Friday, April 22, 2016

SOLAS VGM--MANY ARE UNAWARE AND UNPREPARED

Survey says, VGM awareness and preparedness still lacking

With only 10 weeks to go until the container weight verification rule goes into effect globally, surveys show shippers and LSPs are still mostly unprepared to comply.

   A host of troubling statistics this week show that the majority of shippers and logistics service providers remain unaware or unprepared for a rule set to go into effect July 1 requiring cargo interests to provide a verification of container weights to carriers.
   The rule, an amendment to the International Maritime Organization’s existing Safety of Life at Sea convention, requires shippers to provide verified gross mass (VGM) to carriers either through a physical weighing of a laden container or by adding weight of the cargo (including pallet, dunnage and packaging weight) to the tare weight of the container.
   This week, the shipment management software provider CargoSmart said that in a global survey of 820 customers (roughly 57 percent LSPs and 38 percent shippers), only 4 percent had a solution in place to deal with the rule. According to CargoSmart’s research, 36 percent of respondents had not yet started planning, 20 percent were not aware of the new requirements, and 20 percent were in the discussion stage with several parties.
   In terms of the best method to submit the VGM data to carriers, 59 percent of respondents preferred doing so along with the shipping instructions, while 20 percent said it should be in the booking request, shipping instructions, or in a separate document, depending on the trade route. Ten percent preferred to submit the VGM in a separate document.
   The survey results were released this week in CargoSmart’s Innovating newsletter, which noted that only 11 of 171 IMO member states have published VGM compliance guidelines. The VGM rule leaves much room for interpretation in terms of how member states enforce the rule and how commercial parties in those countries comply with it.
   Recent American Shipper research into the issue found sentiment more split as to how the VGM data should be submitted to carriers. Of the nearly 500 respondents in a March poll on VGM, 30 percent each said the data should be submitted with as part of the bill of lading, with the shipping instructions, or as a separate VGM document.
   Nearly 60 percent, according to the American Shipper poll, indicated they did not understand how to comply with the VGM rule.
   Finally, the shipping advisory company Drewry this week said that non-vessel-operating common carriers appear unprepared to comply with the rule.
   “None of the 20 NVOs met by Drewry when we ran a global ocean freight tender for a U.S. multinational in April said that they were ready to comply globally,” the company said in its Logistics Executive Briefing released this week.
   Drewry cited CargoSmart’s research into the VGM issue in determining the biggest obstacles to compliance: the most commonly cited barrier was the extra process to determine the verified weight, and the second biggest barrier was getting the proper “sign-off” on the verified weight.
   The VGM rule requires shippers or LSPs (whoever is named as the master shipper on the bill of lading) to sign off on the VGM data before submitting it to the carriers. Shippers have voiced concern about this process, as it created liability issues. In other words, the person able to physically (or digitally) sign the VGM might not be allowed to do so for liability reasons.
   Either way, the data isn’t promising. With 10 weeks remaining before the VGM rule goes into effect, it’s clear much of the industry is unprepared to comply as it awaits clarity on enforcement within each country and globally.