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Russell, Llew --- "Australia looks at the possibility of an alternative cargo reporting regime" [2007] MarStudies 16; (2007) 154 Maritime Studies 24

• Australia looks at the possibility of an alternative cargo reporting regime

Australia looks at the possibility of an alternative cargo reporting regime

Llew Russell^[1]

The European Union has developed proposals for an alternative cargo reporting regime to be introduced on 1 July 2009 that involves cargo destined for Europe to be reported 24 hours before loading, and the US is currently considering a major expansion of its current 24 hour prior to loading reporting regime. Canada has a similar system to the current US regulatory regime and other countries are closely watching these developments.

What about Australia? Between 5 and 25 March this year, three senior representatives of the Australian Customs Service visited Singapore, Brussels, London, Southampton, New York, Washington and Los Angeles to investigate the impact of the existing North American regimes, gauge reaction to the EU proposals, gather views on the new US proposals and on Australia moving down this path of reporting prior to loading. The CEO of Shipping Australia was invited to join the delegation and did so for the meetings held in Brussels, London and Southampton and in the USA excluding those meetings with UK and US Customs officials.

The fact that Shipping Australia was invited to be a part of the study tour speaks volumes for the willingness of the Australian Customs Service to involve industry at such an early stage of this investigation to ensure that Customs is aware of potential practical difficulties and possible barriers if a decision is made to proceed with this project. Mr Steve Morris from the Customs Brokers and Forwarders Council of Australia joined the delegation in Washington along with Mr Paul Zalai, the Freight and Operations Manager of CBFCA who also travelled with the delegation to Los Angeles.

The delegation met ocean carrier representatives and their associations, freight forwarding associations and a freight forwarder, IT companies involved in trade data, Customs Brokers and Forwarders Associations, shipper councils and associations, World Customs Organisation, Port of Los Angeles Authority and the Eagle Marine Services Container Terminal as well as the restricted meetings between ACS and representatives of the British and American Customs Services. (Refer to Box 1)

There are many details yet to be considered before a decision could be made to adopt pre-load reporting in Australia. This will rely on clearer details about costs and benefits. Ease of compliance for industry and outcomes for border security will be important considerations.

Carrier representatives and their organisations are very supportive of pre-load reporting the world over and will continue to push for such regulatory regimes to be introduced that are hopefully identical or very similar to the US system. This support is based on the potential to significantly enhance logistics systems, including ship planning and scheduling particularly in the exporting countries.

While the Australian examination of pre-load reporting continues, the EU proposal for a Authorised Economic Operator Programme which essentially involves enhancing security arrangements right though a supply chain is presently scheduled to be introduced from 1 January 2008 for cargo entering and leaving the EU and the prior-to-load reporting scheme is currently scheduled to be introduced from 1 July 2009. The EU approach is significantly different from the current regime that applies in the US. The US has had almost five years experience in implementing their regime. The concern with the EU proposal is that it does not facilitate the filing of data currently held by freight forwarders where they wish to file that data direct and not via a carrier. It was clear that there were other benefits associated with the EU proposal, in particular the upgrading of electronic transmission of such data in the EU, enhancing the collection of revenue and actively combating the potential import of counterfeit goods into Europe. It was clear to the delegation that there were still differing views between the 27 member states in terms of the detail involved in implementing the EU proposals.

The US is currently considering expanding its cargo reporting regime to include trade data prior to the loading of containers on vessels in addition to the information normally provided by carriers.

The American Customs proposal for advanced trade data elements rose out of the recognition by Congress of the need for more robust security targeting and thus they passed the SAFE Port Act. That Act included the provision that required the electronic transmission of additional data elements to US Customs to improve high-risk targeting including appropriate elements of entry data. This proposal became known as the 10+2 proposal.

In addition, carriers under this proposal will be requested to provide container status messages e.g. reporting container terminal movements and to report the change of status of containers, for example, from empty to full. It is proposed that the data elements from these messages will provide US Customs with additional transparency into the custodial environment through which inter-modal containers are handled and transported before arrival and after unloading in the US. Clarification is still being sought on precisely what information will be required in these messages.

In relation to the 10 trade elements, a sub committee of the Advisory Committee for Commercial Operation of Customs and Border Protection and Related Agencies, known as COAC, had made a number of comments and sought clarification regarding a number of issues associated with this proposal including, for example, the comment that the final regulations should define transactions exempt from the security filing including, but not limited to, freight onboard and cargo to be re-exported as well as the containers themselves, pallets etc. Importantly the COAC has asked US Customs to complete a cost-benefit feasibility study and report, as recommended in the SAFE Port Act before the final rule is published.

In addition, a US shippers representative body, the National Industrial Transportation League, has written to US Customs supporting the direction and objectives behind the 10+2 proposal but raising concerns with a number of the proposed data elements, particularly from the perspective of importers currently not having the information required such as the container stuffing location for consolidated containers or less than full container loads. Providing information of the consolidator’s name and address would require, for example, significant changes for the US importer. Of particular concern was the manufacturer’s name and address as this could be impossible to obtain in situations where an overseas supplier is not the actual manufacturer but merely a distributor, wholesaler or broker of the goods. In addition, an importer may deal with a manufacturer who operates multiple manufacturing facilities at different locations. It is clear that there is still a large number of details regarding the 10+2 proposal that have to be resolved if it is going to work effectively.

Importantly, other countries are considering the introduction of pre-reporting prior to loading and Australia must be ready to accept this new worldwide regime as it evolves.

It should be noted that the United States is also proposing to amend their current cargo reporting regime to provide for more details of the notifying party on Ocean Bills of Lading. It is understood that these new details will have to be provided by carriers 24 hours before loading in Australia, for example, as from the beginning of next year.

What is exciting from Shipping Australia’s perspective is the potential for pre-clearance of cargo before arrival in Australia if there was a scheme for deferral of duty, for example, based on an Accredited Clients Scheme. This will deliver a much greater degree of certainly for service providers in Australia and could eventually lead to the increased use of rail transport and less road transport as a result of more efficient utilisation of trucks.

Shipping Australia will continue to work closely with Australian Customs and with the Government to push for internationally consistent approaches to cargo reporting through the alternative cargo reporting project.

^[1] Llew Russell is the Chief Executive Officer of Shipping Australia Limited, phone (02) 9266 9903, email lrussell@shippingaustralia.com.au. Web site www.shippingaustralia.com.au.