Features

Customs Intelligence making all the difference

customs

MHD talks to Andrew Coldrey, Vice President Oceania for C.H. Robinson, about how Australian businesses can save thousands every year on import duty. 

According to a report prepared for the Australian Department of Human Affairs and Trade, the average tariff rate applied in Australia has fallen from more than 7 per cent to less than 1 per cent over the past 30 years. 

Andrew Coldrey, Vice President Oceania for C.H. Robinson says complacency over such reductions can be the Achilles’ heel of importers who overspend on import duty. 

“The import rates are less of an issue, but they still exist and can remain a big cost for businesses,” Andrew says. 

To challenge this unnecessary expense, C.H. Robinson spent around 18 months developing a Customs Intelligence (CI) program here in Australia to zero in on where clients are paying too much duty so they can claim back the excess.

Launched this year, C.H. Robinson’s CI program partners its customs expertise and tech power to automate the process in a way that’s easy to identify clear opportunities to cut down on import costs and mitigate threats of non-compliance.

“We saw the opportunity to develop our own proprietary tech to enable our incredibly valuable customs experts to better leverage large amounts of data in order to identify cost-saving opportunities,” Andrew says. “This year we’ve had clients be refunded over a million dollars. It’s possible to go back four years to get duty refunds, which can result in real windfalls.” 

The process starts with a letter of authority from a client or prospective client authorising C.H. Robinson to obtain records of import duty paid from Australian Border Force (ABF). 

The CI allows C.H. Robinson’s customs experts to analyse the ABF data to identify opportunities to assess and recover excess duty paid by importers. Andrew says this could be because of wrong assessments or through lacking a deep knowledge of free trade agreements and the various factors affecting import duty.

Basically, the program identifies opportunities within data that clients already have or data they have available to them, simply by accessing their ABF records.

“It enables us to aggregate opportunities,” Andrew adds. “There might be an added duty amount on a given import line, for example $100 might not seem like a lot but it becomes significant when it’s applied to say 5000 importations.”

CI can save importers hundreds of thousands of dollars a year in import duty.

The program also allows C.H. Robinson’s consultants to compare free trade agreements to get the maximum benefit from the various agreements in place today. 

“No-one wants to pay more taxes or duty than they need to,” he says. “By laying out the information CI can glean from ABF records in a simple dashboard, clients can see at a glance where they can improve efficiencies, make changes to suppliers or customs agents and claim back past overpayments.”

A variety of reasons can lead to Australian businesses overpaying on duty.

For example, an importer might bring in a product as a sample, and at the time decide it isn’t worth applying for tariff concession. But if the business decides to increase the volume of imports on a product, the classifications have to change with it, Andrew warns. 

“Often people don’t go back and re-assess, so a small impact turns into a big impact a couple years down the track,” he says.

A supplier changing origin is another factor to account for, says Andrew. Free trade opportunities can be missed if a supplier moves factories to a different country where free trade exists. 

“It’s pretty rare that we’ve ever had a set of data [where] we haven’t been able to find something,” he says. “The beauty of CI is having the technology in one piece [which] best utilises our experts who know exactly what to look for.”

First and foremost, C.H. Robinson concentrates on immediately recovering any financial loss from import duty for its clients. The next part of the process is identifying how to close those setbacks and help businesses build for the future. Andrew says using multiple brokers can cause issues with different classifications. 

“Usually we’ll recommend using a single broker,” he says. “But if there are reasons why there’s more brokers involved, we put a process in place for the customer so they have a common source of their tariff information.”

The program’s assessment can spark a supply chain review for businesses, which can lead to applying for tariff concessions, confirming product origin and free trade opportunities.

“If you imagine having multiple people doing your tax, you’d be worried you’re not receiving the right information all of the time,” Andrew says. “Often companies don’t realise that they’ve got multiple people involved, particularly in larger contract organisations.”

“That’s when we start bringing in the supply chain mapping so we can move forward by consolidating not only the decreased cost, but more importantly, decrease the risk of no-compliance for the business.”

The program can be easily altered to comply with any future legislative or regulatory changes and to take into account rules that were current at the time for any date over the previous four years.

The success of the program in Australia is helping C.H. Robinson overseas, too. In the US, importers provide the classification whereas the responsibility lies with the brokers in Australia, giving Australian brokers a higher compliance requirement. 

“The actual tools that we’ve built have been really helpful in the US and Canada,” Andrew says. “To export our expertise within an American company is testament to how well the technology works, and how proud I am of the team behind the CI program.” 

For more information on C.H. Robinson, click here.

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