Ports that insist on “no doc/no gate” policies with regard to verified container weights could lose business, the company’s export manager says.
STIHL Inc. only plans to utilize U.S. ports with flexible policies towards meeting new international maritime safety guidelines for carriers to obtain the certified weight of containers prior to vessel loading. Ports that won’t allow export containers through the gate if the truck arrives without the verified gross mass (VGM) on file could lose the company’s business.
“We’re making sure our freight goes through port facilities that we deem VGM friendly. So if there is a port facility that has said, ‘We will not accept a box,’ we may divert freight away from that port,” R. Murray Bishop, manager of export and logistics, said Thursday during a panel discussion at the Virginia Maritime Association’s annual conference in Norfolk. “That’s not something that we want to do, but it’s my job to make sure our customers get their goods on time and in the most economical manner possible.”
STIHL manufactures outdoor products such as chain saws, grass trimmers and leaf blowers. It exports products to dozens of countries around the world.
The International Maritime Organization’s July 1 deadline for container weight verification was a major topic on the minds of some 375 attendees at the conference.
Under an amendment to the Safety of Life at Sea (SOLAS) convention, carriers are not supposed to load containers without having their gross weight in advance. The shipper, either the beneficial cargo owner or a transportation intermediary, must submit the data on the master bill of lading or an equivalent document issued by the carrier, along with a signature from an authorized company representative.
Ocean carriers gave customers two options to help them comply with the new standard: weigh the entire container after it has been packed or calculate the weight of the cargo and add it to the tare weight of the container stenciled on the side of the shipping box.
Many U.S. exporters, especially in the agriculture community, are upset that the new procedures add extra cost and complexity to a process they argue wasn’t broken in the first place.
Exporters already provide weight data to meet Customs and commercial requirements and opponents argue that in the United States overweight containers have rarely, if ever, presented a problem contributing to any kind of accident. Furthermore, they say that under a longstanding Occupational Safety and Health Administration rule, every outbound container received at marine terminals must be weighted at the terminal, or elsewhere, to obtain the actual gross weight before they can be hoisted by equipment. Many ports have scales at the truck gate and provide the weighing service for their carrier customers.
Liner industry officials note, however, that at least a quarter of rail cargo that arrives at on-dock rail facilities is not weighed.
Some have suggested that the IMO standard was changed to spread the best practice in the United States to other parts of the world. U.S. exporters question why they need to be subject to missed sailings and costly IT upgrades when the U.S. regulatory regime was already working.
The U.S. Coast Guard formally clarified its position in a recent safety bulletin that U.S. laws and regulations are equivalent to the new SOLAS requirements and that implementation is up to commercial parties to work out among themselves. The declaration prompted the ports of Charleston, Savannah and Virginia to announce they would accept containers without the VGM data, weigh them on port scales, and provide the information to both shippers and carriers for compliance purposes.
The news was welcome relief to Bishop and other shippers.
“I feel very strongly that any port that does not accept the container at the gate without a VGM is really doing a massive disservice to the entire export community because it’s going to back those gates up, it’s going to delay sailing,” Bishop said. “I congratulate the Virginia Port Authority for changing its position.”
STIHL has not decided what method it will use to comply with the SOLAS standard. It currently calculates the weight of its goods in its EDI system, but is contemplating whether to invest in pallet scales. Now, it may opt to rely on port weighing services instead of trying to take the measurements itself, Bishop said.
Having the option of using port scales is a good back up too for shippers that provide the verified container weight themselves, he added.
“We are likely to take advantage of those ports that are offering weighing services even if we are providing the VGM ourselves. Knowing that if a box shows up at a port and the port isn’t going to reject it is huge. If we calculate the VGM and we send it on to the carrier, and the carrier provides it to the port, great. But if there’s a breakdown in that communication, a port that is going to refuse that box is less likely to get our business.
“Whether we’ll divert freight, I don’t know. I certainly hope that’s not the case. It’s looking less and less likely, at least on the East Coast that we would need to do that because there seems to be some movement among the East Coast ports to take a little more customer-centric focus,” Bishop said.
On Wednesday, APM Terminals said it would provide VGM support services at 29 global facilities, but none on the list are in the United States.
Having the extra time to transmit certified weight information after a container arrives at a port is important, Curtis Struyk, president of Carolina Ocean Lines, the largest lumber NVO in the United States, said.
Carolina Ocean Lines has more than 250 customers of all sizes and receives shipment information at different times.
The company often enters dummy information to populate fields in the bill of lading and then goes back and revises it when the correct information becomes available.
“We’re not going to be able to do that with the VGM,” he said.
Bishop called for a national, or at least East Coast, port standard on how marine terminals plan to handle container weight verification.
“The port that is the most VGM friendly may see more business than what it had before. I don’t want my costs to go up, I don’t want my transit times to go up. But if I run the risk of that box arriving and not getting loaded on vessel, that is just not something I can live with,” Bishop declared. “So, I’d really like to encourage everyone in the industry to at least get one set of standards on the East Coast.”
Ashley Craig, a trade attorney with Venable LLP who has provided counsel to some freight consolidators and carriers, suggested port authorities and marine terminal operators might be able to achieve some sort of uniformity by going through the Federal Maritime Commission and seeking anti-trust immunity to discuss a common implementation plan.
He also offered some free legal advice to shippers and carriers.
Beneficial cargo owners and NVOs should make sure they are comfortable with what documents they are actually signing and determine who is going to be authorized to sign on the company’s behalf.
(Some shippers have categorically stated they won’t sign and take on the liability associated with the accuracy of the tare weight since they don’t own or control the equipment. OCEMA, a carrier group that sets joint intermodal best practices, on Thursday issued a formal tariff that would absolve customers from any liability for using the weight of the container provided by the carrier.)
Carriers need to update their terms and conditions so customers know how they plan to approach the VGM requirement and shippers need to carefully review those terms, Craig said.
And if carriers plan to install any surcharges for dealing with the extra data interchange, they must do so at least 30 days before July 1, as spelled out in the Shipping Act, he added.
NVO’s, especially consolidators, are caught in the middle and may not be able to give their customers full clarity of their policies until after July 1, he warned.
Consolidators, even though they are technically the shipper in relation to the steamship line, are likely to ask their customers to provide them weight data they can enter on their house bill of lading, to fulfill their responsibility as a non-vessel operating carrier.
