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JOINT STANDING COMMITTEE ON FOREIGN AFFAIRS, DEFENCE AND TRADE Trade Subcommittee
14/04/2010
Australia's trade and investment relations with Asia, the Pacific and Latin America

CHAIR —I would like to welcome on behalf of the subcommittee Mr Brian Lovell, the CEO from the Australian Federation of International Forwarders. Although the subcommittee prefers that all evidence be given in public should you at any stage wish to give any evidence in private you may ask to do so and the subcommittee will give consideration to your request. Although this committee does not require you to give evidence on oath, you should be aware that these hearings are legal proceedings of the parliament and therefore have the same standing as proceedings of chambers themselves. Before we proceed to questions do you wish to make a short opening statement to the subcommittee?

Mr Lovell —I would like to advise a little bit about the federation if that does not take up too much time.

CHAIR —That would be appropriate.

Mr Lovell —Good morning all. I will read from a prepared statement just to save time and for clarity. The Australian Federation of International Forwarders was created in 1996. This followed the merger of two distinct organisations that existed prior to that; they were the Australian Federation of Air Freight Forwarders and the International Sea Freight Forwarders Association of Australia. Both of those bodies go back to the seventies, so the genesis of our association probably goes back over 30 years.

The merger was deemed to be a natural progression which mirrored the business of its combined membership, most of whom were active in both air and sea transport. Existing and new members could be elected from both the air and sea divisions of the existing entities. As we progressed we moved into areas such as third party logistics, as well as the basic freight forwarding elements, but at all times it represents the international movement, not so much the domestic freight forwarding movements in Australia.

In addition to the specific air and sea matters, AFIF also represents its members in issues related to Customs and quarantine, IT and e-commerce, training and education, security with both air and sea cargo security, and depot and warehousing. AFIF also strengthened its presence at both local and international involvements.

AFIF provides a comprehensive training and education program for its members, which I can talk about if the committee wish to know. I will not list all of our primary objectives, but just three or four that are probably quite important for the committee to know. We actively facilitate the development of more efficient freight forwarding services on behalf of our members. We aim to maintain and expand consultative relationships with various government bodies, both state and federal. We maintain and expand consultative relationships with industry service providers and other bodies in our industry and develop and facilitate appropriate training programs, as I have said.

That is a bit about us. Having said that, I would like to hear from the committee what they would like to know in terms of our specific areas of involvement.

CHAIR —We have quite a few questions.

Mr Lovell —I am sure.

CHAIR —We may not get through them all, but we will give it a go. From what I have read about your organisation it seems that you would be involved in the whole trade export-import at multi levels, so a good experience. My question is rather general. What do you see as the major problems facing Australia’s import and export sectors at present?

Mr Lovell —We see the interface at the port, the airport and also the compliance border in Customs and quarantine. I can break that down. First of all I will address the sea freight ports interface. The four main points that I have listed are the productivity and efficiency of the cargo terminal operators--that is, the stevedores. We would like to see improved benchmarking and targets, and I can talk a little bit more about those, having spoken with the New South Wales ports minister, Mr Paul McLeay. Another one is the road and rail infrastructure which surrounds the ports because without adequate infrastructure unfortunately the cargo does not move to and from the port very well. An important one is the mismatch of working hours where the ports can work seven days a week, 24 hours a day, but the importers and exporters do not. The transport operators can, but then what do they do with the cargo that they are supposed to be delivering? An important issue which often gets forgotten is the dehiring and the movement of empty containers, so once they are unpacked they have to go somewhere and then they have to go back overseas. That is a very important commercial issue because the sea freight operators do not often want to move empty containers, but they have to reposition them. Would you like to talk about the ports before we move on to air and Customs?

CHAIR —Yes, let us deal with the ports. We have visited a few ports so we have had a bit of exposure to them.

Mr Lovell —Just dealing with the first point I raised about productivity and efficiency, the New South Wales ports minister has become very involved, as did his predecessor, in trying to improve the efficiency. One of the solutions that was brought forward was to impose penalties and fees, because if the ports would not work efficiently by evolution or by organic methods then perhaps they needed to be forced to do so. Some solutions that were brought forward were penalty rates for picking up containers from the wharf during peak hours. Of course, we are talking about peak hours as daylight business hours that impact upon other users of the roads—consumers, but also business. Therefore, by imposing penalties on the transport operators, could we shift their hours of working to night time and evening and how would we do that? The penalty proposal was brought forward, which is called peak period pricing, PPP. I would not say that has been shelved, but it is still there in the background as a threat.

In the meantime, the ports minister for New South Wales is trying to encourage Sydney Ports, who operate the ports on his behalf, to bring forward these productivity and efficiency initiatives, some of which relate to internal target setting by the CTOs themselves; in other words, setting their own targets for which if they do not achieve them then maybe they impose on themselves some internal penalties on staff and operations. I envisage all of that will come to a head within the next six months, because if this does not work and we still have inefficiencies at the ports with long truck queues and congested roads around the port, then something has to be done. Obviously my members, being the freight forwarders, would be the first line of paying these bills because the transport operators often work not independently on behalf of a customer, but they work for a freight forwarder. The freight forwarder, being the intermediary in the process between the customer and the transport operator, would receive the bill and they would then have to pass that bill on to the customer, the importer or the exporter. That is where we will have some interesting discussions.

We cannot talk about charges here. We can never discuss charges, setting or agreeing on prices, as that is not the role of an association under trade practices. However, what we would object to is that being the first port of call—excuse the pun—which the government turn to if they cannot get efficiencies out of the Sydney Ports operations. I will leave that aside, unless you have questions on that, but that is going to come to a head.

CHAIR —It signifies that efficiencies, or inefficiencies, movements and times are seen as a problem.

Mr Lovell —Exactly. That leads into the road and rail infrastructure around the port, particularly in Sydney, but also in Melbourne. I would probably deal with Sydney and Melbourne as our largest problems, although Brisbane will face problems some time in the future. Around the ports are inadequate roads. In just looking at Sydney because it is easy as it is local, the M5 is inadequate. The M4 does not reach the ports or the city and the feeder roads around here are just totally inadequate. The government aim to move more of the containers onto rail. They aim to get to a target of 40 per cent. I cannot remember the year by which they want to achieve that figure.

CHAIR —What rail?

Mr Lovell —This is the proposed South Sydney freight rail which feeds into the mainline rail, but also would reach intermodal off port, that is inland, depots. There are two depots proposed to take this rail traffic and they are Enfield in Sydney’s inner west and Moorebank, which is a little bit further west. Enfield is under development, but there are some teething problems. Moorebank is constrained by some land ownership issues. It is okay having a rail line, but at some point you have to offload this at a rail head and then deliver the containers into the road system. At any point in time it could end up on the roads, but if we can move a lot of the containers away from the port into these depots then that would ease the congestion.

I guess one of the burdens faced by the freight forwarding industry is the time lines by which these depots may come on line and the development or the completion of the South Sydney freight rail.

CHAIR —A general lack of infrastructure is the issue.

Mr Lovell —The general lack of infrastructure is the problem. The same exists in Melbourne to a differing extent. There are better roads, in general. That is probably an anecdotal comment, but I think that is fair to be said. That is road and rail infrastructure.

You might recall that I mentioned the mismatch of working hours where the freight forwarding industry can work seven days, 24 hours, at a cost. Again, the cost must be paid by somebody if it is not to be absorbed by the industry. A customer may not wish to pay the bill because they say, ‘We work five days or six days a week which is adequate for our business to manufacture and produce. We want to receive your goods during the working hours of those five or six days.’ What transport operators have to do to avoid paying storage charges at the wharf—and there is a term called ‘demurrage’, which is loosely described as storage charges—they will pay storage charges to the cargo terminal operators. The transport operators, themselves, will have to then move the goods off the wharf and if they cannot deliver them to the customer they must stage them. Staging is offloading those containers from their trucks to an area, be it a depot or some form of warehouse facility. They may charge their own storage charges if they cannot deliver the goods to the customer at some point.

Just putting that aside for one second, there is another area of the problem. It is called detention charges. Detention relates to where a container is moved off the wharf, that is away from the port, taken to the customer and then is allowed to remain undelivered back to the wharf for 10 days on average. Detention charges would apply if the empty container is not returned within 10 days. There have been some horrendous charges or threats of charges recently because you would obviously be well aware of the insulation problem that the federal government faced. If you think of that in a freight forwarding sense, a lot of this insulation was coming from overseas and it got stuck. There is a separate issue there whereby there is a possibility of a class action being mounted by a legal firm to assist these importers who are stuck with the insulation materials that cannot be used.

CHAIR —Accruing charges.

Mr Lovell —Yes. That is an issue for the committee to look at in the very short term, but in the long-term we envisage that will go away. It does highlight the point that detention charges would apply to containers which are left undelivered back to their owner, which is the shipping line, and they are delivered through to empty container parks, which facilitate the dehiring of these containers and then, when the shipping line is ready to take them back overseas, the shipping line will call for those containers to be delivered to the wharf and loaded onto the ship.

You can imagine, in a commercial sense, that it is not productive for shipping lines to move empty containers around the world. They do have a policy to reposition them to where they are needed most, but that is a commercial imperative. It may not necessarily fit the imperative that we see in New South Wales as clogging up the empty containers parks and the roads.

CHAIR —On insulation, have you, as an organisation, been in contact with the minister’s office?

Mr Lovell —We have not directly because we are well aware of the situation whereby the government have stated that compensation may be available to those businesses which have been hardest hit. They have not given the process by which that could be done on a mass basis, so we have taken on board a legal entity who are going through the process as to how that would be dealt with in a legal sense, should it come to that, but also looking at how compensation can be claimed on an individual basis.

Mr COULTON —Just for clarification, you deal with containers coming in, distributing them and forwarding them on. Do you work in the reverse? Are you involved with exporters as well?

Mr Lovell —Yes.

Mr COULTON —What would the discrepancy be of full containers coming in and full containers going out? What percentage of that container exchange has to go out empty?

Mr Lovell —I have not got the percentages available, but I could obtain them.

Mr COULTON —Just off the top of your head.

Mr Lovell —I think the inbound problem is much larger, because Australia is an importing country of manufactured goods. Let us not look at bulk or raw materials that often go in the carrier as bulk. On containerised goods it is a much higher percentage on inbound.

Mr COULTON —Apart from the refrigerated containers, can you bring in a container full of white goods and then move it on to someone who fills it up with grain or timber products, or are they specific?

Mr Lovell —There are specific containers for specific products, especially when you are looking at perishables versus white goods, which is the example that you gave. The process is clear. The shipping line will arrange for the container to be delivered to the notified party or the actual importer, but it must be returned to the shipping line. It cannot be passed around because they need to track their containers and they are quite valuable items.

Mr COULTON —They are mainly owned by the shipping line?

Mr Lovell —Yes.

Mr COULTON —You have been focusing on the precinct of the ports. Have you been having trouble with logistics? I am from a regional area and I have a lot of container traffic coming in, whether it is meat or different sorts of grains. Are you having trouble with getting that supply line through to the port, competing with space on lines with, say, bulk coal trains and things like that? Is that a problem at all or can you get those containers through the system to the city area?

Mr Lovell —There are some consolidation depots in regional areas such as Griffiths and Parkes that consolidate from the outer regions. Rail lines do get through to the ports. They are quite good at that. You talked about grains and such products and I will be honest with you that our association is not as au fait with that sort of product because we are dealing with more manufactured goods and smaller items. I believe that the bulk carrier situation is not too bad, but I am sure that they have issues of their own as well.

Mr COULTON —The line that you were talking about that is being constructed now, for your interest it is taking the containers away from the port and will put them in a distribution point.

Mr Lovell —In intermodal depots, which are in the western suburbs, generally speaking.

Mr COULTON —Mainly a focus on importing?

Mr Lovell —Correct.

Mr COULTON —Thank you.

CHAIR —Please continue.

Mr Lovell —Let me refer to my notes from the meeting we had with the New South Wales ports minister. We talked about what could be done and a couple of points were raised. It relates to the empty container situation:

The New South Wales government was considering a possible solution to develop an incentive penalty system to ensure that where possible trucking operations drop off empty containers and pick up full containers on the same run and that single movements are penalised.

In other words, if you are just picking up and then going, but not dropping off at the same time, or you do not come to the port with an empty container and pick up a full one, then there could be a penalty. We asked him not just to look at penalties, but look at incentives—the carrot or the stick—where the carrot is sometimes better. The container movements per month out of Sydney Ports was in excess of 150,000 what they call TEUs, which is a 20 foot equivalent unit. You can have a 40 foot container, but that is like two 20 footers, so 150,000 TEUs. If there was an ability to move empty containers at the same time as picking up full containers it may remove some of the congestion from the roads. He is looking at that. That is one other thing.

I think this movement to alleviate the peak period at which time containers are picked up and dropped of is gaining some ground and perhaps it is the threat of penalties that is actually allowing the transport companies to rethink the way they do business. At the moment it may be because the container volumes are not reaching peak period, which they will not until later in the year. It is a combination of factors. At the moment the pressure is not on to introduce the penalty system because it is managing reasonably well, but when everything settles down to the busy time, we will see whether that comes in.

I am mindful of the time for the committee. If there are no further questions on sea, I might move to air and other matters. I am happy to pause while you think about that.

CHAIR —Please move on. I am conscious of the time as well. We will not get through all of the questions, so if you do not mind, we will send some follow-up in writing.

Mr Lovell —I understand. The air freight side is another very important part of the freight forwarders business. There are, in fact, more shipments sent by air in import and export than by sea, but obviously they are much smaller. They are containerised as well in air cargo containers, often at the airport itself, but quite frequently at the larger freight forwarders’ premises. I will talk about air cargo security as a separate issue because that is very big.

Our concern in relation to the interface at the airport is the uncontrolled costs. I know that this is not a forum for discussing costs.

CHAIR —What do you mean by there being uncontrolled costs?

Mr Lovell —There are uncontrolled costs applied by cargo terminals at the airport. They are not controlled by any authority. You might look at the ACCC, but the ACCC monitor competition issues. They have a prices surveillance arm, but it is not currently looking down to the level of the cargo terminal operators that apply charges. It might look at the airport as a whole, Macquarie Airports for example, but even so I am led to believe that they are having difficulty in looking at, monitoring and applying any pressure to alleviate cost impositions there.

CHAIR —What are a couple of examples of the cost impositions?

Mr Lovell —The air cargo terminal operator will operate on behalf of an airline carrier, both inbound and outbound. A carrier, an airline, will not have its own cargo terminal or its own operation. It will employ a cargo terminal. That cargo terminal applies costs, both to the carrier that it unloads the cargo for and also to the freight forwarder picking the goods up from the cargo terminal. Our concerns are that it has the opportunity to bill both parties. When it bills a contracted carrier there are some contracts in place for both parties to negotiate. When it bills a freight forwarder or the customer picking up the goods or delivering the goods to the terminal, there is no contract, so it can charge what it likes. There are some new charges, which I will not go into because it is not the role here, I am sure, which are going to be imposed upon our industry and which our members have no option but to pay and to pass these on to the consumer.

If we look at it in the bigger picture sense, the consumer is going to pay more—that is everybody in the street. That is our concern. I do not know if this committee can refer such matters to other authorities as to whether air cargo terminal costs can be monitored and some pressure brought to bear.

CHAIR —We are interested to hear more and you may want to do that in writing as a follow-up.

Mr Lovell —I will make a note of that. The other issue which is common to both air and sea freight is the productivity and efficiency of these cargo terminals to unload and make available cargo on import, and to load and remove the cargo for export. Whilst we have no particular issues at the moment, we should be mindful that it is a quiet time, the early part of the year, and again everything will come to a head between October and December when the pressure is on. We are consistently applying pressure to the cargo terminals to improve their efficiencies and, once again, to let us know what their benchmarks are and what their targets are because we do not see that transparency.

CHAIR —The next question is to do with the international logistic chains. By reading your information that you provided, my question is: how has the greater reliance on the international logistics chains affected the work of the federation?

Mr Lovell —I suppose our role has expanded. The total supply chain is now the common term. The supply chain obviously goes from the exporter, the manufacturer or producer, right through to the consumer at destination and in reverse. The role of the freight forwarder now is to assist all parties in the supply chain. However, when we remind ourselves that our role is international, that does interface with domestic road and rail transport to the point where the goods are taken to the port or the airport of export or from the port of import to the consumer. There is a little bit of an interface with the road and rail domestically, but we try to draw the line between that and those cargoes which are moving interstate or intrastate domestically.

Our role is moving into security surveillance as well. With security I am talking about air cargo and sea cargo antiterrorist surveillance, also theft and those issues that relate to security as well. Would you like me to speak about some of those?

CHAIR —When you say ‘moving into’ what do you mean?

Mr Lovell —If we go back probably 15 years there was no structured air cargo or sea cargo antiterrorist programs. That is quite a recent introduction. Things have moved very quickly and are still moving. I think it is a very large factor in relation to our activities, so I might speak about those briefly.

CHAIR —Yes.

Mr Lovell —The security issues relate to compliance costs, compliance for our members in terms of regulation for the development of efficient and effective programs to ensure the integrity of the cargo from the supplier through to the carrier that takes the goods out of the country. To do that there must be training in place, a system in place to monitor the cargo through its movement and there is audit and compliance. With those two items come costs as well.

Just recently you would be aware that the government announced $54 million to assist industry to implement and enhance the air cargo security program. I have just been to meetings recently in Canberra where we have been talking about how that money will be spent. Part of that money will be developing a regulated shipper program. You talked about our role as freight forwarders. We are getting closer to the shipper because at the moment the shipper is unregulated in air cargo security in that all they have to do is identify themselves and show that they have a drivers licence or whatever and they can give the cargo to the party in the chain that takes it to the airport. That is not satisfactory. We need to know more about the individuals working at shippers’ premises, as much as we have to regulate our own industry. Part of this money will go towards a new regulated shipper program.

Part of the money will also go to improving the technical examination of cargo. By this I mean cargo x-ray and explosive trace detection technology, which is available in some form already. These technological improvements we will see continuing on forever and at the moment I cannot guarantee that they are foolproof. I can guarantee that they are putting hurdles in the way of would-be terrorists and therefore making the supply chain a lot more secure than it would be without them.

We are looking to work together with the government to develop these new systems to improve cargo security. At the same time it should be noted that the freight forwarder is going to have to pay more to work with this technology, not just in the purchase of equipment but also in the training required to operate the equipment effectively. Do you have any questions on security?

CHAIR —I do not.

Mr COULTON —Is it going to slow the process up very much?

Mr Lovell —That is a very good question. At the moment there is a balance between cargo flow and adequate security. Once the government wants to step up security there is a trade-off and we believe that there is going to have to be more surveillance and therefore it is going to impact in some way upon the speed of the cargo movement to the port or the airport. Just how much that delay will be, time will tell, but the more intrusive, the more detailed it becomes, the cargo must inevitably move slower. That is an impediment to trade.

Mr MURPHY —In your background paper you state that AFIF members provide service for 65 to 70 per cent of container freight movements. Who looks after the rest?

Mr Lovell —The shipping lines and the airlines have the ability to approach customers direct and vice versa, customers can go to an airline or a shipping line. It depends on which shipping line or airline you talk to as to their willingness or ability to service the customer adequately. For example, some shipping lines do not want to talk to the customer directly because there are so many legal and technical documents involved in the shipping of goods; their job is just to carry the cargo. Others say, ‘We have a department which can handle that. We’re going to approach customers directly.’ To answer your question, they can approach Customs directly. There is nothing to stop them, but a lot prefer not to.

Mr MURPHY —Thank you.

CHAIR —I am going to ask a couple of quick questions. I am conscious of the time so we will have to finish up and I will send the rest of them in writing. How does your work relate to that of the Australian Logistics Council?

Mr Lovell —The easiest way to explain that is that the ALC deal more specifically with domestic cargo movements, namely inter and intrastate movements around Australia. Of course, as I said before, these would interface at some point logically with the international movements of goods, so we do have a dialogue with them. As an association, we are a member of their group, and I am personally involved in their security subcommittee.

CHAIR —Is there someone from your organisation that is on the board?

Mr Lovell —Not on the board.

CHAIR —You are a member.

Mr Lovell —We are a member.

CHAIR —I knew I had read that somewhere.

Mr Lovell —I am personally a member of their security subcommittee, so I work with them on that.

CHAIR —Can you give us some examples of the type of subjects offered in your vocational training programs?

Mr Lovell —We provide training in basic import, export, air and sea freight procedures. We also provide training in the technical and regulatory requirements for the freight forwarder, and those specifically are how to handle and prepare dangerous goods for transport by air and sea and, as I mentioned before, the security compliance. We provide training for our members in how to develop security training programs and how to obviously apply those and work with the government on those programs.

CHAIR —Do you do the basics like the how to?

Mr Lovell —Yes.

CHAIR —I just took it for granted that you did.

Mr Lovell —Import, export, air and sea freight and operations.

CHAIR —Particularly for newcomers or people who do not know what the regulations are and all of that.

Mr Lovell —Absolutely. I might mention that we are also developing a degree program. This would allow a pathway for a young individual or anybody coming from another industry to join our industry and can see an academic pathway for them to achieve at the highest level. At the moment we have diplomas and technical programs for training, but this will be the first degree for our industry.

CHAIR —Who will be the accrediting institution with the degree?

Mr Lovell —At this stage we are at phase 2 of the project. Phase 1 identified a suitable institution, the Australian Maritime College, which is an adjunct of the University of Tasmania. They are very interested and we are working through phase 2. I cannot say much more because, at the moment, it is subject to some funding through another independent body, but we hope to get there.

CHAIR —That is good. Do you operate in cooperation with any other training organisations, for example the Australian Institute of Export?

Mr Lovell —Yes, we have an affiliation with them. We advise our members of programs that they provide. They will primarily be for the export customers in that regard. We also interface with a young traineeship company called My Freight Career. They are, as I said, providing traineeships for industry entrance, so we promote that through our membership, and ultimately we hope that will form part of our degree program as a recruitment area.

CHAIR —Could you give us some details about the annual conference this year: the theme, the major speakers and the location?

Mr Lovell —We are holding our annual national conference in conjunction with another industry body by the name of the Customs Brokers and Forwarders Council. This will be our first joint conference. It is going to be held at the Hyatt Coolum between 14 and 16 October. Our main issues, quite normally, relate to our industry, but they are perhaps of some interest. We will be focusing on the Customs and the quarantine border, as much as anything, because there are big changes that we expect in that area. Both organisations are going through some form of change, particularly quarantine, who are moving to more of a biosecurity analysis in line with other jurisdictions. There will be air freight, sea freight, air cargo security, Customs and quarantine issues highlighted there. We have actually invited the Prime Minister, Mr Kevin Rudd. He has not yet advised whether he will be able to make it, but he is very interested in international transport so we keep our hopes up.

CHAIR —I am sure he gets a lot of invitations, but I can understand why people would want to do that. Last month your organisation issued a notice about AQIS fumigation compliance. The notice indicated that your organisation has some concerns that the new procedures may hamper fumigation providers in carrying out treatments. As trade facilitation is an important issue in this inquiry, can you outline the problem for us?

Mr Lovell —I might come back to you with the detail on that.

CHAIR —That is fine.

Mr Lovell —I think that is probably the best way to do it, rather than wasting your time. There are issues because fumigation is a very important part; chemical requirements change and overseas providers or offshore providers change. If they are not fumigated correctly before they arrive here then we have to fumigate the products here and it has to be done in a safe and secure environment.

CHAIR —Thank you.

Mr COULTON —I have an issue with fumigation with some of my exporters. It is a similar one that is down to the actual process of fumigation and what is required. I know they feel that it is very difficult to comply with the guidelines that are set down by AQIS with regard to unpacking containers and the amount of time that the product has to be under fumigation and then the amount of time that it has to air afterwards. There are concerns of recontamination and issues like that. Is that the same sort of thing that you are talking about?

Mr Lovell —It is all part of the same issue. It is a moving target. It continually changes. The Australian requirements and overseas requirements continually change, but we are trying to harmonise those with other countries around the world and there has been some progress in that matter.

Mr COULTON —The trouble I have is that the people further removed from the ports and the actual exporters themselves are not particularly organised as a single body because they are quite protective about the information of what they are actually doing themselves. So it is very hard to get them to act as one body because they are quite guarded about the information that they give to their competitors.

Mr Lovell —I understand.

Mr COULTON —Is there a need for people at that level of the supply chain to be a little bit more organised so that they can actually deal with AQIS and other issues.

Mr Lovell —I think that is a very good point. The freight forwarding association would like to be able to talk to one group when we have issues which we believe would be of interest to such exporters. There is the Australian Horticultural Export Council, which is just horticultural. There is the Australian Chamber of Commerce and Industry, ACCI, but apart from those two there would be local chambers of commerce and not much else.

Mr COULTON —I am interested to hear that because that is something that I am grappling with at the moment. I am only dealing with grain, cotton and those sorts of products, but it is very difficult. It is like herding cats trying to get them into one point.

Mr Lovell —I can imagine. There is the Freight and Logistics Council of New South Wales, FALCON is their acronym, but unfortunately they have just announced that federal and state funding has been withdrawn, so there is going to be a summit meeting to decide whether they go forward with independent funding or whether they can convince the federal and state governments to keep it going. Other logistics councils in various states have come and gone. I think there is one in South Australia and there is the Victorian Air Freight Council, but these councils have come and gone. Federal and state governments have tried to arrange them because of the concerns that you have expressed, but they seem to fall by the wayside because funding is removed. Perhaps that could be brought to those that—

Mr COULTON —Thank you.

CHAIR —Last year the industry action group was reorganised into two subcommittees covering service delivery, administration, policy and legislation. Are the new subcommittees proving to be successful or is it too soon to say? What do you think the impact will be on the facilitation of freight movements?

Mr Lovell —We are referring here to the Customs Border Protection National Consultative Committee subcommittees.

CHAIR —Yes.

Mr Lovell —We, as an association, belong to the peak group, the CBPNCC, and also the subcommittees. In answer to your question, it is probably too early to tell whether they are going to be effective because we have only had two or three meetings of each subcommittee and it can get bogged down in quite a lot of detail, so it remains to be seen whether they will be effective.

CHAIR —It needs more time.

Mr Lovell —We are working with them to make that effective, but I think it is too early to tell.

CHAIR —Has the review of the tariff advice system been completed and, if so, how will the result affect your member’s operations?

Mr Lovell —I will need to take that on notice to check with my industry experts on that one.

CHAIR —Thank you. How closely do you work with Tradegate?

Mr Lovell —I should declare at this point that I am a director of Tradegate.

CHAIR —Pretty closely.

Mr Lovell —Very closely. In fact, I am supposed to be at a board meeting today. I was excused to attend this meeting.

CHAIR —Send our apologies for taking you away.

Mr Lovell —If it does not cross conflict of interest, I might say that Tradegate is working hard to facilitate electronic communication through ports, particularly, which should eliminate some of the waste of timing.

CHAIR —They gave evidence at our last Sydney hearing, which was quite useful. We have met them.

Mr Lovell —We are working very hard in that area.

CHAIR —Would you outline for us your work as a member of international organisations, such as the International Federation of Freight Forwarders Associations, FIATA, and the Federation of Asia-Pacific Air Cargo Associations, FAPAA?

Mr Lovell —I will start with the easy one. I am actually the secretary-general for the Federation of Asia-Pacific Air Cargo Associations.

CHAIR —I should have known before I asked.

Mr Lovell —Again, if it does not cross conflict of interest, we find it a useful body where we meet with our other economies from the region, and as much as we learn from them they learn from us. It is about sharing information and, at the same time, I think we all step up a bit as we learn from each other.

In terms of the world freight forwarder body, FIATA, you can imagine it being a much larger group. In fact, after the United Nations, it is the second largest world body around. They have a number of subcommittees, working groups and ad hoc committees, but I think all in all their work is very effective as they get together and harmonise international work on freight forwarding.

CHAIR —I think we will stop there. I thank you for your attendance here today. The evidence that you gave was very helpful for the committee. If there are any matters on which we might need additional information the secretariat will write to you. We have a couple more questions that I know we will write to you on, and a couple that you have taken on notice as well, so we will wait for your reply. The secretariat will send you a copy of the transcript of your evidence, on which you can make any necessary corrections to errors of transcription. Thank you very much.

[12.19 pm]