Friday, June 17, 2016

FMC WARNS CONTAINER LINES ABOUT SOLAS VGM

Shipping Regulator Warns Ocean Lines on Container Weights

FMC chief raises caution against ‘specter of anticompetitive behavior’ as July 1 deadline for new rule on cargo ship safety nears


The international requirement is aimed at making vessels safer by making container stacks less likely to tip over or cause ships to break apart at sea. ENLARGE
The international requirement is aimed at making vessels safer by making container stacks less likely to tip over or cause ships to break apart at sea. Photo: European Pressphoto Agency
The top U.S. maritime industry regulator jumped into a controversy looming over the shipping world on Thursday, warning ocean carriers that they should accept container-weight measures offered at cargo terminals or face potential scrutiny for “anticompetitive behavior.”
Federal Maritime Commission Chairman Mario Cordero’s statement comes as the shipping industry is bracing for rules that go into effect on July 1 requiring exporters to verify the weight of their shipments before the containers can be loaded on vessels.
The international requirement is aimed at making vessels safer by making container stacks less likely to tip over or cause ships to break apart at sea. But unresolved details, including how the weights are verified and the information provided to shipping lines, have observers worried about major bottlenecks and delays at seaports.
Mr. Cordero said the “obvious solution” was right at hand: ocean carriers should use the weights taken at terminal gates by port terminal operators—a measure that is already performed for dock safety and ship stowage purposes—to satisfy the United Nations International Maritime Organization requirement.
“Using the weight taken at the terminal gate. is a simple and efficient solution for assuring the continued smooth flow of export cargoes,” Mr. Cordero said.
The requirement, an amendment to the Safety of Life at Sea Convention, or SOLAS, has generated a storm in the shipping world, as carriers, shippers and port operators argued over who should bear the cost and risks of implementation. Some carriers sought to break the impasse last month by laying out an agreement with six major ports to work toward a common solution. The Ocean Carrier Equipment Management Association, or OCEMA, filed the agreement with the FMC FMC -1.37 % for approval.
Mr. Cordero said such agreements only further complicate the issue and would be closely studied by the commission. “Why anyone would add procedures, requirements and costs to doing business is not only puzzling, it raises the specter of anticompetitive behavior and necessitating Commission action,” he said.
John Butler, president of the World Shipping Council, which represents ocean carriers, said in a statement that fulfilling the requirement would be more complicated than the regulator suggests. “Marine terminals are not the only solution, and not all marine terminals are offering these services,” Mr. Butler said. “I think that the Chairman is trying to help, but to the extent his statement suggests there is only one path to [verified gross mass] compliance, that is incorrect.”
Jonathan Gold, vice president for supply chain and customs for the National Retail Federation, said U.S. retailers that source from dozens of countries “are still concerned. They’re not hearing enough information just on the basics of how it’s going to be done.”
“Less than two dozen of the IMO member nations are putting forth guidance and the regulations are all different depending on which country they’re coming from” despite an announcement in May from the IMO urging leniency in enforcement of the rule in the first three months, he said. “It’s all over the board.”
Write to Erica E. Phillips at erica.phillips@wsj.com