Paul Zalai

The Customs Brokers and Forwarders Council of Australia Inc (CBFCA) has made a request to Customs to review existing Integrated Cargo System (ICS) functionality to achieve improvements in cargo reporting and to reduce incidents of late targeting. The CBFCA understands that Customs is increasingly using the import declaration for its border risk assessment, and not just for commercial/revenue collection purposes. The problem with this is that the current systems and business processes do not adequately match this requirement.

As a result, CBFCA and Customs representatives met in Canberra on 25 February to discuss a range of issues pertaining to targeting, risk assessment and examination of import sea freight, and this was followed up with another meeting between the parties in Sydney on 3 March 2008.

Cargo reporting compliance
Customs have indicated that cargo reporting compliance activities may increase in line with the ‘CEOs Customs Compliance Statement 2007 -2008’.

The CBFCA outlined the many causes for late cargo reporting, including :
1. The difficulty to access voyage number data used by the principal shipping line in reporting to the ICS. Visibility of voyage number data through the IAR reference file needs more work to be done to make it more accessible and to be more user-friendly (perhaps in an excel format) as well as integrated into third-party software applications.
2. Forwarders lodge voyage number data in line with ‘what they have’, if it is incorrect, they need to withdraw and re-report the cargo report. Similarly, forwarders often have to make other adjustments to cargo reports in order to overcome ICS inadequacies due to the incorrect posting of cargo report data by a higher level forwarder or shipping line. Customs have limited ability to differentiate between a ‘late report’ and a ‘re-report’.
3. ‘Reasonableness’ of using the original Impending Arrival Report (IAR) or Estimated Time of Arrival (ETA) as the basis for calculating timeliness of reporting compliance. An ‘actual’ ETA, or amended IAR date may be more appropriate.
4. The difficulty to access transhipment vessel data – the data feeds from some shipping lines lack accuracy and are not always provided in a timely manner.
5. Late or incomplete documents from overseas agents and local customers.
6. Errors or laziness on behalf of the forwarder. While this ‘may’ occur, this is the only cause by which escalation and application of the Infringement Notice Scheme (INS) and penalties would have a possible direct impact in improving.

The CBFCA suggested that if increased cargo reporting compliance can be achieved, then an opportunity exists for the import declaration to be lodged early and match to the cargo report. Another impediment to lodging early import declarations is the difficulty in ascertaining the Value of Taxable Income (VoTI) as obtaining relevant data from shipping lines is not always achievable in a timely manner.

The CBFCA stressed that assuming that an environment with minimal Customs/systems impediments were to exist, then the next issues would need resolution:

1. How long a screening period does Customs really need once this full provision of data is provided?
2. How would amendments to the cargo report or import declarations be treated (particularly ‘non-critical’ data fields)?

‘Certain Status’
The CBFCA explained how the predictability and timeliness of cargo release is essential in order to deal with increasing import container volumes, terminal congestion, vehicle booking slots (VBS), etc.

The CBFCA stated that depending on the answers to these questions above, it is quite possible that the CBFCA would support a model whereby an ICS release is only transmitted after an agreed screening period (which would commence after the receipt of the cargo report AND import declaration). Importantly, this would overcome the situation of Customs issuing a release and then later targeting a consignment with CEF intervention.

Delays at container examination facilities (CEF)
The CBFCA highlighted the difficulties experienced by delays in CEF processing in obtaining VBS and co-ordinating downstream logistics issues. A particular focus was placed on delays experienced at the Sydney CEF during December 2007 and at other Australian ports (the latter primarily resulting from congestion of end-of-week vessel arrivals and freight availability).

The CBFCA highlighted its proposals as referenced to the New South Wales
Government’s Independent Pricing and Regulatory Tribunal (IPART):
1. To have stevedores supply three (3) days of availability from the time that the container is cleared by Customs and physically available at the terminal.
2. For Customs to work extended hours and/or night shifts to minimise disruption of operations during peak periods.

Compensation
Customs stated that it will review the formal ‘Complaints & Compliments’ process to provide an improved mechanism to measure CEF performance. The CBFCA also requested that a formal process be introduced to facilitate the supply of data to assist in identifying the cause(s) of delay and claiming of the recovery of costs.

For further information please contact Paul Zalai, manager, freight and business operations at pzalai@cbfca.com.au or visit www.cbfca.com.au.

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