In May 2002 the government announced the ‘Protecting Our Borders’ program to help control illegal movement of people and goods while at the same time ensuring law-abiding citizens and traders suffer minimal disruption. Since this time container x-ray has become an accepted and integral element of the logistics chain.
Why container x-ray is important and necessary?
Container x-rays improve the Australian Border Force (ABF) capacity to detect prohibited goods, including illicit drugs and illegal firearms that may be illegally shipped in containers. They also help identify non-compliance with import and export requirements. The container selection process is not random. Selection is intelligence driven and based on risk. Current container examination facilities (CEF) operations indicate the number of imported containers subject to x-ray is approximately 101,500 TEU and physically examine around 14,000 TEU each year.
Where are CEFs currently located?
The four major CEFs are located in Sydney, Melbourne, Brisbane and Fremantle. These facilities house container x-ray machines capable of x-raying up to four sea cargo containers at a single time. There are also smaller CEF’s in Adelaide, Newcastle, Darwin, Launceston and Townsville. CEFs allow ABF to inspect a significant amount of cargo coming into Australia.
The Container Selection and Inspection Process screens and risk assesses all import and export cargo and will select around 7% of loaded import containers for inspection at the CEFs. Empty containers and export cargo are inspected where there is an identified need to do so and of all of these containers approximately 10% are subject to further examination based on the analysis of X-ray images.
Critical components of the process
In accordance with the Customs Act, ABF require a cargo reporter to report all goods that they have arranged to be carried to Australia 48 hours prior to vessel arrival in most cases. Late reporting means the inspection process may commence late, take longer and this may result in additional storage and related costs from container terminal operator(s).
Who is responsible for cargo reporting to ABF?
The shipping company and sub manifest reporter is responsible for reporting the contents of each container. As container examination is intelligence driven, detailed information is critical to process outcomes.
CTOs currently provide three days free storage for containers once they are declared available after discharge of the vessel. ABF endeavours to return all containers from the CEFs so that it can be collected without the importer incurring storage charges, however, this is not always possible due to a variety of regulatory and CTO requirements.
While time slots can be booked in the CTO’s vehicle booking system prior to the cargo being cleared by ABF, it is a commercial reality that this process is dependent upon booking container receival slots in advance. Where slot bookings are made prior to ABF release to try and facilitate a speedy cargo turnaround, you become exposed to additional costs occurred from the cancellation of the slot time and subsequent cascading costs involving both transportation and labour time.
Understanding the challenges experienced by your logistics solution provider
Your logistics solution provider has no control over the compounding effects of the sea cargo logistics chain when CEF intervention occurs. This chain is complex and requires as far as possible integration of regulatory agencies, CTOs and all other parties involved in the cargo logistics delivery chain.
The links within the logistics chain include:
- Predictability in ABF container release
- Vehicle booking system time slots availability
- Transport and importer availability
- CTO operational patterns
- ABF – CEF’s operational patterns
It only takes one of these links to become out of step to disrupt the entire cargo logistics delivery chain process. Many of these issues are outside the control of, and are not the direct responsibility of, your logistics solution provider. As such additional costs involved are a result of government policy and CEF intervention and unfortunately will be to the importers account.
What is the impact on your business?
Delays gaining access to cargo, the possibility of extra storage and subsequent CTO and transportation charges could be incurred for the reasons explained within this article.
While ABF and their contracted service providers should exercise appropriate care for all cargo, it is good business practice to ensure you have arranged for the appropriate packing and insurance of goods. Any claims for damages and storage, where there is evidence to suggest this has arisen as a result of the CEF activities should be directed to the Compliments and Complaints to ABF or their sub contractor’s liability.
What can importers do?
As the challenges involved with the CEF process have arisen from government policy there is little that can be done to avoid the issues detailed. You can however, take note of the possibility of ABF CEF intervention as part of your normal operations and liaise carefully with your logistics service provider who will continue to facilitate your cargo release and communicate with you throughout the CEF process.
An option available for importers is to consider becoming an Australian Trusted Trader which is a voluntary trade facilitation initiative. It recognises businesses with a secure supply chain and compliant trade practices, rewarding accredited businesses with a range of trade facilitation benefits including priority trade service, a lighter touch at the border, access to dedicated Account Manager, consolidated cargo clearance, monthly cargo reports etc. Perhaps ABF may provide more predictability of sea cargo status at the border as part of their commitment to provide priority treatment of goods at the border to benefit Australian Trusted Traders.
The CBFCA has been actively involved in Container and Cargo Examination Facilities related issues since the start of CEF operations in 2002 and has worked on behalf of its members with ABF to review the concerns relating to delays in cargo release and the impact on the trading community since the introduction of the CEFs.
Industry will be aware of the ABF investigation by the Commonwealth Ombudsman (Ombudsman) into delays in processing inbound containerised sea cargo. The CBFCA had a number of meetings with the Ombudsman during the course of the investigation to address the issues experienced by members and their clients when long border hold delays were experienced.
The Ombudsman report has been released and lists a total of 10 recommendations which address many of the concerns members have in regards staffing levels, processing times, infrastructure, the ability for clear communication and a clearly detailed compensation process. It will be interesting to see if ABF will progress on any of the recommendations highlighted in the Ombudsman report.
It has become evident that to achieve an operationally viable practice on behalf of the trading community, an increase in public awareness of the associated issues and subsequently an increase in pressure on relevant stakeholders to ensure predictability in container release and continuous process improvement is necessary.
These challenges in the border clearance process are a result of the intervention of the ABF CEF process and the inherent lack of predictability in container release. These requirements are outside the control of your logistics solution provider and are the direct result of government policy. The additional costs created from the compounding effects of CEF intervention are NOT as a result of or indeed the responsibility of your logistics solution provider.
* Paul Damkjaer is chief executive officer, CBFCA