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Henning Harders April 2019 Newsletter

Table of Contents

Australia and Indonesia sign landmark Trade Agreement

On 4th March 2019, Australia and Indonesia signed the Indonesia-Australia Comprehensive Partnership Agreement (IA-CEPA). Indonesia is Australia’s 13th largest trading partner with two-way trade in the last financial year worth $16.8 billion. While the ASEAN Free Trade Agreement is already in force, IA-CEPA is expected to bring improved benefits to Australian exporters, with 99% of tariffs being reduced to zero from 2020. No implementation date has been set yet as both governments begin the ratification process, though more information will follow in future releases. 

Steering Committee to examine proposed biosecurity levy

The Minister for Agriculture David Littleproud has announced the chair and members of the steering committee. The budget proposed a blanket tax across all sea containers, break-bulk and bulk cargo, a move which was met with great criticism from industry. The committee will help to steer an informed delivery for the levy. Henning Harders is following the story with interest and will issue updates as they become available. 

Minister announces Border Permits Review

The Minister for Home Affairs, the Hon Peter Dutton MP, has announced that the Department of Home Affairs will commence a whole-of-government Border Permits Review into the legislative and business process requirements for border permits and associated licenses for prohibited imports and exports. The review aims to modernise and streamline international trade with a “system that is seamless, digital, automated and user-friendly.” The outcomes are expected to be reported to government by the end of December 2019.

Aluminium importer fined for Dumping Duty deception

A Sydney based fabrication company has been ordered to pay more than $67,000 in penalties and recovered duties and taxes after an ABF compliance investigation. The business imported 15 tonnes of aluminium sections from China through Thailand to evade payment of duties and taxes totalling approximately $40,000. The issued penalty notice, at an additional 75% of the short-paid duty and GST, accounts for the difference. 

Under the current compliance-based framework in which ABF operates, this is a timely reminder to all importers to review their supply chain processes to ensure compliance with their obligations. 

Please do not hesitate to contact Henning Harders Advisory Service if you have any concerns around your products or potential dumping duty complications.

Harders Advisory is a dedicated, experienced supply chain and trade consultancy. Our Job is to help clients gain a competitive advantage within their industry.

Changes to the prescription of Asbestos

From the 26th March 2019, asbestos and goods containing asbestos are prescribed as tier 1 goods under Schedule 7 of the Customs Regulations 2015. This will alter the liability offence for the importation of asbestos or asbestos products.

From 26th March 2019, a person convicted of the importation of asbestos or asbestos products will be liable for a penalty not exceeding 1000 penalty units (currently A$210,0000) or three times the value of the goods, whichever is the greater. If a body corporate is convicted of the importation of asbestos or asbestos products then the penalties are up to 5000 penalty units or 15 times the value of the goods, whichever is the greater. These penalties increase if the importation is deliberate.

As we have previously outlined, it is imperative that all importers are aware of their supply chain to ensure there is no risk of asbestos being incorporated into the manufacture or assembly of their goods to be imported into Australia. 

Differentiated examination benefit for Trusted Traders

The Australian Border Force has implemented a lighter touch at the border for all Trusted Traders and this has been automated into the department systems. Trusted Trader accredited companies will now have their ABN flagged within the departments systems to ensure a lighter touch at the border and speedier clearance through the barrier. 

Henning Harders is a Trusted Trader, however the benefits of this light touch will only be made available to importers who are also accredited Trusted Traders. If you are considering this accreditation, then we are able to assist you with the process. Please discuss the scheme with your Key Account Manager who will outline the benefits of being an Australian Trusted Trader.

Landside Logistics

Ongoing Industrial Action

It has been and will continue to be a challenging period on the waterfront around Australia with ongoing industrial action causing vessel operations to cease or delay arrivals into ports. It is our aim to provide daily updates where required on any disruptions on the waterfront. Please ensure that you read our tips on how to minimise impacts on your business during this period. 

Container Empty Parks

During the last month we saw an unprecedent amount of delays and waiting times experienced at Container Empty Parks nationally. This was extenuated by a reduction in container yard capacity, larger volumes of containers being handled and a high number of ‘re-directions’ from shipping lines to ensure empty containers are being positioned in areas to benefit the flow of exports. Empty Parks have also reduced the slot times allowing vehicles to enter premises to try to accommodate additional containers to be dropped in any given day. Our transport operators have in the past dealt with these issues internally and have ensured our customers are not affected by additional charges, however in March many have increased booking fees to accommodate ongoing delays and administration of handling the containers. We will continue to watch this space and work alongside our trucking partners in achieving efficiencies for dehiring your empty containers. We believe that in the not-too-distant future, most empty containers will be dehired at the terminals instead of a number of privately-owned container yards and parks. Many lines have already adopted this policy however at an additional cost to industry, which will need to be monitored over time.

Container Detention

Container detention continues to be a hot issue with Importers and Logistics service providers in 2019. With the delays currently at the waterfront, onshore BMSB treatments and restricting periods of free time allowed by shipping lines, we are seeing increasing number of importers being stung by large detention costs. It is becoming increasingly challenging for transport providers to manage collections and dehire within 7 days of arrival, especially when a weekend is included. This month both Easter and ANZAC fall in a two short week period. We recommend that you check with your Account Managers on the number of free days for containers to manage the month ahead. 

Container Trade

Port of Melbourne released their monthly trade report for February which showed a decrease of 7.4% throughput of imported containers. Melbourne port handled over 97,000 containers in the month compared to over 104,000 in January. 

Export containers also took a hit with a 15.3% decrease in February. It seems the only improvement was the trade in Empty Containers with a 32.7% increase of empties leaving the Port of Melbourne which may have had an impact on the Container Parks and their capacity reductions.

Chinese New Year

Due to the continued status of the market ex North East Asia (NEA), whereby vessels are not sailing to full capacity, a number of carriers are now in “repair” mode. They have commenced reducing the vessel sizes, such as Cosco, Evergreen, Yang Ming and Hyundai via the A3S service, which is the main service ex NEA. Others, like Maersk, have scheduled and notified the market of blank sailings for the next 15 weeks from Southern China, which will affect the ports of Xiamen, Nansha, Hong Kong and Yantian into Sydney, Melbourne and Brisbane.

This means that the container (teu) capacity will decrease and there will be increased competition for space.

Please plan ahead to avoid any disappointment and delays with bookings.

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