online retail logistics october 2016 - quest events · state of the game • increased and...

Online Retail Logistics –October 2016

Freight & Trade Alliance (FTA)

Regulation at the border

Travis Brooks-GarrettPartnerFreight & Trade Alliance (FTA)

FTA advocacy

• Background to the Freight & Trade Alliance initiative

• Emerging air cargo issues- Compliance …Pre-load cargo reporting … is this the solution?

- Internet Trade

- Trusted Trade Programme

• Implications of Free Trade Agreements – Hunt & Hunt

Lawyers

• ???????

• Background to the Freight & Trade Alliance initiative

• Emerging air cargo issues- Compliance …Pre-load cargo reporting … is this the solution?

- Internet Trade

- Trusted Trade Programme

• Implications of Free Trade Agreements – Hunt & Hunt

Lawyers

• ???????FTA – 245 Business Members including:Target, Super Retail Group, Toshiba, Myer, Pacific Brands, Pfizer, Boehringer Ingleheim, Novartis etc

APSA Members:Anchor LogisticsAsaleo Care LimitedAusfine Foods International Australian Cotton Shippers AssociationAustralian International Movers AssociationAustralian PaperBarrett Burston Malting Bega Cheese LtdCargill Australia LimitedCycle Link Australia Enirgi Metal Group H.W.Greenham & Sons KotahiManildra GroupMessor Grain Murray Goulburn Cooperative Pro Kinetics (Aust.) Riordan Grain ServicesSunriceTatura Milk IndustriesValley Pack Visy IndustriesWarranambool Cheese & Butter Factory

• Powerful advocacy body• Inter-membership partnership & networking• Freight and Trade Community

FTA advocacy

International Trade Sector Reforms

1. State of the Game

2. Border Agencies & Regulators

• Australian Trusted Trader & MRAs

• Changes to the treatment of low-value goods (HVLV; LVT; GST

vendor collection; levying GST on LVG)

• Outturns/delivery without authority

3. Logistics risks/events

State of the Game

• Increased and Increasing Volumes

During 2014-15 CAPEC members transported into Australia 8.8 million low value consignments.

1 week of sample data. 129,000 consignments; 73 per cent of consignments destined for businesses had a

value under A$300

• Increased compliance activity due to the threats of terrorism & international

crime

• Declining people resources for intervention/regulation, while contemporary

models for managing the border (technology and big data) exist

• Increased Customs to Customs dialogue, driven by the WCO

• Revenue models that reflect contemporary needs

Australian Trusted Trader

• Build best practice capability into organisations through the application of the principles of the SAFE Framework, the WCO Risk Management Compendium, the ATT Rule and other Standards such as ISO 9001 (quality), 31000 (risk), 28002 (supply chain security) and 27001 (information security).

• Increased regulatory requirements and security checks = differentiated intervention

• 30% trade volume, 50% of trade value

• 300 waiting accreditation

• Shift from traders only to service providers

• Is it mandatory to become a Trusted Trader service provider if you are working with a Trusted Trader?

• Joint validation with other agencies

Reference https://www.legislation.gov.au/Details/F2015L01478

https://www.legislation.gov.au/Details/F2015L01478

Are you trusted?

• The Australian Trusted Trader is currently in pilot phase but will be open to all participants from July 1

• Regime of self-regulation for “Trusted” supply chain participants

• Programme focus on international traders but also service providers (freight forwarders, customs brokers, CTOs, transport operators, etc.)

• Australian Government target:

30% of Australian trade volumes under Trusted Trader40% of Australian trade value under Trusted Traer

• Current pilot participants include Pacific Brands, IKEA, DB Schenker, Geodis Wilson, Myer, Target

The market will split into two:

Trusted Traders and non-Trusted Traders

Predictions and Possible Future Developments:

• Trusted Traders who are importers/exporters will prefer to deal with Service Providers who are also Trusted Traders. Ikea has already made this a requirement in a recent Request for Tender.

• Trusted Traders will experience “differentiated” (read: reduced) intervention, while Government resources will still be assigned to non-Trusted Trader entities

• Other benefits will be introduced to service providers including Streamlined Reporting (where a Freight Forwarder/Customs Broker can report periodically instead of on a transaction-by-transaction basis)

• Similar regulatory reforms are currently underway with “known consignor” (Office of Transport Security) and Approved Arrangements (Department of Agriculture and Water Resources)

THIS REPRESENTS A SIGNIFICANT CHANGE TO THE STATUS QUO!!!!!!!!!!!!!!!!!!!

State of the Game

CURRENT SITUATION

Reference https://www.border.gov.au/Customsnotices/Documents/acbpn201356newobligationsoncustomsdepotandwarehouselicenceholders_001.pdf

GST Collection from an offshore vendor

Government is focusing on digital transaction, under current rulings no impact on freight side

Abolishment of the LVT for commercial purposes

Vendor has meet the minimum turnover threshold for GST registration in Australia ($75,000)

https://www.border.gov.au/Customsnotices/Documents/acbpn201356newobligationsoncustomsdepotandwarehouselicenceholders_001.pdf

High Volume Low Value


Report at Master Bill level for under LVT

Changed when the LVT was increased from $250 to $1,000 (2005) . 11 year anniversary today!

Stated in the 90’s

Pumpkin Patch were one of the first to package up air freight containers full of individually consigned shipment of children’s clothing to Australian customers – before the Internet really kicked off this was mainly via mail-order.

In those days the low value threshold was A$250 with duty and sales tax under $50 to be “screen free” (a term for Customs release of goods without the need for a formal declaration).

The benefit of this at the time was that a whole aircraft container of goods could arrive and in effect, be exempt of Australian taxes based on the logistics model.

In 2005, things changed with the implementation of the Integrated Cargo System (ICS) with the low value threshold rising to A$1000. Coinciding with this change was the concept of Self Assessment Clearance (SAC) whereby industry had to make the threshold self- assessment.


HVLV


Low value cargo means each consignment must have a value of less than $1000 and therefore not subject to entry requirements (Regulation 31AC of the Customs Regulation 1926).

Such low value consignments comprise of consignments from a particular mail order house.

A mail order house is defined in section 63A of the Act as a commercial establishment carrying on business outside Australia that sells goods solely in response to orders placed with it, either by mail or electronic means.


HVLV- barrier to entry


3 months, during which reports (at a House Bill level) must be provided

Systems to pull data and report to Customs via the ICS- $100,000 (according to one member)


Crack Down on E-Commerce


$8k for any parcels released without clearance

Last financial year fines totalled $1 063 350 for deliveries without authority Sec 33(6) Customs Act 1901- Moving, altering or interfering with goods subject to Customs control without authority

- Refer June Compliance Report page 14 http://www.border.gov.au/Busi/Comp/Comp/Comp .


http://www.border.gov.au/Busi/Comp/Comp/Comp

Other items of note

• Drones (CASA and NTC)

• Automated Vehicles

• Future consideration in FTA’s and trade facilitation

• Sea Freight Risks

• Block Chain (network of computers holding synchronised copies of information), CBA executed their first full paperless trade finance transaction (LC, ownership documents changing hands), with an agri-exporter.

THANK YOU