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  May 23rd, 2016 | Written by

Confusion Reigns Over New Container Weighing Rule

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  • Many shippers and forwarders still do not know how to comply with new SOLAS VGM rule.
  • The U.S. Coast Guard recently said that existing US VGM laws were equivalent to the SOLAS requirements.
  • Drewry survey: 55 percent of shippers expect container shipment delays as a result of the VGM rule.

With five weeks to go before new regulation comes into effect mandating container weighing, there is still much confusion over how shippers will be able to comply, a new Drewry report concludes.

Mandatory amendments to the International Convention for the Safety of Life at Sea (SOLAS) effective July 1 require shippers—and forwarders as well if they are named as the shipper on the bill of lading—to verify and provide containers’ verified gross mass (VGM) to the ocean carrier and port terminal prior to it being loaded onto a ship.

But Drewry found that as the countdown continues “it is clear that many shippers and forwarders still do not know how to comply. Better information on compliance requirements and options is starting to be communicated but there is still a lack of standardization and coordination.”

Complicating matters is a recent U.S. Coast Guard pronouncement that existing U.S. laws for providing the gross verified mass of containers were equivalent to the requirements in the amendments to SOLAS. In a letter to the IMO the USCG declared that the “current regulatory regime provides for other entities within the container export chain to work in combination with the shipper” and that the “equivalency acknowledges the dynamic and flexible business relationship between the entities in the export chain, and it provides flexibility for these entities to reach arrangements in order to ensure compliance.”

But, as Drewry noted, it’s unclear if methods acceptable to the Coast Guard for providing VGM differs from the rule as promulgated by the IMO.

In the Drewry survey, virtually all respondents were aware of the new container weighing rules, but 45 percent of shippers said that their service providers haven’t shared enough information on the new VGM rules. Over half the shippers, 55 percent, expect some delays to container shipments as a direct result of the VGM rule implementation in July. The proportion of forwarders and ocean carriers expecting delays was even higher.

Survey respondents in Asia were most likely to anticipate delays, followed closely by North America, Africa, Latin America and Europe.

Eighty percent of shippers said that they will not shift any of their usual ocean volume to air cargo, while 17 percent said that will shift no more than 20 percent of their cargo to the sky.

Seventeen percent of shippers said they will build safety stocks to mitigate the supply risks caused by the container weighing rule, “which implies,” according to Drewry, “that while delays are generally expected they are not thought to be sufficient to cause stockouts.”

“It is clear that not all shippers will be ready to comply with the new IMO rule,” Drewry concluded. “We urge any shipper or forwarder to talk to their carriers as a matter of urgency to clarify and finalize their compliance processes and to plan for likely port and logistics delays” beginning July 1.