Home' MHD Supply Chain Solutions : MHD Mar-Apl 2017 Contents ON THE BORDER
IN HIS REGULAR COLUMN, DIRECTOR OF THE
FREIGHT & TRADE ALLIANCE (FTA) PAUL ZALAI
COMMENTS ON CARGO REPORTING COMPLIANCE
AND THE NEED FOR REFORM
What is a cargo report?
Most importers use the services of a licensed
customs broker to complete the import
declarations and will be familiar with this form of
reporting to complete payment of duty, GST and
import processing charges.
Importers may not be aware that separate
statutory reporting is also required for each
import consignment. Shipping lines, airlines
and freight forwarders must provide a ‘cargo
report’ and in the case of consolidated cargo or
where wholesale arrangements exist, a series of
‘cascading’ cargo reports are also required.
This process is a largely a hangover from
decades of customs reporting requirements. Up
until the early 1980s, shipping lines would lodge
with customs manifests itemising each Bill of
Lading and airlines would lodge paper air waybills.
During the 1990s these processes were replaced
by electronic reporting systems known as Air
Cargo Automation and Sea Cargo Automation.
These systems were replaced on 12 October
2005 with the introduction of the Integrated
Cargo System (ICS), which remains in use today.
Why is the cargo report important?
The Australian Border Force (ABF) uses the
cargo report to:
1. Provide a list of all cargo on board a
vessel or aircraft, providing a frame work
for reconciliation to import declarations to
create a ‘single status’ required to generate a
release of cargo.
2. Provide base information to allow the ABF to
commence their profiling and risk assessment
of import cargo.
Section 64AB of the Customs Act 1901
prescribes timeframes for cargo reports to be
lodged prior to the aircraft or vessel arrival at
the first Australian airport or port. Failure to
meet these timeframes can result in shipping
lines, airlines or freight forwarders being
subject to significant financial penalties via an
It comes as no surprise that the ABF has
outlined timeliness and accuracy of cargo reporting
in recent goods compliance updates as focus areas
as this aligns with efforts to target weaknesses in
the existing border control framework.
Challenges faced by
Over recent years, industry across the board
remains 90-95% compliant in terms of timely
There are various reasons why freight
forwarders fall short of achieving 100%
compliance. Delays are commonly caused by
human error, systems failures and/or lack of
timely receipt of data from overseas agents.
Freight & Trade Alliance has been working
closely with the ABF and we are pleased to
report that freight forwarders will soon have
online access to reporting tools to be able to
self-assess compliance performance to identify
and initiate remedial action. We hope to be in
a position very soon to report more detail about
While this is positive news, fundamental
changes are still required to ICS functionality.
Currently any change to ‘consignment key’
data (vessel, voyage, container no, master air
waybill, house air waybill and house bill of
lading) requires a cargo report to be cancelled
We remain of the view that the ICS should
allow these data fields to be simply amended.
We believe that a major underlying reason for
the ABF resisting our proposal is that it would
be too difficult to enhance the ICS - therefore
we must live with ‘workarounds’.
We have provided extensive details to the
ABF that freight forwarders commonly withhold
their ICS cargo report transmission until they
have confirmation of import vessel and voyage
data. This, in turn, delays the timing of the cargo
report as, increasingly, import cargo is being
transhipped via intermediary ports.
It is common for freight forwarders to have
had an ocean bill of lading available weeks
prior to the estimated time of destination. The
cargo report will be held back by the freight
forwarder as the cargo may be transhipped and
import vessel and exact voyage number details
are unknown. Further complicating matters
is when the first port of arrival for the import
vessel is Fremantle before making its way to
the Australian east coast. Statutory provisions
mandate that the cargo report details be
provided at least 48 hours prior to arrival of the
first port (not the port of discharge).
Instead of providing a cargo report well in
advance of arrival, albeit with the knowledge of
having to amend import vessel and voyage data
once confirmed, the freight forwarder will find
themselves in a position of failing to comply with
legislative requirements by waiting until import
vessel details were confirmed.
A need for further reform
So what is the way forward?
In partnership with the Australian
International Movers Association (AIMA), FTA
has been advocating the merits of introducing
a US style ‘pre-load’ model, proposing that
all cargo reporting must be completed before
cargo is loaded for a vessel or aircraft destined
We acknowledge that this would be a major
reform and in fact was rejected back in 2007
after investigation by a working group involving
both industry and government representatives.
Since this time many other customs’
administrations have implemented a pre-load
model meaning that in the contemporary
operating environment, implementing ‘do
not load’ requirements for incomplete cargo
reporting at overseas ports would align with
other global practices.
While we are seeing some systems
functionality improvements, the only way
that the ABF can rest assured that it will
receive 100% timely cargo reporting by freight
forwarders is to follow a global trend and
implement a ‘pre-load’ model.
FTA is an advocate for the Australian freight
and trade sectors. For more information email
pzalai@FTAlliance.com.au or visit
“Delays are commonly caused by human error,
systems failures, and/or lack of timely receipt of
data from overseas agents.”
MHD SUPPLY CHAIN SOLUTIONS — MARCH / APRIL 2017
THE LAST WORD
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