Friday 22nd Sep, 2017

INDUSTRY OPINION: Inland ports seeking formal designation

Photo: Cameron Boggs
Photo: Cameron Boggs

FOR the last 12 months, Freight & Trade Alliance (FTA) has provided input into work by the Department of Immigration and Border Protection (DIBP) looking at assigning our intermodal facilities formal designations as “inland ports”, as defined under Section 15 of the Customs Act 1901. To date there are no inland port facilities, other than gazetted airports.

The work is being supported by a multi-agency working group, including representatives from the Department of Agriculture and Water Resources (DAWR) and representatives from the Department of Infrastructure and Regional Development (DIIRD).

Currently, intermodal facilities are covered under Section 77G of the Customs Act 1901, defined as depots, and are subject to strict licensing requirements. For the movement of cargo to these facilities, the system already has considerable flexibility, where uncleared cargo is moved via an under-bond movement in the Integrated Cargo System (ICS) to the nominated establishment.

So what changes are being proposed by industry?

Stevedores, logistics service providers and shippers have submitted proposals to push the first point of customs and biosecurity intervention to the inland port.  In an ideal world, this is imagined as one continuous movement, where the container is lifted from the box to the vessel, to the wharf, to the train, to the nominated facility, where it can be treated by the border agencies, if required. There is no doubt that this would provide significant transport productivity dividends, reducing wharf dwell time and unlocking capacity.

The obvious risk is how and when the risk is treated, particularly if the cargo report or the customs declaration are not presented in a timely manner. Late cargo reporting remains a major issue faced by DIBP and DAWR. If a container is identified as a border risk and needs to be taken to the Cargo Examination Facility (CEF) at the port, stopping the train and returning the container to the wharf for examination is not going to be an easy task. Early reporting, or the enforcement of pre-load reporting, could solve this issue, and theoretically all containers could be pre-cleared, but it would take a significant shift in industry practice.

Biosecurity, as ever, remains a significant risk, particularly for proposed inland ports in regional areas. The threat of Giant African Snail (GAS) and other pests remains real and the movement of untreated containers through these areas on rail is still regarded by DAWR as an unacceptable risk.

Moving the CEF facilities to the inland ports is also challenging, requiring a decentralisation of customs resources, and potentially the need for more border officers, at a time when additional resources are simply not available. The number of new intermodal facilities – Moorebank, Enfield, Sommerton, Dandenong South, etc. – would also require Customs to “pick winners”, unless the facilities would be open to subsidising the onsite Customs resources. Adapting new technology, and automating these processes, may provide the solutions to this challenge

Understandably, shipping lines are very supportive of inland port concepts, particularly where the inland facilities are listed as the Final Discharge Ports on the Bills of Lading. This would deliver significant benefits to the shipping lines, giving them control of costs and services to this end point.

The Australian Trusted Trader may be the dark horse solution to this problem, where several streamlined arrangements are currently being considered.

If all the containers destined for an “inland port” are Trusted Traders, then why would intervention be needed? It’s a fair question. The assumption should be made that these containers would not be subject to the same level of intervention as non-trusted traders. “Differentiated intervention” is a term that has been used widely in this context. It is easy to see how it could address the risk of moving customs intervention away from the wharf, if all of the shippers involved are accredited under the scheme.

DIBP is working to deliver a broad trade modernisation agenda, including looking at the modernisation of ports. DIBP welcomes industry’s views and feedback on this important work.

With the “freight on rail” movement more active than ever, technology delivering new solutions and with the Australian Trusted Trader creating a climate conducive to innovation and change, now is the perfect time to explore these reforms.

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