Independent freight forwarders beware of Chinese scam

Independent freight forwarders around Europe are being targeted by a fraudulent scam conducted by fake or unscrupulous Chinese agents. Agents are being urged to ensure all due diligence is undertaken before entering commercial agreements with previously unknown partners.

The industry is used to being hit by hundreds of speculative emails from foreign agents offering cheap ocean rates and while most of these are ill-advised and often unprofessional, a number are used as cover for duping unsuspecting victims.

Several regional freight forwarding associations have brought the increasingly prevalent practice to light and highlighted the methods in which the scam operates.

BIFA (British International Freight Association) warned: “On face value these emails appear to be from independent forwarding companies looking for UK partners, by way of offering cheap ocean rates. The majority may be genuine but, for some, deep down there is criminal intent.

“Once an agreement is in place and business starts, all appears to be normal. This is until the cargo arrives at the UK port and no-one has received the original Bill of Lading. When contacted, the Chinese forwarder then demands a large ransom for the release of the original Bill of Lading.

“The dilemma for UK forwarders and their customers is whether to pay, knowing the pain and cost that comes with not having the original documentation.

“BIFA recommends diligence and advises that when entering into any form of agreement with an overseas partner, just asking for a signature on an agency agreement is not good enough.”

Releasing the cargo without the original Bill of Lading can lead to major problems and financial penalties and is to be avoided in all circumstances.

Europe Opens Antitrust Proceedings Against Unnamed Shipping Companies

EU efforts to ensure open competition in the container shipping industry increased last week with confirmation from the European Commission that it has begun antitrust proceedings against a number of unnamed global shipping companies.

The move is the last stage of an investigation begun in response to accusations from shippers and forwarders that shipping companies are colluding when publishing intended price increases via the media. The investigation itself is aimed at ascertaining whether there is what the EU terms a ‘concerted practice’ between these companies, with their announcements intended to communicate price hikes between them rather than a genuine warning to customers.

In a statement released on November 22, the EU Commission revealed that its investigation has been ongoing since as long ago as 2009, since when “these companies have been making regular public announcements of price increase intentions” either on their own websites and as press releases in the “specialised trade press”.

“These announcements are made several times a year and contain the amount of increase and the date of implementation, which is generally similar for all announcing companies,” the statement continued. “The announcements are usually made by the companies successively a few weeks before the announced implementation date.

“The Commission has concerns that this practice may allow the companies to signal future price intentions to each other and may harm competition and customers by raising prices on the market for container liner shipping transport services on routes to and from Europe.

“The Commission will now investigate whether this behaviour amounts to a concerted practice in breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU) and of Article 53 of the European Economic Area (EEA) Agreement.”

It’s generally believed that proving any collusion or wrong-doing will be extremely difficult given that, in recent years, shipping rates have fallen to a level that is considered by many in the industry as unsustainably low. This strengthens the idea that announced increases are simply a legitimate effort by these companies to keep their own businesses afloat in the face of extreme competition.

The Commission has confirmed that there is no legal deadline for bringing an antitrust investigation to an end. The duration of an investigation depends on a number of factors, including the complexity of the case, the cooperation of the undertakings with the Commission, and the exercise of the rights of defence.

While the individual companies have not been named, Maersk Line has confirmed that it is amongst them, issuing a statement that they are confident they have operated within the scope of the EU’s antitrust rules. In 2011, the offices of 14 of the world’s largest shipping companies – including Maersk – were targeted by EU authorities in a series of dawn raids across the continent.

European law strictly defends its open market and competitiveness policies so as to protect its markets against the influence of cartels. Any activities that may suggest companies are colluding or fixing prices between each other are, therefore, carefully investigated, and it is this factor that has brought the container shipping companies under the Commission’s microscope.

Several other industries have been targeted by the Commission in recent years, with the most high-profile including its antitrust investigation of suspected pricing collusion between Apple and a number of European and US-based e-book publishers, also in 2011.

Using eCommerce to expand your retail business into China

International Cargo Express Pty Ltd in conjunction with the China Retail Group is inviting you to learn about

Using eCommerce to expand your retail business into China
Why Australian retailers/brand owners need to get ready for China and how to go about it.

China is both an opportunity and a threat to Australian retailers and brand owners. Many foreign retailers succeed but many more fail or are in limbo.

This seminar aims to inform Australian retailers of cost effective means by which to enter the China market and expand using eCommerce as an entry point.  Our expert panel from King & Wood Mallesons, China Retail Group and Asia Pacific Digital will brief participants on current trends in China for ecommerce, market entry, working with Chinese partners and digital strategies to succeed.

Topics:

• Framing the China opportunity for retailers
• Strategies for market entry and fulfilment
• Building your brand effectively through social media

Melbourne

Wednesday, 29 January 2014

8.00am – 10.30am

Next Digital, Level 8, 14 William Street, Melbourne VIC 3000

Sydney

Friday, 31 January 2014

8.00am – 10.30am

Sydney CBD – venue to be confirmed

Please RSVP by 17.01.2014 to rspahr@icecargo.com.au

The Tradex Scheme: How It Benefits Importers

Australian importers do not only import goods to satisfy the Australian retail market. Some consignments are imported with the express intention of exporting them again at some time in the future. It might seem strange, but it’s common practice especially when those goods are used by Australian manufacturers to complete their goods for export.

Logically, this import-export revolving door system would add greatly to the cost of goods, but the introduction of legislation has tried to reduce that impact as much as possible. The Tradex Scheme is the newest and the most effective to be introduced, and for importers represents the best cost-saving option available.

Why? Because it’s designed not only to negate the cost of import duty by allowing qualifying importers secure duty refunds, but actually streamlines the system completely. In fact, with Tradex, the financial pressures on importers are eased considerably.

How the Tradex Scheme Benefits Importers

The Tradex Scheme was originally introduced in 1999 to replace the Duty Drawback Scheme that had existed under the Customs Act 1901. The drawback system was a welcome development, with importers reclaiming both the duty and the Goods and Services Tax (GST) payable when importing goods. But the refund was only available once the imported goods were exported to their destination, which means a waiting period of several months before those costs are recouped.

The Tradex Scheme effectively cuts out that waiting period by qualifying the importer for an exemption from customs duty and GST. So, instead of paying those costs and reclaiming them later, the payment is skipped on the understanding the goods imported will be exported anyway.

The savings can be significant, not least in the crucial area of cash flow. For example, an importer might face a customs duty bill of 5% on a consignment and an additional 10% GST payment at the time of importing.

But with the Tradex Scheme, that payment not longer applies, so expenditure is lower. Perhaps even more importantly, that cost is not passed on along the supply chain, ensuring exporters benefit too.

Who Qualifies for the Tradex Scheme?

Of course, the scheme is not available to simply anyone. According to AusIndustry, the division of the new Department of Industry responsible for the implementation for the Tradex scheme, only those importing one of 3 categories of goods are eligible for the scheme.

• Imports that are intended to be exported again
• Imports that are to be incorporated in goods to be exported
• Imports that are to be used in manufacturing goods to be exported

Also, the exportation of these goods must take place within one year of their arrival in Australia, or a longer period subject to the approval of AusIndustry.

The range of goods that can fall into one or more of these categories is extensive, but ineligible goods include those which are:

• intended for sale in retail outlets at duty-free or other tax-free prices
• excise-equivalent goods, meaning if they were produced in Australia, they would be subject to excise duties anyway. These goods include most forms of alcohol, tobacco products and petroleum products.

Getting a Tradex Order

Like most matters relating to import and export paperwork, complexity is commonplace when it comes to securing a Tradex order. You can download the application pack directly from the AusIndustry and fill in the forms independently, but it’s best to let properly versed professionals take care of the paperwork – like your International Cargo Express team.

For many importers, the biggest challenge is in having the necessary paperwork in order to satisfy the scheme. Applying for the Tradex order must be done before importing any goods, but poorly organised applications can take as long as 30 days if AusIndustry decides to carry out a more detailed assessment.

The good news is that once your application is accepted there is no need to apply again ahead of any future consignments. So, getting it done right first time is well worth the time and effort.

Of course, this is dependent on the necessary paperwork being kept in proper order. This includes not only records of the imports nominated to be covered by the scheme, but also any manufacturing records where the imports were incorporate on finished products for export.

Contact Your ICE Team

At International Cargo Express, we’re always interested in helping our clients cut their costs by taking advantage of the full range of concessions and entitlements they are entitled to. To find out exactly how the Tradex Scheme can benefit you, simply call your nearest ICE team. Then why not let us take care of it, and guide you to lower costs and greater competitiveness.

Vertical Services The Future Of Freight Forwarding

The future of the freight forwarding industry rests on the ability to provide Vertical Services, according to experts speaking at an international conference at the Supply Chain Academy in the UK in September, which was attended by International Cargo Express Managing Director Ronald Spahr.

The Supply Chain Academy was established by ICE’s UK-based agency, Uniserve, to educate forwarders and customers alike on developments in the industry. Almost 20 freight forwarding agents from around the world, from Canada to Bangladesh, attended the conference.

The conference was told that European freight forwarders are increasingly dealing with companies looking for ways to offer greater benefits to the customer. As a result, the industry is now steering away from transactional relationships, which are highly competitive but offer no real benefits either to the forwarder or the customer.

Transactional Vs Vertical

A transactional relationship relates to a basic import or export deal, with revenue earned only through the transportation of cargo. Competition in that arena is so acute that the difference between deals is often only a few dollars.

Vertical services relate to the freight forwarder going beyond the scope of the traditional transactional relationship, incorporating aspects that effectively mean handling the entire supply chain system so as to offer solutions to any issues that may crop up.

The principal benefit to the customer is that costs are reduced because the whole range of tasks involved is kept in the hand of one service provider. A secondary advantage is that the service can run more efficiently since there is no need for complex collaboration or integration agreements between two or more interested parties – one company takes care of it all.

“Offering Vertical Services means offering more entrenched services that help to streamline the importation and exportation procedures,” explains ICE Managing Director Ronald Spahr. “This can be provided by checking on a customer’s entire supply chain system, identifying any hiccups that may exist and offering a solution that improves it.”

ICE Already Positioned For Change

According to Mr. Spahr, International Cargo Express is already well positioned to develop its own dedicated Vertical Service.

“ICE already works closely with customers, sharing our expertise and knowledge to ensure our customers enjoy the maximum benefits and savings. It means we can easily be subcontracted to do the functions that many customers traditionally arrange at a significant cost in-house. This is because most of those functions are replicated in our own existing services. We already know that this is where the big savings are for our customers.”

For more information on Vertical Services from International Cargo Express, simply contact the ICE Team. We’d be glad to address any queries you have.

Abbot Point Development Hit By BHP Withdrawal

Plans to expand Queensland’s Port of Abbot Point into Australia’s largest coal exporting facility have taken a severe hit with confirmation that BHP Billiton has withdrawn its interest in developing a new terminal at the port.

BHP had been identified as the preferred developer of Terminal 2 in the ambitious expansion, and had committed a sum of $5 billion to a project that included the construction of a railway line from Goonyella. The terminal, work on which was to begin in 2015, would have increased the coal export capacity of the port by an estimated 60 million tonnes per year.

Doubts over the project were raised as long ago as 2012, but it is only in November that the multinational mining corporation formally relinquished its claim as developer with North Queensland Bulk Ports (NQBP). In a statement, the company confirmed it would also “formally withdraw from related regulatory applications”.

The decision has caused NQBP to rethink the future of the development plan, but two companies remain committed – Adani and GVK Hancock, who hold the development rights to Terminal 0 and Terminal 3.

NQBP has stated that it will review the plan and assess how best to hold a “staged and timely incremental expansion” of Abbot Point as it searches for a new developer for Terminal 2.

Queensland’s port development plans have been set back by a number of events in recent months. A report from the public interest think-tank, The Centre for Policy Development, published this month, stated that port over-development along the Queensland coast would significantly weaken the state’s economy in the long run.

“Coal ports are operating at 65 per cent capacity, well below the industry average of 85 per cent,” the report claims, while its author, Laura Eadie, has stated that should Queensland develop Abbot Point, “it may all be for nothing. There is a risk of stranded assets, job losses and royalty shortfalls”.

Meanwhile in June, UNESCO warned that the Great Barrier Reef, which lies just a few miles directly east of Abbot Point and along the Queensland coast, could be added to their ‘In Danger’ list. It claims that by developing ports further, the risk of damage to the world-famous location will only increase.

At present, the Queensland government is re-examining its port and dredging policies, with Deputy Premier and State Development Minister Jeff Seeney stating the “Great Barrier Reef must not be put at risk”.

A new draft strategy is being considered, in which dredging for deep water port developments would be banned for 10 years and port authorities required to prepare master plans. The strategy is open for public comment until December 13.

ICE To Expand Freight Forwarding Services Into South America

International Cargo Express is to expand its full freight forwarding services into the South American market, greatly enhancing the options available to Australian importers and exporters.

Port of Montevideo in Uruguay

ICE has already established itself as a leading name in the freight forwarding industry from Australia to European and Asian markets and is enjoying a growing presence in the North American market. Launching new services into South America represents a major expansion for ICE as a global freight forwarder.

In a statement, ICE Managing Director Ronald Spahr said: “This is an exciting development for everyone at International Cargo Express. Now, we can offer the entire pallet of freight forwarding solutions in all South America countries, including customs clearance, delivery and distribution of cargo.”

Offering services that meet the highest levels of quality has always been a core part of ICE’s philosophy. Now, with new agents that have IT platforms that can communicate easily and securely with ICE’s own platform, the Australian freight forwarders are in a position to guarantee the same standards of excellence that customers enjoy when importing or exporting to other parts of the world.

ICE is now able to provide the complete forwarding and logistical solution for ocean and air freight services throughout South America. These include advice and document preparation for customs clearance, shipment tracking, contract management, exhibitions logistics services, warehousing and distribution services.

The news follows a series of meetings ICE Managing Director Ronald Spahr had in September with agents in Miami, USA, which is considered the gateway to Central and South America.

For further details about the exciting new freight forwarding opportunities available from International Cargo Express, simply contact the ICE Team. We’ll be glad to talk to you about how our new services to the Americas can cater to your needs.