A recent US Transport Security Administration (TSA) revaluation of the air cargo security arrangements Australia has in place for exports to the USA has found that they do not meet US requirementsThe TSA has advised that Australia will need to screen 100% of export cargo carried on passenger aircraft to the US at piece level, in order to meet US requirements.

Delays expected

Delays expected

At this stage there is only a very limited capacity in Australia to screen and inspect every piece of every shipment that is tendered to the airlines for uplift to the USA, prior to being loaded on board an aircraft.

Australian Government’s Office of Transport Security (OTS) is working to quickly implement a two part strategy in cooperation with industry to meet these requirements, including:

1)      Allowing approved industry participants to examine air cargo off airport and

2)      Establishing a Known Consignor scheme.

The implementation deadline to comply with the USA regulations is 31st July 2015 – we do not expect that full industry wide arrangements to comply with the US regulations will be in place by that date.

What’s next?

We await advice from the Government OTS on its expectations of the Australian aircargo industry to address the issue of the available resources for screening of aircargo to USA.

As a consequence of the rushed application of these regulations, we foresee significant issues including:

  • Delays and costs in the immediate & longer term
  • Airline & airfreight terminals will be required to invest in new screening equipment and resourcing
  • Significant cargo congestion will be experienced at most Australian airports, with corresponding delays in uplift of cargo
  • At peak times there will be Airline cargo terminal space issues
  • Earlier receival cut-off times will be implemented for freight acceptance at airline and airfreight terminals
  • We expect that a new level of fees will be introduced to cover the costs associated with the application of these USA regulations
  • Confusion & chaos….

 

The application of any interim and long term solution will have an impact on exporters moving their product to the USA via airfreight.

Magellan’s priority at this stage is to find the best “work around” solution to minimise the impact on our customer’s aircargo moving to the USA.

If you would like more information, please contact our office on 1300 651 888 (Aus) or (09) 974 4818 (NZ) or via email on info@maglog.com.au

Chafta

The long awaited agreement is expected to open the vast Chinese market for Australian products and services.

 

 

 

 

 

 

 

 

 

The China–Australia Free Trade Agreement (ChAFTA) is a bilateral Free Trade Agreement (FTA) between the governments of Australia and China.  Since the announcement of a joint feasibility study in early 2005, 21 negotiating rounds have been completed and the announcement of the conclusion of negotiations was made by Australia’s Prime Minister Tony Abbott and Chinese President Xi Jinping on 17th November 2014.

The long-awaited agreement was signed by Trade Minister Andrew Robb and Chinese Commerce Minister Gao Hucheng last Wednesday in Canberra.  The agreement is expected to open the vast Chinese market for Australian investment, primary products and services.

The agreement will ensure 85 per cent of all Australian exports will enter China tariff-free, rising to 93 per cent within four years and 95 per cent when it is in full force.

China is Australia’s largest trading partner, with the two-way flow of goods and services exceeding $160 billion last year.

Now that both sides have completed the legal review and translation of the text of the Agreement the signature of the Agreement;

What happens next…

  • The text of the Agreement, accompanied by a National Interest Analysis, will then be tabled in the Australian Parliament for 20 joint sitting days;
  • Following tabling, the Joint Standing Committee on Treaties (JSCOT) will conduct an inquiry into the Agreement and will report back to Parliament;
  • Legislation will be introduced to make any necessary amendments to existing legislation and will be considered by the Parliament;
  • Relevant Regulations would also be amended in due course;
  • During this time, the Chinese Government will undertake its own domestic treaty-making processes;
  • When Australia and China have completed their domestic processes, both countries will exchange diplomatic notes to certify that they are ready for the Agreement to enter into force;
  • 30 days after this exchange or on a date otherwise agreed, ChAFTA will enter into force.

Because it is expected that the above processes will take some time, the agreement is not anticipated to take effect until sometime in early 2016.

If there is any further specific detail required please contact Jeff Kershaw on 0418 543 994 or by email on Jeff@maglog.com.au.

 

 

Tags: , , , ,
Posted in FTA by magellan_logistics. No Comments

Magellan Logistics New Zealand Limited has officially opened it’s doors in Auckland, with Paul Knight appointed as Magellan’s New Zealand Manager.

Paul has over 30 years experience in the logistics and transportation industries in both New Zealand and internationally.

Paul’s experience covers a wide range of business development and sales management roles, having been exposed to most industries, including working with clients in the textiles, footwear and clothing markets, across both imports and exports.

His wealth of experience has positioned Paul to appreciate that freight forwarders do more than just move freight – they provide a service which impacts a client’s profits which is affected by timeliness of both response and delivery. Excellence in service has been the single most important factor in successfully looking after his clients.

We are very pleased to have Paul join the Magellan team and the positive and pro-active approach that he brings with him.

Magellan has recognised the opportunity within the New Zealand market to both broaden the current services to our existing Australian clients who ship from both Australian and overseas direct to New Zealand, as well as offering the same high service standards to New Zealand based businesses. Magellan envisions replicating the great success and growth experienced in Australia, in this new and exciting marketplace.

“The role will be challenging as well as satisfying and rewarding for all involved and especially clients looking for extraordinary service levels, in the freight forwarding industry”, Paul shares.

Standing by his commitment to the Magellan values.

Paul Knight standing by his commitment to the Magellan values.

Our New Zealand office contact details:

Suite 5, Level 1, 75J Porana Road,
Wairau Valley, Auckland, NZ 0760

International Telephone:

+64 9 974 4818 or
+64 9 974 4817

International Facsimile:

+64 9 974 4819

Postal Address:

PO Box 316-024,
Wairau Valley Post Centre,
Wairau Valley, Auckland, NZ 0760

________

We extend a warm invitation for New Zealand specific enquiries. Please contact Paul directly at paul@maglog.co.nz  or in the office on +64 9 974 4818 or +64 9 974 4817, or via mobile on 021 497024.

Or alternatively, you can reach our customer service team in our Melbourne head office on info@maglog.com.au or 1300 651 888

We look forward to assisting our existing and future New Zealand based clients, and our Australian clients with their freight forwarding, customs clearance and 3PL needs into and out of New Zealand.

Protecting your intellectual property is essential in this day and age as it provides a company or individual with a competitive advantage over other players in the industry. Most companies do not regard their supply base as intellectual property but they do so at their peril. Exposing your supply base to your customers can have dramatic consequences – the worst of which is the danger of your customer going directly to your supplier.

magellan-logistics-protecting-your-supply-base

Australian retailers are well placed to deal directly with offshore manufacturers and indeed most of them have some direct supply in their product offerings. If you are currently supplying the larger retail chains with product you source from overseas you will have noticed an increased pressure to provide that product on an FOB basis rather than the traditional free into store approach. One of the dangers of agreeing to provide product on an FOB basis is the potential exposure of your supplier information to your customer – who could then quite realistically become your competitor.

Normally, when shipping goods from, say, China to Australia a bill of lading is cut with the consignor and consignee details listed on the bill. In normal circumstances the consignor would be the offshore manufacturer and the consignee would be the name of the entity that is to take delivery of the product. In the above FOB scenario the consignor would be your supplier and the consignee would be your customer. So it is easy to see that in this case your supply base is exposed. However, Magellan Logistics can help you with protecting your supplier information by manipulating the documentation to provide you with comfort that your valuable IP is being hidden.

The export documentation will be produced as normal and used for clearing the goods through the offshore Customs authority. However, once export formalities have been completed Magellan Logistics will raise a separate house bill of lading to indicate that you are the consignor and your customer is the consignee. Further, the invoice accompanying the shipment will be the FOB invoice raised by you on your customer. This documentation will be used to clear the goods through Customs in Australia. In this way, your supplier information is hidden from your customer and should go some way towards providing you with peace of mind.

As this is an extremely commercially sensitive area of concern we suggest that a Standard Operating Procedure (SOP) should be developed to ensure that all stake holders are fully aware of their obligations at each step of the way.

If you would like to discuss this issue further please contact Jeff Kershaw on 0418 543 994 or at jeff@maglog.com.au

AS ALWAYS – MAGELLAN LOGISTICS IS HERE TO HELP

holiday-hours-magellan-logistics-may-holidays

The Chinese May Day holidays are one of the major holiday periods across China. Most businesses and Government agencies will close during the period 1st May thru 3rd May inclusive (excluding Hong Kong).

Magellan’s China offices will be either closed or on skeleton staff during this time.

Please note the following when planning shipments.

SHANGHAI

Holidays from 1st May, returning  4th May.

AIR Cut off 30th April  (for both freight and documents).

SEA Cut off as follows:

ETD: 1st May , Cut-off: 27th April 18:00

ETD: 6th May , Cut-off: 29th April 18:00

Most other China offices will also be closed in line with Shanghai.

QINGDAO

Holidays from 1st May, returning 4th May.

AIR Cut off 30th April  (for both freight and documents).

SEA no change,  schedules remain unchanged.

HONG KONG

Holidays 1st May only.

AIR Cut off 30th April (for both freight and documents).

SEA no change, schedules remain unchanged.

Should you need clarification, or options available for freight movement around this holiday period, please contact the Magellan Customer Service team on 1300 651 888 or info@maglog.com.au

Traditionally, fashion companies have used buying agents or sourced resident teams to undertake quality control procedures at the manufacturer’s premises – either in-line or final quality control (Q/C).

However, this process has not always proved to be totally effective and product is often determined to be out of specification once it has arrived in Australia. Australian importers then need to engage in lengthy and costly discussions with their suppliers about who pays for what.

THERE IS A BETTER WAY AND MAGELLAN CAN HELP

quality-control-words-magellan-logistics

Magellan can provide quality control facilities in its offshore warehouses that allow for detection of issues BEFORE the goods are exported. In the event of any non-compliance the goods are returned to the supplier for correction and re-delivery. This approach eliminates claims and the onus is put squarely on the supplier to get the product right BEFORE it leaves the country of manufacture.

Experience has shown that suppliers learn very quickly that if they deliver non-compliant product this will disadvantage them economically. It follows that self regulation becomes an imperative for them.

EXAMPLES OF QUALITY CONTROL PROCEDURES INCLUDE:

  • Needle detection
  • Button and stud testing
  • Swing Tag confirmation
  • Labelling confirmation
  • Thread snipping
  • Re-ticketing
  • Technical Q/C – (provided by client)

 

So, if you want to eliminate claims for non-compliant product in the future contact Jeff Kershaw at jeff@maglog.com.au or call on 0418 543 994.

 

happy-easter-magellan-logistics

Please be advised of the below Public Holidays in Australia - ‘Easter Holidays’ -

Friday 3rd of April 2015 and Monday 6th of April 2015.

As a result Magellan’s Offices will be closed on these days..

Our offices will resume normal work operations on Tuesday 7th of April 2015.

Please also note that China/Hong Kong will also celebrate Ching Ming Festival together with the Easter Holiday this year, therefore their offices will be closed as follows:

China

Saturday 4th April 2015 returning Tuesday 7th April 2015

Hong Kong

Friday 3rd April 2015 returning Wednesday 8th April 2015

The Magellan team warmly wish you and your families a Happy Easter.

For enquiries, contact our office on +61 3 8318 9600 or info@maglog.com.au

customs-magellan-logistics-production-assist-costs

What are Production Assist Costs?

Production Assist Costs relate to tangible and intangible assistance provided to a foreign supplier by an Australian buyer of imported goods. If this assistance is provided free of charge or at a reduced cost then the cost of this assistance (to the extent it is not already included in the price) needs to be included in the value declared to Customs upon importation. The production assist costs that fall within this description are commonly referred to as “Assists”.

Categories of Assists

a) materials, components or other goods that form part of the imported goods;

b) materials consumed in the production of the imported goods;

c) tools, dies, moulds or other machinery or equipment utilised in the production of the imported goods;

d) art work, design work, development work and engineering work (including models, plans and sketches) – the design of which has been undertaken outside Australia;

e) inputs in the production of the goods referred to in (a) to (d) above;

f) overseas transportation and packing costs relating to (a) to (e) above;

g) foreign customs duties, sales tax, or other duties or taxes on production tooling, work goods or subsidiary goods;

h) repairs or modifications to the materials, components, subsidiary goods, tools, dies, moulds, and other goods referred to above.

An example of a transaction involving “Assists” would be an Australian white goods wholesaler providing Australian standard electrical cords and plugs to a Chinese manufacturer for incorporation into Australian imported white goods. If the cords and plugs are provided free of charge to the manufacturer then the value of the cords and plugs would need to be added to the suppliers invoice price to arrive at an acceptable Customs Value.

It should be noted that it is irrelevant whether duty is being paid on the imported product as the importer has an obligation to report accurately to Customs and, as such, any under-valuation would fall within the ambit of the Infringement Notice Scheme.

As always, Magellan Logistics stands ready to assist with determining whether your business is exposed due to non-compliance with the above requirements. If you would like more information on this subject or simply wish to clarify any of the foregoing detail please contact Jeff Kershaw at jeff@maglog.com.au or by telephone on 0418 543 994.

Have you done the due diligence required to ensure compliance?

transfer-pricing-magellan-logistics

Transfer pricing is the setting of the price for goods and services sold between controlled (or related) legal entities within an enterprise. For example, if a subsidiary company sells goods to a parent company, the price set for those goods is the transfer price. Transfer pricing does not apply to importers and exporters that deal with unrelated buyers and sellers.

It is a fact of life that multinational companies, from all sectors and in every part of the world, face difficulties with respect to the valuation of goods. These difficulties arise because transactions between related parties are subject to both customs and fiscal examinations and are thereby bound by differing rules and contradictory interests.

There are two reasons for this problem:

Firstly, tax and customs administrations, even within one country and sometimes within the same government department, have different approaches: tax administration focuses on intra-group sales’ prices that may be perceived as higher than they should be; whereas customs authorities control imported goods for which prices may be perceived as lower than the market price. While both administrations seek to achieve the same goal (which is arm’s length pricing) revenue interests in the transaction still remain at odds with each other. An arm’s length transaction is one in which the buyers and sellers of a product act independently and have no relationship to each other. The concept of an arm’s length transaction is to ensure that both parties in the deal are acting in their own self interest and are not subject to any pressure or duress from the other party.

Secondly, tax and customs administrations often set rules independently for the same transaction/good. Tax authorities seek conformity with the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines which have been largely codified in many countries. This set of rules provides guidance on the application of the arm’s length principle for the valuation of cross-border transactions between associated enterprises, whereas customs authorities conform to Article VII of the General Agreement on Tariffs and Trade (GATT) Valuation Code – currently the World Trade Organization (WTO) Valuation Agreement.

This dichotomy, present in both developed and developing countries, creates a climate of uncertainty and complexity compounded by economic globalisation. It also leads to increases in compliance and implementation costs, absence of flexibility in the conduct of business operations, and creates a significant risk of penalties. Indeed, even when a company complies with both the OECD guidelines/principles and the World Trade Organization (WTO) Valuation Agreement, there is no guarantee that there will not be a dispute between two countries or two administrations in the same country on the determination of the arm’s length price. This means that valuation conflicts can arise not only prior to but also after an audit.

Given that intercompany transactions account for more than 60% of global trade in terms of value, the divergence of customs and transfer pricing valuation presents an obstacle to the liberalisation of trade and inhibits international development for companies of all sizes.

Magellan Logistics can provide advice on this complex subject. So if you are involved in cross-border trade with a related company and have reservations about the legality of your arrangements you should contact Jeff Kershaw at Jeff@maglog.com.au or by telephone on 0418 543 994.

Geelong is the largest regional city in the State of Victoria. Located only 55 minutes from Melbourne, the city is located on the shores of Corio Bay and the region boasts some of the world’s best surf beaches covered by the Surf Coast Shire including the towns of Aireys Inlet, Anglesea, Lorne, Moriac, Torquay and Winchelsea as well as the Bellarine Peninsula.

Geelong-Eastern-Beach-Waterfront-Magellan_Logistics

Geelong’s Eastern beach looking across to the waterfront precinct. (Photograph: Katrina Lawrence)*

 

Looks like an amazing place to live doesn’t it?

Well say hello to local resident Greg Healey, experienced in international freight who excitingly joined the Magellan Logistics’ Business Development team recently. He left the hustle and bustle of busy Melbourne, to raise his family in the friendly community and relaxing surrounds of Geelong over 6 years ago.

With Greg on the ground, not only is he closer than ever to the enviable sea breeze of the coastal region, but he is available to provide valued personal service and develop trusted relationships with Magellan’s locally based current and future clients. His attentive approach is to listen to his customer’s challenges and requirements, which then enables him to explore and provide the most suitable solution to meets his client’s needs.

Greg-Healey-son-fishing-magellan-logistics-geelong

In Greg’s spare time he enjoys spending time at the beach with family and friends. And why wouldn’t you, with that view?

Are you a business within the Geelong area or surrounds and would like to discuss your freight forwarding and customs clearance needs? Contact Greg Healey directly on 0402 775 816 or (+61) 03 8318 9600, or you can reach him by email on greg@maglog.com.au.

* Image source: http://www.workingin-australia.com/