The International Maritime Organization’s new verified gross mass requirement puts a new spin on the shipper-carrier relationship, according to Virginia Thompson, VP of Product Management Global Trade Solutions at Integration Point.
In May of 2014, the International Maritime Organization’s Maritime Safety Committee (MSC) approved changes to the Safety of Life at Sea (SOLAS) treaty to require shippers to verify gross mass of a container carrying cargo. This new requirement goes into effect July 1, 2016, and it is currently sending waves of distress through the carrier, port and trade communities.
There are two main parties affected by this SOLAS update – the responsibility of obtaining and documenting the Verified Gross Mass (VGM) of a packed container lies with the carrier, however, it is the shipper that must initially supply that information to the carrier. As such, this puts a new spin on the relationship between the shipper and the carrier. Since the information must be provided in advance of vessel loading, the obligation and hence the responsibility, indirectly shifts to the shipper. The issues come down to – how does the shipper weigh the container and what happens if cargo arrives at the terminal with no VGM? Who is responsible then for the VGM?
While the carriers and terminals work to get this figured out, here are a few tips that shippers can use to keep their cargo moving once the new SOLAS requirement goes into effect.
1. Stay abreast of the changes. Some industry analysts have predicted that SOLAS will harm international trade by slowing down cargo ships in the ports while each country figures out how to enforce the new requirements. Make sure your cargo doesn’t get caught in the fray by staying up-to-date on how SOLAS will be enforced in countries where you have ocean cargo departing or arriving.
2. Consider how you could determine Verified Gross Mass (VGM). There are two approved methods explained in the SOLAS regulation – decide which you will use. You may need to assess if you have a trailer scale at each of your facilities that ships ocean freight. If not, is there one en route from your facility to your port of shipment that could be used?
3. Allow time for the process to be completed. In other words, allow enough time from when the weight is known to vessel loading to get the information on your shipping documents and passed on to the carrier or forwarder. Consider if you will add the declaration to current documents or create a new VGM Declaration. Will your process need to vary based on carrier, forwarder or customer you ship to – if so, do you have each process documented?
4. Make it clear in all negotiations with customers – who is responsible for any costs incurred in obtaining VGM – seller, buyer or carrier? And how may that vary based on shipment type (LCL vs. FCL)? This will be a crucial part of any ocean cargo as SOLAS does not outline enforcement and there is concern that the different member-states (170 total) could shift the responsibility of verification directly to the shipper. Also, some terminals are offering services to weigh containers if they arrive with no VGM, and costs could be incurred there.
5. Don’t forget about your imports! Especially for those importers who buy goods FOB or EXW, you will want to communicate with your carriers/forwarders to get clarity on what their approach will be in each region, so that you can inform your shippers accordingly and ensure that your supply chain is not interrupted after July 1.
Commentary: 5 tips to make sure you don’t get lost at sea with SOLAS
