Some logistics providers remain skeptical about how well it will work for ports to weigh containers and transmit the data to carriers on behalf of shippers.
Many third-party logistics providers have spent considerable time and resources preparing for international ocean transportation safety rules requiring shippers to submit the certified weight of shipping containers to ocean carriers in advance, effective July 1. 3PLs ultimately aren’t responsible for filing the data, but as service providers, they work to manage freight transportation and reduce related hassles for their clients.
As such, the new rules also could create new revenue streams for these outsourced logistics providers, some say.
Yusen Logistics is fully ready to comply with the new requirements for certified container weights, Ronald Marotta, vice president of Yusen Logistics International, said during a press conference in Washington recently held in conjunction with the release of the annual “State of Logistics” report by the Council of Supply Chain Management Professionals.
“We’ve engaged in a huge amount of global training [for our staff and customers]. It has cost us a small fortune to do the programming to make sure every shipper is ready,” he said.
Under an amendment to the Safety of Life at Sea Convention (SOLAS) adopted two years ago by the International Maritime Organization, manufacturers and agriculture producers must provide the verified gross mass (VGM) of the loaded container to the vessel operator prior to loading. Without the information, the carrier is not allowed to hoist the load on board a vessel. The rule attempts to address maritime industry concerns regarding overweight containers being tendered that pose a hazard to vessel stability and structural integrity, as well as the physical safety of dockworkers if a heavy box topples from a stack or falls from the grip of a crane. The weight data is used by load planners to help determine where to best stow containers for optimal safety and unloading at destination ports.
The new standard has roiled the ocean freight sector. Many shippers were caught off guard about the requirements and there remains widespread confusion over how it will be implemented in countries around the world. Many governments have not issued clear enforcement guidelines and there are wide differences in enforcement policies and penalties between countries that have addressed the matter. Meanwhile, a segment of the carrier customer base in the United States vociferously protested that the rules were unnecessary because export loads are already weighed on port scales per U.S. safety regulations and that they added a considerable compliance burden in terms of information technology costs, potential for missed sailings and liability. Shippers complain that carriers have been slow to issue instructions on how to electronically file the VGM data in time so their cargo doesn’t get held up and that carriers were late to provide cut off times for the data, after which the load would not be accepted for the next vessel sailing.
Container lines have established different filing methods. Some will accept the information on their web site, some through their online booking system and others through community portals such as INTRAA or CargoSmart.
Marotta said that Yusen, a subsidiary of Japanese carrier NYK, is set up to electronically exchange weight data with terminals, carriers, shippers and other parties. Well before the deadline, the company proactively reached out to every carrier it deals with to find out their requirements.
Several logistics officials say they don’t plan to rely on ports weighing outbound loads because such a process is fraught with too much uncertainty. The U.S. Coast Guard has stated that using port scales to weigh containers, as is current practice to meet Occupational Safety and Health Administration regulations, is equivalent to providing a VGM. Many U.S. ports and terminals have indicated they plan to offer submit the data to ocean carriers on the shipper’s behalf.
Marotta said weighing containers that arrive at a marine terminal without a VGM would probably take too much time in high volume ports.
“So we’re doing it at the shipper level and training them in advance about what is needed to gives us the proper data so there are no glitches,” he said.
Usage of port scales might develop over time once an agreed standard is developed for how to certify scales, Brian Hancock, chief marketing officer at freight railroad Kansas City Southern, said. Several U.S. ports are working with an ocean carrier intermodal group to develop a common process for handling the VGM data, but the Coast Guard has said that certification of scales by authorities in each state will be accepted.
Weighing containers at truck gates is even less of an option at foreign ports because “most of them don’t have the capabilities to install scales without adding to the congestion issues they already have,” Rick Gabrielson, vice president of transportation for home improvement retailer Lowe’s, said at the press conference. Foreign ports might be able to do some random weighing as a spot check exercise, but most do not seem positioned to handle large volumes of containers, he said.
As an importer, Lowe’s isn’t directly responsible for the VGM, but is closely monitoring its vendors and validating weight declarations to make sure they are accurate and within tolerances.
“I also think there is a real opportunity for 3PLs because you may have a handful of shippers that may not have the ability, or sophistication, to do it. So there’s a play for 3PLs in the overseas consolidation space where shippers they may be using a container freight station, but if they put a set of portable scales in they can offer a value-added service,” Gabrielson said.
Ann Bruno, senior vice president of strategic projects at Baltimore-based forwarder ICAT Logistics, also questioned whether port scales would be an ideal compliance method because the VGM cut-off might be two days before the physical cargo delivery deadline to make the sailing. She was unaware of any process for filing an amended VGM, as there is with other required carrier documentation such as automated export declarations and master bill of ladings, so the cargo can be accepted with an estimated weight and followed with more accurate data.
In a phone interview, Bruno said ICAT will file VGMs for some clients and others plan to file the weights on their own.
ICAT is requiring customers to submit the VGM declaration with a signed certification, Bruno said. ICAT is not a consolidator, so shippers load their own containers for pick up by a trucking company.
Bruno said ICAT is not charging a fee at this time to file the VGM because carriers are not charging for filing.
“However, we reserve the right if this proves to be more labor intensive than we think, to reevaluate and assess a fee,” she said.
ICAT will pass on any fees for less-than-containerload shipments ICAT arranges through a co-loader because those types of non-asset based carriers are charging fees, she added.
Bruno cited Hapag Lloyd as an example of a carrier that has made the process easy by having the tare weight of containers in its system. ICAT personnel simply look up the container number, enter the cargo weight and the system adds up the total weight, she said.
3PLs say they are ready to handle VGM filings for shippers
