AS Report: Preparing for VGM

An American Shipper report released Tuesday found that nearly three-quarters of shippers and forwarders believe they will have containers held when the new verified gross mass mandate kicks in July 1.    Shippers and freight forwarders are unclear how to comply with a fast-approaching mandate to verify the weights of containers prior to loading on vessels, according to new research from American Shipper.
   A new report released Tuesday, “Weighing on an Industry: Shipper, NVO, and Carrier Perspectives on VGM,” found that nearly three-quarters of shippers and forwarders believe they will have containers held when the new mandate kicks in July 1. What’s more, the vast majority of shippers and forwarders don’t understand how to comply with the new rules, called verified gross mass (VGM).
   The rule, more commonly known as VGM, is an amendment to the International Maritime Organization’s existing Safety of Life at Sea convention, and requires that master shippers (the companies whose name appears on the bill of lading) verify the weights of their containers via one of two methods. Shippers can either physically weigh their cargo or they can total up the weights of their cargo, packaging, and dunnage and that to the tare weight of the container.
   American Shipper’s report represents the most comprehensive research to date on the subject, with perspective gathered from 521 shippers, carriers, forwarders, NVOs, 3PLs, consultants, port authorities and technology companies. Of those respondents, 45 percent were shippers; 36 percent were forwarders, NVOs, or logistics providers; and 13 percent were carriers.
   “With just weeks to go before shippers and NVOs must become VGM compliant, there’s still so much uncertainty in the industry,” said Eric Johnson, American Shipper research director and IT editor. “American Shipper has been chronicling this issue on a near daily basis for months, and yet still many shippers don’t seem to have a plan in place because it’s been so unclear how this rule would be administered and enforced from country to country.”
   The wording of the VGM amendment leaves it up to individual nations as to how to enforce the rule. The report found, interestingly, that most in the industry believe it shouldn’t be enforced uniformly through all countries, likely due to differing on-the-ground characteristics.
   Other findings in the report touch on which weight verification method shippers and NVOs are most likely to use, how shippers and NVOs will most likely transmit VGM data to carriers, and the biggest financial beneficiaries of the VGM mandate.
   As ports, terminal operators, and container terminals have attempted to clarify the process for collecting and transmitting VGM, technology providers and logistics companies have been developing solutions to help shippers and NVOs more effectively comply with the rule.