Ocean carriers should “embrace the obvious solution” terminal operators can offer to ensure compliance with the International Maritime Organization’s new verified gross mass regulations, says Federal Maritime Commission Chairman Mario Cordero.
Mario Cordero, the chairman of the Federal Maritime Commission, said ocean carriers should allow shippers to use weights from marine terminal scales to meet the requirement to supply the verified gross mass (VGM) of containers prior to them being loaded.
In a statement issued Thursday by the FMC, Cordero said with the requirement to provide a VGM under the International Maritime Organization’s Safety of Life at Sea Treaty (SOLAS) going into effect July 1, “the time has come for ocean carriers to embrace the obvious solution to achieving compliance that marine terminal operators can offer.”
He said the weight of export containers, as determined by terminal operators, can and should be classified as the verified gross mass of the container.
Cordero also noted that any VGM compliance regime established under the auspices of a discussion agreement on file at the Federal Maritime Commission that adds burdens to declaring container weights will invite increased scrutiny by the FMC.
“There is a course to SOLAS VGM compliance provided by the Coast Guard that is not only not burdensome, it requires no additional action at all. 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,” said Cordero. “Using the weight taken at the terminal gate for the purposes of satisfying the need for a verified weight of a container is a simple and efficient solution for assuring the continued smooth flow of export cargoes.”
Carriers and terminals have been using discussion agreements as a way to find solutions to the VGM requirement.
Last month the discussion agreements for terminal operators in Los Angeles, Long Beach and Oakland announced they had agreed to forward weights from truck scales for use by carriers which they could use at their discretion for compliance with the VGM requirement.
In addition, the 19 ocean carrier members of the Ocean Carrier Equipment Management Association (OCEMA), in conjunction with six major East and Gulf coast port authorities, said they had established a plan to use port scales to provide VGMs and formed a discussion agreement to implement the program. The port authorities include the South Carolina Ports Authority, the Georgia Ports Authority, the North Carolina State Ports Authority, the Port of Houston Authority, the Port of Virginia and the Massachusetts Port Authority.
Speaking at the annual meeting of the Agriculture Transportation Coalition in Long Beach on Thursday, Richard Craig, chief executive officer of Mitsui O.S.K. Lines Ltd. (MOL) America, said the gist of Cordero’s statement was “let’s get on with it, let’s get this thing going and dealt with.”
Craig said most, if not all, terminals are under at least under some general understanding now that box weight, the scale weight taken at the terminal gate, will be used for the VGM.
“Once we have got that in place and understood with all the terminals, then this should not be that big a deal anymore for cargo moving through the gates at the ocean terminal,” he said.
New York terminals have yet to adopt such a plan, and he said some West Coast terminals “have come back with ifs and and buts.”
“This is all a little cumbersome,” admitted Craig. “We’ve got 15-16 ocean carriers talking to a couple of dozen ocean terminals and we want to get everybody on the same page. That is why we are working through OCEMA, the one body where ocean carriers can get together and talk about these issues.”
“I’m optimistic we are going to have agreements with the terminals and anybody who is an outlier and does not want to participate in this is going to be under a lot of pressure from a lot of people that the ocean terminals will agree to VGM with the scale weight,” he added.
He said on-dock rail is still an issue because ocean terminals are not configured to move a box coming off a train over a scale, and because the information flow needs to be clarified.
“We have to find a way to get the declared verified weight that you the shipper give us the ocean carrier into the system through the rail or directly to the terminal.”
Carriers should not only accept weights determined by terminal operators for complying with SOLAS that mandates providing verified container weights, but the shipping lines should also streamline the transmission of the information, said Cordero.
“In the interest of furthering efficiencies, weights determined at terminal gates for the purposes of SOLAS VGM compliance should be transmitted directly from the terminal operator to the shipping line, not provided to the shipper to then present to the carrier,” observed Cordero.
“The quickest route between two points is a straight line and that applies to data flow as much as it does to navigation,” he added. “It only makes sense to have a direct reporting of container weights from the terminal operator to the ocean carrier.”
Cordero expressed frustration that with the SOLAS VGM implementation date looming, uncertainty remains as to what will be expected of shippers, especially given the Marine Safety Information Bulletin (009/16) issued by the United States Coast Guard on April 28, which announced that “…existing U.S. laws and regulations for providing verified container weights are equivalent to the requirements in SOLAS Regulation VI/2.”
“The Coast Guard has made it clear that the existing methods and procedures for tendering export cargo and declaring container weights are already in compliance with what was mandated via the International Maritime Organization’s amendment to SOLAS,” said Cordero. “While I certainly applaud efforts to make the maritime transportation of cargo safer, I am increasingly struggling to fathom why the ocean carrier community has not fully embraced the equivalency declaration as a way to demonstrate flexibility and sensitivity to our U.S.-export shippers. Additionally, such an approach would further the objectives of the President’s Export Initiative.”
John Butler, the president and chief executive of World Shipping Council, a group that represents container liner companies said of Coredro’s comments, “I think that the chairman is trying to help, but to the extent his statement suggests there is only one path to VGM compliance, that is incorrect.”
“Carriers have offered multiple transmission methods to their customers, and there are multiple places where loaded containers can be weighed. Increasingly it appears that marine terminals will be part of the solution,” said Butler. “That is good news, but marine terminals are not the only solution, and not all marine terminals are offering these services. The Coast Guard, shippers, terminal operators, and carriers are all saying that having multiple operational approaches is the way to go, and it is important to keep that flexibility in place in order to ensure a smooth implementation of the SOLAS regulation.”
FMC chairman urges use of terminal scales to meet SOLAS VGM requirements
