Friday, April 22, 2016

SOLAS VGM TO START FIRST FOR TRANSSHIPPED CONTAINERS

VGM compliance to start earlier for transshipped cargo

Shippers should think about supplying container weight data to ocean carriers ahead of the July 1 start date if they ship cargo that transfers to a second vessel in another port.

   Exporters who use ocean carriers that transship their cargo in hub ports should be ready to comply with new container weight verification rules for maritime safety several weeks before the July 1 deadline, an industry specialist said this week.
   Many shippers are wringing their hands over an International Maritime Organization amendment to the Safety of Life at Sea treaty requiring them to provide an accurate weight of ocean containers along with the signature of a responsible employee. Container lines, citing lax weight standards that allegedly contributed to several accidents at sea and at marine terminals, pushed for the rule change so they can use the data in their stow plans. The goal is to balance loads throughout a vessel to ensure stability and structural integrity. Implementation is being handled differently by each signatory nation, which is contributing to confusion about how to follow the requirement and potential enforcement mechanisms. Concerns are strongest among agricultural producers and NVOs, and range from the U.S. Coast Guard’s decision to forego any rulemaking and leave it to commercial parties to work out data sharing requirements, to which party is responsible for supplying the weight of the empty box itself, overweight tolerances, and cut-off times for cargo delivery.
   Opponents argue that moving ahead with the “verified gross mass” rule as scheduled will create an administrative nightmare that causes cargo backlogs and imposes heavy costs on exporters.
   Shippers need to be especially mindful of the July deadline if their cargo is routed by feeder vessel and reloaded at an intermediate port onto a large trans-oceanic vessel, Ed Ordway,  senior director of product management, at INTRAA told attendees at the National Customs Brokers and Forwarders Association of America conference in Tucson, Ariz.
   INTRAA is the largest neutral electronic platform for booking ocean freight and exchanging shipping documents. It has created a VGM tool that enables shippers to submit the data to carriers as a separate message or along with shipping instructions to the carrier.
   A container shipped without the VGM from an Asian port in mid-June for transshipment in someplace like Singapore or Busan, South Korea, in early July will probably not be loaded on the second ship because the SOLAS rule states that carriers must have the container weight in advance, he said.
   “So July 1 is the date, but based on conversations we’ve had with carriers, you really have got to be thinking more like May 15 to be sure containers don’t get held up in some intermediate port,” Ordway said via teleconference.
   Although the U.S. Coast Guard has suggested that enforcement is up to ocean carriers unless officers detect an overweight box onboard during a normal safety and security inspection of a vessel, some countries are making shippers accountable to national authorities, the INTRAA official said.
   At least four countries have indicated they plan to levy financial penalties, and in some cases even prison sentences, for non-compliance, he said. Canada is one of those countries.
   A few countries have published guidelines on how they plan to implement the SOLAS rule changes, but the guidelines vary and many countries haven’t even issued any instructions so far.
   Shippers, for example, can meet the requirement either by weighing the loaded container on a scale or weighing the contents and adding the tare weight that is stenciled on the side of the box. Ordway said there are recent rumblings from some governments that they will also require shippers to declare to the carrier the VGM method used.
   The Hong Kong Marine Department, which is equivalent to the Coast Guard, wants to conduct a trial program for collecting container weight data and is soliciting three or four shippers and an equal number of ocean carriers to participate, Brian Conrad, executive administrator of the Transpacific Stabilization Agreement discussion group of container shipping lines operating in the U.S.-Asia trade lane, said.
   One of the big complaints by some exporters is that liners are requiring their measurement to include the weight of the actual container itself. Shippers say they shouldn’t be responsible for supplying the weight of a box that they don’t control, especially because the listed weights may not be accurate and could leave them liable if there is any accident or enforcement action.
   The World Shipping Council and other carrier industry representatives in recent weeks have publicly stipulated they will not hold shippers liable for the accuracy of the tare weight, but that the information needs to be included as one data set because that’s how carrier’s IT systems are set up to receive it.
   The Ocean Carrier Equipment Management Association (OCEMA), a U.S.-based association of 18 ocean common carriers focused on devising common safety and operational rules related to intermodal transportation of ocean freight, met Wednesday to develop specific contract language that will release shippers from liability, OCEMA counsel Don Kassilke, said.
   An NCBFAA member in the audience said that having to send someone at the warehouse to manually take pictures and enter the tare weight numbers is a burden for manufacturers, forwarders and freight consolidators, especially if they move lots of containers each week. She requested that OCEMA and the steamship lines electronically send the tare weight numbers so their processes can be fully automated.
   Kassilke said container lines “never contemplated” that gathering the tare weight info would be onerous, but added that some lines are talking about making tare weights available through their web sites when someone enters the container number.
   OCEMA should also provide the tare weight of the generator set that is attached to refrigerated containers, another audience member suggested during the question-and-answer period.
   The weight of frozen products such as poultry can be impacted when transloading occurs in humid locations because ice can quickly form on the top of containers when warm and cold air meet, which is why there should be a weight tolerance, a representative for a freight forwarder in New Orleans said.