Skip to Content

Blog Archives

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.

0 Continue Reading →

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.

1 Continue Reading →

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.

0 Continue Reading →

Reminder: SOLAS compliance deadline

The date for Safety Of Life At Sea / SOLAS compliance to the new global regulations is drawing near – 1 July 2016.

At that time, all shippers who tender seafreight cargo for export from just about any port in the world, will need to make a prescribed declaration of the weight of the shipment, prior to any containers being received at wharf terminals.

The International Maritime Organisation (IMO) has mandated these new regulations, which become law on 1 July in 171 countries around the world – most of the countries that Australia trades with are signatories to this treaty.

The new regulations effective 1 July 2016 state the following…

The SOLAS compliance regulations prescribe two methods by which the shipper may obtain the verified gross mass of a packed container:

  1. The shipper may weigh the packed and sealed container using calibrated and certified equipment.
  2. The shipper may add the weight of each package stuffed in the container, add the packing and securing material and add the tare weight of the utilized container. The method itself needs to be certified and approved by a national regulatory body in the country of export.

An estimation of weight is not permitted.

This responsibility sits clearly with the Shipper of the goods under the regulations, not with any other party (ie. Packer, Freight Forwarder, Shipping Line etc).

What do you need to do as an importer:

  • Raise the issue with your suppliers and get confidence that they and their vendors are familiar with the new responsibilities on them as the Shipper of goods
  • Understand the Supplier’s supply points and if products come from external vendors, get comfort that the external vendors are familiar with their responsibilities
  • Ensure your suppliers are conforming with either methods 1 or 2 in the supply of a verified gross mass declaration, compliant to the applicable regulations in their country.

Whilst the compliance is a Shipper obligation, it becomes an Importer’s issue if any Shippers fail to comply on or after 1 July 2016.  Non-compliance to regulations at the point of export will most probably cause shipping lines to refuse receival of containers for shipment. It is an offence under SOLAS regulations for ocean carriers to load or carry any non-compliant shipments.

We have drafted a letter template that can be used to bring the issue of compliance to your shippers attention. Also, we have prepared a slidepack which further details the new requirements.

Please feel free to contact a Magellan Customer Service Representative should you need further information or clarification on these new regulations.

1 Continue Reading →

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

0 Continue Reading →

Freight forwarder in New Zealand takes off

One year on from the official opening of our Auckland office Magellan Logistics New Zealand is going from strength to strength.

The reason we entered the New Zealand market – to both broaden our services to our existing Australian clients who ship direct to New Zealand, as well as offering the same high service standards to New Zealand based businesses has been borne out.  Magellan NZ has set an enviable 12 month benchmark in retaining 100% of the business it handled as an agent and growing consignment numbers by some 500% in 10 months.  No wonder we’re hiring!

Due to this recent, impressive growth Magellan NZ now also provides customs brokerage and operations to complement its freight forwarding services and as such is well poised to continue its expansion in the years to come.

Paul and his new team enjoy a reputation for the responsive and agile service they provide to agents, exporters and importers alike.  This service is characterised by excellence and the Magellan values that underpin the way we conduct all our business – integrity, professionalism, transparency, respect and quality.

Located on Auckland’s growing North Shore, Magellan is ideally situated close to the city – the heart of Auckland’s thriving fashion district – and Auckland port.  Many of our growing list of clients are located within the North Shore business community, and our close proximity aids us in providing our superior levels of customer service.  This location is also convenient to West Auckland and Paul and his team are never too far away from the airport and South Auckland based customers.

Agents looking for improved service levels and local on the ground knowledge should refer their freehand cargo and any sales leads to Paul Knight at paul@maglog.co.nz or on +64 9 974 4818 or +64 9 974 4817, or via mobile on +64 (0)21 497024.

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

0 Continue Reading →

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.

0 Continue Reading →

Exports – not as easy as imports in reverse

Over the last 19 years Magellan has built its reputation on handling large volumes of import cargo into Australia for our customers across a variety of industries, but especially fashion, textiles and other retail. What you may not be aware of is that exports is also central to our offer (and growing). Our exports team has considerable experience in Australia’s core export markets, including commodities and agriculture.

Whether it’s 2 small parcels, or 20 containers of cargo to be shipped, Magellan can advise on the most cost effective solution, as well as the benefits and drawbacks of different shipping methods.

Magellan currently exports cargo via courier and consolidated airfreight, as well as less than (LCLs) and full container loads (FCLs), on a regular basis, to destinations including UK, USA, Asia, and New Zealand. In fact, through our strategic alliances with overseas agents, we can service the vast majority of major cities worldwide.

If you are shipping to New Zealand, our Auckland office provides the opportunity for Magellan to directly monitor the door to door movement of your product. If your cargo is bound for another destination outside of Australasia, Magellan will work with our network of trusted agents to ensure your cargo is handled with the utmost care, avoids all non-mandatory delays, and meets the requirements of all local authorities at destination.

We can also guide you through the various documentation needed to ensure the export process runs smoothly. To start with our easy to use Shipping Letter of Instruction (SLI) can be downloaded from the resources section of the Magellan website (under Shipping and Customs forms).

Some countries are easier to trade with than others. For example, USA has strict pre-reporting requirements known as ISF / AMS filing. Magellan can guide you through this process to ensure minimal impact on your business, as well as advise what will be required to satisfy other government departments e.g. Food and Drug Administration (FDA).

The Magellan export specialists are waiting for your call, and looking forward to assisting you with your export shipments. Get it touch with us via www.magellanlogistics.com.au or 1300 651 888.

0 Continue Reading →

TRANS PACIFIC PARTNERSHIP – IN A NUTSHELL

This week negotiators in the US announced, after eight years of negotiations, an historic agreement had been reached as to the terms of the Trans Pacific Partnership.

WHAT IS IT?

The TPP is a web of agreements between the involved countries designed to boost trade and economic growth.  It spans everything from jeans to lobsters to intellectual property.The TPP is designed to create major changes in the economies of the 12 signatories and will be the world’s largest FTA covering 40% of global GDP.

WHO IS INVOLVED?

The final agreement was signed by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam. The countries involved make up 40 per cent of the world economy.

The agreement began as almost casual negotiations between New Zealand, Brunei, Singapore and Chile but rapidly expanded.

While one of the Australia’s largest trading partners, China, is not involved in the deal, several other countries have indicated they are hoping to be covered in the new system of trade rules.  These include South Korea, the Philippines, Taiwan and Colombia.

KEY OUTCOMES

The TPP addresses a variety of trade topics including trade in goods, services, investment, Government procurement, intellectual property, environmental laws, labour laws and intellectual property.  The details of the trade outcomes are yet to be released.  However, the following is significant for Australian trade:

  • This will be Australia’s first significant FTA with Canada, Mexico and Peru (but this only represents less than 2% of Australia’s trade).
  • Agricultural access to the US and Japan is likely to be improved beyond our existing FTAs.
  • Country-of-Origin labelling will be based on TPP regional content. As such, goods can include content from multiple TPP partners and still qualify for preferential treatment.  This could be important for goods of US or Japanese origin that undergo some further process (such as repacking) in Singapore or Malaysia.  Certificate of origin details are yet to be released.  However, it is unlikely formal certificates of origin will be required.  Both the US and NZ do not traditionally require such documents and other TPP countries have shown a preference for self-certification.
  • The TPP is drafted in a way to allow inclusion of other countries in the future. It is not unrealistic to foresee a future where the TPP will be the primary trade agreement governing Asia Pacific trade.
  • In recent presentations, DFAT suggested that change in tariff classification will be the primary rule of origin for goods that are not wholly originating. It also includes timelines to cut tariffs and financial levies on all goods, but it is unlikely to include the complete abolition of many tariffs.
  • The TPP also provides for a range of agreements to make cross-border investing easier and therefore more frequent by reducing regulatory hurdles.
  • The agreement includes commitments to help small- and medium-sized businesses understand the agreement, take advantage of its opportunities, and bring their unique challenges to the attention of the TPP governments.
  • A chapter entitled “Trade Remedies” includes a series of agreements designed to clarify key details in exporting and importing a wide range of products.

 

NEXT STEPS

Usually it takes 9-12 months from the conclusion of negotiations to the implementation of an FTA.  However, each country will need to pass and ratify associated legislation for the partnership to begin.  Given this includes the US parliamentary process in an election year; we expect 2017 is a more realistic commencement date.

With the implementation time-frame uncertain and few details on specific outcome, the best advice is for parties to stay informed and keep the TPP in mind when making long term strategic trade decisions.

If you have any questions you need any further information, please do not hesitate to contact Magellan on 1300 651 888 or via email info@maglog.com.au

Read the Prime Minister’s media release here

Sources: Hunt & Hunt , SMH.com.au

0 Continue Reading →

Trusted Trader Program – UPDATE for importers

The Australian Trusted Trader Program is a voluntary partnership between an accredited businesses and the Australian Government that aims to streamline and facilitate trade, and enhance supply chain security.

The Department of Immigration and Border Protection (DIBP) recently launched the programme announcing the initial four pilot participants and is now extending invitations to other exporters and importers to participate in the pilot phase.

The following is as an independent observation provided by the Freight & Trade Alliance (FTA) outlining the current status of the programme and key things businesses should consider when weighing up whether to participate.

BENEFITS

Importers are likely to benefit from participation with priority trade services (including the possible relaxation of document requirements under FTAs), access to a relationship manager and increased predictability of cargo release which will assist in the management of logistics operations.

Other benefits are likely to include duty deferral and streamlined reporting processes, including reforms to align cargo reporting requirements with contemporary multiple supplier (assembly order) commercial practices.

In parallel, industry is also looking for a reduction in the DIBP administered Import Processing Charge (IPC) that is currently charged on a consignment basis.  Note – effective 1 January 2016 the IPC will increase to $50 for consignments valued between $1,000 and $10,000 and to $152 for consignments of greater than $10,000.

Further information on duty deferral and streamlined reporting for Trusted Traders will be subject to Government consideration as part of the 2016 / 2017 federal budget process.

Exporters are expected to benefit from streamlined processes via Mutual Recognition Agreements (MRAs) being established between governments that support global trusted trader programmes.

It is also anticipated that joining the programme will satisfy international airfreight “security” requirements and will be aligned to the Office of Transport Security’s “known consignor” scheme.

COSTS

DIBP will not charge for the application process or ongoing client management support associated with the programme.

However, businesses will need to demonstrate requirements relating to supply chain security and a history of trade compliance.  It is anticipated that costs will vary depending on existing audit measures in place and remedial action required for qualification against the DIBP standards.

NEXT STEPS

Until there is a clearer understanding of the programme’s benefits and costs, it’s difficult to determine a definitive return on investment.

In the interim and as an indication of requirements, an Australian Trusted Trader self-assessment questionnaire that forms a part of the application process is available from ComLaw.  It is important to note that not all questions will be applicable to all applicants.

We recommend that exporters and importers continue to work closely with their freight forwarders and customs brokers as their trusted advisors to ensure ongoing high levels of compliance with trade measures and to document supply chain processes.  In an environment of increased compliance activity, this approach will reduce exposure to significant penalties and will best position businesses to take advantage of the Australian Trusted Trader programme once benefits are clearly established.

Magellan Logistics is well placed to assist.  Should you need any further information, please do not hesitate to contact Daniel Crawford, our National Customs Manager on 1300 651 888 or via email daniel@maglog.com.au.

0 Continue Reading →