matches the you are paying an intended supplier by provided account number. If you enter an is conservatively estimated to be their name, unless you check account incorrect BSB and/or account number, a $442 million cybercrime industry numbers and BSBs on every payment, your funds may be paid to an unintended locally. Despite its scale and growth, a fraud or error could occur. Criminals recipient and it may not be possible to few businesses understand how take advantage of this vulnerability daily. recover your funds from that recipient.” to protect against it, especially in Here are fve areas to consider in your Where fnancial loss occurs due to fraud a digital world where we can’t fully cybersecurity plans: or error, banks are not obligated to refund monies lost. Banks cannot access funds trust a simple email. 1. No business is immune once in the recipient’s account and a In today’s digital world, any business is fraudulent or accidental recipient has no susceptible to cyber-attack and payments obligation to return the money. fraud. A common misconception is 3. Simple data entry errors can that fraud sits outside the business, yet result in big losses research shows the perpetrators are usually ‘inside’ the business. Even in the hands of trusted and reliable teams, accidental data entry can occur Not only big businesses are targeted. from out-of-date or duplicate payee SME’s are often resource-constrained records. As more information is digitised and lack the necessary controls, such and business records multiply, the risk as separation of duties in managing of data entry error increases – as do suppliers, entering and approving the consequences, such as misdirected invoices, and authorising payments. payments. In the digital world where business While it is always wise to manually check transactions and payments are conducted online, all businesses need to protect against new types of fraud. 2. Don’t expect banks to fx the problem… If you sufer a fraud or error from an invalid payment, your bank is not obligated to resolve the matter. Strict privacy laws mean the banks cannot tell you where the money went. From their perspective, they received a payment instruction from you, so the ultimate liability sits with you. On request, your bank may try to help recover the funds, but this can be very time consuming and relies on other parties as well as the recipient of the funds co-operating. If that recipient was the fraudster, the funds have likely already been moved.

58 I Autumn 2018 I Across Borders that payments data is correct, including further diligence – through processes or software to validate the integrity of the payee name matching the account automated tools – to ensure payment payments data in real time, helping to number, this may not be practical and accuracy before submitting to your bank. ensure the name of your payee matches is often only performed as a partial the BSB and account number prior to 5. Businesses are ultimately ‘spot check’. Also, payment details can making every payment. The EFTsure responsible still be manipulated in the banking and software also provides additional accounting software after this checking. As businesses extend their use of compliance checks for ABN, GST This can also occur in the ABA payments digital technologies and processes, they status and other alerts to provide a best fle – an editable fle used by Australian must acknowledge and prepare for the practice ‘Know Your Payee’ solution. fnancial institutions to process payments. increasingly complex and inherent risks. We are proud to be an FTA sponsor The onus rests with businesses owners 4. The introduction of real-time and look forward to working with fellow and fnance ofcers to ensure company payments means the money moves members of the Alliance. assets, including the incoming and faster! outgoing fow of funds, are protected. Please call Ed Ellif on 0423 866 876 or The recently introduced New Payments This includes implementing systems, email [email protected] to arrange Platform (NPP) is a major Australian procedures and processes that promote an obligation free discussion on how banking initiative allowing fast, data-rich a sound internal and external control EFTsure can assist your business. payments between fnancial institutions environment to minimise the risk of Or for more information, see and their business and consumer payments fraud, acknowledging that www.eftsure.com.au. customers in near real time. The NPP such fraud can be perpetrated both will ofer improvements in fast payment within and external to an organisation. methods: funds that are currently Protecting a business from fnancial cleared in up to 3 business days will be fraud also ensures against reputational cleared in seconds. Based on overseas damage, which has the potential to experiences, however, this revolutionary further impact customers, suppliers and advance may lead to a signifcant shareholders. increase in fraudulent activity, especially as the banks will no longer have 3 Who we are business days to investigate suspicious transactions before moving the funds. EFTsure is an Australian fntech provider It is now more imperative to apply ofering cost-efective, cloud-based

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Autumn 2018 I Across Borders I59 SPONSORS

The Australian Peak Shippers Association (APSA) and Freight & Trade Alliance (FTA) would like to acknowledge the following sponsors for their ongoing support of the Alliance.

MAJOR SPONSORS

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FTA SPONSORS

To fnd out more about advertising in Across Borders or how to become an APSA / FTA sponsor, please refer to www.FTAlliance.com.au or contact us at [email protected]

60 I Autumn 2018 I Across Borders BUSINESS PROCESSES GETTING YOU DOWN?

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