Australian Trusted Trader - The Downside

As the world gets smaller and more interconnected supply chains are growing longer and more complex. All the while, commerce is moving at increasing speeds, often through an array of intermediaries. Government regulation and systems are struggling to keep pace.

Over 50,000 Australian businesses are engaged in international trade. Add to that the general public’s growing appetite for international e-commerce, the types of cargo crossing Australia’s border are becoming more diverse and the time available to clear goods is reducing as transport technology improves.

These transactions are regulated by more than 30 Government
agencies operating under approximately 200 pieces of legislation.

With this increasing complexity, the need for best practice
intensifies and so too does the need for trust and confidence between the
people and organisations involved.

The Australian Government has recognized the importance of
integrity in supply chain and sought to foster an environment of global
competitiveness with the introduction of the Australian Trusted Trader Program.

The ATT has been designed to free businesses from the regulatory
burdens of international trade they currently face. As volumes increase, those
not in the program will be left in the go-slow queue.

Can you afford not to be in the program? It should not be expected
that remaining outside the ATT will simply mean the status quo remains.

HOW DOES IT WORK?

ATT is a modernisation of the border environment designed to
promote streamlined, reliable, predictable and most importantly, secure trade
by pre-screening businesses and their supply chains rather than each shipment
to assess risk.

By providing preferential treatment to businesses who meet supply
chain security and trade standards, Australian Trusted Trader incentivises
quality systems and compliance.

Those who meet the program’s standards receive a significant range
of tangible financial and time-saving benefits – including reduced supply chain
costs, improved lead times, and reduced audits – as well as more predictable
customs processes and outcomes.

As an example, preliminary findings on the Origin Advance Ruling
under ChAFTA alone are indicating savings for one Trusted Trader of up to $1.6
million each year.

On the flip side, those without ATT accreditation could face a
multitude of risks.

THE WAY YOUR CARGO IS PROCESSED AT THE BORDER HAS CHANGED.

Australian Trusted Traders are recognised globally for their
compliant and trustworthy security and trade practices.

This means that border clearance for them involves consolidated
clearances, duty deferral, advanced rulings and access to a dedicated Account
Manager to unblock log jams that arise. Trusted Traders can also look forward
to reduced border holds and if they do receive a border hold, their containers
will be x-rayed before containers of non-Trusted Traders.

Accredited businesses have reported that this has helped them
attract new business opportunities. In
short, accreditation offers a significant competitive advantage to the now over
400 businesses and service providers operating in the Australian market.

WHERE IS ALL THIS HEADING?

The status quo won’t continue for importers who are not trusted traders. As well as missing out on the advantages their competitors enjoy, businesses who aren’t accredited will begin to see ABF’s scrutiny focus sharply around their supply chains. This could result in significant disruption.

Border Force has a goal of having 80% of trade covered by the
Trusted Trader program within 5 years. This will enable Border Force and other
Government Departments to provide flexible outcomes to Trusted Traders,
regarding the import and export of goods.

The remaining 20% will become the focus of tactical intelligence
and other compliance strategies. Importers who do not participate in the
voluntary code will receive greater attention at clearance which will have
flow-on impacts on time and cost.

It’s simple maths. Through
the accreditation of 80% of Australian businesses, the resources of Border
Force will be significantly freed up to focus their activity on those who have
either not sought or failed to gain accreditation. It’s easy to see that scrutiny increasing
over time as it becomes apparent that increased security risk resides in these
businesses.

BECOMING ACCREDITED? WE’VE DONE IT. WE CAN SHOW YOU THE WAY.

As with many Government programs, even the idea of participating
can feel daunting. How hard will it be
to navigate the process? I just don’t
have the time and resources to devote to this. Will the benefits really make
much difference? I’m only a relatively
small player.

It’s important to keep in mind that Border Force wants you involved. The more businesses who participate in the program the more streamlined and efficient the clearance process will be and more benefits will flow.

Recently the application process has been improved. Red tape has been stripped out and
accreditation timeframes sped up with most businesses able to be accredited
within 60 days of applying.

Instead of weighing up the benefits of accreditation, weigh up the
impact of being one of only a few businesses in your market who isn’t
accredited. Not only are your
competitors enjoying the advantages of reducing their cost-base associated with
customs clearances, but they are also gaining the benefits of increasing their
speed to market and reducing their standing inventory. This puts them in a better position to
respond to your market and potentially your customers.

Magellan achieved Australian Trusted Trader status in April 2018
because we wanted our clients to be confident their supply chains were
supported by accredited industry leaders.
It also gave us the experience and expertise to help you through the
process.

Magellan helps businesses better navigate in complex and uncertain global supply chain environments to help them get ahead and stay there. Get in touch on 1300 651 888 if you would like to discuss what Australian Trusted Trader means for your business or email darko@maglog.com.au