On July 1, the International Maritime Organization's Safety of Life at Sea (SOLAS) Container Weight Verification rule will take effect, requiring that shippers verify gross container weight -- the combined weight of the cargo and the container -- prior to shipping. There is still no clear picture for many shippers as to the "how, who or where" mechanics of this new rule. If shippers don't comply or are unable to comply fully, their containers will likely be prevented from loading aboard a ship. It could be a mess at ALL container ports on July 1 in places where there is still confusion.
The Ag Transportation Coalition posted this statement on their website, which sums up the confusion and problems facing shippers due to the SOLAS rule: "Currently, the shipper is responsible to accurately report the weight of its cargo, but does not own, control, or maintain containers. This rule was never submitted to Congress, reviewed or approved by a federal agency, nor published in the Federal Register. There has been no input from the shipping community. Now shippers, steamship lines, terminal operators, and governments are scrambling to create best practices and implementation guidance for this new rule. Unless thoughtfully considered by individuals with intimate familiarity with the export supply chain process, this rule will create major turmoil at the marine terminals and a very significant impediment to U.S. exports."
Midwest Shippers Association (MSA) Executive Director Bruce Abbe told me that the Port of Charleston, South Carolina, "kind of led the way in deciding they would offer to do the weighing for containers coming in, since they do a version of this anyway. At first they were going to charge a fee (something we all were concerned might occur everywhere)... but it was pretty nominal what they were talking about, if at all. So Charleston has been a bit of the hero port in this so far."
On May 5, South Carolina Ports Authority (SCPA) posted a press release on its website stating, "Last week, the U.S. Coast Guard announced its approval for U.S. ports to verify the weight of containers on behalf of the shipper to comply with the Safety of Life at Sea (SOLAS) regulations, and will provide this weight to the shipper or exporter."
"It has been our position all along that we have employed a best practice in safely loading ships in our port for the last 20 years due to our weighing of all export containers," said Jim Newsome, SCPA president and CEO. "We applaud the Coast Guard for recognizing this in its recent Declaration of Equivalency to the International Maritime Organization on the SOLAS regulations.
"For many years, SCPA has weighed every export container received at its terminals on calibrated scales consistent with requirements in OSHA regulation 1918.95 (b)(3). SCPA will assist its export shipper customers and the container shipping lines in complying with their obligations under the SOLAS regulations regarding verified gross mass (VGM) of containers effective July 1, 2016."
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Abbe said: "There has been movement on the issue of ... if terminals will let containers onto their property without a VGM files, or turn them away. Gradually more of them... Norfolk soon, then others, have said they now will allow them in. Short period of time until they have to have the VGM (I see this as an initial policy to deal with potential initial congestion issues.) I can't say if they will offer a service to weigh them, or if there will be a charge, or what time length they'll allow until detention fees kick in, etc. But gradually more ports/terminals are stepping up with things like this. There has been some announcements and changes later by carriers, ports, etc., so it's tough to track."
American President Lines Ltd (APL), one of the world's leading ocean carriers, has a dedicated SOLAS web page on their company website which includes tracking and updating which ports and terminals are doing what as far as these acceptance policies. http://goo.gl/…
IMPACT ON GRAIN INDUSTRY
Abbe said that since nearly all grain exporters have certified scales at facilities they use, they should supply it themselves and not pay for the port/terminal to do it. "Avoid ports/terminals that have unnecessary costly policies to do this, or potential penalties. And be aware of which ports/terminals are doing what," Abbe said.
"For many grain, soy and DDGS export container shippers, it ought to be relatively easy to submit a 'verified' cargo weight because ag/grain elevators and facilities use a certified weighing scale, already," said Abbe. "Identity-preserved (IP) soybean exporters like many MSA members that load bags or super sack totes also know the weight of their cargo now. When they load them at their plant, they're sure of what they load."
Rail shippers of bulk grain, DDGS, and soy exporters to the coast where product is transloaded into containers will likely face some added challenges.
"The actual container is loaded by someone else, a logistics service provider," Abbe said. "So, since the shippers are to be held responsible -- but someone else is loading it -- I see a likely need for some amended language in service contracts to clarify these matters."
Grain and other ag products shipped by containers often will see small weight changes for moisture that can develop while in route when going through rain, humid or dry conditions. Abbe told me, "I've seen no word on any standard margin of error or flexibility on weight differences from a posted VGM to allow for things like moisture or minor changes in weight while in transit from the shipper to the terminal. Most other countries have them. It's something we need."
Lastly, Abbe said his message to shippers is to "keep track of everything filed per each container and be in close contact and on the same page as their forwarders, and any transloaders if they use them on executing this."
On Thursday, June 16, Federal Maritime Commission Mario Cordero released a firm statement saying: "The time has come for ocean carriers to embrace the obvious solution to achieving compliance that Marine Terminal Operators can offer. Specifically, Cordero asserted the weight of export containers, as determined by terminal operators, can and should be classified as the Verified Gross Mass (VGM) of the container." Here is the link to the entire statement: http://goo.gl/…
For anyone interested or affected by SOLAS, here is link to register for a webcast sponsored by Logistics Management On June 30, 2016, at 2 p.m. EDT: https://goo.gl/…
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