Interview Brian Lovell: A challenging start to the year, but the iron ore price recovery may signal better times ahead
Uncategorised
Sunday, 20 March 2016
A challenging economic start to the year, a raft of new rules and regulations plus new international trading opportunities are making work for the Australian Federation of International Forwarders (AFIF’s) management.
Brian Lovell, chief executive of AFIF, also holds the part time position of executive director to the Federation of Asia Pacific Air Cargo Associations (FAPAA) - as well as multiple other roles.
Arriving in Australia from the UK in 1981, he held several roles in air freight companies before taking an active voluntary role with the Australian Federation of Airfreight Forwarders (AFAFF) where he assisted with the growth and development of its industry education and training programs. During this time he held the honorary positions of president NSW branch and federal director of Education Services. In 1994, he became the Federation’s first full-time chief executive and in 1996 (AFAFF) joined forces with the sea cargo forwarders representative body (IFAA) to form AFIF, with Lovell heading the merged entity.
AFIF is a national association member of the global freight forwarder representative body – FIATA and Lovell is on the Council of the FIATA Advisory Body, Safety and Security (ABS)
He is also actively involved in several national representative Boards and Committees including: Director and chairman, Australian International Trade & Transport Industry Development Fund (ITDF); director, Industry Working Group on Biosecurity Ltd (AIWGB); Dept Agriculture and Water Resources (DAWR) Biosecurity Cargo Consultative Committee (DCCC); Dept Infrastructure Office of Transport Security (OTS) – Cargo Working group; Dept Immigration and Border Protection (DIBP) National Cargo Facilitation Committee (NCTF); Dept. Immigration and Border Protection (DIBP)Trade and Goods Compliance Advisory Group (CAG) and the IATA Australia Cargo Executive Council (CEC).
How are members dealing with Australia’s extended soft market for air freight?
Brian Lovell: Fortunately, freight forwarders have always been resilient. They seem to survive every calamity, be it wild currency exchange variations; stricter and more regulated compliance and major disruptions in trade flows. The market is soft but there is always are two sides to the story; when imports are down exports are up and vice versa. This current market requires flexibility and creativity but new markets and new opportunities are opening up all the time for those forwarders prepared to seek them out. Are current rates low because of continuing capacity problems? There is a lot of capacity bound for Asia because of the milk powder demand, which has proven a silver lining for some companies. Others have not been able to find sufficient space. However, contracts are being honoured; there has been no disruption or cancellation of contracts. Spot cargo also has been honoured. If carriers have full cargo loads its good for their business and the industry in general, as all parties need to thrive. and I have not heard of any significant problems.
How do you see Australia’s economy faring in the next few years? Is the country’s manufacturing in a position to fill the gap left by our resources sector?
Australia has always been an innovative country. Most of the large bulk resources were shipped by ocean freight during the boom and therefore had little effect on air freight. The iron ore price has recovered 36 per cent in the last three months and this augurs well for a general recovery in the resources sector and more reasonable rates. The improvement in resources pricing will influence manufacturing to a certain extent. We are also developing new export streams including smart technology which will benefit air freight forwarders.
What is AFIF’s view of the new CHAfta and TPP trade deals? Will they create significant demand for Australian firms?
It could be fantastically good for Australia but governments by necessity had to finalise these new agreements quickly (having been in the negotiation stage for many months). Unfortunately the new rules and regulations are causing confusion for Customs brokers and administrators. The rule makers and the operators have not fully understood what their requirements are. Only just this week at a Customs and Compliance meeting in Canberra these issues were discussed and better education of the new regime was flagged as a priority. It was decided that Australia’s Border Force will assist the industry to better understand the new requirements.
Will AFIF offer more specific training in this area?
Not as such. It is not an area where AFIF is required to provide specific training as it is more a Customs brokers area and it requires specific interpretation of the new rules. We will however maintain a general understanding of the rules and monitor what impact they have on industry.
Take up of e-AWB in Australia is still well down on other countries, with Australia languishing down among the bottom 50s. What is the problem?
There are two issues. One is that it is not as easy as it sounds even though it is an electronic process replacing paper. First of all there needs to be an electonic agreement with the carrier. This can be signed off across all carriers with one forwarder. Each forwarder must also change its system processes to facilitate the electronic documentation and then it is up to the carrier to be able to accept the electronic docs. This is where some of the problems arise as there are many carriers that cannot yet accept e-AWBs. Obviously, some of the major carriers such as Emirates, Cathay, Singapore, Qantas have embraced it and are showing very strong performance in usage of e-AWBs, but it gradually falls away when you move away from the main carriers. Australia has a whole range of airlines operating to a diverse range of destinations but if they cannot adopt e-AWB then the forwarders’ hands are tied. CCN, as the major data switching hub between forwarders and airlines, transmits 98 per cent of all fwb (Master Airwaybill) data to the carriers’ handling agent, so the electronic transmission of Airwaybill data in Australia is at one of the highest levels in the world but the e-AWB carriage document is not accepted by all carriers and therefore we cannot get maximum use of e-AWB.
There has been some confusion in the marketplace regarding CASA’s approval of Dangerous Goods By Air Acceptance level training for forwarders. What is the status?
Firstly, Dangerous Goods by Air Acceptance Recertification can be conducted through an online course provided that CASA has approved the online course provider and the resource material in the same way they approve traditional methods of course delivery. Secondly, the Dangerous Goods by Air Full Acceptance course can be approved for online delivery provided there is an instructor or moderator available in real-time who can be accessed for questions and guidance throughout the course process. There was also some confusion recently about a provider of an online training course for Dangerous Goods by Air which was only approved for the actual Shippers’ of Dangerous Goods, not freight forwarders. Subsequently, forwarders who had undertaken and passed that particular course were not recognised as accredited by CASA because they had not undertaken a CASA-approved course for freight forwarding functions. AFIF is able to facilitate online delivery of Dangerous Goods by Air.
Cybercrime is now a major threat to global supply chains. Perpetrators mis-direct international payments, use new technology to target physical cargo and there’s always a terrorism risk. What is AFIF doing about this?
AFIF has in the past participated in whole of government coordinated cybercrime research and activity but at this point there is no regulated course on cybercrime training that is specific to our industry. We continue to monitor and stay up to date with the situation and if we can assist our members then we will certainly do so.
New global security programs by the US require advance screening data on all shipments and will have a major impact on forwarders. Australia was given an additional grace period. Are forwarders now better equipped to handle compliance?
When we talk about the physical ‘technical’ screening of cargo, the US has decreed that as at 01 July 2017 any air cargo destined for the US must be screened at ‘piece level’ or originated from a Known Consignor. Piece level’ means any freight that will fit through the aperture of an accepted/approved x-ray screening machine and if that initial screening fails, a secondary screening or back-up screening may be carried out by swab or hand search. As at this date the swab technical screening may be acceptable as a Primary method. We have maintained regular advice to industry. Airlines that are signatories to US TSA requirements must incrementally increase the level of technical screening they now undertake to work towards the 100 per cent mandate by 01 July 2017. In other words they don’t just go from current to 100 per cent on the ‘go live’ date. There is a lot of work going on in the background so that industry is prepared for the new requirements. Government also plans to assist in red-tape reduction by reverting to ‘Model’ security plans rather than individual specific programs (TSPs) for each entity.
How is the annual conference shaping up?
We have finalised the conference program being held this year at the Novotel Coffs Harbour, New South Wales (11-13 May). We have had a good response and a high-level of acceptances from invited speakers. We are returning to the Coffs Harbour location after 12 years and this has been well received by members through early registrations and exhibition sponsors.
What is the theme and who are the keynote speakers?
We don’t have a particular theme as such as the industry is quite diverse. The program does however have a particular focus on new Border Force requirements, air cargo security and the new container weight verification requirements of the International Maritime Organisation (IMO). Our opening address will be delivered by Max Walker the legendary Australian cricketer and tv personalty.
What is AFIF’s view on the new Australian Border Force?
The new Australian Border Force (ABF) has taken the former ‘Customs’ operation to a higher level of compliance requirements. We have been involved in numerous discussions, becoming familiar with the advanced requirements demanded by ABF and are keeping members informed. From a practical point of view our members have already seen more surveillance, higher financial penalties for non-compliance and greater involvement at the operational level from ABF officers. We have always had reasonably close ties with the former Customs Department and now are getting to know new people involved with ABF at the top level. We are on record saying we want the new ABF to be consistent in its application of the new regulations, just as much as they expect our members to raise their compliance levels.
Technology and increasing use of robotics threatens jobs, with CBFCA predicting a decimation of medium sized forwarders in the next five years or so. Has AFIF done any research on future employment opportunities in the industry?
Experience tells us that despite predictions of dramatic change in the number of businesses servicing the industry, overall there still remains a good cross section of large, medium and small enterprises. Yes, the ‘big do get bigger’ but so do mid-sized companies and this all leads to fragmentation and there are always new opportunities that see the creation of niche market forwarders. That progression has never changed in the 40 years I have been in the industry. I would not put my house on it because there is a seemingly relentless flow of mergers and take-overs but I expect to see a continuing relative number of forwarders of all sizes going forward.
What has been the biggest change you have experienced since joining the industry?
The focus on security at every level both for air freight, sea freight and Customs compliance. The security focus has radically changed the various sectors and forced the industry to adapt to new ways of doing business.
What inroads are sea freight operators making in Australia at the expense of air cargo?
There are a number of products deemed unsafe or unsuitable for air carriage. Many have moved to sea freight. The most recent case has been lithium ion and metal batteries. Air carriage of lithium batteries contained in equipment is permitted as long as there is no more than a 30 per cent charge in the battery at time of loading. The United Nations and IATA have both been asked how to determine the state of charge in a consignment of lithium batteries to determine its safety. How is it possible to check and verify that charge levelduring transit in the supply chain? IATA has now stated that it may not be verifiable and we have since questioned the ruling (and any applicable penalty).
Interview Brian Lovell: A challenging start to the year, but the iron ore price recovery may signal better times ahead
Uncategorised
Sunday, 20 March 2016
A challenging economic start to the year, a raft of new rules and regulations plus new international trading opportunities are making work for the Australian Federation of International Forwarders (AFIF’s) management.
Brian Lovell, chief executive of AFIF, also holds the part time position of executive director to the Federation of Asia Pacific Air Cargo Associations (FAPAA) - as well as multiple other roles.
Arriving in Australia from the UK in 1981, he held several roles in air freight companies before taking an active voluntary role with the Australian Federation of Airfreight Forwarders (AFAFF) where he assisted with the growth and development of its industry education and training programs. During this time he held the honorary positions of president NSW branch and federal director of Education Services. In 1994, he became the Federation’s first full-time chief executive and in 1996 (AFAFF) joined forces with the sea cargo forwarders representative body (IFAA) to form AFIF, with Lovell heading the merged entity.
AFIF is a national association member of the global freight forwarder representative body – FIATA and Lovell is on the Council of the FIATA Advisory Body, Safety and Security (ABS)
He is also actively involved in several national representative Boards and Committees including: Director and chairman, Australian International Trade & Transport Industry Development Fund (ITDF); director, Industry Working Group on Biosecurity Ltd (AIWGB); Dept Agriculture and Water Resources (DAWR) Biosecurity Cargo Consultative Committee (DCCC); Dept Infrastructure Office of Transport Security (OTS) – Cargo Working group; Dept Immigration and Border Protection (DIBP) National Cargo Facilitation Committee (NCTF); Dept. Immigration and Border Protection (DIBP)Trade and Goods Compliance Advisory Group (CAG) and the IATA Australia Cargo Executive Council (CEC).
How are members dealing with Australia’s extended soft market for air freight?
Brian Lovell: Fortunately, freight forwarders have always been resilient. They seem to survive every calamity, be it wild currency exchange variations; stricter and more regulated compliance and major disruptions in trade flows. The market is soft but there is always are two sides to the story; when imports are down exports are up and vice versa. This current market requires flexibility and creativity but new markets and new opportunities are opening up all the time for those forwarders prepared to seek them out. Are current rates low because of continuing capacity problems? There is a lot of capacity bound for Asia because of the milk powder demand, which has proven a silver lining for some companies. Others have not been able to find sufficient space. However, contracts are being honoured; there has been no disruption or cancellation of contracts. Spot cargo also has been honoured. If carriers have full cargo loads its good for their business and the industry in general, as all parties need to thrive. and I have not heard of any significant problems.
How do you see Australia’s economy faring in the next few years? Is the country’s manufacturing in a position to fill the gap left by our resources sector?
Australia has always been an innovative country. Most of the large bulk resources were shipped by ocean freight during the boom and therefore had little effect on air freight. The iron ore price has recovered 36 per cent in the last three months and this augurs well for a general recovery in the resources sector and more reasonable rates. The improvement in resources pricing will influence manufacturing to a certain extent. We are also developing new export streams including smart technology which will benefit air freight forwarders.
What is AFIF’s view of the new CHAfta and TPP trade deals? Will they create significant demand for Australian firms?
It could be fantastically good for Australia but governments by necessity had to finalise these new agreements quickly (having been in the negotiation stage for many months). Unfortunately the new rules and regulations are causing confusion for Customs brokers and administrators. The rule makers and the operators have not fully understood what their requirements are. Only just this week at a Customs and Compliance meeting in Canberra these issues were discussed and better education of the new regime was flagged as a priority. It was decided that Australia’s Border Force will assist the industry to better understand the new requirements.
Will AFIF offer more specific training in this area?
Not as such. It is not an area where AFIF is required to provide specific training as it is more a Customs brokers area and it requires specific interpretation of the new rules. We will however maintain a general understanding of the rules and monitor what impact they have on industry.
Take up of e-AWB in Australia is still well down on other countries, with Australia languishing down among the bottom 50s. What is the problem?
There are two issues. One is that it is not as easy as it sounds even though it is an electronic process replacing paper. First of all there needs to be an electonic agreement with the carrier. This can be signed off across all carriers with one forwarder. Each forwarder must also change its system processes to facilitate the electronic documentation and then it is up to the carrier to be able to accept the electronic docs. This is where some of the problems arise as there are many carriers that cannot yet accept e-AWBs. Obviously, some of the major carriers such as Emirates, Cathay, Singapore, Qantas have embraced it and are showing very strong performance in usage of e-AWBs, but it gradually falls away when you move away from the main carriers. Australia has a whole range of airlines operating to a diverse range of destinations but if they cannot adopt e-AWB then the forwarders’ hands are tied. CCN, as the major data switching hub between forwarders and airlines, transmits 98 per cent of all fwb (Master Airwaybill) data to the carriers’ handling agent, so the electronic transmission of Airwaybill data in Australia is at one of the highest levels in the world but the e-AWB carriage document is not accepted by all carriers and therefore we cannot get maximum use of e-AWB.
There has been some confusion in the marketplace regarding CASA’s approval of Dangerous Goods By Air Acceptance level training for forwarders. What is the status?
Firstly, Dangerous Goods by Air Acceptance Recertification can be conducted through an online course provided that CASA has approved the online course provider and the resource material in the same way they approve traditional methods of course delivery. Secondly, the Dangerous Goods by Air Full Acceptance course can be approved for online delivery provided there is an instructor or moderator available in real-time who can be accessed for questions and guidance throughout the course process. There was also some confusion recently about a provider of an online training course for Dangerous Goods by Air which was only approved for the actual Shippers’ of Dangerous Goods, not freight forwarders. Subsequently, forwarders who had undertaken and passed that particular course were not recognised as accredited by CASA because they had not undertaken a CASA-approved course for freight forwarding functions. AFIF is able to facilitate online delivery of Dangerous Goods by Air.
Cybercrime is now a major threat to global supply chains. Perpetrators mis-direct international payments, use new technology to target physical cargo and there’s always a terrorism risk. What is AFIF doing about this?
AFIF has in the past participated in whole of government coordinated cybercrime research and activity but at this point there is no regulated course on cybercrime training that is specific to our industry. We continue to monitor and stay up to date with the situation and if we can assist our members then we will certainly do so.
New global security programs by the US require advance screening data on all shipments and will have a major impact on forwarders. Australia was given an additional grace period. Are forwarders now better equipped to handle compliance?
When we talk about the physical ‘technical’ screening of cargo, the US has decreed that as at 01 July 2017 any air cargo destined for the US must be screened at ‘piece level’ or originated from a Known Consignor. Piece level’ means any freight that will fit through the aperture of an accepted/approved x-ray screening machine and if that initial screening fails, a secondary screening or back-up screening may be carried out by swab or hand search. As at this date the swab technical screening may be acceptable as a Primary method. We have maintained regular advice to industry. Airlines that are signatories to US TSA requirements must incrementally increase the level of technical screening they now undertake to work towards the 100 per cent mandate by 01 July 2017. In other words they don’t just go from current to 100 per cent on the ‘go live’ date. There is a lot of work going on in the background so that industry is prepared for the new requirements. Government also plans to assist in red-tape reduction by reverting to ‘Model’ security plans rather than individual specific programs (TSPs) for each entity.
How is the annual conference shaping up?
We have finalised the conference program being held this year at the Novotel Coffs Harbour, New South Wales (11-13 May). We have had a good response and a high-level of acceptances from invited speakers. We are returning to the Coffs Harbour location after 12 years and this has been well received by members through early registrations and exhibition sponsors.
What is the theme and who are the keynote speakers?
We don’t have a particular theme as such as the industry is quite diverse. The program does however have a particular focus on new Border Force requirements, air cargo security and the new container weight verification requirements of the International Maritime Organisation (IMO). Our opening address will be delivered by Max Walker the legendary Australian cricketer and tv personalty.
What is AFIF’s view on the new Australian Border Force?
The new Australian Border Force (ABF) has taken the former ‘Customs’ operation to a higher level of compliance requirements. We have been involved in numerous discussions, becoming familiar with the advanced requirements demanded by ABF and are keeping members informed. From a practical point of view our members have already seen more surveillance, higher financial penalties for non-compliance and greater involvement at the operational level from ABF officers. We have always had reasonably close ties with the former Customs Department and now are getting to know new people involved with ABF at the top level. We are on record saying we want the new ABF to be consistent in its application of the new regulations, just as much as they expect our members to raise their compliance levels.
Technology and increasing use of robotics threatens jobs, with CBFCA predicting a decimation of medium sized forwarders in the next five years or so. Has AFIF done any research on future employment opportunities in the industry?
Experience tells us that despite predictions of dramatic change in the number of businesses servicing the industry, overall there still remains a good cross section of large, medium and small enterprises. Yes, the ‘big do get bigger’ but so do mid-sized companies and this all leads to fragmentation and there are always new opportunities that see the creation of niche market forwarders. That progression has never changed in the 40 years I have been in the industry. I would not put my house on it because there is a seemingly relentless flow of mergers and take-overs but I expect to see a continuing relative number of forwarders of all sizes going forward.
What has been the biggest change you have experienced since joining the industry?
The focus on security at every level both for air freight, sea freight and Customs compliance. The security focus has radically changed the various sectors and forced the industry to adapt to new ways of doing business.
What inroads are sea freight operators making in Australia at the expense of air cargo?
There are a number of products deemed unsafe or unsuitable for air carriage. Many have moved to sea freight. The most recent case has been lithium ion and metal batteries. Air carriage of lithium batteries contained in equipment is permitted as long as there is no more than a 30 per cent charge in the battery at time of loading. The United Nations and IATA have both been asked how to determine the state of charge in a consignment of lithium batteries to determine its safety. How is it possible to check and verify that charge levelduring transit in the supply chain? IATA has now stated that it may not be verifiable and we have since questioned the ruling (and any applicable penalty).
Firstly, Dangerous Goods by Air Acceptance Recertification can be conducted through an online course provided that CASA has approved the online course provider and the resource material in the same way they approve traditional methods of course delivery. Secondly, the Dangerous Goods by Air Full Acceptance course can be approved for online delivery provided there is an instructor or moderator available in real-time who can be accessed for questions and guidance throughout the course process. There was also some confusion recently about a provider of an online training course for Dangerous Goods by Air which was only approved for the actual Shippers’ of Dangerous Goods, not freight forwarders. Subsequently, forwarders who had undertaken and passed that particular course were not recognised as accredited by CASA because they had not undertaken a CASA-approved course for freight forwarding functions. AFIF is able to facilitate online delivery of Dangerous Goods by Air.
