DCN September Edition 2019

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CUSTOMS BROKING & FREIGHT FORWARDING freedom of shipping in such places as the Middle East and South China Sea. But as well as these grander themes, the traditional forwarder has had to evolve in terms of the transmission of information. It’s a theme taken up by AFIF business affairs manager Stuart McFarlane. “Shippers and consignees that utilise freight forwarders are now putting a lot more pressure on freight forwarders to be able to provide that visibility in the supply chain,” Mr McFarlane says. “Then the disrupters are coming into play; the digitising of the freight forwarder service. Those platforms are evolving… “I think ‘cracking that nut’ is probably the ultimate aim but is also a difficult one because of all the value-added services that traditional freight forwarders offer. Things like coordinating the customs clearance and labelling or storage or distribution of the goods.” Mr McFarlane talks of the freight forwarder as being “a fixerupper” of many issues. “When it moves to larger, box-type freight, there are myriad issues in terms of physical transportation but also the governmental requirements for the export country,” he says. “So I think that it is important, from the traditional freight forwarders’ perspective to recognise that the demands for the customer and the market are evolving and digitisation is reality.” Mr McFarlane talks of the need to be able to provide “greater digitisation or a platform for customers to access that provides visibility, transparency, reliability and cost effective movement of their goods door to door. “I understand some of the software providers are doing a lot in that space to provide digitisation of the information and the doorto-door services that freight forwarders can offer.” Mr McFarlane also notes increased merger and acquisition activity in the sector, due to tighter margins. EMERGENCE OF ONLINE FREIGHT FORWARDERS • Online freight forwarders guarantee reliable tracking for customers • 24/7 check of the status of shipments and payments online • Relationship with carriers for best pricing and securing space • Door-to-door fixed pricing per shipment to simplify quotations • Ease of access to overseas markets Source: AFIF “Scale is important, so bigger companies get bigger and we’ve seen that with DSV and Panalpina,” he says. “You see the likes of CMA CGM and CEVA now getting together. There is quite an evolution occurring.” FINAL THOUGHTS Summing up, Mr McFarlane says most traditional freight forwarders are well aware of what is required in terms of the information age and being able to match their service to that. He notes other future challenges including the advent of blockchain technology, biosecurity issues in dealing with brown marmorated stink bugs, giant African snails and whitespot disease in prawns. “Then there’s the cost of doing business. You’ve got port charges, infrastructure levies, Biosecurity Import Levy on the horizon, yet to be finally announced,” he says. “So there are a lot of things that freight forwarders have to be across and have to be nimble about in the big picture.” INDUSTRY PERSPECTIVE Port Adelaide business Smith Channon & Co is one of the longest-established freight forwarding and customs brokerage firms in Australia. In 2014 it was acquired by Autocare Services, a division of LINX Cargo Care Group. General manager Martin Bourn had a chat recently with DCN editor David Sexton. What are your observations about the modern customs broking sector? Increasingly we are seeing the majority of licenced brokers pooling and operating out of the big cities like Melbourne and Sydney and even a few organisations have tariff compilers offshore to reduce overall employment costs. There are brokers licenced under the Commonwealth even lodging entries offshore so technology has significantly changed the way freight forwarders and customs brokerages operate in Australia. You have been in business for a long time? What are some of the benefits of that longevity of perspective? We’re one of the oldest customs brokerage and freight forwarding companies where we continue to operate in house from an imports and exports perspective. It allows us to maintain an open communication channel and establish a positive working relationship with customers, understand their imports and on many occasions, we find ourselves giving business advice to our clients to achieve efficacy and more importantly reducing overall costs and make a win-win situation for both parties. What are some of the opportunities for customs brokers moving forward? Being a licenced broker comes with obligations and risks, personal integrity and compliance concerns are heavily placed against a licenced broker from a government department’s perspective and at the same time, brokers are each other’s fierce competition. Through industry bodies, we have been working with government agencies to collaborate with us through industry contacts and allow adequate resources together with customs brokers in protecting Australian borders. As brokers ourselves, we need to give each other an opportunity to set industry standards. For growth to occur, there needs to be change in the way licenced brokers are promoted or presented in the supply chain. 34 September 2019 thedcn.com.au
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