American Shipper

Commentary: It’s time to pull together on VGM

Strong language is often needed to advocate for a position, but now that progress is being made on container weight verification, people should choose their words more carefully.

   Two weeks ago, Agriculture Transportation Coalition (AgTC) Executive Director Peter Friedmann addressed the Virginia Maritime Association’s annual conference in Norfolk and torched the trade associations representing international ocean liners for their perceived inflexibility with regard to new data collection requirements aimed at preventing tendering of overweight containers that many believe puts vessels and maritime workers at risk.
   The AgTC has been the most aggressive opponent in the United States of the International Maritime Organization’s update to its Safety of Life at Sea (SOLAS) convention. The onus is on shippers to provide the weight of the entire loaded container and certify its accuracy. Agriculture exporters have two primary beefs with the new rule that becomes effective July 1: shippers using the calculation method shouldn’t be responsible for the accuracy of the empty container’s tare weight – or even having to mess with submitting this data – since the carrier should know the weight of its own equipment; and second, carriers only offered shippers two ways to comply when the rule allows other methods that achieve the same goal.
   Friedmann excoriated ocean carriers for acting like lemmings and going along with an implementation scheme that he says will add huge costs in the form of administration, information technology and cargo delays for both shippers and carriers. Vessel operators in the midst of existential financial troubles shouldn’t be adding cost and complexity to the supply chain that could cost them business, he argued.
   And, he said, the implementation scheme is the brainchild of the World Shipping Council and the Ocean Carrier Equipment Management Association (OCEMA), which are run by lawyers who are clueless about the operational realities of modern supply chains.
   The AgTC has characterized the carrier groups in similar terms before, saying officials aren’t familiar with how cargo actually moves in the field.
   However, Friedmann’s diatribe comes across as unnecessary and counterproductive.
   First of all, cooler heads should prevail when so much collaboration and negotiation is required among stakeholders to figure out the best way to capture and transmit the verified gross mass to carriers and terminals. The U.S. Coast Guard has basically washed its hands of the matter and said industry parties have to come up with acceptable methods for compliance.
   Following a congressional hearing on maritime matters in mid-April, World Shipping Council President John Butler and Donna Lemm, vice president of global sales for AgTC member Mallory Alexander International Logistics, were overhead agreeing on the need to tone down the rhetoric on both sides and get carriers and customers to sit down and work out process and IT details necessary to exchange container weight data.
   Second, the momentum on the VGM controversy has turned in the AgTC’s favor in the past several weeks. Friedmann and his team have been effective behind closed doors in pushing the Coast Guard to issue a declaration of equivalency between the existing U.S. regulatory regime for weighing outbound containers at ports and SOLAS, which, in turn, led several port authorities to say they would provide the VGM service on behalf of shippers. After the VMA conference, OCEMA said it would work with a half dozen ports to develop a harmonized system for gathering the data. The AgTC has also kept the pressure on the Coast Guard and the liner industry by taking its complaints to Congress, leading to hearings on VGM and a Senate panel’s request for a briefing on the matter from the Federal Maritime Commission.
   OCEMA also said carriers would issue tariff rules indemnifying shippers from liability for any inaccuracy in the official tare weight listed on the container or provided by the vessel operator.
   Putting together a standard system applicable to all ports remains a challenge. There are still many details to work out.
   In a speech Wednesday to the Long Beach Chamber of Commerce, Butler suggested that reason should prevail over emotion in policy debates. He was speaking in general about industry change, without specifically pointing to SOLAS.
   “It has always been the case that times of rapid change can cause both private sector players and government regulators to question what they know,” Butler said. “Some of that questioning is productive. But that questioning ceases to be productive if it results in changes to the rules of the game that are driven by a fear of the unknown or that are driven by listening to those who talk the loudest, rather than being driven by well-considered legal and policy objectives.”
   The bottom line is that shippers now have a path available where they don’t have to directly submit any container weight data to the carriers, if that’s the option they choose.
   With progress already being made, perhaps it’s time to remember that one often gains more by using honey than vinegar.