Customs Considerations When Exporting to Australia

Mufaddal K.

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Manufacturers looking to export their products abroad need to consider various factors when evaluating export markets.  One of those factors is the customs clearance infrastructure and processes within a given country.  This article presents an overview of the time and cost it takes for a local partner to clear imported products through customs in Australia.  This overview, along with a regional comparison, should help you better qualify Australia as an export market for your products.



Country Overview


Australia is located within the East Asia & Pacific region.  It is a large, sparsely populated country with roughly 25 million people as of 2018.  89% of the population lives in urban areas.  The World Bank categorizes it as a high income country with a GDP per capita (PPP) of USD $49,900 per person.



Regional Comparison


The "World Bank's Doing Business project" publishes an evaluation of countries based on their efficiency of cross border trade.  When assessing import efficiency within a country it primarily reviews four factors:


1.  The time for border compliance (imports):  Compliance time associated with the country's customs regulations, inspections and handling that takes place at its port or border.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.


2.  The cost of border compliance (imports):  Compliance cost associated with the country's customs regulations, inspections and handling that takes place at its port or border.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.


3.  The time for document compliance (imports):  The time for obtaining documents, preparing documents, processing documents, presenting documents and submitting documents.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.


4.  The cost of document compliance (imports):  The cost for obtaining documents, preparing documents, processing documents, presenting documents and submitting documents.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.



When evaluating border compliance time and cost amongst major regional economies, Australia ranks 5th regionally in terms of border compliance time and 9th regionally in terms of border compliance cost.  A US$50,000 imported shipment of auto parts would take 39 hours to clear border customs and cost roughly US$525.


Country     Border Compliance Time (Hours)     Border Compliance Cost (USD)    
Singapore 33 $220
Thailand

50 $233
Hong Kong 19 $266
Japan 48 $275
South Korea 6 $315
Malaysia 69 $321
New Zealand 25 $367
Vietnam 56 $373
Australia 39 $525
Philippines 72 $580
China 72 $790
Taiwan 141 $828


When evaluating document compliance time and cost amongst major regional economies, Australia ranks 6th regionally in terms of document compliance time and 8th regionally in terms of document compliance cost.  A US$50,000 imported shipment of auto parts would take 4 hours in Australia to have documents prepared & cleared and would cost roughly US$100.


Country     Document Compliance Time (Hours)     Document Compliance Cost (USD)    
South Korea 1 $27
Singapore

3 $40
Thailand 4 $43
Philippines 96 $50
Hong Kong 1 $57
Malaysia 10 $60
New Zealand 1 $80
Australia 4 $100
Japan 3 $107
China 54 $150
Vietnam 76 $183
Taiwan 149 $742


Detail for Border Compliance Time and Cost


Border compliance time and cost are calculated as a function of three driving factors: the time/cost related to working with customs authorities, the time/cost related to working with other agencies and finally border handling time/cost.  The border compliance time and cost for Australia are primarily driven by border handing.


Sydney Overview:


Detail Type     Time (Hours)     Cost (USD)    
Working with Custom Authorities 1 $100
Working with Other Agencies

2 $0
Border Handling

36 $425


Detail of Document Compliance Time and Cost


Document compliance time and cost is a function of the various documents required by the country when importing goods.  For Australia, the documents required when importing goods from abroad include a bill of lading, telex release, packing list, import declaration, certificate of origin, treatment certificate and SOLAS certificate.



Transportation Costs


Another factor that influences import trade efficiency is transportation costs.  For shipments bound to Sydney, the port where goods would most likely land would be Sydney port.  When calculating transportation cost for the US$50,000 auto parts shipment, the World Bank calculates that the shipment that would land at Sydney port would need to be transported 15 km with an average travel time of 4 hours.  This brings the delivery transportation cost for the shipment to roughly US$525.



Infrastructure Digitization


Greater use of technology within the customs clearance process helps improve efficiency and lower time and cost associated with customs clearance.  Today many countries use digital systems to streamline the customs clearance process.  Many of these customs systems are known as EDI or Electronic Data Interchange systems.  More recently however, there has been a push to develop even more integrated customs clearance systems known as SW or single window systems.  These systems provide greater integration within a given country and between multiple countries when managing customs clearance.



Australia does have an EDI system known as Customs Connect Facility (CCF).  It also has an operating SW system known as Integrated Cargo System (ICS).  More information about this new system can be found at https://www.ccf.customs.gov.au/.