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China’s Comeback: Destination Hong Kong

As fashion executives around the world reported in the first BoF- McKinsey Global Fashion Survey, the year 2016 can be summarised in three words: uncertain, changing, and challenging. But in spite of this, fashion remains one of the key value-creating industries for the world economy.

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AMSA to commence SOLAS compliance activity in earnest

Wondering what has been happening since the implementation of the SOLAS provisions on 1 July this year?

We understand that the Australian Maritime Safety Authority (AMSA) has not yet conducted major SOLAS compliance activity, consistent with MSC.1./Circ 1548.

Well, all that’s about to change.

AMSA has recently advised that compliance activity would immediately escalate with a Concentrated Inspection Campaign (CIC), looking at Verified Gross Mass (VGM) declarations and identifying indicators of falsehoods and other inaccuracies. Consistently rounded numbers is a bit of a giveaway!

We also understand that AMSA is considering its options regarding check weighing, sample weighing and upstream auditing.

The key take-out would be that any grace period AMSA has granted has come to an inevitable end.

For more information visit the AMSA website or download our guide here.

Magellan Logistics has your back on this and any other customs or freight forwarding topic.  If you would like to discuss SOLAS compliance with me further please get in touch on 1300 651 888 or via steve@maglog.com.au.

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Magellan Expands Again – this time it’s Brisbane

Magellan has recognised the opportunity that exists in the Brisbane market to both broaden services to our existing clients who already ship direct to Brisbane, as well as to offer the same high service standards to Brisbane based businesses. With the recent opening of direct international flights into Gold Coast Airport, Magellan envisions replicating the great success and growth experienced around Australia in this important and growing marketplace.

With the opening of our new office at Banyo, Magellan Logistics is pleased to announce its expansion into Queensland which will be led by Business Development Manager, Tania Nicolson.

Starting out as a travel consultant fresh out of high school Tania quickly learned there was a similar need for her keen attention to detail and ability to tailor travel itineraries in the freight sector and after jumping ship (so to speak) she has not looked back.

Sixteen years on, Tania has accrued considerable experience in the freight and logistics industry both in Brisbane and internationally in roles spanning operations, customs, transport and more recently business development.  With exposure across most industries, Tania has enjoyed immense success working with clients in the textiles, footwear and clothing sector, across both imports and exports.

Her wealth of experience has given Tania the appreciation that freight forwarders do more than simply move freight – they are business partners who provide a service which directly impacts a client’s business success in terms of response and delivery time. For Tania, understanding each client’s unique requirements has been the single most important factor in providing excellence in service and building enduring relationships.

Describing her role to industry outsiders as like being a ‘travel consultant for your freight’, Tania was instantly struck by ‘Magellan’s lateral approach to logistical solutions and customer centric focus’ saying ‘I can see from the way Magellan prioritises their customers’ needs that we will make a great fit, that and the opportunity to work with a fabulous team of people!’.

We are delighted to welcome Tania to the Magellan team and the positive and responsive approach she brings.

Our Brisbane office contact details:

Unit 16, 14 Ashtan Place, Banyo QLD 4014

We extend a warm invitation for Brisbane specific enquiries. Please contact Tania directly at tania@maglog.com.au or on the phone via on 1300 651 888 or 0431 575 220

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 Queensland clients with their freight forwarding, customs clearance and 3PL needs into and out of Brisbane and Gold Coast.

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SOLAS compliance day is today

We are now “live” for compliance in Australia.

All Australian exports submitted at wharf terminals and depots now need to be compliant.

Any non-compliance in these early days may still incur significant costs or delays.  See attached media release from AMSA or visit the website.

And remember, that whilst this is a shipper compliance issue, Magellan is here to help you work through any problems as and when they occur.  Please do not hesitate to get in touch with us on 1300 651 888 or email daniel@maglog.com.au or steve@maglog.com.au or your usual Magellan contact.

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Safety Of Life At Sea (SOLAS) – Verified Gross Mass (VGM) shipper’s declaration – Compliance date 1st July 2016.

Effective for vessels sailing on or after 1st July 2016 from most export ports globally, all containerised seafreight shipments submitted for export will need to have a Verified Weight Declaration (VGM) submitted by Shippers.

For Australian exports, Verified Gross Mass (VGM) compliance actually starts on 22nd June 2016, which is the opening of the wharf terminal window for receivals for vessels sailing on/after 1st July 2016.

This is an International Maritime Organisation (IMO) global regulation, that in Australia is covered under Federal Government legislation administered through the Australian Maritime Safety Authority (AMSA), it requires shippers of containerised seafreight cargo to make a lawful weight declaration.

Attached to this email is both an explanatory fact sheet from Shipping Australia Limited (SAL), and a Magellan presentation which gives a more detailed explanation of the new Shipper responsibilities. In these documents you will see references and an explanation to the only 2 methods which can be used to identify the “gross mass” of a container, or its contents. Should you need further information, clarification or advice on utilising either of these methods, please feel free to contact myself, or any member of our Export Team.

We have also updated our Shipper’s Letter of Instruction (SLI) to include a Verified Gross Mass Shipper’s declaration. For FCLs, a separate declaration is required for each packed container. Any shipments departing on or after 1st July 2016 will need to have the shipment details submitted via this updated SLI.

The SLI and VGM weight declaration must be submitted to us prior to any FCL or LCL cargo being received at the wharf terminal and/or depot. Please note the process for us to receive that declaration from the shipper, then retransmit it in the prescribed manner to the parties receiving the cargo at the terminal/depot can take at least 2 hours during normal working hours (Monday to Friday).

FCL Cargo:

For FCL the document that needs to be submitted to the wharf terminals is the PRA, which cannot be completed or transmitted without the compliant weight declaration. No containers will be accepted at any of the wharf terminals in any Australian port without a PRA having been submitted and accepted prior to any container arriving at the terminal gate.

LCL Cargo:

For LCL cargo, there is an allowance at some receiving depots to weigh the shipment upon arrival in the depot, however this is not the case for all depots, and does come at a significant cost.

Should method 1 be used by a Shipper to declare the weight, we need to make sure that adequate time is allowed for the container to go via a compliant weighing facility.

As the verified gross mass is now a lawful declaration of weight, estimations of weight are not permitted.

  • We can receive the Verified Gross Mass (VGM) Shipper’s declaration via any of the following means;
  • Original signed document via post/courier
  • Scanned signed document via email (PDF format).
  • Faxed signed document.
  • Transmitted XLS document, where the name of the person declaring the weight, is the same as the email address that the SLI/VGM is submitted to us on.

Should you need to discuss this process, get clarification on this new responsibility as a shipper, or just need advice on the options for getting your cargo weighed, please do not hesitate to give meor any of our Export Team a call on 1300 651 888.

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Triangles, Handovers and 3rd party shipments: What are they and why you need one?

It’s not hard to think of a product made up of components sourced from multiple locations, assembled offshore and sold in a local Australian shop.  An elegant suit made in Hong Kong from Italian wool cloth, and sold in Collins Street?  A sofa manufactured in Indonesia to a Sydney customer’s precise specification covered in fabric milled in China’s Shandong province, perhaps? You’ve probably got a house full of items just like these.

But did you ever consider the logistical procedures that make it happen?

Time from order to delivery into store, handling costs, import duties and the protection of the manufacturer’s and consignee’s intellectual property are some of the main factors that need to be considered when arranging for the importation and delivery of goods with complex supply chains.  There are countless others, but that’s for another day.

Triangle shipments - traditional method

Traditional method:

Using the Italian wool suit as an example, the consignee imports fabric from Italy and arranges for it to be delivered to their warehouse in Melbourne.  From there it is shipped to the factory (3rd party) in Hong Kong to be manufactured into a suit.  While this is great way to protect the consignee’s intellectual property and ensure the details of the supplier of fine Italian wool fabric remains a trade secret, it also effectively means the goods are double handled, there is additional duty to be paid and considerably more time and cost is added in the supply chain.

The alternative is to use Triangle Shipments (sometimes known as handovers or third party shipments).

 

Triangle2.png

Triangle Shipments:

Using the same example, the consignee would order the fabric from the supplier in Italy and arrange for it to be shipped directly to the 3rd party – factory in Hong Kong.  On the face of it is clear that this will reduce handling, time and costs, but the question of protecting the consignee’s trade secrets still remains.

The answer to this lies in the concept of the Switch Bill.  In traditional forwarding, a Bill of Lading is produced by the carrier and notes the goods, the consignee and the destination (among other things) and is effectively the contract for the transportation of the goods.

In a Triangle Shipment, 2 Bills of Lading are produced – the first one details the original consignee and true supplier of the goods.  The second BoL is prepared to travel with the goods from origin (supplier) to the 3rd party that shows the original consignee as the supplier of the goods and the 3rd party as the consignee.  The effect of this is to render the supplier of the goods (Italian wool fabric) anonymous, thus protecting the IP of the original consignee.

Sound complicated?

Triangle Shipments are a specialist freight forwarding service.  While the concept is pretty well known and most forwarders do it, it is a boutique offering.  Critical to a forwarder’s success with Triangles are strong relationships with both clients and overseas agents alike.

To ensure the triangles go to plan, a forwarder will have a thorough understanding of their client’s requirements developed as up to date and clear SOPs, combined with regular communication with shipping agents.  Instructions may include the stripping of documentation, repackaging of goods and in some instances, the removal of labels and tags.  Getting this right, every time, is the only way to ensure that clients’ relationships are protected.

Magellan has a solid track record with Triangle Shipments – some of our customer service team members estimate that up to 80% of their work involves Triangles.

If you think a Triangle Shipment is the perfect solution to your freight forwarding needs, then don’t hesitate to get in touch with us on 1300 651 888, or visit www.magellanlogistics.com.au.

Resources:
http://shippingandfreightresource.com/about/shipping-and-freight-resource/
http://www.austrade.gov.au/australian/how-austrade-can-help

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INCOTERMS – exactly what are they?

Incoterms or International Commercial Terms are a series of pre-defined commercial terms published by and is a registered trademark of the International Chamber of Commerce (ICC) widely used in international commercial transactions.

Incoterms are a series of three-letter acronyms related to common sales practices, and are intended primarily to clearly communicate the tasks, costs and risks associated with the transportation and delivery of goods. The Incoterms rules are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from different interpretations of the rules in different countries.

They’re used to make sure both the buyer and the seller are clear about:

  • Who will arrange for the carriage?
  • Who is responsible for the cost of transporting the goods, including insurance, taxes and duties?
  • Who is responsible for the goods at each step during transportation?
  • Who will bear the risk for loss and damage of goods?
  • To and from where the goods should be picked up and transported?

By agreeing to use an Incoterms rule, the buyer and seller achieve precision and clarity in defining their obligations and responsibilities.  The rules do not attempt to cover all aspects of the commercial agreement – there are important matters such as transfer of title and how the goods are to be paid for, on which the Incoterms rules are silent.

The rules can be usefully arranged into four groups:

  • Buyer responsible for all carriage – EXW
  • Buyer arranges main carriage – FAS, FOB, FCA
  • Seller arranges main carriage, risk passes after main carriage – DAT, DAP, DDP
  • Seller arranges main carriage, but risk passes before main carriage – CFR, CIF, CPT, CIP

First published in 1936, the rules have been periodically updated. The sixth and most recent version – Incoterms 2010  was published in 2011.

Magellan has produced a handy summary of the Incoterms for you to download and print for future reference.  All the current terms are described in this summary, however, EXW, FOB, CIF and CIP are the most frequently used in Australian exports.  More detail on this information and how to apply it is available in published volumes, available online from the ICCA bookshop.

If you would like more detailed information on which term is most applicable for you or have a general freight forwarding or customs clearance inquiry, please get in touch with Magellan on 1300 651 888, or visit us at www.magellanlogistics.com.au

Sources:
www.incotermsexplained.com/
http://www.iccwbo.org/

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SOLAS VGM NEW DRAFT MARINE ORDER 42

The following information has been provided by the Australian Maritime Safety Authority (AMSA) concerning the industry consultation on Marine Order 42.

“New Draft Marine Order 42” (Carriage, stowage and securing of cargoes and containers) 2016 is open for consultation until 30 April 2016.

Background: The current Marine Order 42 deals with carriage, stowage and securing of cargoes and includes requirements for loading of freight containers and blending of bulk liquid cargoes. The Order gives effect to Regulations 2 (Cargo information), 5 (Stowage and securing), and 5-2 (Blending of liquid bulk cargoes) of Chapter VI of the International Convention on Safety of Life of at Sea 1974 (SOLAS).

In November 2014, the Maritime Safety Committee (MSC) of the International Maritime Organization (IMO) adopted amendments to SOLAS chapter VI contained in IMO Resolution MSC.380 (94), which come into force internationally on 1 July 2016. The amendments provide new regulations for the verification of the gross mass of a packed container.

Marine Order 42 (NNF 2016/019) reflecting the SOLAS VGM amendment is amended to:

  • give effect to the new SOLAS regulations for verification of gross mass of containers
  • move existing requirements on weighing gross mass of containers from Marine Order 44 to this Order
  • move existing requirements of SOLAS Chapter VI Regulation 5-1 for material safety data sheets (MSDS) from Marine Order 21 to this Order
  • include SOLAS Chapter VI Regulation 4 on the use of pesticides on ships and for fumigation of cargo transport units
  • rename the Order to make it more appropriate to the subject and contents.

AMSA looks forward to comments and contributions from shippers that will assist AMSA in developing best regulation.

Should you wish to make submissions to AMSA, please visit the AMSA Consultation page.

The consultation process runs through to 30th April 2016.

Magellan’s submission to AMSA will be done though our representative industry bodies.

AMSA’s responsibility in the compliance of the new SOLAS regulations covers vessels and associated operations within Australian territory, and in particular are of interest to Australian Exporters, Shipping Lines, Terminal Operators and Freight Forwarders requiring compliance.

For information about your obligations under the new marine order and the amendments to the Safety of Life at Sea (SOLAS/VGM) Convention please contact Magellan on 1300 652 888 or download a copy of our SOLAS/VGM presentation.

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VERIFIED GROSS MASS INDUSTRY FAQS (SOLAS / VGM)

A SOLAS / VGM FAQs document has been compiled by TT Club in collaboration with World Shipping Council, Global Shippers’ Forum and ICHCA International in response to the many questions that have been raised by the industry in relation to the revised SOLAS / VGM regulation.   The amendments to this regulation have substantial impact on practices of parties in the international supply chain involved in the movement of containers by sea.

While the SOLAS / VGM convention relates to the safety of ships at sea, it is also concerned with shore based activities relating to the presentation of cargo that are fundamental to safe outcomes at sea.

These FAQs relate to new rules, effective from 1 July 2016, and provide considerable detail concerning the requirement for shippers to verify the gross mass of a container carrying cargo. The rules prescribe two methods by which the shipper may obtain the verified gross mass of a packed container:

Download a copy of the SOLAS / VGM FAQs document from our site.

Or get in touch with the Magellan Customer Service team on 1300 651 888 or via www.magellanlogistics.com.au of you have specific question in relation to this.

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ChAFTA Update

Now that the Federal Opposition Leader Bill Shorten says he has reached a compromise with the Government and will now support the Chinese Free Trade Agreement it is worth going over a few of the key points as we see them.

A COUPLE OF KEY POINTS AS WE SEE THEM:

Hong Kong is not part of China  Hong Kong is classified as a different customs territory to mainland China and is a Freeport.  For the purpose of ChAFTA goods shipped via Hong Kong will not retain their status as Chinese originating goods unless the goods remain under customs control at all times (this was also the case for the China-NZ FTA).

The implications of this are profound for the many organisations that operate distribution centres and warehouses (that are not bonded warehouses) in Hong Kong as the goods entering Hong Kong will lose their China Preferential status.

Phasing of Duty  At present for items originating in China that have a duty rates of 5%.  It should not be assumed that from implementation of the FTA the duty rate will simply drop to 0%.  Although it is the aim to reduce all items to 0%, this will be phased in for some items over a period of some years (up to 5 years in some circumstances).  Clothing is one of these items where under the first year of the CHAFTA operation the duty rate will not be changed at all.

WHAT YOU CAN DO:

Whilst the agreement has been signed and now has bipartisan support in the Parliament, there is still a lot of detail to be finalised in order to provide greater certainty to industry. This process has already taken some time and is expected take a couple more months before implementation (we are expecting Dec 2015 or early 2016).  If you have any questions about how the ChAFTA will impact your imports please get in touch with Magellan 1300 651 888 or by email.

 

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