Labor’s six-way bet on Vic’s next box port
Victoria’s Labor Party is considering up to six possible locations for an international container port, shadow minister for ports Natalie Hutchins has announced.
Ms Hutchins and ports minister David Hodgett went head-to-head in Geelong debating each party’s ports policy.
An independent body, Infrastructure Victoria, will be created to analyse and assess decisions such the site for the next container port, if Labor is elected on November 29.
Ms Hutchins main contention was that a port in the Capital’s outer west could be used as a “key part of a supply chain system for the whole of the state”. “We currently have very good networks here in this region [Geelong].
“A Bay West option would have a lot of strong landside advantages – access to standard rail gauge, access to a national freight network, access to regional cities, excellent road connections with the M1 and the planned outer metro route (which will connect up with the Hume highway), and close proximity to Avalon and Tullamarine airports,” said Ms Hutchins.
Mr Hodgett said that Hastings was a better option for Victoria’s next international container port and an expansion of the existing port facilities can be achieved to accommodate 8000+ teu by 16-metre draft vessels.
“Port of Hastings is an existing, natural deep-water port. “We are confident that effective new container port capacity can be delivered at Hastings within the time frames required to avoid the disastrous gap in the state’s capacity to accommodate freight,” said Mr Hodgett.
Ms Hutchins argued that a big box port at Hastings could see a freight cost increase of up to $400 per container.
“That would lead to almost a doubling of the cost of freight and that in the broader sense will not only lose jobs in this region but in the state as a whole,” said Ms Hutchins.
Trade program urgently needed to lift Australia to level playing field
Without a national Authorized Economic Operator (AEO) program, Australia’s industry cannot exploit new global trading opportunities and is left at a severe competitive disadvantage, according to a recent Lowy Institute analysis.
Australia’s top ten import source countries, nine of its top ten export markets, and all but one of its bilateral free-trade agreement partners have established AEO programs.
Australian Customs and Border Protection Service fellow and report author Nicholas Humphries said the current lack of an Australian AEO program means local companies face higher import transaction costs than their counterparts in countries with programs that have attached import benefits.
Mr Humphries used his analysis paper "Global value chains, border management and Australian trade" as a call to action, stating there is no time to waste in establishing an Australian AEO program.
However, to ensure its efficacy it must be widely embraced by Australian industry and the attached benefits must be “meaningful, measurable, and reportable”. “To that end, a key feature of an AEO would be to make it easier and cheaper for Australian companies to import.
“This is critical to their ability to participate in GVCs (global value chains) because efficient access to imports increasingly determines the competitiveness of their exports,” he said.
At its core, an AEO program is a partnership between government and industry within which private entities enjoy tangible trade facilitation benefits and, in return, provide information and assurances about the security of their supply chain.
And it should be noted here that Customs is currently engaged with industry in the co-design of an AEO program known as Trusted Trader.
It is intended to be open to exporters and importers (who are increasingly the same entities), as well as other supply chain participants.
To become a Trusted Trader, a business would need to undergo a risk assessment that considers the entity, the goods being traded and its supply chain.
However, the authorisation process should not (wherever possible) add yet another layer of regulation, but instead leverage the existing information and systems of partner agencies and departments (and the entity itself), such as the Office of Transport Security and the Department of Agriculture.
This would not only mitigate the confusing trade-inhibiting effect of multiple regulations, but also minimise accreditation expenses for those entities already certified in other supply chain security schemes.
And while the scale and scope of AEO programs may vary, they shift the regulatory focus from the border transaction itself to the entities and systems behind the transaction.
They reduce transaction costs at the border for traders, and allow Customs to focus its resources on higher-risk movements of goods and people across the border.
Mr Humphries said local companies have no way to demonstrate to export markets that their supply chain security practices meet international AEO equivalent standards – standards that are increasingly “front and centre as determinants of competitiveness.”
“As a result, Australian companies are more likely to face delays at market ports, affecting the cost, timing, and reliability of Australian exports,” he said.
“Accordingly, foreign multinational companies concerned with reliability and costs – as well as their own supply chain security and AEO equivalent status – are less likely to include Australian companies in their GVCs.”
As stated by the report, GVCs incorporate all production activities including: design; production; marketing; logistics; distribution; and, support required to bring a product or a service from its conception to its end use.
However, successful participation in GVCs is not guaranteed and it will involve more than just trade facilitation reform.
Also fundamental are the continued unilateral and multilateral liberalisation of tariff and non-tariff barriers along with the right national policies for promoting skills development, education, innovation, and the creation of strategic infrastructure.
“The multidimensional nature of GVCs means that gains made on one front can all too quickly be negated by inertia on another,” he said.
Ultimately, the Lowy Institute analysis paper highlighted that it will take a whole-of-government approach to ensure that Australia can realise the opportunities of a changing global trading system.
Nevertheless, Mr Humphries said that better trade facilitation is a key step in improving Australia’s export performance and mitigating the disadvantages of a high-cost economy, distance from economic and knowledge centres, and a persistently strong dollar.
“A small but integral part of this strategy is soft trade facilitation reform at the border to streamline trade and reduce the cost of conducting business internationally.”
Capacity threat to cloud short term - Moody's
Rates in global shipping could rise, but only moderately, in the next 12-18 months, and capacity will outstrip demand and limit the ability of shipping lines in three sectors to improve their operating earnings.
That is the sober assessment of Moody’s Investors Service in its annual outlook on the industry.
Moody’s nevertheless said the industry would be stable for the next 12-18 months.
It said the “supply glut limits the ability of companies to raise the rates they charge for shipping freight, which subsequently constrains their revenue and [earnings before interest, tax, depreciation and amortisation] growth”.
Moody's made broadly similar assessments for the three major sectors, with the exception of the product tanker segment, where rates “should improve modestly” for the next 12-18 months because of tight supply.
It added, however: “We expect product tanker deliveries to increase after 2015, which will make sustained rate increases difficult.”
Supply in the dry bulk sector is problematic: deliveries this year have been delayed, says Moody’s.
If pushed into 2015, this could dampen the favourable factors that prompted Scorpio Bulker chief financial officer Hugh Baker to say that the “market is at early stages of a recovery that should really help it to prosper in 2015 and 2016”.
Demand for dry bulk will rely on economic growth in China, which is slowing.
Moody’s, citing Drewry Maritime Research, says deliveries of dry bulk carriers amounted to 19m dwt in the first half of 2014.
An additional 44m dwt is scheduled to be delivered by the end of the second half.
“But we may see vessel deliveries being pushed out because only about a quarter of the deliveries scheduled at the beginning of 2014 have been completed thus far,” Moody’s noted.
If the delays persist through 2015, it could aid the rates scenario.
However, if they are simply pushed into next year, it could hurt.
In container shipping, Moody’s notes that shipping companies are continuing to order the ultra-large containerships and warns of a supply glut into 2016.
“The vessel backlog for containerships will remain high through 2015.
Over time, if the backlog eases and older ships continue to be scrapped, the gap between supply and demand will decrease.
However, Moody's says this is "unlikely to take place before 2016”.
Doubt cast doubt over TSA decision to scrap GRIs
Plans to scrap recommended general rate increases (GRIs) and switch to base-rate guidelines announced by the Transpacific Stabilization Agreement (TSA) in September certainly raised a few eyebrows.
The TSA says that the new base rates will fully reflect the overall cost of services, including handling fees, intermodal costs and bunker surcharges.
The last time the TSA tried such a move was back in 2009 as it looked to halt the transpacific freight rate collapse that occurred early that year.
Back then the TSA set minimum rate guidelines of US$1350 feu to the US west coast and US$2500 feu to the US east coast.
Despite the recommendations rates soon fell to below US$1000 and US$2000 per feu on the west and east coast respectively, according to Alphaliner.
It was not until the following year that rates fully recovered, when vessel capacity cutbacks and increased demand caused severe space shortages on board carriers, which finally enabled lines to push through their 2010/11 season increases.
So if the introduction of a base-guideline did not work then, it begs the question as to why it would succeed this time round.
Source: Llyod’s List Oct 2014
Importing and Re-Exporting
Don't Overlook the TRADEX SCHEME is easier than ever to engage with....
The Tradex Scheme allows an importer to gain an up-front exemption from Customs duty and GST on eligible imported goods that are intended for export. The goods may be exported in the same condition as imported, subjected to a process or treatment after importation, then exported or incorporated in other goods which are exported. Export may be carried out by the importer or a third party.
Tradex provides an alternative to the Customs Drawback Scheme which requires an up-front payment of Customs duty and GST and then the subsequent recovery of these taxes when the goods have been exported. The Tradex Scheme can, therefore, provide a significant cash-flow benefit.
The goods must be exported within 12 months of importation, although approval can be sought to extend this period.
Customers are required to complete an application form for entrance into the Scheme.
For more information please contact your Account Manager.
Tougher rules on importing illegal timbers coming next month
New due diligence requirements for timber importers and processors designed combat illegally-sourced timber products will be in place from November 30, 2014.
“The government has consulted extensively with Australian businesses to develop practical regulations that address the real issues without unduly burdening industry,” parliamentary secretary to the minister for agriculture Senator Richard Colbeck said.
“We have worked to ensure that the Australian industry is provided with efficient processes to help them establish that the timber they’re dealing with comes from legal sources.
“Businesses will have to undertake a relatively simple due diligence process, which involves asking their suppliers to provide evidence that the products they are buying have a legitimate source.
“In fact, many businesses will now be able to rely on existing or only slightly modified business systems to stamp out an abhorrent environmental practice that undercuts responsible producers and markets,” said Senator Colbeck.
He added that the Department of Agriculture is working to implement processes that will help businesses comply with the new requirements.
“We are recognising international certification schemes so that businesses can use a streamlined due diligence process for timber that is already certified as being legally harvested,” Senator Colbeck said.
“We have also expanded the range of schemes that can be used to include the Forest Stewardship Council (FSC) and Program for the Endorsement of Forest Certification (PEFC) Chain of Custody schemes.
“This should ensure that many more businesses can rely on a streamlined due diligence process,” the Senator added.
The government had also worked with trading partners to develop Country Specific Guidelines to help Australian importers understand the certification schemes available in countries of origin, he said.
“For the first 18 months that the new requirements are in place, our focus will be on awareness and education. The new requirements are not about penalising people who genuinely make an effort to comply,” Senator Colbeck said.
About 5-10% of the global industrial round-wood trade is potentially illegally harvested, according to the Organisation for Economic Cooperation and Development, which translates to a loss of assets and revenues in developing countries of up to $23bn every year.
Australia imports about $4.4bn of timber and wood products (excluding furniture) each year of which, it is estimated by JP Management Consulting, a firm contracted to report on the subject for the Federal government, up to $400m worth comes from sources carrying a risk being illegally logged.
A high-level prohibition on trading in illegally-logged timber was brought into force in November 2012.
The Illegal logging Prohibition Act 2012 makes it a criminal offence to intentionally or recklessly import or process illegally-logged timber or timber products.
The new legal due diligence requirement will come into force on November 30, contained in the Illegal Logging Prohibition Amendment Regulation 2013.
These regulations will require importers and timber processors to assess and manage the risk that the timber they are importing / processing has been illegally logged.
“It is up to individual businesses to decide what due diligence arrangements they will implement,” reads a statement from the Department of Agriculture.
However, the department also adds that due diligence will include gathering information about the timber or product; using appropriate guidelines or frameworks (available from Customs) to help inform in decision-making; carrying out a risk-assessment; and taking extra steps to reduce the risk of the timber being illegally-logged or imported.
Importers will have to answer a declaration about their compliance with the due diligence obligations as part of their full import declaration to the Customs service.
Penalties for breach include five years’ jail; an $85,000 fine for an individual and / or $425,000 for a corporation.
A review of the illegally-logged timber laws is due in 2017.
Biosecurity gets $20m boost in Western Australia
Western Australia’s biosecurity defences for the agriculture and food sector will receive a $20m boost to upgrade the state’s early detection and response to pests and diseases.
Premier Colin Barnett said the government’s Royalties for Regions investment would reinforce the state’s “enviable biosecurity reputation” and ensure that WA’s major pest and disease-free status was maintained.
“Being free from many of the world’s worst pests and diseases gives WA a tremendous marketing advantage,” Mr Barnett said.
“We must work to protect this reputation to ensure existing and future trade opportunities are not compromised.”
The project includes activities to address biosecurity risk assessment, early detection of declared pests and disease, preparedness to respond to incursions of significant pests and disease, awareness and compliance with new laws, community engagement and the use of new technology.
Modelling, e-surveillance and other new technologies will be developed to aid the early detection of pests, diseases and weeds.
Smart phones technology will also be employed to encourage biosecurity recording, reporting and investigation, particularly in the grains and grape industries.
Value of Australian imports up 12% in September
Australia imported $22.6bn worth of international trade goods in September 2014, an increase of $2.5bn (12%) on the revised August 2014 merchandise imports of $20.2bn, according to recent data from the Australian Bureau of Statistics (ABS).
Its current International Merchandise Imports, Australia report states that in seasonally-adjusted terms, goods debits rose $1,.5bn (7%) between August and September 2014 to $22.9bn.
“Intermediate and other merchandise goods rose $973m (11%), and consumption goods rose $186m (3%),” said the ABS. “And capital goods rose $187m (4%).”
Meanwhile, a variety of trends in Australia’s top 20 goods imports are notable.
September imports of pumps (excluding pumps for liquids) increased 148.5% to $482m from $194m in August.
And the import value of telecom equipment and parts increased 45.4% to $1.02bn from $702m.
And furniture (including bedding), which happens to be one of Australia’s important containerised finished goods imports, increased 9.4% to $339m in September from $310m in August.
Imports of pharmaceutical products (excluding medicaments) decreased in value by 0.5% to $199m from $200m, while medicaments (including veterinary) increased in in value by 6.8% to $656m from August’s result of $614m.
The import value of household electrical equipment increased 10.1% to $228m in September from $207m.
And the value of imported prams, toys, games and sporting goods increased 18.3% to $323m from $273m.
Imports of rubber tyres, treads and tubes increased in in value by 5.6% to $209m from $198, and measuring and analysing instruments increased in in value by 10.2% to $260m from $236m.
7 Great Ways to Motivate Your Staff – A Guide for all businesses.
Your team or staff are your most valuable business asset. Keeping them engaged, motivated and satisfied should be your highest priority as a manager. Here are 7 great ways to help to the most from your staff/team.
Team-based incentives
Teams thrive when they can share in rewards together. Set team or department -based goals and have group incentives when they are achieved. These are separate to individual goal incentives and don't always have to be about revenue. While some teams don't have a revenue focus, what they do can affect revenue. Remember to set goals that are realistic. There is nothing more demotivating than a goal that is too hard to reach.
Recognition & rewards programs
We all like to be acknowledged when we do good work. Recognition in the form of competitions or high-achiever awards are a great way to encourage your team. Any new program must be constantly assessed along the way, so let your team know from the start that adjustments will be made as the effects on both the business and the team are better understood.
A 'thank you' goes a long way
You'd be surprised how far a simple 'thank you' can go to acknowledge a job well done. It can put a smile on someone's face for days. 'Thank you's' should be done verbally if possible, but the addition of a nicely written email or personal letter can be a great extra touch.
Nominate as mentors or advisors
To validate someone's ongoing contribution to your business they could be invited to be part of an advisory committee or mentoring program. They may appreciate the opportunity, and your business will benefit from their involvement in this way.
Be genuinely interested
As managers we have a big responsibility to the people we are entrusted with. Be sensitive to their individual needs, but don't step over the line. If someone seems concerned or distracted a simple 'how are things going?' can open the doors to sharing something and getting it off their chest.
Develop a team spirit
The best teams and departments are those that pull together both in good times and challenging times. A team spirit doesn't just happen by itself. As a manager you should lead the charge both in your attitude and the ongoing activities you initiate. Activities should be both work-related and social to create a true team environment.
Keep in touch regularly
Touching base individually with each member of a team or department on a regular basis will ensure you keep in tune with their needs and concerns. It's better to get constant feedback and make any necessary changes than to wait too long for issues to reach boiling point.
Source: IndustraCom Oct 2014
