Commentary: T-minus 100 days until VGM

Some issues surrounding the pending International Maritime Organization container weight verification rule have become clearer, but so much remains opaque with 100 days and counting until enforcement begins officially.    We’re either a 100 days away from container shipping Armageddon or from the next Y2K because today marks 100 days until the verified gross mass rule comes into effect worldwide on July 1.
   The verified gross mass (VGM) rule, an amendment to the International Maritime Organization’s century-old Safety of Life at Sea (SOLAS) convention, requires shippers to verify the weight of their containers and send data related to that verification to carriers before dropping them at the port of departure. Containers without a VGM will be denied loading.
    As an industry, we know more about VGM than we did a month ago, which is good. For instance, it is becoming clear that carriers want to receive the VGM data from shippers electronically, and somewhat clearer when the VGM will have to be submitted (cutoffs for submission will be set during booking confirmation).
   But there are so many outstanding issues, not the least of which is how and where containers will be physically weighed.
   Some shippers have said they will install scales at their own facilities to manage the process. Others will rely on third-party weigh stations, while many more will rely on the calculation method, where the total weight of all cargo and packing is combined with the tare weight of the container itself.
   In a survey of 233 shippers over the past five weeks, American Shipper has found that more than 68 percent don’t understand how to comply with the VGM weight verification rule.
   Around 45 percent believe the best way to verify container weights is using the calculation method. Nineteen percent feel containers will be physically weighed at either shippers’ or forwarders’ facilities, 18 percent at container terminals, and 17 percent at third party weigh stations.
   More than two-thirds of respondents said they believe they will have boxes held on July 1.
   Aside from all the points that have been brought up previously, here are the lingering questions as I see them:
   1. The U.S. Coast Guard has said it won’t enforce the VGM rule because it has no jurisdiction over shippers. Yet carriers have said clearly they will not allow a container to be loaded with the VGM. There is also little clarity about what constitutes a certified weigher.
   So, in light of all that, what good is a verified container weight if the party verifying that weight is not being regulated or audited? Or to put it more simply, who audits the auditor?
   2. To what extent will shippers be liable for boxes whose weight is inaccurate on the VGM if the ship that container is on has an accident? If the VGM is intended to verify the weight, and the carrier accepts that VGM, what does that mean from a shipper liability standpoint?
   Multiple shippers have voiced concern that this regulation has been driven by a desire to shift the burden of liability further toward the shipper. And some might say that’s correct, since the shipper ought to have been responsible for reporting the accurate weight of the container even prior to the new VGM rule.
   3. How will shippers manage all the disparate processes at origin?
   All the hand-wringing about the U.S. Coast Guard’s decision to let VGM in the United States be a commercial matter between shippers and carriers obscures the fact that the VGM rule allows each nation to enforce the rule as they see fit. This is extremely troubling to multinational shippers, as it essentially requires them to develop unique processes with suppliers and forwarders at each origin point. If things get really complicated, it’s not hard to envision different processes being required at different ports or terminals within the same origin country. And with a few notable exceptions, clarity on VGM enforcement has been noticeably lacking out of some of the biggest cargo origin ports in the world.
   The bottom line is that carriers are moving forward under the assumption that a container won’t be loaded without a VGM, or if that VGM is not submitted prior to the stipulated cutoff. Given that reality, shippers and their service providers better be aiming to have their processes ready by July 1.
   So the mantra should be “hope for Y2K, but plan for Armageddon.”