Roger Clarke's Web-Site


© Xamax Consultancy Pty Ltd,  1995-2016

Roger Clarke's 'EDI in Aust. Int'l Trade'

EDI in Australian International Trade and Transportation

Roger Clarke

Principal, Xamax Consultancy Pty Ltd, Canberra

Visiting Fellow, Department of Computer Science, Australian National University

Version of 3 May 1994

© Xamax Consultancy Pty Ltd, 1997

This paper was presented at 7th EDI-IOS Conference, Bled, Slovenia, 6-8 June 1994

This document is at


Australia leads the world in its application of EDI to the regulatory data-flows involved in international trade. This paper reports on studies of EDI's use not only in regulatory, but also in the commercial and operational transactions involved in Australia's international trade and transportation sector. The studies comprised structured interviews with 73 organisations active in various segments of the industry, which were undertaken by senior professionals from within the industry; and a set of case studies of particularly important projects.

The picture which emerges is mainly positive, in that substantial penetration has been achieved in several segments, and the path prepared for considerable expansion of EDI's role in the future. There are, however, many sobering messages to be found in the patchiness of coverage, the long lists of impediments to progress, the clear signs of market failure, especially in some market segments, and the failure of government to recognise the problems and provide the missing impetus.



EDI in Australia

Size of the Australian Trade and Transportation Sector

Background to the Survey

Outcomes of the Survey - Sea Trade

Outcomes of the Survey - Air Trade

Outcomes of the Survey - Road and Rail

The Case Studies

Issues Arising from the Survey and Case Studies

Important Gaps in EDI Implementation

Current Developments


Source Materials



Australia's wealth was originally based on the agricultural and pastoral industries. More recently mining has been a significant contributer to Gross Domestic Product. Although the post-war period was characterised by protectionism in relation to secondary industry, the economy has become very open during the last twenty years. Australia is a leading advocate of liberalisation in relation to trade in agricultural commodities, through the Cairns Group and GATT. As a result of these factors, Australia is a very active participant in international trade.

Australia is a vast nation, similar in size to mainland United States and Europe-without-Russia. There are long, empty distances between the pockets of 4.5 million people (in Newcastle-Sydney-Wollongong), 3 million (in Melbourne) and 1.5 million (in each of Brisbane, Adelaide and Perth). Despite the distances, there are significant volumes of traffic between those conurbations.

It has been recognised in Australia for some years that EDI has the potential to overcome inefficiencies associated with the transmission of trade and transportation data. A number of initiatives have borne fruit, but the general feeling is that the technology's penetration has been much less than the national interest demands.

During 1993, studies were commissioned to provide a detailed understanding of the situation. A team from the Australian National University (ANU) prepared case studies of leading schemes. A survey was undertaken by a Task Force representing the two major industry associations, Tradegate and EDICA, and the federal government, and chaired by the leader of the ANU research team. This paper summarises the results of those studies.

EDI in Australia

After a late start, particularly compared with North America and the United Kingdom, here has been a flurry of EDI interest and activity in Australia since the late 1980s. Purchasing-related schemes are in place in a number of industries, and pilots are running in others. Several major schemes, both purchasing and non-purchasing, involve government agencies (EDI Research Australia 1989-92, Clarke, Pedler et al 1990, Australasian EDI Report 1993-, EDICAST 1992-, Clarke, Campbell et al 1992, Clarke 1993b, 1993c, NCG 1994 pp.15-20, Clarke 1994a, 1994b).

Australia enjoys one of the most sophisticated, reliable and cost-effective telecommunications infrastructures in the world. Six major VANs provide relevant network services, including EDI, email and bulletin board systems. Four of these are subsidiaries of, or joint ventures with, multi-national companies (AT&T, GEIS, IBM and SITA), and two are Australian (Telecom Plus and NEIS).

A specialist industry association, the EDI Council of Australia (EDICA) has been active since 1988. It represents the interests of EDI users and potential users generally, stimulates and administers working groups in particular industries (currently over 20 of them), and provides documentation and training services.

Tradegate Australia Ltd is a company formed in 1989 and supported by major industry associations. Its primary function is to provide EDI support services to the trade and transportation sectors. Under a contract running from 1989 to 1995, technical infrastructure is provided by a joint venture between AT&T and two Australian companies. Corporate membership has grown to 600 organisations covering 900 user sites.

Size of the Australian Trade and Transportation Sector

The scale of international trade and transport in Australia is large. In 1991-92, imports of 34 million tonnes were moved by sea (2 million in bulk, 32 million in non-bulk) and 167,000 tonnes by air, worth respectively $36 billion and $14 billion. Exports by sea were 267 million tonnes in bulk and 49 million tonnes in non-bulk, valued at a total of $44 billion, and by air 198,000 tonnes worth $11 billion. Of the non-bulk international sea cargo, about 85% is containerised. In 1992-93, 1.8 million container movements occurred through Australian ports, 84% through Sydney, Melbourne and Brisbane.

About 20 distinguishable kinds of business enterprises and government agencies are involved in the 1.2 million consignments of sea freight and 1.5 million of air cargo which are handled each year. The total number of documentary flows involved in international trade is estimated at between 70 and 150 million per annum.

Domestic freight movements totalled 1.4 billion tonnes, 1 billion by road, 0.34 billion by rail, 0.04 by sea and 138,000 tonnes by air.

Background to the Survey

Following major initiatives in relation to waterfront reform during the 1980s, the time is ripe for reform of the information infrastructure and services supporting international trade. In an endeavour to bring together the many disparate interests involved, the National Consultative Group on Transport EDI was formed during 1992. It in turn established several Task Forces, the first of which, the Situation Assessment / Stocktake Task Force (SASTF) was formed to provide an information base which can later be built upon. The aims of the SASTF were expressed (NCG, 1994, p.6) as being:

The study considered all transport modes, and all of export-related, import-related and purely domestic transport. Electronic support mechanisms of all kinds including email, databases, file transfer and on-line systems, were considered to be relevant. However the study focussed in particular on EDI , and on the movement of containers into and out of Australia's major maritime ports.

It was vital that the team-members have a common understanding of the scope of the 'trade and transportation sector'. This was achieved through a series of workshops, and the development of explicit models. The two most central of these are in Exhibits 1 and 2. These show the enterprises involved in, respectively, container sea trade, and air cargo, together with the primary document-based relationships among those enterprises. These overviews were supplemented by more detailed diagrams and tables identifying the document flows, the functions performed by the various enterprises, and the associations which represent the hundreds of companies involved (NCG 1994, pp.45-50, 72-73, 117-125).

INSERT EXHIBIT 1: The Australian International Sea Trade Community

INSERT EXHIBIT 2: The Australian International Air Trade Community

There are many instances in the trade and transportation sector of companies which bundle multiple functions into a single legal entity; for example, some large importers and exporters perform their own freight forwarding and customs broking, and some airline companies run air freight terminals. The study team accordingly focussed on 'enterprises' which perform a well-understood and defined function, rather than on legal entities.

In addition, it was found to be useful to distinguish among three classes of documents:

The survey was conducted in three phases. Preliminary research was based on existing written sources and the know-how of experts in the various industry segments (including, but not restricted to, the members of the Task Force). The sector was modelled, key segments were identified for detailed investigation, detailed questions for study were formulated, the enterprises populations in each segment were defined and stratified, samples were selected, and structured interview questionnaires were prepared appropriate to each particular segment.

Interviews were conducted with staff of a total of 73 organisations (see Exhibit 3). The interviews were conducted by senior professionals with knowledge of the particular segment. A 125-page report was drafted, and 200 copies were circulated widely for comment (NCG 1994). A more detailed description of the survey method is in Appendix B to the Report (pp.101-107).

Outcomes of the Survey - Sea Trade
* General Measures of EDI Penetration (NCG 1994, pp.38-43)

The trade and transport sector comprises about 23,000 enterprises (equivalent to what the Australian Bureau of Statistics calls 'locations' or 'sites', as distinct from companies). Of these, about 18,000 employ fewer than 10 people, and the liklihood and importance of EDI penetration at this level was generally regarded as a low priority. There are therefore about 5,000 enterprises of interest.

Exhibit 3: Industry Segment Estimated Populations and Samples

Industry Segment	Population	Size
Comments on the Sample

Importers /Exporters		3,500		16
4 industry bodies and 12 representative companies
Shipping Companies		80	20	
some shipping companies (both conference and non-conference lines) and some shipping agents
Freight Forwarders		200	13	
major operators and representative of small and medium-sized enterprises
Customs Brokers		450	5	
a relatively homogeneous group in terms of size and type of operation
Container Terminals		20	4	
including national firms covering 95% of container volume handled through terminals
Container Depots		150	5	
Road Transport Operators	800	7	
the 5 dominant companies and 2 representative small ones
Rail Transport Operators	6	6	
population survey
Airlines			30	2	
the 2 air cargo terminal operators which handle the cargo on behalf of all airlines

About 5,500 organisations in Australia were estimated to be using network services of some kind. It was judged that about 1,500 were in the trade and transportation sector, suggesting that about 30% of relevant organisations are currently connected to a network services provider.

Tradegate has a contract with the Australian Customs Service (ACS), current until the end of 1996, for the supply of electronic services to the ACS user community. Over 2,000 locations are currently connected, 900 directly to Tradegate/AT&T, 950 via Telecom Plus and 270 via GEIS. Of these, more than half use EDI services of some kind. This also suggested a figure approaching 1,500.

Of the (annualised) 13 million EDI messages transmitted through the Tradegate network at present, 12.5 million are regulatory in nature, and hence only 0.5 million are commercial and operational combined. The penetration is therefore estimated to be quite high in relation to regulatory data, but very small in the other areas.

* Shipping Companies (NCG 1994, pp.50-54, 113-115)

Shipping companies have been sophisticated users of information technology for 25 years. Proprietary schemes and protocols were in place long before international standards developed, and they continue to dominate. The use of electronic commerce as a basis for a marketing advantage is generally perceived to be futile, and the recently released electronic trading strategy for the shipping industry (ACOS 1993a) evidences positive attitudes towards collaboration.

To date, there is virtually no use of EDI between shipping lines and individual shippers / exporters / freight forwarders. The Australian Customs Service's Sea Cargo Automation (SCA) system, which supports the clearance of inward cargoes, is an important direction of development for shipping companies. Their participation is vital to the success of SCA as a driving mechanism for use of EDI in international trade and transportation, because they are the most convenient source of data about cargo on an inwards-bound vessel. SCA is described in a subsequent section. Other areas of focus at present are the use of EFT, and the full integration of shippers' internal systems to remove the remaining instances of multiple keying.

One particular opportunity which currently exists concerns the bill of lading. This document resists computerisation, but is essential if the goods are to be traded while in transit. Where a document of title to the goods is not necessary, however, an equivalent but simpler document referred to as a 'non-negotiable sea waybill' could used in place of a bill of lading. This became possible on 1 January 1994, when the Uniform Custom and Practice for Documentary Credits (UCP500) came into force. At least in Australia, however, an amendment to the relevant national legislation may be required before it can become generally used (NCG 1994, pp.113-115).

* Container Terminal Operators (NCG 1994, pp.54-56)

Two major terminal operators / stevedores handle in excess of 90% of container movements through Australian ports. They are EDI-enabled, and are participants in SCA. Generally, bayplans (for imports) and booking lists (for exports) are provided by the shipping companies to the terminal operators in electronic form, but at present in proprietary rather than EDIFACT format.

During the last few years, truck queuing times at some terminals have been significantly reduced through the requirement for trucking companies carrying containers to use a nominated on-line vehicle booking system (VBS). One Sydney terminal also operates an automated electronic delivery and receival system, whereby vehicles are fitted with transponders and their movements within the terminal are scheduled and monitored.

* Freight Forwarders (NCG 1994, pp.56-57)

Port forwarders or forwarding agents handle organisational, administrative and documentary aspects of shipping on behalf of exporters and importers. They are in many cases also customs brokers. In some cases they also perform 'slot chartering', buying space on a sailing, and selling that space as though were themselves a shipping company (this pattern corresponds with what is referred to in the United States as a Non Vessel Operating Common Carrier - NVOCC).

EDI has made almost no inroads as yet into the link between freight forwarders and their clients, the exporters and importers. In addition, communications with freight forwarders overseas generally continue to be undertaken using hard-copy documents. Exceptions are primarily to be found in the short-haul Trans-Tasman trade (i.e. with New Zealand). The trend towards electronic transmission is expected to accelerate in this area when a key package supplied by the Tradegate network services provider, AT&T, is upgraded to support the necessary document formats.

In most cases, freight forwarders are EDI-enabled, however, in order to handle regulatory data-flows. They are generally users of the Australian Customs Service's EXIT 1 system for exports, would be willing participants in EXIT 2 subject to some modifications being made, and anticipate being users of SCA for imports in the near future. (For information about EXIT 1, EXIT 2 and SCA, see the case study section below). The active participation of freight forwarders in EXIT2 will be critical to its effectiveness as a driver of increased EDI usage, as they are the originators of the consignment data, on which so much of the remaining activity depends.

Freight forwarders are very interested in seeing the incorporation into the existing electronic commerce framework of payment for goods, freight and services. They have also advocated the extension of the APEC/BHP pilot to all Trans-Tasman trade. For an outline of this pilot, see the case study section below.

* Customs Brokers (NCG 1994, p.58)

Customs broking has been a heavily IT-using business for almost two decades, since the introduction of firstly the on-line COMPILE customs declaration lodgement system, and later the TAPIN customs tariff information scheme. Most brokers are EDI-enabled and use the EXIT1 system for export declarations, and EFTS for value transfer. The on-line COMPILE system is scheduled for gradual replacement by an EDI-based system called EDIFICE, commencing in 1994. Brokers will be participants in SCA, although its significance for them is far less than the other systems.

The primary concerns the customs brokers have is that there be no slippage below the level of performance of the existing systems, and that further improvements be achieved in speed, efficiency, software costs and transaction costs.

* Depots and Container Parks (NCG 1994, pp.58-60)

Depots pack export and unpack import LCL/FAK (less than full container-load) cargo. In relation to import cargo, they are committed to participation in SCA, but will be dependent on shipping companies providing the part-manifests to them in electronic form. EDI penetration to date is accordingly limited to the SCA trial sites. Depots advertise cargo availability through the GEECON bulletin board system.

Container parks store and service large numbers of containers, on behalf of many different container owners, each of which operates its own internal container management system. There is little or no use of EDI at present, and standardisation is needed before it could be implemented.

* Importers and Exporters (NCG 1994, pp. 60-61)

EDI usage in relation to international trade remains low among importers and exporters. This may not be particularly important, because the primary role in the trade and transportation process is played by the freight forwarder rather than the principal. Where companies perform that function themselves, however, their participation is much more critical.

Some of these companies use EDI for domestic purchasing, selling and logistics (particularly in the automative, retail and paper manufacturing industries). In these application areas, the ANSI X12 document standard is dominant, although a tendency is evident for new documents to be implemented in EDIFACT, and existing documents to be (slowly) converted towards the international standard.

* Port Authorities (NCG 1994, pp.61-62)

All five major ports are EDI-capable, and are participating, or will participate, in SCA. Their data-handling is not particularly critical to the future of EDI, as they are primarily a 'sink' into which data descends for charging calculations and statistical analysis. On the other hand, they have considerable influence over their port communities, and can be a major factor in adoption. In the late 1980s, the Port of Melbourne Authority adopted a stance which was particularly positive, if not ultimately particularly successful (PMA 1990a, 1990b).

Outcomes of the Survey - Air Trade (NCG 1994, pp.71-81)

The patterns in air-related segments are very different from those in maritime-related trade and transportation. Air cargo tends to be of high value, and the time from initiation to ultimate delivery is far shorter. As a result, slow information flows could completely undermine air cargo services. Air freight is highly competitive, but for some clients cost is less critical than service quality and reliability. Hence substantial investments have been made in information technology, to very good effect.

Some of the larger freight forwarders and some international airlines offer integrated, end-to-end services (in particular the multi-national companies DHL, FedEx, TNT Express and UPS). Rather than relying on networks of data-flows among many companies, these integrated services providers have internalised all of the flows and operate tightly run information systems. These use proprietary protocols and on-line systems rather than asynchronous message transmission. This applies to the commercial and operational data-flows, but of course not to the regulatory flows. They have addressed this difficulty by entering into meaningful negotiations with customs agencies in many countries, including Australia.

IATA (the International Air Transport Association) provides specialised network services through its subsidiary SITA. These include transmission of EDI messages in IATA's CARGOIMP format, and a Cargo Account Settlement System (CASS).

Since 1990, the Australian Customs Service has operated the Air Cargo Automation (ACA) system, to enable carriers, the two cargo terminal operators (CTOs - QANTAS and Ansett), and forwarders, to report air cargo imports. For further information on ACA, see the case study section below.

Penetration of EDI into commercial and operational data-flows has been very limited, but is expected to grow in the near future. The industry is highly competitive, the integrated services have provided recent evidence of competitive advantage being gained from IT, and the degree of collaboration needed to establish an industry-wide scheme has not been forthcoming. The airlines, through IATA, tend to dominate the industry, and forwarders and handlers are likely to be much influenced by international industry standards such as IATA's document standard CARGOIMP, international networking arrangements (TRAXON and CDIG) and specific services (such as CASS).

Customs brokers use ACA, and there are a couple of instances of EDI usage between airlines and trucking companies which offer courier services. On the whole, however, the level of EDI use outside the regulatory area remains limited.

Outcomes of the Survey - Road and Rail (NCG 1994, pp.83-89)

The road transport sector in Australia is fragmented, with about 800 operators, many of them small, including many owner-drivers. A few large companies are using such forms of electronic commerce as email, electronic file transfer and EFTS. Those which service customers who place a high priority on time have invested or are investing in internal scheduling and vehicle monitoring systems. The only companies which are EDI-enabled appear to be the few very large companies involved in urgent segments of the industry, particularly those which provide services to integrated air cargo companies.

Survey respondents considered that EDI would generally not be implemented for hauliers' own purposes, but only as and when customers required its implemention. This was considered most likely in the automotive and retail sectors, which have already implemented shipping notices between the supplier and the recipient.

It is possible that vehicle booking systems could be extended to include an EDI requirement in respect of container trucks picking up from and delivering to container terminals. The additional benefits that EDI offers road transport operators over mobile phones and faxes may, however, be marginal.

Road transport operators were concerned about the spectre of having to interface with a multiplicity of networks, formats and software. The segment is highly competitive, and anything that seems likely to increase running costs is viewed with great suspicion.

There are six operators of government rail networks in Australia, plus several private rail operations linking mines with their associated ports. There is currently very little use of EDI, although several organisations have run trials involving transmission of consignment note information from major rail customers. Some concern was expressed about legacy systems being slow to modify to cater for EDI. There were several specialised freight forwarders, one in particular focussing on services to and from sea-ports, and impetus towards EDI implementation could come from this quarter.

The Case Studies
* The Research Undertaken

The Australian Research Council provided a grant to the Australian National University in 1993-94 to study international trade EDI in Australia. A considerable amount of prior work had been undertaken, and a broad-based survey approach was being taken by the NCG project. The grant was therefore invested in detailed studies of a number of key aspects of, and projects in, international trade EDI.

The studies, reports on which are consolidated into Clarke & Jeffery (1994), were:

Key information arising from these studies is extracted below.

An overview of the vital role played by the Australian Customs Service (ACS) is to be found in NCG (1994, pp.26-27).


EXIT1 is an EDI-based system, developed by the ACS, and implemented in 1988. It enables exporters or their agents to apply for an export permit. It requires the inclusion of a valid commodity classification. Once the application is approved, the exporters receive an export clearance number (ECN), which they can quote on subsequent documents. The scheme also supports amendments and withdrawals of entries. ACS acts as an agent for many other so-called 'permit agencies', and passes consignment data on to them where appropriate (e.g to the National Parks and Wildlife Authority, in relation to the proposed export of native animals).

An important motivation from ACS's viewpoint was the vast improvement the scheme brought in the accuracy and timeliness of the trade statistics it reported to the Australian Bureau of Statistics. The system also provided improved control over exports, especially those subject to restrictions, and released ACS resources previously dedicated to low-value paper-handling. EXIT1 initially engendered considerable lack of goodwill among user organisations and industry associations, but it overcame a slow start. Its use was made mandatory in 1991, and about 97% of ECNs are now applied for and issued using it.

A separate federal agency, the Australian Quarantine Inspection Service (AQIS) implemented an extension to EXIT1 in 1992. The EXDOC scheme enables foodstuff exporters to use EDI to provide AQIS with details of consignments, and receive notification of clearance. The scheme had been scheduled to commence operation much earlier, but a series of inter-agency and other political and technical difficulties delayed it considerably. Nonetheless, by the end of 1993, data about almost all meat exports were handled via EXDOC, and it is intended that the scheme be extended to all foodstuffs exports which are subject to controls.

EXIT2 is an EDI service implemented in 1991, and applicable further along the industry value-chain. It enables shipping companies, airlines and forwarders to lodge manifests covering all consignments on their flight or voyage. The ACS checks manifest details against the previously submitted export entry details, and flags discrepancies. The manifest must be approved before the flight can depart, or the ship can sail. Finally, accounting and statistical data are generated.

EXIT2 has been well-accepted in relation to the handling of air cargo exports, and 89% of master waybills are submitted by airlines electronically. It has achieved very little penetration into freight forwarders in relation to house waybills, and low penetration in relation to sea cargo, currently about 20%. This arose because of teething problems during its introduction, and dissatisfaction among forwarding and shipping companies as to the appropriateness of the scheme's design.

Additional details are to be found in Goleby (1993) and Clarke & Jeffery (1994).

* Air Cargo Automation

The Air Cargo Automation (ACA) system handles documentation related to import air cargo. Its origins go back to 1986, when ACS conceived of an integrated cargo control and clearance system. Major players in the various transport industry segments were not fully accepting of the idea, and the decision was taken to treat air and sea cargo separately. ACA uses IATA's CARGOIMP, to sustain consistency with the air cargo industry, and some EDIFACT document standards. Transmission costs are borne by participants, not ACS. Participants are free to use any interfacing software and VAN, but the ACS processor is connected to the Tradegate network.

The system's objectives are to receive consignment data, to conduct profiling and risk assessment, and to make decisions on consignment status, all prior to the aircraft's arrival; to isolate cargo of interest and facilitate issue of the remainder; and to make status information available to interested parties. It was expected that data processing costs would be significantly reduced, that freight clearance delays would be reduced from 6-8 hours to minutes, and that ACS would make staff savings while improving control.

ACA entered testing in 1989, but was not trialled until 1990, in Sydney. It quickly proved itself, and was soon adopted by all major airlines. Modifications were made in the light of the experience gained. It was implemented in Melbourne in mid-1991, and in all major airports during the following 9 months. By early 1992, penetration of total cargo volume had reached 25%, although a significant proportion of consignments were being reverted to manual processing due to data quality deficiencies. Early adopters included QANTAS, the integrated service providers (DHL, FedEx, TNT Express and UPS), and the cargo terminals operated by the major domestic carriers, Ansett and Australian Airlines (which has since been absorbed by QANTAS). The take-up rate among freight forwarders and air cargo terminal operators has been slower than it was among carriers and integrated service providers.

During 1992, the penetration grew to 50%, and the proportion reverted to manual dropped to 22%. By then, most major airlines were connected, either directly or through Australian agents. By the end of 1993, around 70% of all waybills were being processed through ACA, or 1.5 million waybills involving almost 5 million individual EDI messages, making the system one of the largest-volume schemes in the country.

The impact of ACA on the air cargo industry has been significant. Change and additional costs have been imposed, in return for opportunities for rationalisation, cost reductions and improvements in turnaround. Many companies seem to be unaware of, or unconcerned about, the competitive advantage which the more sophisticated operators have been able to extract from the speed of ACA-based clearance. Only those enterprises which have had the imagination and willingness to adjust to the new environment appear to have gained from the scheme to date.

There remain a variety of problems, including the retention of dual automated and manual systems, late lodgement of manifests, re-keying of data which is not available to the carrier or freight forwarder in suitable electronic form, errors arising from inadequately trained staff, inadequacies in error messages, slow response times under peak load, and a general lack of flexibility in the software. Nonetheless, ACA must be regarded as a very successful project.

Further details are to be found in Cameron (1993) and Clarke and Jeffery (1994).

* Sea Cargo Automation

The Sea Cargo Automation (SCA) system is concerned with documentation relating to import sea cargo. It was trialled in Melbourne in 1988, but the difficulties encountered were so great that the scheme was withdrawn. A re-conceived and re-developed system was piloted in the port of Brisbane during 1993, and extended to Sydney in 1994. It uses the EDIFACT CUSREP, IFTMCS, CUSCAR AND CUSRES messages.

The system requires the submission to ACS by the shipping company, of an import manifest and container discharge list, prior to the arrival of the vessel in the first Australian port of call. Most shipping companies receive the manifest in electronic form, but generally not in the precise form required for submission to SCA, and hence one-time programming and recurrent processing effort are involved. The shipping company may provide a complete manifest, if freight forwarders have delegated the responsibility to the shipping company; alternatively, the shipping company may provide a skeleton, and the freight forwarders the part-manifests for the portions of the cargo for which they are taking responsibility.

ACS processes the data, and identifies any containers or consignments which it wishes to inspect. On receipt of vessel arrival information from the port authority, ACS provides a permit to unship. The stevedore unships the cargo, and submits an outturn report and related messages. Initially the scheme was restricted to FCL (full container load) cargo, but it was extended to LCL/FAK (less than full container loads / freight all kinds) during the course of 1993. LCL cargo requires a further series of EDI messages, which also involve the unpacking depot. SCA may be later extended to the remaining classes of cargo, viz. bulk and 'general' (i.e. other, such as over-size consignments and cars carried on deck).

The scheme's design and implementation has involved a great deal of consultation with representatives of all interested parties. This was recognised by ACS as being particularly important following the lukewarm receptions its previous initiatives had received.

The pilot implementation involved 4 shipping companies, 2 terminals, 2 depots, 3 freight forwarders and the port authority. During the pilot, not all vessels were processed electronically, and 20% of the manifests which were submitted were reverted to manual procedures, due to difficulties encountered during the processing. Nonetheless, the trial was sufficiently successful that the two largest shipping lines have suspended parallel paper processing, such that the ACS now depends entirely on electronic manifests from those lines.

Many of the companies which participated in the Brisbane pilot are active in other ports; hence the progress is cumulative. Implementation in Sydney is currently under way, and extension to all other major Australian ports is intended to follow soon afterwards. In addition, the communications software used by participants is capable of handling communications with other parties in the international trade community as well.

Further detail is provided in Jeffery (1994) and Clarke and Jeffery (1994).

* EDI in Trans-Tasman Trade

During 1992-93, a pilot study was conducted by parties in Australia and New Zealand. The first transaction, in early 1993, is believed to have been the first occasion that EDIFACT documents were used for all of the commercial and regulatory aspects of an international trade transaction, a shipment of 3,000 tonnes of steel products. Subsequently, a few hundred further consignments have been sent under the same arrangements.

The study was conducted under the auspices of the Asia-Pacific Economic Council (APEC), the project was managed by EDICA, and the parties which participated were the Australian steel giant BHP, as exporter; BHP's shipping agent and freight forwarder, Seatrans, in both countries; customs broker Daniel Silva in New Zealand; various New Zealand customers of BHP; and the Customs Services of Australia and New Zealand. Thirteen separate data-flows were involved.

In some respects, the transaction appears to have been a simple one, involving business partners of long standing, and goods which had been traded many times in the past, between countries which have close economic ties, a common language, and similar laws. On the other hand, the study confronted many of the complexities which must be surmounted as international trade goes electronic.

The study exercised all of the participants, and provided them with improved insight into EDI's potential, and the challenges which it presents. In addition, the study was of more general interest, in the following ways:

There remain many technical, commercial and political challenges; but this project has solved some of them, pointed the way towards resolution of others, and demonstrated that the vision of electronic international trade facilitation is not a dream.

Further detail is provided in EDICA (1993), Pelley (1994), Clarke and Jeffery (1994) and NCG (1994, pp.29-33).

Issues Arising from the Survey and Case Studies

Respondents to the NCG survey identified a range of issues of concern to them (NCG 1994, pp.62-66). They generally perceived that EDI was of potentially high value to themselves, but that there were considerable costs, complexities, delays and uncertainties involved, and that few organisations would reap significant benefits in the short term. Some companies are EDI-enabled, and aware of what is required to exploit the technology; but many are not.

The most important inhibitors and impediments nominated by respondents were:

Some of the impediments require careful consideration, and will only be solved with the exercise of a degree of imagination, a great deal of commitment and a moderate amount of resources. Where market failure is detected, government should not be backward in providing leadership, and infrastructural investment. Solutions to other inhibitors, on the other hand, are fairly apparent, and involve more effort than imagination and cost. These challenges are being addressed by the NCG's Implementation Task Force.

Important Gaps in EDI Implementation

The very substantial penetration of EDI into regulatory data-flows has to date not been matched by its application to commercial and operational transactions.

The benefits of EDI in the international trade value-chain arise from the accuracy and reliability of consignment data capture, once, at its source, and the timely transmission or availability of that data to organisations further along the chain. The most critical enterprises, whose active participation is vital in order to lay the foundation for electronic data-handling, are therefore:

In some segments, major improvements in productivity are dependent on significant rationalisation of data-flows. Such industry sector-level 'business process re-engineering' involves losers as well as winners, and it is only natural that organisations, and individual executives, managers and employees, will be nervous about its impact.

One area in which significant cost-savings appear to be achievable without major threat of re-organisation is electronic invoicing and payment instructions, sometimes referred to as EDI/EFT or F-EDI. Until very recently, however, financial institutions, with one important exception, have not provided electronic support for the payments process.

Another approach which appears capable of paying quick dividends is to migrate the majority of consignments from bills of lading to UCP500 non-negotiable sea waybills, thereby enabling electronic transmission and simplified delivery.

Current Developments

The Sea Cargo Automation scheme may have a decisive effect on the speed with which EDI penetrates the trade and transportation sector. After being piloted in a medium-sized port, it is in the process of implementation in one of the two large ports. To maximise the returns on investment to the Australian economy, the system needs to be adapted to cater for the needs of the private sector participants, as well as those of the ACS.

The Australian Customs Service has recently been subjected to a searching review, and is under considerable pressure to mature its organisational model, at least in part, from that of a regulatory body and revenue collector, to that of a trade facilitator. The criticisms which have been levelled at it have related to aspects of its performance other than its use of information technology in general and of EDI in particular. The IT organisation, which has successfully implemented systems to provide electronic support for regulatory data-flows, should now be floated off into a separate organisation, which could then be used as a means of extending EDI much more effectively into the commercial and operational data-flows.

During 1993-94, Tradegate's Electra project has identified and prioritised the additional electronic services required by participants. Negotiations are in train to bring the highest-priority services to fruition, and the first sub-projects, relating to implementation guidelines, and EDI/EFT in the settlement of maritime imports, is now under way. In addition, Tradegate has negotiated Memoranda of Understanding with TradeNet (Singapore) and KTNet (Korea) for the establishment and testing of technical links for the movement of EDI and email messages among companies in those countries.

Finally, the Implementation Task Force of the National Consultative Group on Transport EDI is proceeding with its work on clarifying the impediments to growth of existing schemes and implementation of new ones, and the structuring of programs to overcome those impediments.


EDI in Australian international trade and transportation comprises great, and even world-leading, success in relation to regulatory transactions, coupled with very limited progress in relation to commercial and operational data-flows.

The current developments are insufficient to address the problems. Ample evidence of market failure has accumulated; that is to say that conditions exist whereby competitive forces will not result in technology being applied in ways which are quite generally agreed to be socially desirable. There are few circumstances in which EDI can be used by corporations to achieve advantage over their competitors. Moreover, because of the need for a pool of EDI-enabled business partners, there is actually an advantage to second-movers. In short, there are inadequate incentives for, and significant disincentives militating against, innovation. The successful application of EDI in international trade and transportation, as in some other spheres, demands collaboration among participants.

The structure and dynamics of the international trade and transportation sector are complex. In addition, the sector comprises companies which are by tradition fiercely competitive, and in many market segments the industry associations have relatively limited power to encourage commonality of outlook among their members. Collaboration cannot be achieved through negotiations among companies and their industry associations. The plethora of conflicting interests, and of bilateral and multi-lateral sensitivities, ensures that every well-meaning initiative induces suspicion among at least some participants.

Government intervention is necessary to overcome the indecision, and stimulate progress in electronic support for international trade and transportation. The participation of the Department of Transport in the NCG, in the studies which are reported on in this paper, and in the first of the Tradegate Electra sub-projects, are all highly beneficial. But they represent far from sufficient involvement by the Government in an arena which is vital to a trading nation's future. National governments in North America, in Europe, and especially in the area most important of all to Australia, East Asia, provide not just mere encouragement, but active and substantial support, and strategic leadership. It is essential that Australia's national government do the same.

Source Materials

The NCG's Report ('EDI Implementation in the Transport Sector: An Assessment / Stocktake: Preliminary Report for Review') is available gratis from the Department of Transport in Canberra.

The ANU's volume of case studies (Clarke and Jeffery, 1994) is available for purchase from the Department of Commerce, Australian National University.


The survey on which much of this paper is based was undertaken by the Situation Assessment / Stocktake Task Force of the National Consultative Group on Transport EDI. This Group comprises the company established to coordinate the international trade community network, Tradegate Australia Ltd, the industry association representing users and potential users of EDI in Australia, EDICA, and the federal Department of Transport.

The work was undertaken by eight senior representatives of industry nominated by EDICA and Tradegate. I record my personal thanks to Michael Baker of EDICA, Peter Brown of Liberty and Tradegate, Jan Gessin of EDICA, John Jenkins of Tradegate, Brian Minchinton of BHP Transport, Andrew Robertson of Tradegate, Malcolm Smith of Compdata Information Services, and Des Williams of Tradegate.

The Department of Transport provided a substantial and experienced secretariat, and funding for the transport costs of an independent chair. I record my personal appreciation to Bozena Dziatkowiec, Steve Hyland and Ian Tibballs, and particularly to Tony Francombe, who provided sterling support throughout the project. The Australian National University contributed the time of the Task Force's chair, the author of this paper.

The case studies reported on in the latter part of the paper were funded by a Grant from the Australian Research Council to the author, for research into International Trade EDI in Australia. They were conducted by a team from the Research Programme in Supra-Organisational Systems at the Australian National University. I record my personal thanks to Julie Cameron, Mark Goleby, Kevin Jeffery, John McMahon, Rob Pelley and Chris Purcell.


ACOS (1993a) 'Trading Up - An Electronic Trading Strategy for the Australian Shipping Industry' Australian Chamber of Shipping, Sydney, July 1993

ACOS (1993b) 'From Ship to Store: A Plain Language Guide to the Application and Use of Sea Cargo Automation' Australian Chamber of Shipping, Sydney, July 1993

Allison-Young G. (1993) 'Sea Cargo Automation: A Case Study in the Use of EDI in the Maritime Industry' Australian Customs Service, Canberra, May 1993

Australasian EDI Report Monthly newsletter (successor to EDI Research Australia), 1,1 in Feb/Mar 1993, Technosocial Research Services, P.O. Box 21, Brunswick VIC

Cameron J. (1993) 'EDI and the Air Cargo Industry' Dept of Commerce, Australian National University, June 1993

Clarke R.A. (1992a) 'A Contingency Model of EDI's Impact on Industry Sectors' J. Strat. Inf. Sys. 1,3 (June 1992)

Clarke R.A. (1992b) 'Data Interchange and International Competitiveness' Business Council of Australia Bulletin (September 1992)

Clarke R.A. (1993a) 'Transportation Data Network International' Research Report, Dept of Commerce, Australian National University, March 1993

Clarke R.A. (1993b) 'EDI in Australian Government Agencies: A Research Report' Proc. 3rd World Congress of EDI Users, Gold Coast, Australia, March 1993

Clarke R.A. (1993c) 'EDI in Australia: A Status Report' Dept of Commerce, Australian National University, June 1993

Clarke R.A. (1993d) 'EDI Is But One Element of Electronic Commerce' Proc. 6th Int'l EDI Conf., Bled Slovenia, 7-9 June 1993

Clarke R.A. (1994a) 'Progress in the Use of EDI in the Australian Federal Government' EDI Window 2 (April 1994)

Clarke R.A. (1994b) 'The Path of EDI Application in Australian Government Agencies - 1989-94' Proc. World Congress of EDI Users, Brighton UK, June 1994

Clarke R.A. & Cameron J. (Eds.) (1991) 'Managing the Organisational Impact of Information Technology' Elsevier / North Holland, 1991

Clarke R.A. & Cameron J. (Eds.) (1992) 'Managing the Organisational Impact of Information Technology, II' Elsevier / North Holland, 1992

Clarke R.A., Campbell P.J. & Telfer S.G. (1992) 'EDI: The Practices and Intentions of Agencies of the Commonwealth Government: 2nd Survey Report, 1991/92' 140pp., Department of Commerce, Australian National University September 1992

Clarke R.A., Griçar J., de Luca P., Imai T., McCubbrey D. & Swatman P.M.C.(1991) 'The International Significance of Electronic Data Interchange' in Palvia S. Palvia P. & Zigli R.M. (Eds.) 'Global Issues in Information Technology' Ideas Press, 1991

Clarke R.A. & Hudson P. (1992) 'Corporate EDI Gateways: Their Rationale, Functions and Architecture' Proc. 5th Int'l Conf. EDI, Bled, Slovenia (September 1992)

Clarke R.A. and Jeffery K. (1994) 'International Trade EDI in Australia' Department of Commerce, Australian National University Forthcoming, July 1994

Clarke R.A., Pedler M., Swatman P.M.C. & Campbell P.C. (1990) 'Commonwealth Government Practices and Intentions Relating to EFTS, EFT/POS and EDI: Survey Report' 100pp., Department of Commerce, Australian National University September 1990

Clarke R.A., Wagenaar R. & Wrigley C. (1992) 'Diversity in the Application of EDI to International Trade: A Program of International Comparative Research' Working Paper, Department of Commerce, Australian National University, August 1992, rev. February 1994

EDICAST Periodical of the Department of Administrative Services, Purchasing Australia, 1992-. Available from the Editor, Eva Burns & Associates, P.O. Box 87, Waverley NSW 2024, Fax: (02) 369 4245

EDI Council of Australia Newsletters, particularly those reporting on progress in EDICA's Government Working Party. Available from EDICA, 854 Glenferrie Rd, Hawthorn VIC 3122, Fax: (03) 818 3129

EDICA (1993) 'Report on the APEC EDI Pilot Project, Phase 1' [BHP/NZ Steel] EDI Council of Australia, Melbourne, 1993

EDI Research Australia Monthly newsletter, Feb/Mar 1989 - December 1992, Technosocial Research Services, P.O. Box 21, Brunswick VIC

ExpEDIte (1993) 'Electronic Trading in the NZ Transport Industry' Centre for Information Studies, University of Auckland, 1993

Gilbert-Rolfe J. (1993) 'International Shipping, Container Terminals and EDI' Proc. Conf. IIR, Sydney, 22/23 November 1993

Goleby M. (1992) 'Case Study of EXIT: The Australian Customs Service's Export System' Project Report, Dept of Commerce, Australian National University, November 1992

Jeffery K. (1994) 'The Sea Cargo Automation Pilot Project' Department of Commerce, Australian National University, January 1994

Morris (1992) 'Warehouse to Wharf: Efficiency of the Interface Between Seaports and Land Transport' Report of the House of Representatives Standing Committee on Transport, Communications and Infrastructure, Austral. Government Publishing Service, Canberra, 1992

NCG (1994) 'EDI Implementation in the Transport Sector: An Assessment / Stocktake: Preliminary Report for Review' National Consultative Group in Transport EDI, Department of Transport, Canberra, 7 March 1994

NCWP (1988) 'Cargo Movement' National Communications Working Party on Cargo Movement, Melbourne, June 1988

Pelley R.J. (1994) 'EDI in Trans-Tasman Trade' Department of Commerce, Australian National University, January 1994

PMA (1990a) 'Results of Enterprise Model of the Port Community in the Port of Melbourne' Port of Melbourne Authority, 1990

PMA (1990b) 'Tradegate*Express: A Trade Community System for Australia' Port of Melbourne Authority, 1990

Swatman P.M.C. & Clarke R.A. (1990) 'EDI's Organisational, Sectoral and International Implications' in Berleur J. & Sizer R. (Eds.) 'Information Technology Assessment', Elsevier / North-Holland, 1991

Teitler U. (1992a) 'EDI Data Communications Explained' Project Report, Dept of Commerce, Australian National University, October 1992. Republication forthcoming by EDI Council of Australia

UNCTAD (1993) 'Electronic Data Interchanges Concerning Ports' UNCTAD Monographs on Port Management No. 11, New York, 1993

UNESCAP (1991) 'Electronic Data Interchange (EDI) Systems for Transport-Related and Trade Facilitation Activities' United Nations Economic and Social Commission for Asia and the Pacific, New York, 1991

Wrigley C.D. (1992) 'EDI Transaction Protocols in International Trade' Proc. 5th Int'l EDI Conf., Bled Slovenia 3-5 September 1992

Wrigley C., Wagenaar R.and Clarke R. (1994) 'Electronic Data Interchange (EDI) in International Trade: Frameworks for the Strategic Analysis of Ocean Port Communities' J. Strat. Inf. Sys. 4,2 (June 1994)

xamaxsmall.gif missing
The content and infrastructure for these community service pages are provided by Roger Clarke through his consultancy company, Xamax.

From the site's beginnings in August 1994 until February 2009, the infrastructure was provided by the Australian National University. During that time, the site accumulated close to 30 million hits. It passed 50 million in early 2015.

Sponsored by Bunhybee Grasslands, the extended Clarke Family, Knights of the Spatchcock and their drummer
Xamax Consultancy Pty Ltd
ACN: 002 360 456
78 Sidaway St, Chapman ACT 2611 AUSTRALIA
Tel: +61 2 6288 6916

Created: 15 November 1997 - Last Amended: 15 November 1997 by Roger Clarke - Site Last Verified: 15 February 2009
This document is at
Mail to Webmaster   -    © Xamax Consultancy Pty Ltd, 1995-2013   -    Privacy Policy