THE pressure and change experienced at various points of the international supply chain are felt by the freight forwarders and customs brokers who hold it together, sometimes as entirely new challenges specific to the sector.

Freight forwarders, who co-ordinate the movement of goods between shippers and carriers, need to keep up with evolving trade regulations and tariffs. Customs brokers, who guide businesses through this rapidly changing environment, face the complexity and volume of customs regulations and procedures, as well as rules, tariffs and compliance requirements.

The role of freight forwarders and customs brokers has evolved from facilitation to critical strategic partnerships in global supply-chain management. When errors and delays carry consequences, it is important for this sector to follow the rhythm of developments.

The International Forwarders and Customs Brokers Association of Australia hosts a national conference each year, which brings industry and government together under one roof to talk through these very challenges.

Protecting the border

The IFCBAA 2024 National Conference in May, held this year in Cairns, featured economic outlooks, air cargo updates, maritime insights, some lively social gatherings (see page 56) and important discussions around cyber security, workforce shortages and leadership.

And until criminal syndicates stop using the supply chain to import illicit drugs into the country, border integrity will continue to hold its position on the agenda.

Speaking at this year’s conference, Australian Border Force Commissioner Michael Outram thanked freight forwarders and customs brokers for working with the ABF to improve outcomes for Australian trade. Security is the foundation of a strong border, he said.

“To my mind, the border doesn’t exist just to keep us secure … it’s about our economic security, it’s about our national wellbeing. That’s the primary purpose of the border; it’s to connect us with the rest of the world.”

Commissioner Outram said there has been “a lot of work going on” to make sure the border force is connected with industry and understands the issues it faces. He highlighted work around the increased need for sharing data between customs and authorised economic operators, known in Australia as Trusted Traders. A business with Trusted Trader status is expected to demonstrate how it secures its international supply chain and maintains its compliance with customs-related laws.

“It’s a two-way street; we need to provide industry with more information about what we’re experiencing, about our concerns and methodologies in detecting illicit cargo,” Mr Outram said.

That illicit cargo continues to turn up at Australian borders in shipping containers and airfreight consignments. Authorities have seized huge volumes of drugs at ports and storage facilities, and even in vehicles on ro-ro vessels. ABF has also been cracking down on vapes and illicit tobacco.

“Transnational serious organised crime has very deep pockets,” Mr Outram said.

“They need to know what’s happening at the border; they have to circumvent the controls. The cheques and balances are in place, and to do so, they infiltrate organisations at the border. And they’ve done so very successfully across the globe.

“Customs brokers and freight forwarders regularly help us identify questionable shipments and unusual behaviours in the supply chain, that indicate criminal activity such as the importation of illicit drugs, vapes and tobacco.”

Mr Outram said the world is changing at the border because of developments in technology and artificial intelligence. Supply chains, he said, need to be resilient and secure, but this has been the case throughout much of history. But the threats are evolving, and the relationship between ABF, freight forwarders and customs brokers should evolve with it. He alluded to the possibility of a Trusted Trader 2.0.

“Trust between customs and industry isn’t static. What’s happening in supply chains isn’t static. What’s happening with technology isn’t static. What’s happening with organised crime isn’t static. It’s always evolving,” he said.

Standards around cyber security and critical infrastructure are evolving too, while the volumes of cargo handled at Australian ports is expected to grow 70% over the next decade.

“Standing still is just not an option for us, because I know [freight forwarders, customs brokers and their clients] don’t want trade to slow down by a second, and I don’t want risk to go up. If anything, I want risk to come down. So, we’ve got to think about how we solve that problem together.”

Mr Outram said efficiency in supply chains is not only about moving goods faster, but about fostering trust and collaboration at every link.

“The facilitation of trust goes hand in hand with greater trust in the system between the ABF and industry,” he said.

“Goods can move across the border more quickly and simply and, of course, reliably, and we know more about the players right across levels of supply chains.

“I think the future is very bright for trade and the border as a strategic national asset.”

Customs brokers and freight forwarders regularly help us identify questionable shipments and unusual behaviours in the supply chain.

Michael Outram, Australian Border Force

Compliance

There is also the matter of compliance, as ABF increases its activity to ensure freight forwarders and customs brokers are complying with the relevant regulations.

Lesa Binion, government relationship manager and consultant at 3DL Customs and Consulting, recalled Operation Ironside – a 2018 investigation in which the Australian Federal Police and US Federal Bureau of Investigation replaced a criminal communication network with a new platform covertly run by the FBI.

“It was a very clever ploy because it gave them access to a lot of intelligence,” Ms Binion said.

“What that intelligence told them was that the supply chain had been infiltrated, and there were trusted insiders operating in there – some knowingly, some not – so they had a huge volume of information with shipping details and people that were operating within our supply chain.

“As a direct result of that, ABF stood up the Jardena taskforce. And its job was to focus on the supply chain to ensure it was robust, compliant and more secure against those illegitimate threats.”

When Operation Jardena went live in 2021 it saw ABF crack down on non-compliance to make the Australian supply chain more hostile to criminal activity and illicit imports. The national operational phase of Operation Jardena ended on 30 June 2024, but Ms Binion said the work that’s been done so far will continue.

“ABF does rely heavily on industry colleagues to meet their legislative responsibilities to ensure the supply chain remains as robust as possible against criminal infiltration,” she said.

She outlined the areas ABF is sharpening its focus on, such as visitor logs, staffing lists, identity documents, security culture, incident procedures and staff training.

“ABF are looking to ensure your business has sound practices, to ensure that the goods under customs control are securely stored,” she said.

“They want to know who’s going to be responsible for doing what, and who needs to be notified.”

Biosecurity

Another ongoing challenge for Australia’s supply chain is biosecurity. A look at last year’s federal budget should dispel any doubt about the importance of the biosecurity system; the budget allocated more than $1 billion over four years to strengthen this system.

Holly Buckle, assistant secretary cargo operations (Victoria, SA, WA and Tasmania) at the Department of Agriculture, Fisheries and Forestry, said Australia’s biosecurity system safeguards the economy and protects the nation from devastating pest and disease outbreaks.

“Biosecurity threats and risks are increasing. A significant biosecurity incursion can generate a range of negative impacts, including loss of international markets, cost and availability of food, lost income, supply-chain disruptions, social, health and wellbeing impacts for farmers and the broader community.”

Ms Buckle said the budget package also committed to greater transparency and accountability around the strengthened and sustainably funded biosecurity system. It also saw the establishment of a dedicated advisory panel.

“The new advisory panel has been created to provide increased transparency to key contributors of biosecurity funding, including importers, and will build closer collaboration with government and key stakeholders to share insights, discuss biosecurity priorities and explain government spending decisions,” she said.

Ms Buckle said freight forwarders and customs brokers could expect to be impacted by DAFF’s operations. She highlighted an increase in total import cargo volumes in the last financial year (ended 30 June 2024) compared with the previous year. The increase is largely attributed to low-value, non-commercial import volumes, as commercial import volumes were consistent with the previous year.

While total import cargo volumes increased, additional factors impacted the time of delivery of core biosecurity activities, including an increased number of non-compliance and biosecurity risk protections.

Ms Buckle said the department is seeking the support of freight forwarders and customs brokers to ensure complete and accurate documents are lodged well in advance of the arrival of goods, supporting a timely turnaround.

“The backlog of imported vehicles has eased, reversing the downward trend in the volume of new vehicles arriving with biosecurity risk material,” she said

“The department continues to work closely with the new vehicle industry to help manage the risk of contamination of imported vehicles, without compromising Australia’s biosecurity. Resourcing is still a key focus for the department, but … the employment market continues to be tight, and maintaining our business-as-usual biosecurity risk settings and aligning with additional resources to manage an ever-increasing workload is not sustainable.

“As an example, there is a minimum of six months from when an officer starts with us, before they are fully competent to undertake various roles independently. Add to this the resources required for training, plus attrition, also has significant impact.

“The department has introduced several initiatives that have resulted in reduced intervention for biosecurity officers. In partnership with industry, the key aims for reforms and initiatives are to deliver efficient border clearance, systems and services that meet industry demand, and free up our workforce to target risk-based interventions that deliver biosecurity outcomes for Australia.”

Digitalisation

Emerging risks and modern challenges were discussed at length throughout IFCBAA’s national conference. Economic outlooks, cyber insurance and the risks around transporting lithium-ion batteries all generated some important discussions. But one of the biggest topics, approached from multiple angles, was digitalisation and its impacts for freight forwarders and customs brokers.

WiseTech Global head of carrier integration and transformation Stuart Hayman said the digitalisation journey is about integration, being able to do everything from a single platform and delivering productivity. He said many in the industry have been trying to eliminate paper and manual processes for decades.

“For those of us who’ve been in the industry for a long time … we’ve talked a lot about digitisation. So, it’s certainly not a new concept. A hell of a lot has been achieved, but I think we probably all get a little bit frustrated at times with the amount of time that it takes,” he said.

An important milestone in a phased digitalisation program for air cargo, set by the International Air Transport Association, will occur on 1 January 2026. That date is the target for airlines and their stakeholders to have implemented ONE Record capabilities.

IATA describes ONE Record as a data-sharing standard whose aim is to improve efficiency, transparency and collaboration in the air cargo industry. It provides a single record view of shipments and follows on from work done by the air cargo industry with the e-freight program since 2005. That program set the foundation for the digitalisation of the air cargo industry and led to the implementation of the e-Air Waybill, which is now used for most shipments.

“It really is this new industry standard for data exchange and data sharing,” Mr Hayman said.

“But I think probably the most important thing to point out is that, at the moment, it is a very technical thing, and the work that’s happening on ONE Record is very technically focused in terms of architecture and redesigning things.”

Mr Hayman said it is difficult for freight forwarders and those on the user side to see ONE Record at the moment. It is a complex system in terms of its data elements.

“I think the key thing in terms of trying to keep it simple is that it really is about maintaining that data at the source; entering it once, and then making sure that the right people can access that data at the right time in a very secure environment,” he said.

“The freedom from the message standards that we have today is one of the biggest benefits that’s going to come with ONE Record.”

Mr Hayman said improving productivity through integration reduces cost and errors, but it also greatly improves operational efficiencies and engagement.

“Digitisation and the transformation journey as we move toward the new ONE Record standard, it’s all about change management,” he said.

“That’s what it is at the end of the day. It’s something new. But change is hard – we all know that. But I think one of the biggest barriers we often run into when we’re running any sort of change management program, are human factors. You know, as humans, we don’t like change particularly. It makes us feel uncomfortable.

“So, what we’ve got to do is we’ve got to see a lot of strong leadership. Leaders have to provide a very clear vision, particularly to their front-line staff. You put yourself in the shoes of somebody on the front line. If they don’t know – they hear something, but there’s very little information that comes with it, and no clear vision that comes with it of course, that’s just going to produce fear.

“Fear produces barriers. It’s about that strong leadership and a clear vision to safely take our front-line staff through the change journey.”

This article appeared in the July 2024 edition of DCN Magazine