Parties in the commercial world are increasingly being exposed to insolvency risk, which has unsurprisingly spread to the international supply chain following the recent announcement that ACFS Port Logistics (ACFSPL) has entered administration.
As a consequence, businesses have been taking steps to reduce risks through increased due diligence of customers’ legal and financial positions before accepting work, as well as implementing stronger protections during trading relationships. These measures include requiring payment in advance from some customers, developing improved Terms and Conditions of Trade, obtaining letters of credit, registering securities under the Personal Properties Securities regime, and obtaining credit insurance.
Many of these steps are aimed at giving service providers greater security over goods being carried by them so that they can assert rights over the goods and seek recovery of amounts owed to them.
ACFS insolvency developments
The range of insolvency issues affecting the international supply chain is now on full display due to the insolvency of a key player in the Australian supply chain sector. Rumours have been swirling for some time and now developments are arising in public forums relating to ACFSPL and related parties in the ‘ACFS Group’.
There had been stories of insolvency threats to ACFSPL which had been dismissed. However, ACFSPL has now appointed Salea Advisory as administrators of the company. The administration process is one adopted in Australia by directors of companies who believe that their company may be insolvent. Control of the company then passes to those administrators who would normally make a rapid independent assessment of the company, including meeting with creditors, and determine whether the company should pass into a more formal stage of insolvency or be bought by others (on occasion, the directors of the company) at a discount to full value to try and realise assets and continue the operations of the company.
The role of the administrators and receivers
However, in the ACFSPL administration, the situation has been made more complex by the appointment of partners from BDO as receivers of ACSPL by ScotPac (a specialist business lender) on 6 August 2026. A ‘receiver’ is a different type of insolvency practitioner appointed by a secured creditor, as is a ‘liquidator’ who is another type of practitioner who is more commonly appointed to liquidate and wind up a company. In this case, the receivers had moved to stop a winding-up application of the company at the instigation of the ATO as a major creditor. All the insolvency practitioners have different roles and, in this case, the administrator has stated that it will continue to run the companies in the ACFS Group while the receivers will be undertaking a sale campaign for the sale of ACFS and its assets as a going concern.
Potential impacts on industry participants
The administration and other steps will impact customers, retailers, ACFS employees and the ports. The ABF and DAFF may move to stop ACFS from conducting customs brokerage or biosecurity services. The ports may close ACSF premises, stopping delivery, arrival or departure of goods or containers. Businesses should monitor relevant news sources and seek advice from industry bodies, particularly the International and Customs Brokers Association of Australia (IFCBAA), as well as their own financial advisors. IFCBAA is uniquely positioned to advise on the whole range of effects to industry and work with trusted partners in government and others whose involvement is vital to ongoing operations.
Immediate considerations for supply chains
Businesses scheduled to collect and deliver goods and containers from ACFS and those holding containers to be de-hired at ACFS premises, must advise their customers of the effect of these developments and likely delays, costs and uncertainties in their supply chains. Overseas suppliers need to be advised of possible venue changes for deliveries of shipments. Deliveries to ACFS may be stopped and long lines of trucks may also appear outside ACFS facilities in various ports, congesting vehicle movements. In the immediate future, businesses may look to negotiate with competitors of ACSF, probably at higher rates.
Contact us
With years of experience in the transport, logistics and supply chain sectors, and supported by lawyers with extensive insolvency expertise, Rigby Cooke Lawyers is uniquely placed to advise businesses affected by the ACFSPL administration.
For further information, or to discuss how the ACFSPL administration may affect your business and supply chain operations, please contact Andrew Hudson, Partner in our Customs & Trade team, or Julie Callea, Partner in our Insolvency & Reconstruction team.
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