Terminals and carriers rush to clarify how shippers can meet the International Maritime Organization’s requirement scheduled to go into effect tomorrow, in which shippers must provide the verified gross mass of containers before they are loaded on ships.
The new regulation from the U.N.’s International Maritime Organization (IMO) requiring shippers to provide the verified gross mass (VGM) of containers prior to being loaded onto the vessel will go into force tomorrow, with great uncertainty as to whether it will cause disruption to the shipping industry.
The rule is contained in an amendment to the Safety of Life at Sea (SOLAS) convention and was adopted in 2014, but questions remain about how the rule will be enforced in different countries around the world.
“Government bodies, the competent authorities to which the IMO is looking to consistently enforce the regulation across the globe, have been surprisingly reticent,” said the insurer, TT Club. “Despite encouragement from the IMO for governments to communicate fully with industry stakeholders, around 80 percent of SOLAS signatory states have yet to publish guidance on national implementation.”
TT Club said, “Consistency, however, across the international governmental spectrum has been lacking, causing much frustration,” adding there have been “less-than-helpful and confusing messages from some governmental bodies. It has, therefore, been left to industry partners to step into the breach and provide practical support for implementation of this mandatory international regulation.”
In the United States, however, the U.S. Coast Guard published a declaration of equivalency on April 28 that will allow shippers to meet the VGM requirement of SOLAS by using scales at the entrance gate to their terminals for containers arriving by truck.
“We are in a much better position from the U.S. standpoint today than we were a month ago,” said Don Pisano, president of American Coffee Corp. and chairman of the Ocean Transportation Committee of the National Industrial Transportation (NIT) League. “I’m expecting from the export side that things should run fairly smoothly. I think there will be some hiccups, but for the most part I’m hoping there will not be interruption in flow of shipments and do not load orders.”
The Coast Guard equivalency document gives shippers a third way to meet the SOLAS requirement.
IMO says shippers can meet the requirement to provide the VGM using the so-called “Method 1,” which involves weighing the loaded container; or “Method 2,” which involves weighing the contents of the container, including packing material, and adding it to the tare weight of the empty container.
With imports, Pisano noted shippers of coffee and many agricultural goods that are sold by weight should be able to easily meet the requirement under SOLAS by using “Method 2” even though most of it originates in the developing world – Latin America, Vietnam and East Africa.
The only new wrinkle is that the exporter will have to weigh items such as kraft paper and dessicant bags used to absorb water or dunnage and pallets, and add it to the weight of the commodity and tare weight of the box.
In addition, he said other NIT League members “have been looking at this since early on” and “doing what they need to comply.”
Pisano also noted the NIT League and Global Shippers Forum lobbied at the IMO to provide for the alternative “Method 2” to make it possible for shippers to meet the VGM requirement if they did not have scales on site to weigh fully loaded containers.
Dan Gardner, director of Mobileweight, a New York company that has created a mobile application for submitting VGMs to ocean carriers through the widely used shipping portal INTTRA, said after talking to hundreds of shippers, “The bottom line is most companies are not ready, they are engaging in reality suspension and wishful thinking.”
In May, the IMO Maritime Safety Committee issued a circular advising countries to adopt a practical and pragmatic approach when verifying compliance with the VGM rule during the first three months of it going into force.
Gardner said some business have incorrectly interpreted that as “an invitation not to file VGM and others are clinging to the belief that it is going to go away.”
“If you are a company that exports 500 containers a year through one port, it is a lot easier to get a handle on,” Gardner said. “On the other hand, we are talking to multinationals who export from half a dozen ports in the U.S., and a couple of dozen around the world. Their level of comfort and preparedness, by their own admission is not where they need it to be. We are talking to companies this we who have not fully flushed out their solution and approach. Are they going to weigh on the terminal, are they going to weigh off the terminal? How are they going to submit the VGM? Is it going to be a hard copy or an electronic copy? Who is the authorized party to submit the VGM?”
On Tuesday, Ocean Carrier Equipment Management Association (OCEMA), a group of 19 container carriers, said they will consider weighing containers as they enter marine terminals in the United States a “best practice” for meeting the VGM requirement. Such an approach was urged by groups such as the Agriculture Transportation Coalition.
OCEMA said it had joined with six major East Coast and Gulf Coast port agencies – 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 Virginia International Terminals, and the Massachusetts Port Authority – to agree on the use of a common streamlined terminal weighing approach using port scales to provide the VGM at port locations.
In New York, members of the New York Terminal Conference (NYTC) have announced their approach to VGM in a “Pending Schedule of Rates” updated on June 24 and posted on their website that goes into effect on July 1. The members of the terminal conference are GCT Bayonne, GCT New York, Port Newark Container Terminal, APM Terminal and Red Hook Container Terminal. Maher Terminal, the largest terminal in the port is not a member of the conference.
Bethann Rooney, assistant director of the port department of the Port Authority of New York and New Jersey, said that all the terminals in the port have agreed to provide the scale weight to the ocean carrier for carriers arriving by truck on behalf of the shipper.
Under the tariff, all of the terminals with the exception of Maher, may charge a $10 fee for transmitting the weight, but Rooney said it is not clear that they will actually impose the charge and that it may just be a “placeholder” giving them the option.
“I think it is unlikely it will be charge,” she said.
If containers arrive by rail without a VGM, Rooney said they will be weighed at a cost of $75 because there will be a need for additional labor to load the containers on trucks and drive them over scales. However, Maher terminals has said it will not weigh containers arriving by rail, and boxes will be held until a VGM is provided.
Gardner said the ability to provide VGM at terminals for containers arriving by rail is an issue throughout the county because most terminals do not have facilities for weighing containers arriving by rail because it is “too logistically cumbersome and expensive.”
Container terminals in California have announced they will also forward scale weights for trucks arriving at their terminals to carriers to help shippers meet the VGM requirement.
The terminals told ocean carriers they will continue to provide the weights of containers they have been collecting in order to comply with Occupational Safety and Health Administration (OSHA) regulations found in section 29 of the Code of Federal Regulations and carriers can use them at their discretion, said John Cushing, who acts as the secretary for the discussion agreements container terminals have at the Port of Oakland and the Ports of Los Angeles and Long Beach.
“We are not saying here is the weight, we are not verifying it is the VGM. We are saying here is the weight to meet 29 CFR, if you wish to use it for the VGM, you still need to verify that is what the weight is – we are not accepting the verification role,” Cushing said.
The weights are needed to assure safety at the marine terminal, to properly store containers at the terminal, and to help plan the stowage of containers on the ship so the containers are not crushed and the ship is not made unstable.
He said terminals are addressing the issue of containers arriving by rail on an individual basis.
Because of the ability to meet the VGM requirement with scales, Rooney thinks that when the VGM rule goes into effect on Friday, operations at New York and New Jersey terminals will be “as fluid as it has been, there will be no disruption to cargo. We are doing the same thing we have been doing for decades.”
Just today, Danish ocean carrier Maersk Line revealed it will allow shippers moving cargo by rail to terminals in the U.S. to use the weights provided under the Intermodal Safe Container Transportation Act (ISCTA) to meet the SOLAS requirement.
“With several U.S. marine terminals receiving containers via on-dock rail facilities, some currently do not have scales suitable for weighing such containers to arrive at a VGM,” Maersk said. “Thus, in light of the equivalency determination made by the U.S. Coast Guard, for containers arriving by on-dock rail, Maersk Line will accept the actual gross cargo weights (weight of the cargo, packaging materials, pallets and dunnage) as certified by the shipper or its agents pursuant to the ISCTA.”
Maersk added, “For cargo that does not require a certified actual gross weight under the ISCTA, shippers who wish to avail themselves of this method must submit a certified actual gross cargo weight complying with the requirements of ISCTA for determining and reporting gross cargo weights. Additional procedures necessary for computation and submission of VGM for on-dock rail shipments using ISCTA actual gross cargo weight will be made available to the shipper by Maersk Line.”
New VGM rule takes effect tomorrow
