The ACCC Report provides information about the operating performance of the container stevedores, as well as the level of competition, investment and productivity in the industry.

It also explores issues affecting the broader supply chain, including road and rail connections to container terminals.

Notable Observations:

• On average across the stevedores, total revenue per TEU fell by 2%, due to increased stevedoring competition on the east coast; the increasing use of 40′ containers rather than 20′ containers; and greater bargaining power of consolidated shipping lines.

• However, the combined operating profit margin (EBITA/revenue) of the stevedores rose 4% in 2016-17 to 17.1% (with the profitability of DP World, Patrick and Flinders Adelaide being significantly higher than Hutchison).

• Unit stevedoring revenue fell by 4.5% to $138.8 per TEU. This decline was offset by a 2% increase in non-stevedoring revenue which now accounts for some 18% of overall revenue.

• Non-stevedoring revenue has become an increasingly important source of income for the stevedores – increasing by 14.9% per TEU in the past ten years, in contrast to a 25.2% decline in unit stevedoring revenue over the same period.

• VBS revenue increased by 12.2% in 2016-17 / Storage revenue rose 16.9% in 2016-17.

• Revenue from non-stevedoring activities is likely to rise dramatically with the implementation of new and increased Infrastructure Charges by DP World and Patrick in Melbourne, Sydney, Brisbane & Fremantle.

• It is estimated that the new Infrastructure Charges will gross DP World and Patrick some $70 million per annum, which is equivalent to a 5% to 6% increase in unit revenues.

• While a justification by the stevedores for the implementation / increase in Infrastructure Charges was increasing costs, the ACCC has noted that overall unit costs for DP World and Patrick are stable.  The ACCC has noted however that the stevedores have faced, or are anticipated to face, higher property prices, government taxes and rates.

• The ACCC has noted that it would appear that the stevedores are restructuring their revenues away from the shipping lines and towards to transport sector.

• The ACCC has expressed concern that transport operators are “limited in being able to switch stevedores in response to higher prices.”

• Shipping lines may now be receiving subsidised stevedoring services as a result of the Infrastructure Charges, with the ACCC noting that “it is possible that the revenues being collected from the transport operators are simply replacing revenues that used to be collected from shipping lines.”

• The ACCC has indicated that it will fully examine the impact of the Infrastructure Charges in future monitoring Reports, and will be interested to see whether the stevedores will be able to demonstrate clear infrastructure improvements for transport operators above and beyond business-as-usual capital works.

• The lion’s share of identified future terminal investment by DP World and Patrick in 2017-18 are for quay cranes, which will benefit the waterside, rather than landside operations.

Reference: Container Transport Alliance Australia, http://mailchi.mp/6a132b95d9ea/accc-container-stevedoring-monitoring-report-2016-17-ctaa-observations

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Immigration Minister Peter Dutton has signed a Mutual Recognition Arrangement with China, in a move aimed at boosting trade between the two countries.

Mr Dutton and Minister of China Customs Yu Guangzhou signed the agreement in Canberra today, enabling the countries†customs and border protection departments to recognise each otherâ€s Authorized Economic Operator programs.

Australia already has similar arrangements with New Zealand, Korea, Canada and Hong Kong, with MRA negotiations underway with other major trading partners.

“China is our largest trading partner and this arrangement is expected to bring a benefit of $440m to Australiaâ€s economy over 10 years,” Mr Dutton said.

Picture: Kym Smith.

Minister for Immigration and Border Protection Peter Dutton and Minister of China’s Customs Yu Guangzhou signed a landmark Mutual Recognition Arrangement between Australia and China.

He said MRAs reduced the regulatory burden on Australian businesses, and would provide faster and more efficient access to the Chinese market for Australian Trusted Traders.

“This arrangement will provide Australian and Chinese businesses unprecedented access to trade facilitation benefits and will reduce costs for businesses trading between our two countries, while ensuring the integrity of our border,” Mr Dutton said.

“I encourage Australian businesses of all sizes to participate in the ATT program in order to make the most of this exciting opportunity.”

If you would like to find out how to become an Australian Trusted Trader, contact Stockwells at sales@stockwells.com.au or call 1300 786 468 and ask for Angela Gambell

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That was customs specialist and Platinum Freight Management chief executive Peter McRaeâ€s interpretation after reading the latest Australian Border Force Goods Compliance Update.

Mr McRae said the report, alongside the 2015-16 ABF annual report, showed a lack of compliance testing, making for a perfect fraud breeding ground when matched with poor regulation.

He called for improved import audits before the goods were released from Customs.

“If regulation and compliance testing was up to scratch, Scott Morrison might find the money for his budget that he so desperately needs,” Mr McRae said.

He noted the Update stated 2445 cargo reports were examined during the period from July 1, 2016 until February 28, 2017, as a result of the Compliance Monitoring Programme (CMP) which focused on cargo reporting accuracy.

Of the 2445 cargo report audits reported, the ABF found 3% of errors and only three errors in relation to value of goods imported.

Mr McRae noted an average of 306 checks a month.

“Comparing reports, it doesnâ€t take a genius to see that only hundreds of audits are being carried out on millions of imports landing each month.

“This shows the enormous opportunity for abuse of the system – and the very high chance importers have of getting away with it,” Mr McRae said.

“The Australian government is asleep at the wheel.”

“Underestimating value of goods declared might just be small petty fraud, saving shady importers hundreds of dollars on a single import, but when multiplied over a year, Australiaâ€s revenue loss from under- or uncharged duty and GST is likely to be in the high millions.”

Mr McRae also expressed concern about a failure to adequately certify and regulate cargo, with cargo reports filed by cargo reporters who were untrained, unlicensed employees of airlines and freighting firms.

“Customs compliance needs to be separated from organisational KPIs,” Mr McRae said.

“Cargo reporters working for airlines and freighting companies can be operating under KPI stress that promotes a speedy delivery of goods through the borders at a low cost to the client (the importer).

“Really, this role should be promoting accurate information to assist the correct assessment of duty and GST owed. Regulating the job would improve this.”

(Reference: Lloyd’s List Australia, Australia “bleeding revenue” through petty fraud, May 18 2017.) 

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