Sunday 18th Nov, 2018

INDUSTRY OPINION: Import cargo reporting system to evolve to address security risk

Photo: New Zealand Customs Service
Photo: New Zealand Customs Service

FREIGHT & Trade Alliance (FTA), the Australian Peak Shippers Association (APSA) and ICHCA Australia brought the world’s experts on international trade to Melbourne between 8 and 11 May 2018 as a part of the Global Shippers Forum and ICHCA International Conference.

Importantly, as a part of discussions on trade facilitation and security, it appears the event may be the catalyst for much needed domestic regulatory reform.

Global Cargo Reporting Models

Day 1 of the conference featured Ana Hinojosa, director compliance and trade facilitation World Customs Organisation outlining the benefits of pre-load cargo reporting solutions, focussing on the guidance of advance cargo information and its alignment to the latest update on the SAFE Framework of Standards and Tools.

A 24-hour preloading requirement for manifesting goods headed to the US from the last port of departure has been in place for many years and has been replicated by many other customs authorities, most recently South Africa and next being China effective from 1 June 2018.

The expectation is by providing cargo information before loading, regulators can make an early assessment on the border and biosecurity risk of goods and expedite release on arrival.

Australian Cargo Reporting Model

During the 1990s, Australia led the world by moving from post-arrival cargo reporting of sea cargo manifests and air waybills to pre-arrival automation systems. Those legacy systems were replaced on 12 October 2005 with the Integrated Cargo System (ICS).

The associated legislation (Section 64AB of the Customs Act 1901) requires each cargo report to be submitted at least 48 hours prior to arrival of the importing vessel at the first Australian port and two hours prior to arrival of the importing aircraft at the first Australian airport.

One of the many flaws of the initial ICS design was (and remains) the inflexible nature of the cargo report with the inability to amend “consignment key” data.

While a freight forwarder may have ocean Bill of Lading data well in advance of arrival into Australia, they may not know transhipment details including the actual import vessel and voyage preventing early cargo reporting.

FTA has requested enhancement to the ICS to allow freight forwarders the ability to report early and to be able to simply amend any consignment key data such as vessel and voyage. This request has been declined due to complexity of ICS cargo reporting design. The result of this design flaw and other factors mean Australian freight forwarders remain exposed to being non-compliant with Section 64AB and face the threat of significant financial penalties.

Time for reform

Day 2 of the conference brought a whole new dimension to the topic bringing into perspective security implications.

Sachi Wimmer, executive director transport security, explained the alignment of border and transport security functions within the new Department of Home Affairs with a focus on combatting terrorism. New proposed measures include the advance supply and assessment of cargo data before overseas departure to ensure the security and safety of passenger aircraft which transport the majority of airfreight to Australia.

This is surely the long awaited “game-changer” and the catalyst that means we will move away from a patch-work system with pre-arrival reporting requirements to a pre-load cargo reporting model.

We have stagnated in terms of systems and process design over the last two decades and now find ourselves where we desperately need to focus on trade modernisation to catch up with global best practices.

A pre-load cargo reporting model is the only way to ensure that industry will meet 100% compliance. The reform is simple – if the cargo is not reported, it does not get loaded for export to our shores.

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