time release study 2007 - international transport forum

Time Release Study 2007

1Time Release Study 2007

Contents

Executive Summary 3Introduction and context 3Scope and methodology 3Results 4Key findings 4Acknowledgements 5

Introduction 7

Scope and methodology 9TRS sample size and strata 10TRS sample unit 10Sample period 11The WCO’s TRS measure 12Industry engagement 12

Results 13Results in context 13Cumulative views of cargo status 14Enablers of Australian trade facilitation performance 16Comparisons 17

Findings 19Customs and Border Protection’s processes are not a significant impediment to trade 19The entities and variables contributing to trade facilitation performance are numerous, inter-dependent and span border agencies and industry 21Effective Risk Management is Integral to Trade Facilitation 30The TRS reveals opportunities to further improve Trade Facilitation 30

References 32

Appendices 33Appendix A – Terms of Reference 33Appendix B – TRS Working Group 34Appendix C - TRS Reference Group 35Appendix D – Sample Characteristics 36Appendix E – Exclusions from the TRS Sample 37Appendix F – Definitions 38


Introduction and context

A Time Release Study (TRS) is a method endorsed by the World Customs Organization (WCO) to measure customs performance in trade facilitation. In 2008, the Australian Customs and Border Protection Service (Customs and Border Protection) completed its first TRS for a sample of trade taken from September 2007.

The key objectives of the TRS are:

to establish a baseline of Customs and Border • Protection’s performance in trade facilitation

to identify opportunities to improve or reform • that performance.

Scope and methodology

WCO guidelines were applied to determine scope and methodology.

The scope of the study included import cargo arriving by air and sea in the week from 24 to 30 September 2007 inclusive. The methodology recommended by the WCO has been applied to identify the timing of key events in the import process to allow measurement of:

The arithmetic mean between the arrival of the goods and their release into the economy via a standardised system.

Measurement was based on data from all suitable transactions in the sample period (approximately 36,000 sea cargo and 106,000 air cargo transactions).

TRS PhasesThe study was conducted over four main phases:

Design: A TRS Working Group1 was formed to scope, plan and design the study in accordance with the

WCO guidelines. In addition, a TRS Reference Group2 consisting of industry and other government agency participants in the supply chain was formed to assist planning and review, as a source of expert advice and to provide complementary data for the validation of inputs. The characteristics of the basic sample unit/cargo transaction were established and relevant events in the import process cycle were identified, along with the data required to measure the elapsed times for key intervals including the primary measure, from Arrival to Release.

Data extraction and measurement: All the data required for TRS was collected during the normal course of business via the Integrated Cargo System (ICS), Customs and Border Protection’s electronic gateway and processing system for trade transactions. Consequently, the study was conducted as a data snapshot. The snapshot was conducted more than two months after cargo arrival to allow for all relevant events to have occurred. Time gaps for required intervals were measured and averaged.

Engagement with stakeholders: Following internal testing of the results, members of the TRS Reference Group were selectively engaged to provide industry data to validate and verify the accuracy of the ICS data and the associated TRS measurements. TRS results were then presented at a number of industry forums and feedback sought as to their perceived accuracy. Finally, a series of structured interviews were conducted with a small selection of importers and service providers to further test and validate the results, and to identify the dependencies that influenced the timing of their own actions in the import process.

Analysis and reporting: The results were analysed to determine the impact of Customs and Border Protection’s processing on the delivery process and for comparison with like measures internationally.

Executive Summary

1 Members of the TRS Working Group are listed in Appendix B.2 Members of the TRS Reference Group are listed in Appendix C.

4 Time Release Study 2007

The results were segmented based on various dimensions, such as the port of discharge, weekday of arrival and the clearance method applied. This illustrated the effect of different variables on the time taken to achieve Release. Key findings were identified and where they indicated opportunities for improvement, recommendations were developed to address them.

Finally, this report has been prepared to share the results with participants in the study and all those with an interest in trade facilitation.

Results

The interval from Arrival to Release is the primary TRS measure. The TRS results for Australia are shown below in the Results Table.

Whether compared to the standard TRS measure of Release or the more conservative measure of Clearance, Australia’s results compare favourably with the most recent TRS measurements from other economies in the Asia-Pacific region.

Key findings

Analysis of the results produced by the TRS and the factors underpinning them identified the following key findings:

The TRS results (and the subsequent responses to 1. them by traders and their service providers) indicate that Customs and Border Protection’s processes are not a significant impediment to import trade.

The entities and variables which contribute to and 2. influence trade facilitation performance are numerous, inter-dependent and span the border agencies and industry.

The effective and efficient management of risk at 3. the border is a critical and integral element of trade facilitation performance.

Opportunities do appear to exist for Customs 4. and Border Protection to further enhance trade facilitation by adjusting and supplementing current arrangements. Specifically, there are opportunities to increase the proportion of documents submitted early and to deal with consignments faster.

Ongoing measurement of trade facilitation 5. performance contributes to improvement and reform by helping to inform decision-making by both government and industry.

IntervalAverage Time –

Sea Cargo (Days)Average Time – Air Cargo (Days)

Arrival to Release 1.3 0.3

Arrival to Clearance 1.8 0.3

RESULTS TABLE : Average Times for Cargo from Arrival to Release and Clearance


Acknowledgements

The efforts and expertise of many have contributed to this study. Particular acknowledgment and thanks go to:

members of the internal TRS Working Group who • gave their expertise and effort

members of the TRS Reference Group who provided • advice and perspectives from their industries, along with data which complemented the study

officers of Japan Customs and Tariff Bureau for • their time and advice of their experience in the conduct of TRS

officers of Korea Customs Service for their advice and • perspectives on TRS

Mr Nakayama Daizo, Japan Customs Brokers • Association for his most valuable assistance in arranging input from his members on their experience of TRS

Customs and Border Protection’s Applications Branch • staff for their commitment, enthusiasm and sustained effort which was critical to the project

project sponsors for their ongoing support•

the Strategy & Program Support team, • Enhanced Trade Solutions Branch, Australian Customs and Border Protection Service.


Trade facilitation is a key principle of the World Trade Organization (WTO) and of Asia-Pacific Economic Cooperation (APEC). Studies by the Organisation for Economic Co-operation and Development (OECD) show that the thinning of trade barriers increases domestic productivity. The objective of trade facilitation lies within the outcome Customs and Border Protection is required to deliver, that is:

Effective border management that, with minimal disruption to legitimate trade and travel, prevents illegal movement across the border, raises revenue and provides trade statistics.

As traders worldwide seek the fast and predictable release of cargo, the time taken to achieve release has become a benchmark measure by which the international trading community assesses the effectiveness of a customs administration. The TRS is designed to measure the time taken from the arrival of goods at a port until their release.

In our region, Japan and Korea have used TRS since 1991 and 1998 respectively, to measure performance and to identify opportunities for both government and industry to streamline trade. The measurements obtained over this time clearly demonstrate the achievement of a dramatic reduction in release times in both economies.

In January 2007, Australian Customs and Border Protection Service informed the APEC Sub-Committee on Customs Procedures (SCCP) that it would be adopting the TRS model. Subsequently at the APEC summit held in Sydney in June 2007, Customs and Border Protection advised industry of its intention to implement the first TRS in Australia and requested industry’s cooperation in doing so.

Introduction


Inclusions Exclusions

Cargo Direction Imports• Exports•

Geographical and Administrative Scope

All Regions• All Ports• All Customs and Border Protection offices•

-

Type of Goods All Goods• -

Goods Destination and Discharge

All Goods destined for • Australian ports and discharged at the Destination Port

Feeder Port Cargo• Transhipment Cargo• Transit Cargo•

Mode of Transport Air Cargo• Sea Cargo•

Post• Other (i.e. Self-propelled, • Hand-carried, or Pipeline)

Type of Cargo Air Straight-Line• Air Consolidated• Sea Containerised (FCL or FCX)• Sea Containerised (LCL)• Sea Break-bulk• Sea Bulk•

-

Type of Declaration Goods Cleared By

Import Declarations• Self-Assessed Clearance declarations (SAC)• Cargo Report Self-Assessed Clearance • declarations (CRSAC)

Unaccompanied Personal Effects • (UPE) ReleasesCarnet Releases• Contingency Releases•

TABLE 1.1: TRS Cargo Scope

TABLE 1.2: TRS Events Captured

Core Second Tier Third TierArrival of carrying vessel or aircraft• Discharge of goods• Lodgement of required documents• Release• Clearance•

Consignment ‘Ready to Pay’• Consignment unimpeded by • Customs and Border ProtectionConsignment conditionally • Released by AQISConsignment unimpeded by AQIS• Unpack (i.e. consignment • out-turned at deconsolidation establishment for LCL containers or consolidated air cargo)

When goods are removed from • Customs and Border Protection’s controlReceipt at importer’s premises*•

*The World Bank measures the time interval from arrival to receipt at importer’s premises.

This chapter sets out the scope and methodology employed for the Time Release Study.

All core data was sourced from the ICS, with supplementary data sourced from industry for validation and extension of the study.

The week studied was 24 to 30 September 2007 inclusive.

Scope and methodology


TRS sample size and strata

The TRS sample is stratified by air or sea cargo and is further broken down into types of cargo as detailed in Table 1.4.

TRS sample unit

The TRS sample unit is based on Unique Cargo Lines (UCLs) as the lowest level of reporting to Customs and Border Protection. This level of reporting is suitable for both air and sea cargo. Table 1.5 below describes the inclusions and exclusions from the sample unit.

TABLE 1.3: TRS Intervals Measured

Core Secondary Other

Arrival to Release • Arrival to Clearance• Arrival to submission of all required • documents (Documents)Arrival to Ready to Pay (RTP)•

Declaration lodgement to Arrival • Cargo Report to Arrival • (OBL and HBL for Sea; MAWB and HAWB for Air)Impending Arrival Report to Arrival• Documents to Customs Unimpeded• Customs Unimpeded to RTP• Release to Clearance•

Arrival to Discharge• Arrival to Unpack•

Sample Strata Sample Size Sample Sub-strata

Air 106,000 units Consolidated Cargo• Straight-Line Cargo•

Sea 36,000 units FCL Cargo• FCX Cargo• LCL Cargo• Bulk Cargo• Break-bulk Cargo•

TABLE 1.4: TRS Sample Size and Strata

TABLE 1.5: TRS Sample Unit

Included Excluded

Carrying vessel or aircraft arrived within the • sample periodLoaded overseas• For discharge in Australia• Sourced from lowest level bill (cargo report)• Destination is an Australian port• Discharge port is the same as destination port• Cleared via a standard system•

Feeder port cargo• ‘In-transit’ cargo• Transhipment cargo• Cabotage cargo• Cargo repositioned for export• Empty containers• Air part-shipments• Cargo that has been seized by Customs and Border • Protection or AQISCargo reports that have a status of ‘withdrawn’• Time-up cargo – being cargo that has not been • cleared within 60 days of arrivalMail• Personal effects• Goods cleared by carnet•


120

100

80

60

40

20

0

140

160

180

200

Num

ber o

f Con

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ers

Dis

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(’000

s)

Month

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Num

ber o

f HAW

Bs

Rep

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00s)

Month

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

600

500

400

300

200

100

0

700

800

900

1 000

FIGURE 1.1: Total Number of Containers Discharged per Month in 2007

FIGURE 1.2: Total Number of House Airway Bills (HAWBs) Reported per Month in 2007

Sample period

The WCO recommends that the sample period chosen should be one of ‘normal’ traffic, avoiding seasonal

variations. Based on data from industry reported to the ICS, September was suitable as ‘middle-of-the range’ between peak and low activity, as evidenced by Figures 1.1 and 1.2.


The WCO’s TRS measure

The WCO’s TRS measure is:

The arithmetic mean between the arrival of the goods and their release into the economy via a standardised system.

WCO TRS DefinitionsIn the WCO’s TRS Guide the terms ‘Release’ and ‘Clearance’ are defined as follows:

Release: The action by Customs to permit goods undergoing clearance to be placed at the disposal of the person concerned.

Clearance: The accomplishment of all formalities necessary to allow goods to enter home use, to be exported, or to be placed under another Customs procedure.

Customs and Border Protection TRS EquivalentsThese two events are defined in the local context as follows:

Release: This is equivalent in Australia to a cargo status of ‘Conditional Clear’. This is the point at which the consignment is clear of any Customs and Border Protection impediments, has been paid, and may be removed from customs control (i.e. is placed at the disposal of the persons concerned). Once Release status is given, the timing of actual removal or delivery is at the discretion of the importer or their service provider.

Under Australian legislation, Customs and Border Protection does not have the concept of conditional clearance in relation to its own requirements. Any conditions remaining at this stage are those of other border agencies, in particular the Australian Quarantine

and Inspection Service (AQIS). Broadly, AQIS has two kinds of impediments:

those that prevent removal altogether•

those that allow removal subject to conditions (usually • referring to treatments such as fumigation or additional inspections) which may be dealt with beyond the border but must be met before the goods are released into home consumption. Conditional clearance can be granted in these instances.

Clearance: This is equivalent in Australia to a status of Clear. This is the point at which the consignment is completely unimpeded by either Customs and Border Protection or AQIS (i.e. all impediments and conditions must have been completed and acquitted).

Industry engagement

The TRS results and analysis were tested in a number of industry forums to confirm whether the results aligned with industry experience.

Interviews were also conducted with a selection of importers and service providers to further test the results (and to understand the reasons behind late reporting or declaration and the factors governing the timing of payment). The interviewees confirmed the results found in the study.

A separate project recently conducted to assess the relationship of stakeholders with Customs and Border Protection produced similar findings to the TRS regarding industry perceptions of Customs and Border Protection’s performance and service levels.

Together, these three separate sources of information helped to confirm the reliability of the broad findings based on the TRS data snapshot.


The interval from Arrival to Release (or ‘Conditional Clear’) is the primary TRS measure. Using the WCO standard measures for Release and Clearance, the results of this study can be found below in Table 2.1.

Results in context

The TRS results allow assessment of the extent to which the timely delivery of cargo is impacted by:

when cargo is fully reported to enable processing • to begin

border agency processing procedures and timeliness•

the actual physical availability of the cargo • for collection.

Table 2.2 details the results in context, with descriptions of the events below:

Documents – when a consignment is fully reported and declared to Customs and Border Protection, including all cargo reports and declarations. Each consignment must have the following set of documents:

a report of the impending arrival of the carrying vessel • or aircraft from the operator responsible (Impending Arrival Report)





TABLE 2.1: Average Times for Cargo from Arrival to Release and Clearance

Results


manifest information/cargo reports from both the • carrier and as appropriate, the freight forwarder (Cargo Report)

a declaration in respect of the goods from the • importer or their service provider (Full Import Declaration or Self-Assessed Clearance declaration).

The Documents event occurs when the last of these for a consignment is received.

Customs Unimpeded – when a consignment is unimpeded by Customs and Border Protection, though it may be held by AQIS and payment is still required. Indicates when Customs and Border Protection’s risk assessment, evaluation and processing is completed.

Ready to Pay (RTP) – when a consignment is unimpeded by both border agencies except for the requirement to pay duties, taxes and charges. This event is included because the most common trigger for Release is payment, the timing of which is usually at the discretion of the importer or their service provider.

Availability – when a consignment is physically available for delivery, regardless of whether it has been released. For consolidated cargo, availability has been defined as the time of unpacking from containers. For other cargo, the time of receipt at the discharge terminal from the carrying vessel or aircraft has been used.

Cumulative views of cargo status

The data compiled for the TRS also allows measurement of the proportion (or cumulated percentage) of consignments which have reached a particular status (such as Documents or Release) in relation to a reference point in time (such as Arrival).

This illustrates the pattern of behaviour or performance as time progresses and provides a measure of the proportion of consignments dealt with at points in time. The plot-lines produced also show how much cargo has not been dealt with at the same points in time.

Sea CargoA view for sea cargo is shown in Figure 2.1. It shows the pattern of consignments reaching each respective status with reference to the key event of Arrival. Plot-lines for the average times from Arrival to Discharge and Arrival to Unpack are included to provide additional reference points. Each of the plot-lines shows the cumulative proportion of consignments reaching a certain status in relation to the time of arrival.

Documents - at Arrival around 80% of consignments are fully reported and declared to Customs and Border Protection.

Ready to Pay (RTP) - the shape of this curve follows the pattern of reporting, and clearly shows that the completion of processing by Customs and Border Protection and AQIS is dependent on the timeliness of industry reporting and declaration. The vertical gap between the two lines is relatively uniform and represents the proportion of consignments held by Customs and Border Protection and/or AQIS at that time.

Release - analysis has shown that payment is, in most cases, the trigger for Release, and is only made once customs brokers are certain of all relevant statuses for the consignment. This is in addition to statuses from Customs and Border Protection and AQIS (i.e. RTP), and includes items such as the clearance of commercial documents, secure bookings for vehicle slots, inland transport and readiness of the importer to receive the



Arrival to Documents -2.4 0.04

Arrival to Customs Unimpeded -1.5 0.2

Arrival to Ready To Pay -1.1 0.2

Arrival to Availability 1.2 1.6



TABLE 2.2: Average Times for Cargo from Arrival


Perc

enta

ge C

ompl

eted

(%)

Days To/From Arrival

100

90

80

70

60

50

40

30

20

10

0-22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 222018161412

All Documents LodgedReady To PayReleaseAverage DischargeAverage LCL Unpack

FIGURE 2.1: TRS Sea Cargo

Perc

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ompl

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(%)


100

90

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70

60

50

40

30

20

10

0-1.0 -0.5 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0

All Documents LodgedReady To PayReleaseAverage DischargeAverage Unpack

FIGURE 2.2: TRS Air Cargo


cargo. The vertical gap between RTP and Release at each point in time represents the percentage of consignments being held at a customs broker’s discretion awaiting the decision to pay.

Average Discharge - this is included to show the degree to which the above statuses impact the delivery cycle by preventing the release of goods that are otherwise physically available for removal from the wharf.

Average Unpack - as for Discharge above. Applies to consolidated (LCL) cargo only, which represents less than 20% of all sea cargo.

Air CargoFor air cargo, the same treatment is shown in Figure 2.2. The plot-lines for the same statuses for air cargo show similar dependencies as sea cargo, though the initial difference in shape represents the tighter reporting timeframes inherent in the air industry.

Documents - the very steep part of the curve prior to arrival reflects the dominance of the express couriers which handle more than 80% of all air consignments, most of which are reported on a single document combining a cargo report and simplified declaration. The flattening of the curve after arrival primarily reflects consignments reported by other forwarders and cleared by customs brokers, mostly via a separate Full Import Declaration.

Ready to Pay - as for sea cargo, the RTP curve follows the Documents curve. The vertical gap between them represents the proportion of consignments held by Customs and Border Protection and/or AQIS.

Release - this curve is almost identical to the RTP curve, indicating that the decision to pay is either not an issue at all (more than 80% of air cargo is cleared without payment of duties, taxes or charges via concessions provided for consignments valued at less than

AUD$1000) or is not treated as a sufficient reason to delay.

Average Discharge - is included to show how much the preceding events or statuses are impacting the delivery cycle by preventing the release of goods that are otherwise physically available for removal. Discharge is only relevant for Straight-Line cargo (i.e. cargo which is not consolidated but delivered directly from the discharge terminal). Cargo of this type represents less than 3% of all air cargo.

Average Unpack - as above. Indicates physical availability for consolidated cargo only, being cargo packed in containers which are deconsolidated or unpacked at a depot after removal from the place of discharge. Consolidated cargo accounts for more than 97% of all air cargo consignments.

Enablers of Australian trade facilitation performance

These results rely on current levels of capabilities, rules, practices and performance levels which span government via the border agencies and industry. These ‘enablers’ are summarised below in relation to the timeliness of reporting and declaration, the time taken by the border agencies to perform their processing and the time when goods are made physically available.

Reporting and declarationA framework of legislation, organisation and systems capability operates to support the achievement of ‘early report, early status’ for reporters and declarers who can take advantage of the opportunity. The option of reporting electronically to Customs and Border Protection has been adopted by industry to a high degree, with more than 98% of all reports and declarations submitted electronically, predominantly via electronic data interchange.


Demand from stevedores for early advice of Release status in order that they may provide certainty of delivery times to importers and their service providers provides impetus to early reporting. Similarly, large importers actively managing the performance of their supply chains, increase the incidence of early reporting and declaration.

Border agency performanceCurrent border agency performance is enabled by policy, organisation and capability including resources. Customs and Border Protection, as the primary border agency, protects against risks to the integrity of Australia’s borders for trade and travel. It also administers a range of border controls on trade for and with 41 other government agencies. Quarantine and health matters are managed by AQIS.

Customs and Border Protection’s ICS provides a single window to government for trade reporters and declarers and is highly integrated with AQIS systems. A common declaration from importers is used by both Customs and Border Protection and AQIS. The ICS is accessible to industry for 144 hours per week for the receipt of reports and declarations or more than 97% of total available time.

In addition, the adoption and practice of risk management in Customs and Border Protection’s assessment and evaluation processes means that large proportions of trade are not impeded at all. Capabilities for non-intrusive assessment and examinations also serve to reduce the level of physical intervention and delays in release.

AvailabilityThe speed with which cargo is discharged and made physically available for delivery is enabled by capable cargo handling infrastructure at terminals. Physical availability of cargo is one of the key determinants of when customs brokers decide to pay, with payment the trigger for the Release event from the border agencies. However, other factors such as the arrangement of

handling, inland transport and receipt, determine the timing of actual removal.

For sea cargo, stevedore policy setting the amount of ‘free storage’ time allowed for cargo from availability is a critical factor determining the timing of removal. Complementary data from stevedores indicates that the average ‘dwell time’ from arrival to removal for containers at wharves is closer to the free storage period of three days, than it is to the average time from Arrival to Release, which for FCL containers is around 0.8 days. This indicates that importers and their service providers are utilising the free storage period either to complete transport arrangements for removal or pending readiness of the importer to receive the goods.

Comparisons

International TRSWhile TRS is not intended as a device for competition between economies, the results obtained are broadly comparable. Whether compared on the standard TRS measure of Release or the more conservative measure of Clearance, Australia’s results compare favourably with the most recent TRS measurements from other economies in the Asia-Pacific region.

‘Doing Business’ SurveyThe World Bank’s ‘Doing Business’ survey captures data on a range of measures to establish the relative ‘ease of doing business’ in 178 economies (2008). The ‘Trading Across Borders’ ranking (in which Australia was ranked 34th) is based on a number of indicators, including ‘time for import (days)’.

‘Time for import’ is defined as the interval between a consignment’s arrival and its receipt at an importer’s warehouse. The sample criteria require a standard container of a commodity that is not hazardous or impeded by health regulations and that is imported by a large importer in a large city. For Australia, the


measurement included in the World Bank’s 2008 survey was 12 calendar days, compared with an OECD average of 10.4 days.To test this figure, the TRS results were supplemented with data from a selection of importers meeting the World Bank’s criteria. The finding of this study is that on average, these importers receive containers fewer than six days after arrival. That is, less than half the World Bank’s figure.

Logistics Performance Index (LPI)The International Bank for Reconstruction and Development’s ‘Logistics Performance Index’, is a global survey of 150 countries which aims to show how those various countries are performing in trade logistics. Australia ranked 17th in the study published in 2007 with a LPI score of 3.79.

The score is determined by ratings against a range of both quantitative and qualitative measures, in several areas of performance, including the efficiency of the clearance process by customs and other border agencies. The customs indicators include a measure of the time taken between the submission of an accepted customs declaration and customs clearance.

In the LPI segment which evaluates the efficiency of the clearance process by customs and other border agencies, Australia ranks 17th with a score of 3.58 (Singapore is ranked first with a score of 3.90). The LPI measurement for this interval for Australia is 1.7 days.

Although the precise criteria used in the LPI are not evident, the most comparable TRS interval (from Documents to Ready to Pay) at 1.4 days for sea cargo, suggests that the LPI measurements are reasonably accurate and can be used for comparative purposes.


Customs and Border Protection’s processes are not a significant impediment to trade

The charts in Figure 3.1 show the proportions of cargo in the following categories at the times of arrival and physical availability:

Released•

Ready to Pay•

Impeded, or •

Documents incomplete • (i.e. not fully reported and declared).

As Figure 3.1 shows, the majority of cargo is released or at least eligible for release (by having a status of Ready to Pay) at arrival. The proportions of cargo that are effectively unimpeded at arrival, amount to 65% for sea cargo and 64% for air cargo. By the time the cargo is physically available for delivery, these proportions are approximately 73% for sea cargo and 93% for air cargo.

The single biggest determinant of cargo clearance performance is the timeliness of cargo reporting. If consignments are not fully reported and declared, border agencies are unable to complete their assessment processes.

Findings


Status at Arrival - Air Cargo

63%

1%

20%

16%

Status at Arrival - Sea Cargo

40%

25%

15%

20%

Status at Availability - Air Cargo Status at Availability - Sea Cargo

55%

18%

12%

15%

92%

1%3% 4%

ReleasedReady To PayImpededDocuments Incomplete

FIGURE 3.1: Cargo Status at Arrival and Availability

As shown in Figure 3.1, not all cargo has been reported and declared at arrival or even by the time it is physically available for delivery. Around 20% of sea cargo consignments are not fully reported and declared at arrival, with some 15% still not fully reported when the goods are physically available for delivery. For air cargo, the proportion not fully reported and declared at arrival is lower at around 16% and by the time the cargo is physically available, only around 4% is not fully reported and declared.

As can be seen, the proportion of consignments impeded by the border agencies is less than the proportion

not fully reported and declared or, for sea cargo, the proportion of consignments that is unimpeded and awaiting payment. These figures suggest that delays in the delivery of cargo due to the border agencies are relatively few.

These results were shared with industry, whose feedback confirmed that, whilst a number of irritants exist, the overall impact of border agencies is not viewed as a significant impediment to trade.


The entities and variables contributing to trade facilitation performance are numerous, inter-dependent and span border agencies and industry

The key influences on processing performance are the entities responsible for the timing of specific events and the determinants of differences seen when the TRS sample is segmented by dimensions such as cargo type and discharge port. These influences or variables are grouped into the following three areas:

the timeliness of reporting and declaration•

border agency performance•

the timing of Release.•

Timeliness of reporting and declarationThe variables which appear to most influence the timeliness of reporting and declaration are:

the number and degree of information dependencies • between parties in the supply chain

the effectiveness of business-to-business (B2B) • and business to Customs and Border Protection relationships and of communications between them

the framework of rules for when and how reporting is • required and the relative costs of not complying with such rules

the nature of goods and how freight is arranged•

geographic factors, as these determine transit times • (which provide greater or lesser opportunity for early reporting and declaration).

Border agency performanceThe variables identified as contributors to the speed of border agency processing are:

assessments of the level of risk•

risk management policies and practices as these • determine intervention rates, along with the consistency and quality of interventions

the extent of use of performance targets and • service levels for trade facilitation overall and for component processes

the use of information including performance data to • inform decisions on intervention and the application of resources

resources and working hours and capability, including • communications capability.

Timing of ReleaseAs mentioned above, Release is generally triggered by the act of payment. Customs brokers and importers have advised that the timing of their payment is determined by reaching a point of certainty regarding the status of their cargo, taking into account factors including:

unimpeded status from border agencies • (i.e. a status of Ready to Pay)

confirmation of shipment/‘on board’ status along with • vessel or flight details

commercial clearance (i.e. security of title)•

when cargo is physically available•

the pre-arrangement of landside handling, transport • and receipt

stevedore policy such as the length of time for free • storage at the place of discharge

local factors including working hours and the capacity • or availability of infrastructure and labour

financial considerations such as the existence of • duty-free arrangements, including Free Trade Agreements (FTAs) or the security of funding for payments made by customs brokers on behalf of their clients.


Events and entitiesExamination of the intervals shown previously in Table 2.2 enables identification of the entity or sector that is primarily responsible for the timing of particular events.

Documents (Industry) - occurs when the last document of the required set for a consignment is submitted or declared (usually the import declaration). Responsibility for it rests with the industry reporter or declarer who submits the last document.

Customs Unimpeded (Customs and Border Protection) - occurs when Customs and Border Protection evaluation is complete. Customs and Border Protection is primarily responsible for the elapsed time from Documents to Customs Unimpeded.

Ready to Pay (Customs and Border Protection and AQIS) - occurs when evaluation by both Customs and Border Protection and AQIS is complete. Where RTP occurs later than Customs Unimpeded, the additional time may be attributed to meeting AQIS requirements.

Availability (Industry) - occurs when cargo is made physically available for delivery, (i.e. according to cargo type, is discharged or unpacked). The timing of this event is in the domain of the cargo handling sector.

Release (Industry) - the trigger for this event is in most cases the act of payment, the timing of which is at the discretion of the importer or their service provider.

Clearance (AQIS) - occurs when any conditional impediments imposed on Release have all been removed. The duration between Release and Clearance represents the time taken to resolve conditions AQIS has imposed.

DimensionsThe dimensions examined below illustrate the influence of different variables on the timing of key events in the import process.

Mode of transportThe two modes of transport examined, sea and air, are treated as inherently different. This is reflected in the different legislated timeframes for reporting which accommodate their different natures. Consequently, the sea and air modes of transport are not treated as dimensions but rather as distinct and separate streams.

Document LodgementFigure 3.2 illustrates the pattern of lodgement for the four different document types which together constitute the Documents set for sea cargo.

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0-22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12

48 hours before ArrivalImpending Arrival ReportOcean Bill of LadingHouse Bill of LadingImport Declaration

FIGURE 3.2: TRS Sea Cargo Document Receipt Breakdown


Impending Arrival Report (IAR) - The IAR is received from the ship’s agent and reports the estimated time of arrival (ETA) of the vessel. It is required 96 hours prior to ETA at the first Australian port (section 64, Customs Act 1901).

Ocean Bill of Lading (OBL) - The OBL forms part of the Sea Cargo Report (SCR) and is received from the shipping company. The OBL reports manifest information at the shipment level and is required 48 hours before ETA at first port (section 64AB, Customs Act 1901).

House Bill of Lading (HBL) - The HBL forms part of the SCR and is received from the shipping company or a freight forwarder. The HBL reports manifest information at a consignment level and is required 48 hours before ETA at first port (section 64AB, Customs Act 1901).

Import Declaration - A Full Import Declaration (FID) is usually received from a customs broker on behalf of the importer of the goods. It declares statistical and fiscal information relating to the goods and is required by end of the next working day after arrival (regulation 43, Customs Regulations 1926).

IARs and SCRs tend to be reported early in compliance with legislated timeframes. The level of compliance also reflects the Customs and Border Protection’s effort applied to help achieve it.

Declarations are submitted later, as the legislation allows. However, it is notable that on average, they are lodged earlier than is formally required. Nevertheless, declarations appear to hold the highest potential for improvement in terms of achieving earlier lodgement and earlier release.

While most HBLs are reported after their corresponding OBL, and significantly more HBLs than OBLs are reported late, some HBLs are reported very early and before the associated OBL. There is a sufficient number

of these to make the average time of HBL reporting before arrival slightly greater than that for OBLs. Given the different degrees of information dependency between OBL and HBL reporters, the closeness of the two averages indicates further potential for earlier reporting by both.

The difference of approximately one day between the average lodgement of the last document (usually the import declaration; -3.4 days) and the average completion of the set of four documents (Arrival to Documents; -2.4 days), indicates that an additional level of effort is being applied to achieve linking between all four documents. Anecdotal advice from customs brokers suggests that declarations are often lodged early, with the details required for linking, such as vessel, voyage and bill of lading numbers, added later.

Interviews with importers and customs brokers established that the main reasons for the late submission or linking of import declarations are:

dependency on timely provision of pre-requisite • documents such as commercial invoices, from the suppliers of goods

dependency on timely access to accurate information • from shipping companies as to the identity of the carrying vessel and associated manifest details.

IntervalActual Arrival to Documents

Actual Arrival to IAR

Actual Arrival to OBL

Actual Arrival to HBL

Actual Arrival to Declaration

Days (No.) -2.4 -8.0 -6.7 -6.8 -3.4

TABLE 3.1: Average Document Submission Times by Document Type


Cargo Type

Sea CargoAs Table 3.2 shows, there are notable differences between the processing times for particular cargo types in:

industry reporting – note the Arrival to Documents • interval for LCL cargo

Customs and Border Protection’s processing (though • to a lesser extent) – note the average time to Customs Unimpeded for bulk cargo compared with others

AQIS processing – note the difference for Customs • Unimpeded to Ready to Pay between bulk cargo and other cargo types

industry discharge – note the average time for FCL • compared with others.

These differences indicate:

varying degrees of dependency for information by • reporters as shown in the Arrival to Documents interval, where LCL cargo is the latest reported. The level of information dependency for reporting FCL cargo is lower than that for LCL cargo, where there are generally more entities in the supply chain and therefore more layers of commercial dependency

variations in risk profiles and processing requirements. • For example, the longer than average time taken to address AQIS requirements for bulk cargo indicates a relatively higher level of AQIS interest in cargo of that type

payment tending to follow closely after discharge/• unpack, suggesting that funds are not committed until certainty as to the physical availability of goods is obtained

inherent physical variations in the cargo affecting ease • or speed of handling and, as a result, the time taken to discharge or unpack.

Cumulative views can also demonstrate differences based on cargo type. Figures 3.3 and 3.4 show the differences in reporting and processing times between FCL and LCL cargo.

As can be seen, FCL cargo is dealt with significantly faster than LCL cargo, both in terms of the timing of reporting and declaration and the timing of payment. This is due to factors such as:

FCL cargo tends to be imported by higher volume • importers who invest in and demand faster processing from their service providers

the level of information dependency of customs • brokers is lower for FCL cargo than for LCL cargo, where there are generally more entities in the supply chain

FCL cargo is physically available earlier. For LCL • cargo, early reporting, declaration and payment will do little to change the physical availability of the cargo.

Air CargoFor air cargo, there are differences in reporting and processing time based on cargo type as shown in Table 3.3; however since virtually all air cargo (more than 97%) is consolidated, they are largely insignificant.

Reporting times close to Arrival and much shorter times to Release and Clearance reflect the nature of the air freight industry, as do legislated reporting timeframes, with Impending Arrival Reports required three hours before ETA at first port and cargo reports required two hours before ETA at first port.

IntervalAll Cargo

TypesFCL

CargoLCL

CargoBreak-Bulk

CargoBulk

Cargo

Arrival to Documents -2.4 -2.8 0.1 -4.7 -5.2

Arrival to Customs Unimpeded -1.5 -1.9 1.0 -3.8 -4.8

Arrival to Ready To Pay -1.1 -1.5 1.4 -2.9 -2.4

Arrival to Availability 1.2 0.7 4.1 2.1 1.8

Arrival to Release 1.3 0.8 4.2 0.5 2.3

Arrival to Clearance 1.8 1.3 4.3 1.1 3.5

TABLE 3.2: TRS by Sea Cargo Type


The required timeframe for declarations is the same as for sea freight. However, for air freight, a higher percentage of declarations are made before arrival than for sea freight. Most of these (80%) are made via a single document combining a cargo report and simple declaration.

There are no significant delays between when consignments are Ready to Pay and when they are actually paid. This is generally because more than 80% of air freight consignments are exempt from duties, taxes and charges under concessions available for consignments valued at less than AUD$1000. With regard to the consignments which do require a separate

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All Documents LodgedReady To PayReleaseAverage Discharge

FIGURE 3.3: TRS Sea Cargo - FCL

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FIGURE 3.4: TRS Sea Cargo - LCL


declaration, the negligible difference between Ready to Pay and Release indicates that the delays seen in committing funds for payment in sea freight are virtually non-existent for air freight.

Clearance methodCustoms and Border Protection provides importers with two methods of declaration, according to the value of the consignment:

formal or Full Import Declaration (FID) – a detailed • fiscal and statistical declaration, required for consignments valued at AUD$1000 or more

Self-Assessed Clearance declaration (SAC) – • a simplified declaration, sufficient for consignments valued at less than AUD$1000. In circumstances where the cargo reporter has the information required to make the SAC declaration and is prepared to do so, this declaration may be made by the cargo

reporter via the cargo report as a combined cargo report-declaration (CRSAC).

The consignment value threshold means that SACs are little used for sea cargo (less than 1% of consignments), whereas for air cargo they account for more than 80% of all consignments. As a consequence, the comparative analysis between clearance rates for SACs and those for FIDs, has concentrated solely on air cargo. For air cargo, SACs are generally made as CRSACs (i.e. as simple declarations).

Table 3.4 shows the difference in average elapsed time for each interval for each method of declaration (noting that the CRSAC method accounts for the clearance of more than 80% of all air consignments).

The overwhelming majority of CRSACs are lodged by the four major express courier companies. These companies

IntervalOverall(Days)

CRSAC(Days)

Declaration (Days)

Arrival to Documents 0.04 -0.21 0.98

Arrival to Customs Unimpeded 0.18 -0.05 1.07

Arrival to Ready To Pay 0.25 0.00 1.18

Arrival to Availability 1.60 1.59 1.63

Arrival to Release 0.29 0.00 1.39

Arrival to Clearance 0.30 0.00 1.43

TABLE 3.4: TRS by Method of Declaration

TABLE 3.3: TRS by Air Cargo Type

IntervalAll Cargo Types

(Days)Consolidated Cargo

(Days)Straight-Line Cargo

(Days)

Arrival to Documents 0.04 -0.01 2.07

Arrival to Customs Unimpeded 0.18 0.14 2.05*

Arrival to Ready To Pay 0.25 0.20 2.34

Arrival to Availability 1.60 1.62 0.41

Arrival to Release 0.29 0.24 2.57

Arrival to Clearance 0.30 0.24 2.81

*This reflects a small number of cases where a contingency release is given prior to receipt of a formal declaration.


are integrated freight, transport and clearance providers, meaning that all the information required to report the cargo and to declare it to Customs and Border Protection is held by one entity.

This reduces the reliance on third parties for information required to declare to Customs and Border Protection and is reflected in the faster time to Release.

WeekdayThe effect of the weekday of arrival on time taken for processing was assessed by determining the percentage of consignments at each of the key statuses (Documents, Customs Unimpeded, Ready to Pay, Release and Clearance) 24 hours after arrival, and then examining the differences observed and the likely reasons for them. Figure 3.5 illustrates this for sea cargo.

Differences in processing performance according to the day of arrival are evident and a clear pattern of activity over the week is shown. Performance is best for arrivals in the latter half of the week from Wednesday to Friday and lowest over the weekend and on Monday (which carries some ‘weekend’ effect). Generally, cargo arriving on a Thursday will be dealt with quickest, while cargo arriving over the weekend will be slowest.

The effect of weekend on the lodgement of • Documents is a reduction of around 7%, indicating that day of arrival is not a very significant influence on the ability of reporters and declarants to report or declare ‘on time’. As indicated elsewhere, most do so well before arrival.

The effect of weekend on the proportion of cargo at a • status of Ready to Pay is a slightly greater reduction at 9%, with Customs and Border Protection and AQIS working hours, specifically the impact of not having all-hours coverage, the most likely contributor.

The weekend has its strongest effect on Release, • slowing around 15% of consignments. This indicates that industry working hours and the availability of handling and inland transport add to the other factors observed.

Country of OriginThe data (Table 3.5) also shows differences in performance when segmented by the country from which the cargo was shipped. An example of comparative performance for the processing of cargo imported from the top 10 countries of origin for sea cargo follows (country-by-country differences for air were found to be negligible).

FIGURE 3.5: Sea Cargo Events Completed 24 Hours after Arrival by Day of the Week

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There is a range of performance levels evident here that are subject to a number of variables, including:

inter-company relationships which influence the • efficiency of business-to-business communications, for example between suppliers and importers, between shipping lines and importers, and between importers and their customs brokers

risks posed by the types of goods and country of • origin (for both AQIS and Customs and Border Protection)

the existence of FTAs with the country of origin, to the • extent that these influence the timing of the decision to pay

the distribution of arrivals over particular discharge • ports and the relative efficiency of these ports.

While deeper analysis is required to estimate the impact of the different variables, a simple preliminary approach was taken to compare a country of origin with the average overall and explore reasons for any differences observed.

Using imports from New Zealand as an example, it is evident that in spite of relatively short transit times from New Zealand to Australia, the timeliness of cargo reporting and declaration are very close to the average found for cargo overall. This suggests the existence of

strong inter-company relationships and relatively efficient business-to-business communications between:

New Zealand suppliers and their importer clients • in Australia

shipping companies and their clients•

importers and customs brokers.•

Notable differences are seen in the much faster times than average that New Zealand cargo experiences to Release and Clearance. The contributors to this are likely to include:

that most New Zealand cargo is discharged at Sydney • and Melbourne, both of which are relatively more efficient ports than average on these measures

that the risk profiles for New Zealand origin cargo are • such that the rates of intervention by Customs and Border Protection and AQIS are less than average

that the FTA in place with New Zealand lowers the • incidence of dutiable cargo, thereby reducing delays that otherwise would be attributable to customs brokers waiting to secure importer funds before payment of duties, taxes and charges.

This indicates that for sea cargo, transit times should not be viewed as a reason for late cargo reporting or declaration lodgement. For Australia as an island nation,

Country of Origin

Number of Consignments

Arrival to Documents

(Days)

Arrival to Release(Days)

Arrival to Clearance

(Days)

ALL 36384 -2.4 1.3 1.8

China 13102 -1.9 1.5 1.8

USA 2105 -2.7 1.3 2.0

Hong Kong 2024 -1.3 1.7 1.9

New Zealand 1933 -2.4 0.3 0.6

Thailand 1623 -3.4 0.3 1.0

Malaysia 1527 -2.5 0.8 1.5

Japan 1385 -4.2 0.3 0.9

Taiwan 1383 -2.0 1.4 1.6

Korea 1342 -3.2 0.5 0.7

Germany 1111 -3.0 1.1 1.4

TABLE 3.5: TRS Sea Cargo by Country of Origin


Average Above Average Below Average

transit times in themselves are not generally material to the timing of cargo reporting or declaration lodgement.

Rather, it is the quality and effectiveness of business-to-business relationships and communications that are stronger factors in this regard.

Discharge portAs shown in Table 3.6, when segmented by discharge port, the results demonstrate some distinct differences in processing outcomes between ports. These differences occur in all process segments or intervals, indicating that the underlying causes lie variously with industry, with Customs and Border Protection and with AQIS.

TABLE 3.6: Top Five Discharge Sea Ports Comparison

Interval (Days) All Ports Adelaide Brisbane Fremantle Melbourne SydneyPrimary

Responsibility

Arrival to IAR -8.0 -13.3 -8.5 -6.4 -7.8 -8.1 Ship’s Agent

Arrival to HBL -6.8 -10.9 -7.0 -4.2 -6.8 -7.2 Freight Forwarders

Arrival to OBL -6.7 -11.7 -7.5 -4.5 -6.6 -6.8 Shipping Company

Arrival to Declaration -3.4 -3.9 -2.9 -2.3 -3.6 -3.6 Brokers

Arrival to Documents -2.4 -3.4 -2.2 -1.2 -2.7 -2.5 All reporters

Documents to Customs Unimpeded

0.9 1.3 1.6 1.1 0.8 0.7 Customs and Border Protection

Arrival to Customs Unimpeded

-1.5 -2.1 -0.6 -0.1 -1.9 -1.9 Consolidated

Arrival to RTP -1.1 -1.7 -0.1 0.4 -1.5 -1.5 Consolidated

Documents to RTP 1.4 1.7 2.1 1.5 1.2 1.1 Customs and Border Protection & AQIS

Customs Unimpeded to RTP

0.5 0.4 0.5 0.4 0.4 0.4 AQIS

Arrival to Release 1.3 0.7 2.0 2.4 0.9 0.8 Consolidated

RTP to Release 2.3 2.4 2.0 2.1 2.4 2.3 Brokers

Arrival to Clear 1.8 1.9 2.4 3.0 1.4 1.3 Consolidated

Release to Clear 0.5 1.2 0.5 0.6 0.5 0.4 AQIS

Arrival to Discharge (BLK or B/BLK)

1.8 1.1 1.6 3.5 2.9 0.7 Stevedores

Arrival to Discharge (FCL)

0.7 0.5 0.4 0.9 0.8 0.6 Stevedores

Arrival to Unpack (LCL)

4.1 5.9 5.1 9.1 3.5 3.4 Reporters


For example:

The interval from Documents to Customs Unimpeded • for Brisbane is 1.6 days, compared to the average for all ports of 0.9 days, reflecting Customs and Border Protection’s processing performance and interventions in this port

The interval from Arrival to Unpack for LCL cargo for • Fremantle is 9.1 days, compared to the average for all ports of 4.1 days, reflecting industry’s capacity to handle cargo in this port.

Effective Risk Management is Integral to Trade Facilitation

The way risk management is practised by the border agencies is a critical element in the level of performance achieved in cargo processing. Policies which direct the facilitation of legitimate trade ensure intervention by exception. As a result, large proportions of cargo are not impeded at all by government. The degree or rate of intervention is a major determinant of average processing time.

Consequently the quality and consistency of these interventions via effective border management are integral to trade facilitation rather than separate from it. Trade facilitation for legitimate trade will be most efficient where effective border management enables the accurate identification and differentiation of that trade.

The TRS reveals opportunities to further improve Trade Facilitation

The analysis of the TRS results, particularly of those variables that affect the timeliness of Release, has revealed some opportunities to enhance the level of trade facilitation, reducing the time to Release.These

focus on reporting and declaration, Customs and Border Protection’s performance and release.

Reporting and declarationThe area of reporting and declaration appears to offer significant potential for improvement by increasing the proportion of cargo which is unimpeded by the border agencies by Arrival, thereby reducing the average time from Arrival to Release. Further efficiencies in this respect could be enabled by:

achieving a higher proportion of declarations • lodged early

implementing measures which facilitate the timeliness • and accuracy of the linking of documents, particularly the linking of declarations to vessel arrivals and associated manifest or cargo report documents.

Customs and Border Protection’s performanceOpportunities to improve Customs and Border Protection’s performance include:

reduced intervention of legitimate consignments • through more accurate identification of legitimate trade and use of comprehensive information (including from the country of export) to better direct interventions

more extensive use of targets and service levels for • processing performance, which may lead to faster processing. Regular monitoring and quality reviews to ensure consistency will further assist performance

increasing the speed of processing for impeded • consignments subject to permit requirements by extending the domestic single trade window (i.e. ICS), via electronic data interchange and automation arrangements with more of the 41 Permit Issuing Agencies that Customs and Border Protection acts on behalf of

provision of early advice of impeded status to • importers or their service providers, providing them


with the maximum opportunity to deal with the additional requirements of the border agencies

an integrated and ongoing approach to performance • management that enables better assessment of the alignment of activities to risk and determine where opportunities lie for tactical management. Further analysis of the results data is required to identify circumstances where the service levels achieved in different ports appear not to be aligned to relative risk.

ReleaseOpportunities for Customs and Border Protection to influence the timing of Release are limited. Early advice of unimpeded status via prompt acquittal of holds immediately when impediments are dealt with will assist. Otherwise, the opportunities for changing the timing of Release are principally in industry’s domain.

However, in the event that industry practices change, for example, shorter free storage periods or the implementation of inland hubs to encourage faster removal of cargo from the place of discharge, then the level of Customs and Border Protection’s processing performance may impact more critically than it does today.

If or when inland hubs are to be implemented, Customs and Border Protection faces choices as to whether to extend the border to include the hubs or to use the high levels of pre-arrival and pre-availability release being achieved to move toward more complete ‘gateway clearance’ arrangements. This could be achieved by reducing or eliminating underbond movements (along with the risks to the community and the administrative overheads that these movements hold). This situation may prompt reconsideration of the relative merits of revenue deferral arrangements.


The following sources are cited in this document:

Document Title Version Date Author

CMR Software Developers Guide 3.21 12 February 2007 Customs and Border Protection

Connecting to Compete: Trade Logistics in the Global Economy

2007 The International Bank for Reconstruction and Development/ The World Bank

Customs Industry Engagement and Analysis Project September 2008 Customs and Border Protection

Doing Business: An Independent EvaluationTaking the Measure of the World Bank-IFCDoing Business Indicators

2008 Independent Evaluation Group, World Bank

Doing Business: Comparing Regulation in 178 Economies

2008 World Bank

Doing Business: Comparing Regulation in 175 Economies

2007 World Bank

Guide To Measure the Time Required for the Release of Goods

2002 WCO

ICS DBA Appendix K - Document Linking Rules 5.0 1 November 2006 Customs and Border Protection

Integrated Cargo System (ICS) Detailed Business Analysis (DBA) and Detailed Design Specifications (DDS) documents, various

All currentversions

Various Customs and Border Protection

Regional Best Practice on Time Release Study October 2007 WCO Regional Office for Capacity Building, Asia Pacific

Survey Plan – TRS 2007 1.0 2007 Customs and Border Protection

Trans-Tasman Supply Chain Report 01 2006 New Zealand Customs Service

Waterline Various numbers 2006 - 2008 Bureau of Infrastructure, Transport, Regional Development and Local Government (BITRE)

References


Appendix A – Terms of Reference

The aims of the Time Release Study (TRS) 2007 are to conduct the first TRS for Customs and Border Protection by:

building a data gathering capability to support TRS 2007 as a Proof of Concept that is scalable for regular • repeat surveys

capturing the timing of key events in the release cycle - e.g. Arrival, Discharge, Release and Clearance - • to support the measurement of elapsed time between events

capturing key attributes of cargo and events to support separate measurement for distinct streams of cargo • according to factors such as: mode of transport, cargo type and type of declaration used for clearance

measuring the arithmetic mean elapsed time between the arrival of the goods and their release into home • consumption for each distinct cargo stream

producing a survey report for use by all relevant parties – including industry and the WCO – that includes • analysis, conclusions and recommendations (including those addressing the scope of future surveys).

Appendices


Appendix B – TRS Working Group

The TRS Working Group is responsible for the preparation, planning and implementation of the survey, along with ensuring good cooperation between all parties and agencies involved.

The TRS Working Group should be given the authority to make all decisions that are deemed necessary for the implementation of the study.

Role Name Position

Sponsors Jo Corcoran National Manager, Industry Engagement & User Services Branch (IE&US), Cargo Division

Martin Fisk National Manager Future Strategies (Cargo)

Chair and Study Coordinator

Mark Debeljakovic Director Future Strategies (Cargo)

Customs Specialist Steve Moore Director Industry Engagement, IE&US

IT Specialist Christine A Jones Manager Information Services, Applications Branch

Statisticians George Stockham Director Corporate Statistics

Leonard D’Costa Acting Director Corporate Statistics

AQIS Representative Mark Williams AQIS, Information Technology

Customs Specialist (Air) Michael O’Sullivan Manager Industry Engagement, IE&US

TABLE B: TRS 2007 Working Group Members


Name Representing Position

Hart Krtschil Sydney Ports Cargo Facilitation Committee Chairman

Daniel Cavallo Sydney Ports Senior Logistics Manager

Ruth Thompson Stevedores Project Manager, 1-Stop

Mary Jo Huin Patrick Terminals Business Liaison Manager

Chris O’Keeffe Enhanced Trade Solutions (Customs and Border Protection)

Director, Supply Chain Security

GOTO Manabu Japan Customs and Tariff Bureau Chief, Customs Clearance Division

BYUN Dong-Ook Korea Customs Service Director, Korea Customs Call Center

NAKAYAMA Daizo Japan Customs Brokers Association Managing Director

Phil Bullen New Zealand Customs Service Intelligence, Planning & Coordination

Trevor Long Qantas General Manager Group Facilitation

Rob Battistel CAPEC Secretary

Ben Somerville DHL Express Customs & Regulatory Affairs Manager

Llew Russell Shipping Australia Limited CEO

Paul Zalai CBFCA Manager Freight & Business Operations

Maurice Dimauro Bunnings Group Ltd Shipping & Overseas Supplier Account Manager

Mark Schroder Coles Limited Operations Manager, K-Mart

Peter Sowerbutts Coles Limited Customs Manager, Coles Group Ltd

Phillip Comber Woolworths Ltd Australian Operations Manager, International Logistics

Godfrey Lubulwa Bureau of Infrastructure, Transport and Regional Economics (BITRE)Department of Infrastructure, Transport, Regional Development & Local Government

Director, Maritime and Rail Statistics

TABLE C: TRS 2007 Reference Group Members

Appendix C - TRS Reference Group

The primary purpose of the TRS Reference Group is to serve as a channel of engagement with the industry sectors and other government agencies (OGAs) involved in the supply chain.

As needed, the TRS Working Group will approach members of the TRS Reference Group:

as the entry point for liaison with their respective industry sector•

to review and validate survey planning including assumptions and definitions•

to source complementary survey information, and•

to review and share survey results, conclusions and recommendations. •


Appendix D – Sample Characteristics

TABLE D: TRS Sample Characteristics

Sample Characteristic Air (No.) Sea (No.)

Total Samples/Unique Cargo Lines 106091 36384

FCL NA 29604

FCX NA 495

LCL NA 5457

Break-Bulk NA 762

Bulk NA 66

Air Straight-Line 2411 NA

Consolidated 103680 NA

Importers* 7611 9233

Import Declarations 20505 24517

SAC by Cargo Report (CRSAC) 83780 127

Customs Brokers 422 442

Discharge Ports 8 17

Origin Countries 176 102

Arrivals 900 171

Aircraft Operators 11 NA

Airlines 45 NA

Air Cargo Reporters 103 NA

Shipping Companies NA 34

Shipping Lines & Freight Forwarders NA 540

Sea Cargo Reporters NA 413

*CRSAC Importers are not identified


Exclusion Code Count Reason for exclusion

CABOT 1489 Cabotage (domestic) cargo

EMPTY 3530 Empty containers

FEEDR 3169 Not discharged at destination port

NDISS 2223 No outturn report - reporter non-compliance

NODEC 364 No Import Declaration or SAC declaration

NOTCL 501 No clearance event

OTHER 2334 Duplicates

REPEX 300 Export cargo repositioned

SCRWD 2330 Cargo Report withdrawn

TRANS 2417 Transit cargo - not for discharge in Australia

TSHIP 820 Transhipment cargo - destination overseas

UPEFX 1202 Unaccompanied Personal Effects

TOTAL 20679

Exclusion Code Count Reason for exclusion

SPECL 50 Special clearance goods - declaration lodged later

FEEDR 10294 Not discharged at destination port

HIGHB 10889 Higher level bills

NDISS 28820 No outturn report - reporter non-compliance

NOAAR 33211 Actual arrival not reported/not linked

NODEC 1617 No Import Declaration or SAC declaration

PARTS 5069 Part shipments

RPTER 244 Reporter error - arrival time > discharge time

TRANS 112 Transit cargo - not for discharge in Australia

TSHIP 7679 Transhipment cargo - destination overseas

UPEFX 1 Unaccompanied Personal Effects

TOTAL 97986

TABLE E.1: Sea Cargo Exclusions from the TRS Sample

TABLE E.2: Air Cargo Exclusions from the TRS Sample

Appendix E – Exclusions from the TRS Sample


Term Acronym Description

Actual Arrival AA Actual Arrival - See Arrival (Air) or Arrival (Sea)

Actual Arrival Report AAR A report made to Customs and Border Protection that provides information about the actual arrival of a ship or aircraft at an Australian port or airport.

Air Cargo Report ACR A report made to Customs and Border Protection that provides arrival, consignee and consignor details of all goods that are to be imported into, transhipped or transited through Australia. This report is required for the reporting of all air cargo (including mail) arriving in Australia.

Airway Bill AWB See House Airway Bill or Master Airway Bill.

Airway Bill Outturn AWO A report made to Customs and Border Protection that provides information about:The receipt of air cargo that has been discharged from an aircraft.• The receipt of air cargo at a Customs and Border Protection place as a result of • an underbond movement

It identifies any surpluses or shortages in the cargo received.

APEC Customs Business Dialogue

ACBD An APEC forum established to foster understanding and cooperation between customs authorities and the business sector in the APEC region in order to promote trade facilitation.

AQIS Clear - A status assigned to cargo when it is free of all AQIS impediments (conditional or not). This status is independent of, and does not refer to, any Customs and Border Protection impediment which may be in place.

AQIS Release - A status assigned to cargo when it is free from all AQIS impediments which prevent movement away from Customs and Border Protection control. AQIS ‘conditions’ such as the requirement for fumigation or a ‘tailgate inspection’, may still be in place.

Arrival (Air) - The arrival of an aircraft at an Australian airport that has come to a stop after landing.

Arrival (Sea) - The arrival of a ship that has been secured at an Australian port. This generally means a ship is tied up at the berth (unless the ship has anchored first, e.g. due delays in getting a berth).

Asia-Pacific Economic Cooperation

APEC A forum established to facilitate economic growth, cooperation, trade and investment in the Asia-Pacific region.

Australian Customs and Border Protection Service

Customs and Border Protection

The government agency responsible for managing travel and trade at the Australian border.

Australian Eastern Standard Time

AEST AEST is a time zone that is 10 hours ahead of Coordinated Universal Time (UTC).

Australian Quarantine and Inspection Service

AQIS The government agency responsible for the quarantine clearance of incoming passengers and cargo.

Availability - A status of cargo that it is physically available for delivery. For consolidated cargo, availability is the time of unpacking from containers. For other cargo, it is the time of receipt at the discharge terminal from the carrying vessel or aircraft.

Bill of Lading B/L A document issued by a carrier acknowledging that specified goods have been received on board for conveyance to a named place for delivery to a consignee.

Appendix F – Definitions

TABLE F: Definitions of terms used in the TRS Report



Border Agencies - Agencies responsible for managing the Australian border to provide effective border protection for the community that also supports legitimate trade and travel. Customs and Border Protection is the primary agency managing the border, and also acts there on behalf of a range of other agencies. AQIS works in partnership with Customs and Border Protection at the border to manage health and quarantine matters.

Break-Bulk Cargo B/BLK Break-bulk cargo consists of non-containerised, non-bulk cargo that is loaded individually (e.g. vehicles).

Bulk Cargo BLK Bulk cargo is homogenous cargo that is stowed loose in a ship’s hold and is not enclosed in any container such as a box, bale, bag, cask or the like (e.g. wheat, oil).

Business-to-Business B2B Communication and transactions between businesses or enterprises.

Cabotage - The transport of goods between two ports in the same country.

Cargo Report Self- Assessed Clearance

CRSAC A combined Cargo Report and Self Assessed Clearance declaration lodged by a cargo reporter, typically for air freight.

Carnet - International customs documents that enable the duty and GST-free temporary import of certain goods into Australia without formal entry. They act as a security against customs duty and other taxes should the terms of the carnet be infringed. In simple terms, the carnet acts as a passport for the goods.

Clear - A status that indicates the consignment is clear of impediments and may be released into home consumption.

Clearance - A status that indicates the accomplishment of all formalities necessary to allow goods to enter home use, to be exported or to be placed under another customs procedure. In the Australian context, this is equivalent to the WCO status of ‘Clear’.

Conditional Clear CC A status that indicates the consignment may be delivered into Home Consumption after certain conditions have been met. For example, AQIS approved fumigation, or production of an MVSA permit. This is the equivalent of the WCO status of ‘Release’.

Consignment - A package or collection of packages presented by a consignor for transport.

Consolidated Cargo - A type of air cargo which is consolidated with other consignments. It is moved on a House Airway Bill as a sub-entity under a Master Airway Bill. It is delivered into home consumption from the place of deconsolidation (i.e. a depot rather than the place of discharge).

Contingency - Electronically reported cargo released for home consumption or from further Customs and Border Protection controlled movement via a transmitted release message, or contingency release.

Customs Broker - A person authorised in accordance with the Customs Act 1901 to act on behalf of an owner of goods to undertake activities such as arranging for the clearance of goods into home consumption by making an import declaration.

Customs Unimpeded CU A cargo status that is free of any Customs and Border Protection impediment preventing movement, except for the requirement to pay.

Discharge - The unloading of cargo from a vessel.

Documents - A status event signified by the submission of all required documents whereby cargo is fully reported and declared.

Electronic Data Interchange

EDI The structured transmission of data to Customs and Border Protection’s ICS by electronic means.

Empty - An empty shipping container.

Estimated Time of Arrival

ETA The estimated time at which a ship or aircraft is due to arrive at an Australian port or airport.

Feeder Port Cargo - Cargo that is destined for an Australian port, but is discharged at another Australian port.



Flight Number - The flight number of an aircraft on a particular flight.

Full Container Load FCL A container loaded with goods for one consignee only, whether transported directly to the consignee or through a freight forwarder or an agent.

Full Container Multiple Suppliers

FCX A full container loaded with consignments from multiple suppliers on multiple bills for one consignee.

Full Import Declaration IMD/FID A detailed fiscal and statistical declaration, required for the clearance of consignments valued at AUD$1000 or more.

Hand Carried - Cargo carried by hand from an aircraft or vessel.

House Airway Bill HAWB An airway bill issued by a freight forwarder, providing details of the goods received for freight. It includes terms and conditions of carriage.

House Bill of Lading HBL A bill of lading issued by a freight forwarder, providing details of the goods received for freight. It includes terms and conditions of carriage.

Impending Arrival Report

IAR A report made to Customs and Border Protection that provides information about the expected arrival of a ship or aircraft on a voyage from a place outside Australia. The IAR provides advance notification of the ship’s or aircraft’s ETA, and where cargo (if any) will be discharged.

Integrated Cargo System

ICS Customs and Border Protection’s integrated software application that provides the functions needed to declare, report, risk assess cargo and determine cargo status.

International Air Transport Association

IATA An international industry body that represents and serves the airline industry.

Less (than) Container Load

LCL A shipping container that holds the goods of more than one consignee, whether or not shipped on an FCL basis to a freight forwarder or an agent. These containers must be deconsolidated under Customs and Border Protection control.

Master Airway Bill MAWB An airway bill issued by an airline or a code share partner. If the master bill has been issued to a freight forwarder then the freight forwarder will issue house airway bills for the goods they have contracted to freight.

Ocean Bill of Lading OBL A bill of lading by a shipping company or a slot charterer. If the ocean bill has been issued to a freight forwarder, then the freight forwarder will issue house bills for the goods they have contracted to freight.

Organisation for Economic Co-operation and Development

OECD An international organisation helping governments tackle the economic, social and governance challenges of a globalised economy.

Other Government Agencies

OGA Australian government agencies that are involved in trade related matters.

Outturn - The physical deconsolidation or unpacking of cargo.

Pipeline - A mode of transport for goods that utilises pipeline infrastructure to import goods, such as oil and gas.

Post - A mode of transport for goods utilising the international postal system.

Progressive Discharge Report

PDR A report made to Customs and Border Protection that provides information about the discharge of containerised cargo from a ship.

Ready to Pay RTP A status of cargo that is free of any Customs and Border Protection or AQIS impediments preventing removal, except for the requirement to pay any duty and taxes owing on the consignment. Conditions requiring post-release treatment or inspection may be in place.

Release - The action by Customs and Border Protection to permit goods undergoing clearance to be placed at the disposal of the person concerned. In the Australian context it is equivalent to the ‘Conditional Clear’ event.



Reporter - A reporter is the operator or charterer of a vessel or aircraft on a particular voyage responsible for goods carried on the vessel or aircraft.

Sample Unit - A sample of representative and homogenous data that is suitable for tracking through the cargo delivery cycle. Unique Cargo Lines (UCLs)

Sea Cargo Outturn SCO A report made to Customs and Border Protection that provides information about:The receipt of non-containerised sea cargo that has been discharged from a ship• The receipt of sea cargo at a Customs and Border Protection place as a result of • an underbond movement.

It identifies any surpluses or shortages in the cargo received.

Sea Cargo Report SCR A report made to Customs and Border Protection that provides information about cargo being carried on board a ship arriving in Australia from a place outside Australia.

Self-Assessed Clearance declaration

SAC A simplified declaration, sufficient for consignments valued at less than AUD$1000.

Self-Propelled - A type of cargo that can be loaded and unloaded of its own accord (i.e. without port machinery).

Straight-Line Cargo - A type of air cargo that is not consolidated with other consignments. It is moved as a direct entity on its own Master Airway Bill and is delivered into home consumption from the place of discharge (rather than from a deconsolidation depot).

Time Release Study TRS A study to measure the time needed for the release of goods at international borders.

Time Stamp TS A timestamp is a sequence of characters, denoting the date and/or time at which a certain event occurred.

Time Up - Cargo that has not been cleared within 60 days of arrival.

Transhipment Cargo - A type of cargo resulting from a transfer of goods from one aircraft or vessel that is arriving in Australia to another aircraft or vessel departing for overseas.

Transit Cargo - A type of cargo that is aboard an aircraft or ship arriving in Australia but is not being discharged in Australia.

TRS Reference Group RG The TRS Reference Group is a group that serves as a channel of engagement with industry sectors and other government agencies involved in the supply chain.

TRS Working Group WG The Working Group is responsible for the preparation, planning and implementation of the Time Release Study, along with ensuring good cooperation between all parties and agencies involved.

Unaccompanied Personal Effects

UPE Personal belongings and household effects that arrive separately from the person to whom they belong.

Unique Cargo Line UCL The Unique Cargo Line is the lowest level of detail of a cargo entity. It is either a container, or if part of a consolidated shipment, a House Bill. This is equivalent to a ‘deliverable unit’. It is the TRS Sample Unit.

Unique Consignment Reference

UCR A unique reference number for an international movement of goods.

Unpack - The process of unpacking cargo from a container.

Vessel Identifier - A number that identifies a vessel, such as a Lloyd’s number.

Voyage Number - A number that identifies a particular voyage for a vessel as assigned by the vessel operator.

World Customs Organization

WCO The intergovernmental organisation exclusively focussed on customs matters.

World Trade Organization

WTO The international body dealing with trade between nations.

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