Australia signs agreements to streamline trade

A recent update from the Department of Immigration & Border Protection highlights the Mutual Recognition Arrangement between Australia and New Zealand Customs Service (NZCS), signed during the recent World Customs Organisation’s council session in Brussels in July.

The MRA formally recognises supply chain security programs between customs agencies and provides reciprocal benefits to each country’s trusted partners. The MRA will also provide Australia and New Zealand’s border agencies with greater end-to-end assurance over imports and exports.

The Australia-New Zealand MRA will ensure that members of the Australian Trusted Trader (ATT) programme and the NZCS Secure Exports Scheme receive preferential border treatment and trade facilitation benefits when conducting trans-Tasman trade.

Not just talking the talk – Retail embracing social as well as environmental issues

Not just talking the talk – Retail embracing social as well as environmental issues

We all know that in order to stay on top of your game, you have to adapt. Sometimes moving forward and embracing a strategy that initially has no positive impact on your top or bottom lines can turn into a the “best idea we ever had”.

Of the top 20 brand leaders in 1999, only seven remain in the top 20 today. A very sobering statistic, but one common factor for those that have remained in that top 20 (Cadbury, Google, Dyson, Lego, Sony, Virgin) is their ability to introduce social and environmental matters into their strategy as well as their offering.

A 2016 survey of more than 1800 CEOs in the retail industry found that 52% of CEOs believe their customers choose brands not solely on price and features but also on the basis of social and environmental issues.

In response to consumer concerns, and hoping to be among the brand leaders topping the list in 15 years from now, these companies are offering healthier options, minimising CO2 output and water usage, collaborating with local non-governmental organisations to improve the environment and economic conditions.

Retail giants Costco and Starbucks have led the way in adopting above-minimum-wage pay, a trend that is currently under the microscope here in Australia, and one that some consumers say “heavily influences” their purchase decisions.

So, what are the implications? Consumer goods and retail companies are learning that they need to better represent their customers’ broader needs and values. The few leading brands that have embraced social issues for many years will become part of a much larger club as their competitors and peers scramble to embrace the changes.

Stronger alliances with public health and environmental organisations will take center stage. Companies will invest in political lobbying and government-relations resources to help articulate their point of view on any number of high-profile public policy issues.

At 20Cube, one of our key values is to ensure we have a positive impact on our environment. If you would like to understand how 20Cube can help your business have a positive impact on the environment, please contact us.

www.20cube.com

Amazon can test drones in the UK, but they may cause 'supply chain nightmares'

Retail giant Amazon is set to use small drone technology to deliver its parcels to UK customers, following the permission of the UK’s Civil Aviation Authority to start its Prime Air research and development programme. While the CAA is keen to support innovation, drone delivery posits significant questions about redefining traditional supply chain routes. Read More

Source: Loadstar

Shipping Giant Shows Why We Are in Deep Water on Deflation

It is a sign of stunted investor expectations when an 89 per cent slide in quarterly profit triggers a 3 percent share price jump. Read More

Source: Chris Bryant | Bloomberg Gadfy

2016/17 Measures to Manage Stink Bugs

The Department of Agriculture and Water Resources has developed the following measures to manage the seasonal risk of brown marmorated stink bug (BMSB) infestations in break bulk and containerised sea cargo shipped from the United States. Read More

Australia and New Zealand Sign Arrangement to Streamline Trade

Australian Border & Protection

Trusted Trans-Tasman exporters will be rewarded with fast-tracked customs processing at Australian and New Zealand borders under a new arrangement between the two countries.

The Australian Department of Immigration and Border Protection and New Zealand Customs Service (NZ Customs) signed a Mutual Recognition Arrangement (MRA) last Friday, to recognise the supply chain security programmes of both countries.

Australian Border Force (ABF) Commissioner Roman Quaedvlieg, and NZ Customs Comptroller, Carolyn Tremain, met at the World Customs Organization’s sessions in Brussels to sign the MRA.

Commissioner Quaedvlieg said the arrangement would benefit members of the Australian Trusted Trader (ATT) programme and the NZ Customs Secure Export Scheme (SES).

“It is anticipated that the MRA will allow $3 billion of New Zealand exports to Australia to be fast tracked,” Commissioner Quaedvlieg said.

“As we increase membership of the ATT programme, we expect that $7.5 billion of Australian exports to New Zealand will benefit from the MRA by 2020.

“The MRA provides benefits to trusted traders of both countries and provides border agencies greater end-to-end assurance of imports and exports.

“Reducing the regulatory duplication between the two schemes will make it easier for Australian and New Zealand businesses to trade with each other and boost the international competitiveness of both countries.”

NZ Customs Comptroller Carolyn Tremain said the two agencies already work closely together and this arrangement will provide further assurance over trans-Tasman trade for both countries.

“The MRA means New Zealand’s Secure Export Scheme members will benefit from a faster and smoother border experience with our closest neighbour, and gives traders on both side of the Tasman a competitive advantage,” Ms Tremain said.

Source: Australian Border & Protection 

ANL, Coscon and OOCL under A3 alliance to launch Asia-Oz loops

OOCL has unveiled the joint services it will operate in conjunction with partners ANL and Coscon under the newly formed Asia Australia Consortium (A3) that will focus on the trade between North East Asia and Australia.

The A3 will launch three dedicated services, namely the Northern Express, Central Express and Southern Express, connecting 10 major North East Asia ports with Sydney, Melbourne and Brisbane.

Subject to regulatory approval, the A3 plans to launch the new services starting from September or October.

The port rotation for the weekly Northern Express is Yokohama, Osaka, Busan, Qingdao, Shanghai, Kaohsiung, Melbourne, Sydney, Brisbane and back to Yokohama.

The Central Express is also a weekly service, with the following port rotation: Shanghai, Ningbo, Sydney, Melbourne, Brisbane, and back to Shanghai.

The port rotation for the weekly Southern Express is Kaohsiung, Xiamen, Shenzhen-Shekou, Hong Kong, Sydney, Melbourne, Brisbane and back to Kaohsiung

Illegal Logging Laws: Extension to 'soft-start' compliance period

On 25 February 2016, the Australian Government released the final report of the KPMG led Independent review of the impact of the illegal logging regulations on small business.

The report proposed a package of regulatory and non-regulatory reforms to minimise the costs of complying with the Regulation.

In light of this process and the potential for further changes to the Regulation, the department has decided to extend the initial 'soft-start' compliance period until any amendments from the KPMG review have been finalised. This is expected to extend the soft-start period until late 2016 or early 2017.

​A further Compliance Advice Notice will be released to advise when the 'soft-start' compliance period will end.​

20Cube are available to discuss further and assist clients with ensuring they comply with the Regulations.

Changes to Import Requirements for Used Machinery, Used Equipment & Used Parts

The Department of Agriculture & Water Resources has issued an industry advice notice regarding the importation of used machinery, equipment and parts.

Importers, customs agents and brokers have been advised that from 16 June, 2016, an import permit will no longer be required, a change that coincides with the commencement of the Biosecurity Act 2015.

How does this affect you?

If you're an importer of used machinery, equipment and parts, then you will no longer need to obtain a permit. The aim of the new arrangment is to reduce costs and regulatory burden to importers.

BICON was updated on 16 June to reflect the change.

Your opportunity to contribute to revised import conditions

The Department of Agriculture and Water Resources has commenced a review into the management of biosecurity risks associated with imported used machinery and equipment, which may result in further changes to import conditions​ for these goods. 

A discussion paper is expected to be released in July/August 2016 outlining the proposed changes and affected stakeholders will be invited to provide comment.   

  

Further information

Any enquiries regarding this change, please contact your 20Cube team for more information.

Reminder: Import permits required prior to arrival of goods

With the commencement of the new Biosecurity Act 2015 on 16 June 2016, importers are reminded of the need to obtain any relevant import permits prior to the arrival of goods in Australia.

If you intend to import goods into Australia that require import permits eg fertilizer products, you must comply with the new legislation.

Under the Biosecurity Act 2015, the department cannot issue an import permit for goods that have already landed. In the past, the department has facilitated imports that have landed without a permit by allowing importers to apply for a permit. This will no longer be the case.

For more information, please visit the DAWR website.

AADA increases China-Australia rate US$300/TEU from July 1

Member lines of the Asia Australia Discussion Agreement (AADA) will levy a US$300 per TEU rate increase from July 1 on cargo from mainland China and Hong Kong to ports and points in Australia.

This increase will apply in full on top of existing ongoing market rates and will be subject to accessorial surcharges applicable at the time of shipment.

AADA is a voluntary discussion forum of 16 ocean carriers serving the trade from North and East Asia to destinations in Australia.

Members include ANL Singapore, APL, China Shipping Container Line (HK), Cosco, Evergreen Line, Hamburg Sud, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, Maersk Line, MSC, MOL, NYK, OOCL, PIL, Sinotrans Container Lines, TS Lines and Yang Ming.

For more information, please contact 20Cube.

AADA bunker surcharge rises to US$150/TEU, $300/FEU on June 18

Member lines of the Asia Australia Discussion Agreement (AADA) have increased the bunker surcharge US$150 per TEU and US$300 per FEU for dry and refrigerated containers from Japan, Korea, mainland China, Hong Kong and Taiwan to ports in Australia from June 18.

This reflects recent increases in the price of oil at Hong Kong and South Korea, the AADA said. Customers requiring further information concerning the bunker surcharge are to contact the member lines.

"AADA members have adopted voluntary policy guidelines and have reached a non-binding consensus on the above arrangement," the AADA statement said.

Member AADA lines are ANL Singapore, APL, China Shipping Container Line (HK), Cosco, Evergreen Line, Hamburg Sud, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, Maersk Line, MSC, MOL, NYK, OOCL, PIL, Sinotrans Container Lines, TS Lines and Yang Ming.

New Biosecurity Legislation in Effect from 16 June 2016

Important changes to Australia’s biosecurity system come into effect on 16 June 2016 with commencement of the Biosecurity Act 2015.

The Biosecurity Act 2015 replaces the Quarantine Act 1908. The Biosecurity Act introduces new requirements that will affect how the Department of Agriculture and Water Resources manages the biosecurity risks associated with goods, people and conveyances entering Australia. We aim to make compliance with the new laws easy for you and your business. 

Are you an importer? Find out more about what is changing for your business.

Update: Australian Trusted Trader Programme

T​he Australian T​rusted Trader​ Programme (ATTP)​ seeks to provide trade facilitation benefits to importers and exporters that demonstrate strong security practices and a history of​ ​compliance.

As previously advised, the ​ATTP is currently undergoing its pilot phase,and​ ​consists of three phases. Stage 1 had four initial Australian exporters participate and stage 2 targeted a further 20 Australian importers and exporters to also participate.​ ​Stage 3 commenced this year​ ​where more importers and exporters with complex supply chains​ ​were​ ​selected.

Service providers, including 20Cube,​ ​will also progress in participation, supporting a target to have between 40 and 50 companies participating in the pilot.​ ​It​ ​is ​​​​​​expected to be fully operational and open to all international supply chain participants from 1 July 2016 onwards.

Some benefits identified for importers and exporters who become​ ​part of the ATT​P will include​:​

• Reduced disruptions to supply chain processes (fewer interceptions at Customs barrier, and priority service)​ ​
• ​Reducing International Supply Chain costs and
• Decreasing stock transit time-frames​ ​Mutual Recognition Arrangements with Australia's key trading partners​ ​Priority consideration of trade advice rulings and applications

The DIBP​ (Customs)​ added that as the pilot develops, more Account Managers will be added to the programme as a single point of contact and to maintain the relationship between DIBP and ATT​P​​ participants​.

We've also learned that the ​Self Assessed Questionnaire (​SAQ​)​ stage takes longer to complete, due to the amount of information required, complexity/diversity of business models and competing priorities, which has resulted in the whole pilot process taking longer than anticipated.

For more information, visit the DIBP website. 

Protect or Perish - The Quandry for Government in a Free-Trade World

The recent announcement that steel producer Arrium was moving into voluntary administration threw up a number of comments that many of its problems arose from the alleged international “dumping” of steel products by Asian exporters.

There is no doubt that a glut of steel production in Asia has created issues for Arrium and for similar local steel producers in the EU and the USA.

However, at the same time that Arrium is experiencing difficulties, the other major Australian steel producer in BlueScope recorded excellent results, which would suggest that foreign competition is not the sole reason for Arrium’s problems.

Still, the media continues to carry regular stories regarding the evils of the foreign supply of goods, jobs and investment allegedly threatening Australian business, ownership and jobs.

This provides a quandry for all levels of government who welcome such foreign involvement and commit to it in free trade agreements (FTA).

It is especially an issue at the federal level in an election year – how to continue to promote the strong free trade agenda while still preserving some level of protection for legitimate local interests which may be “damaged” by that trade.

A brief summary of relevant considerations is set out below:

• No such thing as “total” free trade: There are many areas where regulation is permitted in the interests of ‘fair’ trade, such as the WTO agreements on anti-dumping and countervailing.
• Loophole closures: Our trade remedies regime has been subject to significant amendments in the last few years, much of which seems to have been aimed at “closing loopholes” or providing “further protection against unfair competition”.
• Australia’s Tariff Concession order regime: Put simply, the TCO is supposed to allow duty-free entry for goods for which there is no local production of ‘substitutable’ goods.
• Australian Quarantine measures: Our “quarantine” regime is also subject to international pressure. Government maintains that we have a robust and scientifically-based regime yet many of our trade partners see our regime as being unduly restrictive and a “non-tariff barrier” to trade.

In amongst this, there is the task for all Australian political parties to balance legitimate interests which can appear to be in direct competition.

Australian business wants open markets overseas for export of Australian goods and services as well as increased opportunities for outbound and inbound investment. It is hard to reconcile that to a 

politically expedient desire to close off parts of our economy in a way not supported by sound policy. Perhaps the real test of policy in this area is to help those whose lives are affected in the pursuit of trade outcomes of benefit to us all.

A final thought – there is evidence in the US that manufacturing jobs are being reintroduced there, turning back from China and elsewhere in Asia where production has become more expensive and less convenient. Over time there may be a similar turn in the wheel for other economies.

This article has been edited and reproduced with permission of Andrew Hudsons, Parnter of Melbourne office of Gadens. For the full unedited article, please visit the Gaden website

Merger Update: CSCL / COSCO

CSCL and COSCO have merged, following the integration and restructure of China COSCO, COSCO Pacific, China Shipping Container LINES (CSCL) and China Shipping Development. It’s a merger that will create an organisation that will be one of the world’s four largest container shipping lines.

The new entity will have a fleet of 288 container ships, of which 84 are larger than 8,000 TEUs and a total shipping capacity of approximately 1.6 TEUs.

As leaders in China’s shipping industry, COSCON and SCSL have cooperated for many years. The expectation is that the restructure and consolidation will yield a great improvement to the company’s core competitiveness. The merger will also offer employers a more diversified career development path.

For investors, the integration of quality resources and capture of synergies will bring a better return on investment. For customers, the expected shipping capacity and widened scope of the business will optimise the route network and improve the fleet structure. The end-goal for customers is an enhanced ability to deliver high-quality customer services and meet more rigorous services standards. 

While the merger should further consolidate market share among shipping lines, the impact on shippers and consignees in Australia will be less capacity in the trade lane to China. Based on past experience, Australian business can also expect pricing competition to intensify post-merger.

Enhanced Project Bylaw Scheme (EPBS) closure

A recent major announcement from the Australian Government is that the Enhanced Project Bylaw Scheme (EPBS) will be closed. The EPBS provides duty free entry for goods associated with certain large capital projects. 

For very large projects the scheme was often more efficient than using tariff concession orders.  It was no doubt more popular in an environment where TCOs were being narrowly applied.

The popularity of the EPBS is highlighted by the fact that the saving from the closure is projected to be $60 million a year.  In other words, an additional $1.1 billion dollars of imports that will be subject to duty.

Real skill will be required in drafting TCO wording that in the current compliance environment will be  wide enough to cover the variety of items imported for major projects

Container Weight: Who is responsible for VGM?

In January of 2015, the International Maritime Organisation (IMO) amended the Safety of Life at Sea Convention (SOLAS) to require - as a condition for loading a packed container on to a ship for export, that the container has a verified gross mass (VGM).

20Cube provided an update to our clients earlier this month on the issues that shippers must address and the potential consequences for not doing so.

With the legislation due to start from 1 July 2016, there are still some in the industry asking who is ultimately responsible for VGM.

While the immediate answer is that it is the responsibility of the port where the weighing and weight verification should occur (as it is the last stop before shipping), our view is that it is too late in the supply chain and does not align with the purpose of the legislation. Safety is a consideration for road transport as much as it is for sea freight.

The responsibility ultimately lies with the shipper (i.e. the sender of goods), who has the responsibility of obtaining the Verified Container Gross Mass and forwarding this information to relevant parties involved in moving the containers. By definition, the shipper is the legal entity or person indicated on the bill of loading (or sea waybill or its equivalent transport document), not the company that moves goods on their behalf.

Port and ship masters can only plan based on information provided to them, which means that ports do not need to prepare for the IMO/SOLAS changes: their role is to ensure proper stowage based on container weight information provided to them.

For more information about methods for VGM and ongoing dialogue about the legislation,please view our recent update here or contact 20Cube for more information.

Tariff Concession Orders

The Australian Border Force (Customs) acknowledge that the interpretation of Duty Free Tariff Concession Orders (TCO) is an area of concern for importers and brokers.

20Cube advise our clients that care needs to be taken when claiming TCOs. In particular:

Does the NEW / UPDATED model still fit the TCO?

Particular goods may been eligible to claim a TCO previously, but changes in the properties or characteristics of the goods, even small variations, may affect their eligibility.

Applying TCOs which are Sets, Kits and Assemblies

TCOs do not apply to sets, kits, assemblies or systems unless they are specifically referred to in the wording, together with a list of all the items making up the set, kit, assembly or system

Does the wording fit your product exactly?

How does the wording of TCOs, particularly those containing a number of ‘and’ stipulations or specific punctuation, fit your product?

Will my product comply to parameters where units are stipulated in the wording of the TCO?

If doubt exists as to the applicability of a TCO to any goods, 20Cube advise clients that a Tariff Advice be sought, or a NEW TCO on the specific good can be applied for.

For further clarification, please contact one of our Customs Consultants. 

Trade Credit Insurance

n the current economic climate all businesses large and small face the challenge of managing cash flow and the risks associated with bad debts. No matter how well managed and how successful a business may be, cash flow and profitability can be significantly impacted should a major customer or a number of key customers fail to pay.

Trade Credit Insurance or "debtor insurance" protects receivables against loss due to insolvency or nonpayment. It ensures invoices will be paid no matter what.

Trade debtors both in Australia and overseas can be insured with cover extending to insolvency, continued nonpayment and political risks. Policies can also cover supplier default and pre-delivery risk.

Trade Credit Insurance reduces and protects you from the risk of nonpayment,

providing market intelligence from global underwriters on both customers and prospects.

Trade Credit Insurance is not only about indemnifying against losses but also about offering credit terms to the right customers and enabling business growth.

Courtesy of 20Cube Logistics, our partner Invoice Management Solutions (IMS) is offering a free "Health Check" as follows:

• IMS & our panel solicitors will review your Credit Application/Terms & Conditions (an alarming number of businesses are still not covered under PPSA)
• IMS will review your overall credit management (we often find deficiencies in this area/room for improvement but are usually able to offer quick fixes/solutions)
• IMS will provide you with a no obligation Trade Credit Insurance Report which will include quotations from themmajor insurers. (If nothing else at least you will be  provided with an opinion from the insurers on their top clients/potential buyers as to their credit worthiness)

For more information, please contact Mark Lathwell, Managing Director of Invoice Management Solutions on 0417 008 061.

Know Your International Commerce Terms

20Cube has worked with Spanish video designer, Valeria Castano, to develop a quick visual illustration of the International Commerce Terms (IncoTerms).

Led by Project specialist, Alberto Coll, the idea was to make Incoterms easy to understand.

"There are many ways to explain Incoterms and I have seen many videos on the subject, but we wanted to deliver the information succinctly and clearly," says Alberto. "Valeria has done a great job for us in a easy to understand narrative."

Head on over to our YouTubechannel to see and share the video.

Australia continues with Free Trade Negotiations

2016 looms as another significant year for those in the Australian part of the international supply chain.

Industry is still monitoring ChAFTA with more clarity on the approach by the DIBP to implementation of the ChAFTA, given that there have been some recognised "teething problems".

We now wait to see which of the proposed FTA will be actioned next.

The Trans Pacific Partnership (TPP) will see the elimination of 98 per cent of tariffs among 12 countries and was formally signed by Trade and Investment Minister Robb on 4 February 2016 in Auckland.

The TPP is the world’s most significant trade and investment agreement finalised in more than two decades, with member countries accounting for around 40 per cent of global GDP.

Trade Ministers from Australia and 11 other countries issued a joint statement welcoming the TPP as an agreement that sets a new standard for trade and investment in one of the world’s fastest growing and most dynamic regions.

We can expect some difficulties with this process.

Not only will it require approval in many of the contracting countries but our recent experience with ChAFTA gives some indication of the sort of debates and political movements which will be required to ensure that the TPP is implemented. It may well be that the TPP is not implemented until 2017 (if at all).

The other significant movement will surround the completion of negotiations on a Free Trade Agreement between Australia and India, which is believed will be signed signed by the last quarter of 2016, along with the Regional Comprehensive Economic Partnership Agreement and PACER Plus, which is also close to being completed.

20Cube will continue to update our clients as information is received.

Illegal Logged Products | Due Diligence and Importer Responsibilities

Further to our previous announcements, the Illegal Logging Prohibition Amendment Regulation 2013 is law and its requirements c​a​me into effect on 30th November 2014.

From this date, importers of certain timber or timber products (as defined in the Regulation) ​need​ to assess and manage the risk that the timber has been illegally logged.

Importer obligations to carry out due diligence

Under the illegal logging laws, businesses importing regulated timber products into Australia will have to carry out ​​due diligence on these products before import.​ These products include wooden articles and certain paper / paperboard products.​

The Department of Agriculture and Water Resources (DAWR) has released further Information, fact sheets, guidance and news on the progress of Country & State Specific Guidelines​, with the full effect of the regulations taking force this year.

Australian Government Compliance Actions

DAWR has been assessing how businesses are complying with the regulatory requirements.

They ​have initially assessed​ businesses that are importing large amounts of regulated timber, paper or wooden furniture products and are ​now assessing businesses that have volunteered for a compliance assessment as a "health check" of their due diligence practices.​

Importers may now receive letters of ​Request For Information from DAWR, which will require evidence that Due Diligence has been done when identifying the use or non-use of illegally logged timber.

​Should you receive any such request, or need to discuss further on your responsibilities, please contact please contact us.