March 2, 2021 News & Events admin

2019 Women Trading Globally participant adopting zero waste approach to premium coconut oil products from Vietnam

In 2019, the ECA welcomed Thuy Hoang, founder of Cocovie, Vietnam to the Australia Awards Women Trading Globally Program supported by the Department of Foreign Affairs and Trade. Thuy spent two weeks in Brisbane and Sydney with 14 fellow female entrepreneurs from Cambodia, Indonesia, Myanmar, the Philippines, Timor Leste, Vietnam and Mongolia.

Thuy shares her founder story with us through the following Q&A.

Q&A with Thuy Hoang

Founder, Cocovie

Vietnam

Q: What led to you commencing your business?

I started the business of Cocovie after spending years travelling around world working in the luxury products industry. During a visit in Vietnam, I met a friend who gave me a coconut oil sample in a USED LaVie water bottle (LaVie is a popular bottled water company in Vietnam). He worked hard into making good oil but he did not know how to sell… I wanted to help my friend.

Whilst helping this small producer to find a way to sell the oil, I discovered the miraculous benefits of Coconut Oil on my skin and hair. As a buyer and seller of luxury hair care products, I would dye my hair every 2-3 weeks with a new color and apply all types of repair oil from the famous brands that I was selling. However, my hair got drier and weaker. I used the coconut oil sample in the “LaVie Water Bottle” and after the first use, my hair got shiny and strong again. With this visible result, I made the decision to grow long hair again thanks to the Coconut Oil of Ben Tre (a coastal province in the Mekong Delta of southern Vietnam). In addition to dry hair, coconut oil also rectifies dry skin. I no longer use expensive products for personal care and now my bathroom is so spacious thanks to Cocovie beautifying Coconut oil and Soaps.

In memory of this miraculous moment of the Coconut oil in the “LaVie Water Bottle”, we created the beauty coconut oil brand called “Lacocovie” which later changed to “Cocovie”. Our vision was to make the coconut oil of Ben Tre as popular as “LaVie water”. We signed agreements with major retailers in Vietnam market when we started. The special thing about Cocovie is that we created coconut oil workshops right in/ or near the coconut farms to press fresh oil and enable more job opportunities for women in the village. We invested in the machines and instructed the people of Ben Tre to press the oil based on our process. All the farmers, who sell to us, are committed to the preservation of natural state of the Mekong River that goes through their farms.

We are also applying the business model of a circular economy in which nothing in the coconut is wasted. For example, we use the coconut shells to make soap tray and dry coconut flakes (after pressing out all the oil) to make scrub for the soaps. Especially 100% of our product is vegan and organic as per USDA standards.

We know that what we do- as per our current turnover- is just a drop in the ocean… we are trying to increase the number of clean drops day by day with your support…. and the ocean and rivers will not be the same because of those drops

Q: What did you learn from participating in the Australia Awards Women Trading Globally program in 2019?

I have learned that successful global expansion requires consistency, perseverance, careful business planning and especially strategic focus.

Most importantly, for me it’s vital to connect to other women who are on the same path of creating a positive impact on the environment and on the local community through a business venture.

It’s a challenging endeavour as we need to both survive in the fierce business world and remain real to our compassionate and tender nature of a woman. I really admired and learned from these female entrepreneurs in the program who take care well of not only their business, but also family and the local community. They come from a society that is tougher than Vietnam yet they could handle that much and stay positive and energetic all the times.

In fact the Women Trading Globally program gives us certain credibility in the business community in Australia.

Thanks to this program we met potential clients and even volunteer senior mentors in the field of personal care who are helping us to navigate through both Australian and Chinese markets.

These clients did launch some focus groups, investigate pricing structure for retail launch. Unfortunately we decide that at this moment the time is not ripe yet for a launch there. We keep in touch and it’s great that I can always turn to them for advice or contact anytime I need.

Q: As a result of participating in the program, what are some changes you have implemented?

Successfully creating a business framework to work with international distributors
Shift in strategic focus regarding international business that enables us to generate new sales for international sales

Q: How have you been impacted by COVID-19 and how have you responded?

COVID-19 has been a challenging time. As most of our domestic sales were generated through the tourist channels like airports and tourist shops, in the first 2 months, our sales dropped dramatically- almost 50% drop. In this turbulent time, our team voluntarily proposed significant cut in salary and extra hours.

Our client, with whom we owed considerable fees, agreed to take products instead of cash. Our supplier agreed to grant us more time to handle payment.

On the sales side we changed our focus from the offline retail to online and affiliate sales whilst preparing attractive price offers for our international clients, and simplifying our operation process. By the end of 2020, despite a smaller business size, we encountered zero debt and the whole team was still fully rewarded with 13th month salary and festive gifts.

My belief is that in business, it’s the staff and customers who keep the business going, and not only the cashflow. This proved to be true during the Covid period… As long as we have faith, we can persevere through the dark night I believe.

March 1, 2021 News & Events admin

Australian Export Awards recognising remarkable resilience: WA Innovation keeping Australians safe through science

As Australia’s leading provider of synthetic and medicinal chemistry services, Epichem met the challenges of COVID-19 head on, by protecting its business and employees while supporting the community and launching new innovations.

Founded in Perth in 2003, Epichem creates specialised products and provide technical expertise to customers in more than 40 countries in the pharmaceutical, mining, agriculture, and animal health sectors. It exports 80 per cent of its products and services to the US and Europe, so coronavirus has had a major impact.

In early 2020, when the pandemic hit, the company had to put around A$800,000 worth of international project work on hold indefinitely and halt many internal R&D projects. It faced shortages of essential supplies, and reduced income delayed critical equipment purchases and threatened the business.

Innovation meets community spirit

In response, Epichem launched some exciting COVID-related R&D projects, including partnering with a US-based company to gain IP rights to a carbon-neutral benchtop flow reactor prototype.

This Australian-designed technology converts biomass and waste into valuable products such as ethanol, which is used to make hand sanitiser. Epichem is now raising funding to build one in Australia.

The company is also partnering with the WA Government to develop dyed hand sanitisers that show which parts of your hands are not sanitised, and a ‘smart-surface’ spray that destabilises the COVID-19 virus on hospital surfaces.

To keep its business afloat, Epichem leveraged its global supply chain network to secure six months of critical supplies, and invested in equipment with leasing arrangements and accessed government support initiatives to manage cash flow. Staff work from purpose-built laboratories, so Epichem introduced COVID-safe practices and donated hand sanitiser to staff and their families. Regular communication was key, with daily COVID updates sent out.

“During situations like this, leadership comes to the fore,” says Colin La Galia, Chief Executive Officer. “It was important to give the team confidence that the leadership team was taking steps to protect the business and also to protect them.”

Through all this change and business uncertainty, Epichem was aware that health and aged care organisations were facing shortages of hand sanitiser, so the company donated thousands of bottles.

“I remember going to one cancer organisation and I was welcomed with tears because they were down to two bottles,” says Colin. “What really hit home was the importance of the community coming together.”

When local gin distilleries reached out to Epichem for help, Colin and the chemistry team didn’t hesitate. They provided free advice on converting gin into ethanol and then into sanitisers, so these small businesses could continue to earn revenue and keep their staff.

“COVID has hurt Epichem: projects are on hold, cash flow is tight,” says Colin. “But we’re still discovering novel drugs for patients, still supporting our community, still making a difference by being the difference.

“To face the challenges of 2020, adaptation is key. Small businesses cannot stop at plan B or C, but must be prepared with a robust, multi-faceted risk mitigation strategy. Focus on what can be controlled and plan for every conceivable eventuality.”

March 1, 2021 News & Events admin

Productivity Commission review gives additional focus into the supply chain

On 19 February 2021, the Federal Treasurer requested the Productivity Commission (Commission) undertake an independent review (Review) “into supply chain vulnerabilities and risks” to “ensure that the Australian economy is prepared for “possible supply chain disruptions”.

The Terms of Reference for the Review suggest it originates from the COVID-19 pandemic and while Australian supply chains proved to be “resilient”, the circumstances highlighted potential vulnerability to global supply chain disruptions. Accordingly, the scope of the Review has been set as follows;

The purpose of the study is to examine the nature and source of risks to the effective functioning of the Australian economy and Australians’ wellbeing associated with disruptions to global supply chains, identifying any significant vulnerabilities and possible approaches to managing them.

In undertaking the study, the Commission should consider Australia’s part in global supply chains as an importer and exporter, and:

consider the factors that make supply chains vulnerable.
develop a framework for identifying supply chains that are vulnerable to the risk of disruption and also critical to the effective functioning of the economy, national security and Australians’ wellbeing.
use trade and other relevant data to identify supply chain vulnerabilities.
explore risk management strategies, including the roles of, and options for, government and businesses to manage supply chain risks.

The Commission has a very short timeframe to complete the Review, with an interim report (focussing on the import part of the supply chain) due at the end of March 2021 and a final report including findings on the export supply chain being due by late May 2021.

The Commission previously completed a number of reviews looking at issues affecting the supply chain, such as the merit of continuing the collection of general customs duties, the effectiveness of our anti-dumping system and Free Trade Agreements and the imposition of Goods and Services Tax on low–value imports.

The Review is consistent with the funding made available in the last Federal Budget for a “Supply Chain Resilience Initiative” to assist businesses with their supply chains. The Review is also consistent with some of the recommendations made late last year in the Senate Standing Committees on Rural and Regional Affairs and Transport which looked at enhancing the supply chain operation. The supply chain and the problems experienced at and around the Ports are currently under examination including:

The Victorian Government initiated an independent review of the Victorian ports system. The review recommended the adoption of the “Voluntary Performance Model” at the Port of Melbourne to review the performance of the port and those operating infrastructure around the port. The Victorian Government has subsequently commenced another associated review, this time of the wider ports system in Victoria.

The 14th meeting of national and state Infrastructure and Transport Ministers was held on 20 November 2020 and reached an agreement on a number of significant issues associated with the supply chain including “fast tracking” of infrastructure to support economic recovery, making roads safer, improving efficiency in the supply chain and the adoption of a national approach to stevedore infrastructure charges. The current proposal is to develop voluntary national guidelines for applying stevedore infrastructure and access charges. The aim is to provide “greater certainty and transparency for both stevedore and landside transport operators and support continued investment in terminal facilities”. That work is to include reference to the “Voluntary Performance Model” described above.

A Port Botany Landside Improvement Strategy review has been announced into operations around Port Botany.

NSW Ports recently issued direction on Botany Truck Congestion.

Freight Victoria has just announced the commencement of a study into empty container management capacity and supply chain issues in Melbourne. This is to be conducted by the same firm that did a similar study in NSW which demonstrated significant additional costs from an inefficient system.

The supply chain is not only a concern to Australian state and Federal regulators but also to importers and exporters and their service providers moving goods through the supply chain. I have been working extensively with the International Forwarders & Customs Brokers Association of Australia, the Export Council of Australia and the Food and Beverage Importers of Australia, as well as others affected, to address these issues together with related issues such as detention charges.

Our focus in Australia is not alone as there is worldwide concern on congestion and costs in the supply chain triggering ongoing action such as by the Federal Maritime Commission in the USA and the European Commission.

Hopefully, those in industry will engage directly with the Review and the Commission will engage extensively and transparently. The vulnerabilities affect all of those involved in the supply chain and can pose a barrier to entry for Small and medium-sized enterprises with the consequence that other trade initiatives to reduce costs and enhance access to markets are eliminated. There is also concern that the position of licensed customs brokers and freight forwarders should be properly considered by the Commission – after all, few goods would move without their involvement and expertise. The regulatory regime and support for those service providers needs to be a priority.

Our Customs and Trade team are well placed to advise you on all aspects of Australian and international trade and e-commerce.

March 1, 2021 News & Events admin

The Netherlands, Your Gateway to Europe

Recently the ECA attended a session hosted by the Consulate General of the Kingdom of the Netherlands | Sydney

The session included many industry body executives who discussed current trade issues and opportunities and spoke of the need to work collaboratively into the future. Whilst the discussion was centered on trade overall the following information provided by the Consul General is also worth considering when looking at expanding your markets.

The Netherlands is the 4th largest foreign direct investor in Australia, investing A$54.8 billion (equivalent to 2.7% of Australian GDP) in 2019. The Netherlands is Australia’s 3rd largest export market in the EU, with A$2.6 billion in goods and services exported from Australia to the Netherlands in 2019. Data source: Austrade Benchmark Report 2020.

Open economies and trade are an integral part of the Dutch economy. The Netherlands and Australia share a mutual interest in maintaining a rules based world order, and open markets for trade. The continuing negotiations on the EU-AU Free Trade Agreement will serve to improve the trade relationships between the Netherlands, EU and Australia.

For those of you who are interested in exploring an operational base in the Netherlands to access European markets, individual introductions will be made to the Netherlands Foreign Investment Agency – if you would like to be connected to the NFIA for a discussion, please let us know. The Port of Rotterdam and Schipol airport in Amsterdam allow access to the entire European market within 24 hours, and the Netherlands is an important strategic logistical hub for Europe. Using the Netherlands as a logistical base allows businesses access to 244 million consumers who live within a 1000km radius of the Netherlands.

Industry Participants at the session:

Export Council Australia | Diane Tipping (Chair)
Cotton Australia | Adam Kay (CEO)
Seafood Industry Australia | Veronica Papacosta (CEO)
Meat & Livestock Australia | Jason Strong (MD)
GrainTrade | Pat O’Shanessy (CEO)
Accolade Wines Australia | Shae Courtney (Government Relations and Communications)
Embassy and Consulate-General of the Kingdom of the Netherlands
Frank van Beuningen | Consul General of the Kingdom of the Netherlands in Sydney, Head of Economic Affairs in Australia
Dai Forterre | Senior Policy Officer (Economic Affairs)
Stephanie van Loon | Senior Trade Officer (Economic Affairs)
Delegation of the European Union to Australia
Cornelis Keijzer | Head of Trade, Economics, Research and Innovation
Department of Foreign Affairs and Trade
Jeremy Dicker | Deputy Director, NSW State Office

Embassy and Consulate-General of the Kingdom of the Netherlands:

Frank van Beuningen | Consul General of the Kingdom of the Netherlands in Sydney, Head of Economic Affairs in Australia
Dai Forterre | Senior Policy Officer (Economic Affairs)
Stephanie van Loon | Senior Trade Officer (Economic Affairs)

Delegation of the European Union to Australia:

Cornelis Keijzer | Head of Trade, Economics, Research and Innovation

Department of Foreign Affairs and Trade

Jeremy Dicker | Deputy Director, NSW State Office

February 25, 2021 News & Events admin

ECA Featured member – ALTIOS

ECA Featured member - ALTIOS

ALTIOS is a Global Business Development Firm focused on helping businesses grow through international development strategy, international expansion, subsidiary management, recruitment and cross-border investments into the worlds’ leading markets.

Established in Australia in 1991, ALTIOS has consolidated a large amount of expertise across a variety of industry sectors and has assisted foreign companies grow and expand their businesses overseas.

ALTIOS has been serving more than 8,000 international clients – high growth businesses, global companies, investment funds, government organizations and professional associations – entering new dynamic markets, establishing a presence, and expanding their business activities.

ALTIOS offers practical, personalized and efficient services, at every step of global expansion, providing end-to-end solutions and worldwide support without using different providers. ALTIOS’ 430 employees include marketplace experts, specialists in various industrial sectors and staff with legal, financial and HR expertise.

ALTIOS joined the ECA in 2013 and just renewed their membership for another year. They are looking forward to participating to ECA’s events and webinars and continuing to engage with the ECA community to help their members expand overseas.

In 2020, they opened three new offices, in Malaysia, Vietnam and New Zealand to build new relationships and support SMEs to midcap companies to expand and set up in this part of the world.

They also created a new branding deployment within the group.

From an international perspective, they have developed expertise and ability to advise and connect with ALTIOS experts all around the world according to the prospect’s needs despite the crisis

They have also developed new strong relationships and partnership with banks, institutions, professional associations and regional agencies such as Auckland Unlimited, ANZ, Credit Agricole, Singapore Enterprise, Austrade, the French Chamber of Commerce, Business France, New Zealand Trade and Enterprise, …as well as participated in tradeshows (mainly in New Zealand, China and Singapore), conferences and webinars (with speakers from ALTIOS’ group)

Also in 2020, they have developed several contacts and projects within the mining, F&B, food technology, agricultural and premium consumer good environment.

ALTIOS are looking forward to their merge with M+V, which has a strong footprint in India with 5 offices and 200+ employees and they are also merging with an accounting firm in Spain and will be able to provide stronger support to their clients.

The company is developing its Corporate Finance Division to help with external growth and acquisition in 2021.

In an international context directly impacted by Covid-19, business leaders can no longer travel abroad and wonder about the resilience of their activities outside their home market. ALTIOS helped remove that uncertainty surrounding the resilience of their client’s activities outside of their home market thanks to their new Global Remote offer which includes: Rebound Strategy, Business Market Audit, International HR Solutions and Subsidiary/M&A diagnosis.

ALTIOS have a powerful global and well positioned network of 28 offices in the most attractive markets: United States, Canada, Mexico, Brazil, Colombia, France, Germany, Poland, Czech Republic, Russia, United Kingdom, Italy, Spain, United Arab Emirates, India, China, Singapore, Malaysia, Vietnam, New Zealand and Australia.

February 25, 2021 News & Events admin

Promoting Australian higher education to the world

The Morrison Government is promoting Australia’s world-class higher education and online learning offering to more than 12 million people around the globe.

‘Study with Australia’ is a five-year project to showcase Australian education to new and existing learners worldwide.

Minister for Trade, Tourism and Investment Dan Tehan said ‘Study with Australia’ would give Australian education providers another avenue to promote their innovative online products via the learning platform FutureLearn.com.

“When COVID-19 impacted higher education, Australian providers were quick to develop innovative ways to continue teaching their students,” Mr Tehan said.

“During a pilot offering free online short courses at 20 Australian education institutions, ‘Study with Australia’ clocked up more than 836,000 enrolments across 52 courses in just three months.

“The global online e-learning market is forecast to grow from $US101 billion to more than $US370 billion by 2026, which is a huge opportunity for Australian universities and education providers to reach a global audience and provide jobs and growth here in Australia.”

Minister for Education and Youth Alan Tudge said the project will provide international students worldwide with access to short courses through Australian education institutions.

“Building on the award-winning ‘Study with Australia’ pilot, this new agreement enables Australian providers to offer online short courses and microcredentials to millions via the global reach of the FutureLearn platform.”

“Of course, we want international students back in Australia, but while international travel is limited, this initiative ensures students can stay connected to Australia and our world-leading education providers at a time when they need it most,” Mr Tudge said.

FutureLearn Chief Content and Partnerships Officer Justin Cooke said: “We are delighted to enter into the next chapter of the highly successful ‘Study with Australia’ campaign.

“Together with Austrade and our 20 world-leading Australian partners, we’ve enabled more than 450,000 people from almost every country around the globe to gain new vital skills through over 50 different courses in high-demand areas such as digital, technology, law and healthcare,” Mr Cooke said. “We now look forward to continuing to showcase the best of Australia’s education offering as we build on our shared mission to transform access to education.”

The initiative was awarded the 2020 Excellence Award for Innovation in International Education by the International Education Association of Australia (IEAA).

‘Study with Australia’ is a joint initiative of Austrade and FutureLearn.

For more information, visit https://www.futurelearn.com/courses/collections/study-australia.

February 16, 2021 News & Events admin

Opinion: How setting a net-zero target will put us ahead

Although I’ve never been a big fan of setting targets, I must admit that when it comes to improving female representation in politics and to setting a net-zero emissions target, the benefits are clear.

In the case of women, the road to political success is paved with female casualties and waiting for a cultural change to happen organically is unrealistic. In the case of climate change, the road to net zero is paved with uncertainty, and waiting for the market to take us there without legislating a target is unwise.

The Coalition is on the right track. Setting a net-zero target would exert substantial influence on five important areas: trade, soft power, neutralising the ‘left’ , economic growth and jobs.

Trade policies are likely to become more aligned with tackling climate change and the lack of a legislated target could become a handicap for Australia’s trade and international relations, limiting our scope to do deals and in the worst-case scenario, exposing us to sanctions or tariffs. These are some signals that Australia cannot ignore:

Europe is likely to impose a carbon border, putting a carbon price on imported goods as an extension of the EU’s carbon price policy as a necessary step to ensure a level playing field between EU industries and foreign competitors.
The UK is showing interest in joining the ACCTS (Agreement on Climate Change, Trade and Sustainability) which plans to cut barriers to trade in environmental goods and services, phase out fossil fuel subsidies and encourage the promotion and application of voluntary eco-labelling programs and mechanisms, supporting reform of trade rules prioritising the environment.
President Biden also supports “carbon adjustment fees against countries that are failing to meet their climate and environmental obligations at the US border”.
As for China, although it disagrees with environmental protectionism, it seems to be getting ready for its trade implications. For example, it has already set up a carbon pricing framework establishing a system of pollution permits for those power generators who over pollute.

We’ve got the power

We don’t expect Australia to be dancing to other nations’ tunes, but we need to syncronise our climate policies with those of our allies, keeping up with the pace and rhythm expected from a developed economy of our calibre.

Setting a target would enhance Australia’s soft power, allowing us to join like-minded nations that have committed to a net-zero and that are crucial to Australia’s trade and regional prosperity like Japan, South Korea, the Pacific Islands, the US and most European countries.

Our government is committed to playing its vital role in decarbonising and supporting the Pacific, improving energy security, supporting climate action to prevent sea level rise, and to help ensure their military protection. Setting a target will invigorate our global standing in the Pacific region.

Rage against the machine

If our conservative governments do not deal with climate challenges, we run the risk of the young generations resorting to more extreme solutions.

While interviewing former EU Commissioner for Climate Action, Connie Hedegaard, on Sunday at our Coalition for Conservation event on climate resilience, she said: “For those in favour of capitalism, we must show that we can handle this crisis, or we might be faced with the young generations calling for more radical reform like a total change of system”.

This is by far one of the most serious predicaments our conservative governments are facing if we don’t show we are concerned and prove we are taking steps towards net-zero goals.

More ‘Men at Work’

The most elementary examination of Australia’s employment data makes one very clear conclusion: fossil fuel-reliant jobs are few and at-risk, while jobs in renewables are growing at a higher rate.

The ABS data reveals that between 2017 to 2018, employment in renewables grew by 27 per cent to 26,850 jobs. The most recent Clean Energy Council report has found that the sector could potentially employ 44,000 Australians by 2025, with the majority of these jobs in regional areas.

The EY Report ‘Australian Renewable Export COVID-19 Recovery Package’ released in 2020 estimated that every $1 million spent on renewable energy and exports creates 4.8 full-time jobs in renewable infrastructure or 4.95 jobs in energy efficiency. By comparison, $1 million on fossil fuel projects has been found to create 1.7 full-time jobs.

A target would assist in speeding the various pipeline projects that can place Australia in the pole position.

A net-zero target would provide the necessary signal to the market to begin those job transitions, avoiding the mass structural unemployment that would arise otherwise.

One thing leads to another

Setting a target would signal that we are serious about walking the talk to reach our Paris Agreement commitments, bringing a desirable level of certainty, conveying a semblance of confidence to corporates and investors and cementing our space as leaders in technologies and renewables internationally, rather than camouflaging our potential behind a lack of policy.

A target would assist in speeding the various pipeline projects that can place Australia in the pole position, bring the returns to superannuation firms free from exposure to stranded assets and position Australia as a clean energy exporter.

Nationals threaten to flex muscles over 2050 net zero pledge

How soon is now

For those who feel that setting a target could either be a bake-off without ingredients or a promise we cannot fulfil, I would argue that Australia is one of the most reliable countries to achieve this goal. At federal level, the Coalition government with Minister Angus Taylor has set the pathway to achieve emissions reduction through the Technology Roadmap, and our states have set ambitious targets accompanied by sensible policies supporting clean technologies.

Australia’s renewable energy capacity is growing at a per capita rate 10 times faster than the world average, and nearly three times faster than the next fastest country, Germany. Between 2017 and 2020, more than $30 billion was invested in renewables, one of the highest per capita investments worldwide.

Progress can only come with change and we should set up a target now. If there’s no reasonable cause not to do it, let’s support our Prime Minister, so it’s done while it is still a choice, not an ultimatum.

Cristina Talacko is chair of the Coalition for Conservation and a Director of the Export Council of Australia.

February 16, 2021 News & Events admin

Supply chain and regulation

Even as the world struggles with the health issues from the pandemic, those relying on the supply chain are facing a variety of problems, which collectively are creating additional delays, cost and uncertainty. None of these factors will assist with economic recovery, or the distribution of vaccines and other medical products being used to deal with the pandemic. Further, the economic benefits of a reduction in tariffs through Free Trade Agreements and other trade facilitation measures are being eroded by problems and costs in the supply chain.

The focus of the United States Federal Maritime Commission

The Federal Maritime Commission (FMC) in the United States (US) has been busy dealing with challenges to those using sea cargo including:

The issue of a Guide on Detention and Demurrage Practices in April 2020 based on legislative provisions giving the FMC jurisdiction under the US Shipping Act to monitor “just and reasonable” practices in handling property by those in the shipping industry.

A renewed focus on container availability levels for US agricultural exporters as some ocean carriers have indicated that they would not re-deploy empty containers to the interior agricultural areas. The FMC has expressed concerns that these practices may be in breach of the US legislation.

The launch of an inquiry into the use of the term “merchant” in Vessel Operating Common Carriers Bills of Lading seeking to extend liability for charges to third parties (such as freight forwarders) who have no beneficial interest in the goods being carried.

A coalition of road freight providers, shippers, and customs brokers have requested the FMC to consider an immediate suspension of detention and demurrage charges at major ports until congestion at those ports has been reduced. Some of those same parties are also proposing changes to the US Shipping Act on the basis that it is no longer fit for purpose in the current environment and the FMC and government should be given increased regulatory powers.

Other international issues

The issues before the FMC are symptomatic of other international issues around cargo. The Indian government has produced a draft Merchant Shipping Bill which includes a requirement that any charges for the provision of shipping must be “all in” precluding the ability of carriers to impose additional surcharges. The World Health Organisation has complained of “outrageous” air freight rates to fly dry ice and other medical equipment.

In other examples, carriers have continued to leave import containers stranded at north European ports and charge exporters more than $5000 to ship a container to Asia.

Several carriers have been diverting vessels from the United Kingdom (UK) due to congestion issues and unloading import containers at ports in Europe with delays in getting the goods to the UK as they try to get the empty containers back to Asia.

That may be made worse by a “no deal” Brexit. In the European Commission (EC), industry associations representing shippers and freight forwarders, facing lack of capacity, increased rates and surcharges have approached the EC to intervene.

The Australian context

The situation in Australia reflects many of the same issues being experienced elsewhere in the world, including significant ongoing congestion and delays at Port Botany. Some carriers out of China responded by refusing to take bookings to Sydney while other others who continued to service Sydney began adding additional congestion charges as well as changing routes, unloading containers in Melbourne and moving containers by road to Sydney. While the congestion issues around access to Port Botany may be reducing, there is evidence similar congestion and delays are arising into the Port of Melbourne.

There are also other issues which have focused the attention of those in industry in Australia. First is the issue of empty container parks which have become “full container parks” limiting the ability of freight forwarders to de-hire containers, requiring those freight forwarders to store the containers at their own premises (without charge, no doubt) for an indefinite period and also reducing the numbers of “empties” available in the supply chain.

Second, there have been concerns expressed regarding the increased land-side “access to infrastructure” charges being levied by stevedores and the fact that these can be increased regularly and without reviews.

Third, there is a real concern that the Port of Melbourne and Port Botany will be unable to berth the ultra-large container-carrying vessels with their current facilities and they may not have additional areas of land to expand their facilities and to recover the costs of doing so.

The interaction between the need for infrastructure at and around the ports, the limited availability of land for that infrastructure, the cost of that infrastructure and the recovery of that cost together with a profit for the investment is difficult to navigate, especially when the ports and infrastructure are owned by the private sector.

There are several initiatives now being considered by governments and the private sector but all of the resolutions tread a fine line between the need for investment balanced against the lack of competition in the sector and the ability to recover that investment.

Industry representations

After extensive representations by industry, led by work by the International Forwarders and Customs Brokers Association of Australia (IFCBAA) (previously the CBFCA), the Victorian government initiated an independent review of the Victorian ports system. The review recommended the adoption of the voluntary performance model at the Port of Melbourne to review the performance of the port and those operating infrastructure around the port. The Victorian government has subsequently commenced another associated review, this time of the wider ports system.

The ACCC

While the Australian Competition & Consumer Commission (ACCC) publishes an annual Container Stevedore Monitoring Report that is only a record of the performance of the stevedores and the ACCC has no power over the operators for these issues. The most recent report shows an increased reliance on “access charges” for revenue and profits. Subsequently, in a speech delivered in October 2020, the ACCC chair expressed concern there was “no or little regulation of monopoly privately owned ports” where the “unfettered market power” of some ports “is costing our nation dearly”, a situation that also applies to airports.

The chairman reported that in his view there was the need for a new “Part IIIB” monopoly regulation regime that would see owners of significant market power subject to some form of price regulation” as “properly priced infrastructure is vital to our economy”.

Industry discussion paper

The Australian Industry Group issued a discussion paper in November 2020 regarding port and shipping policy which addresses many of the Australian issues described above. This includes issues of infrastructure, competition in port pricing, reliance and security of the supply chain and industrial relations reform.

The discussion paper includes a series of proposals for consideration by the government including reference to the ACCC proposal (above), the imposition of a Community Service Obligation by governments to ensure that port infrastructure operates to public benefit and the potential adoption of our own version of the FMC.

A meeting of transport ministers

The 14th meeting of national and state infrastructure and transport ministers was held on 20 November 2020 and reached agreement on a number of significant issues associated with the supply chain including “fast-tracking” of infrastructure to support economic recovery, making roads safer, improving efficiency in the supply chain and adoption of a national approach to stevedore infrastructure charges.

The current proposal is to develop voluntary national guidelines for applying stevedore infrastructure and access charges. The aim is to provide “greater certainty and transparency for both stevedore and landside transport operators and support continued investment in terminal facilities”. That work is to include reference to the Victorian voluntary performance model described above.

Guidelines for the national and state review will be issued in 2021 for comment.

A time for action

The maritime supply chain is vital to the international economy, especially as the world attempts to manage and recover from the global pandemic. Australia is particularly exposed as 98% of our trade goes through our ports and many jobs rely on the movement of goods in a timely and affordable manner.

It appears that the current model may not be working optimally and as a result, there does need to be change. Many of the affected industry associations such as IFCBAA continue to focus on these issues which state and federal governments now recognise as shown by the introduction of the voluntary program for review of stevedore infrastructure charges. Hopefully, the program will set out reasonable expectations which could lead to future regulatory and legal changes if those expectations are not achieved.

In my view, given the importance of the maritime supply chain, that warrants the early creation of a stand-alone and independent agency such as the FMC with similar jurisdiction and powers. In this case, the importance of the maritime supply chain warrants new regulation.

February 16, 2021 News & Events admin

Businesses encouraged to apply for projects under NSW Government’s $100 million Regional Job Creation Fund

Businesses looking to establish, expand or relocate operations to regional NSW are encouraged to apply for projects under the NSW Government’s new Regional Job Creation Fund.

The $100 million program will provide businesses in engine, enabling or emerging engine industries with the money they need to fast track expansion plans, create new opportunities and jobs, and attract new customers.

The Regional Job Creation Fund will provide co-funding for projects that create and retain at least five regional jobs, including those that:

replace, upgrade or adapt existing plant or equipment, including technology or energy efficiency upgrades
enable existing regional NSW businesses to establish an additional production line
relocate a business from interstate or internationally to regional NSW, or onshore an activity currently being undertaken overseas to regional NSW
develop new tourism experiences and attractions to create new demand in a region.

The $100 million Regional Job Creation Fund will aim to create at least 5,000 new direct jobs across regional NSW in the next three years.

Setting businesses up for success means they can attract new customers, putting more people in work and earning a wage that they will spend in local shops, which supports local retail workers as well as their suppliers.

Businesses already operating regionally that want to expand, as well as interstate and overseas businesses considering relocating or establishing operations in regional NSW, are encouraged to apply.

Applications are open now and will close on Friday 14 May 2021 or when program funding is fully allocated.

Find out more about eligibility criteria and program guidelines here

February 16, 2021 News & Events admin

Looking for an opportunity to make a meaningful social impact? Work with us to assist women and Indigenous entrepreneurs to trade

The ECA, in partnership with the Department of Foreign Affairs and Trade, has programs that are building the capacity and network of women and Indigenous entrepreneurs from Australia and developing countries to engage in international business.

The programs are helping build livelihoods, lift communities and address environmental challenges. The entrepreneurs and businesses are involved in a range of industries including textiles and fashion, handicrafts, agriculture, food and beverage, IT services (such as website and app development), manufacturing, and sustainable packaging.

We need your time and talent. We would welcome your participation in the programs as industry expert presenters during training seminars, as potential mentors, and/or business partners or buyers.

If you have any questions, please reach out to Angela on angelawright@export.org.au

Please register your interest here

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