Global Shippers’ Forum complains of ‘unjustified VGM charges’

Meanwhile, the Agriculture Transportation Coalition is asking the Federal Maritime Commission to step forward and discourage carriers and terminals from imposing fees for verified gross mass compliance in the United States.    The Global Shippers’ Forum (GSF) said some carriers and other service providers to the shipping industry appear to be exploiting the introduction of the International Maritime Organization’s (IMO) new verified gross mass (VGM) rule in which shippers must provide the weight of the container prior to being loaded onto the vessel.
   The shipper advocacy group said some of the carriers and service providers are imposing exorbitant and unjustified charges for questionable and unspecified ‘administration fees’ and other ‘services.’”
   GSF said the charges are being imposed mainly in Asia and Africa and called for them to be withdrawn immediately.
   Meanwhile, the Agricultre Transportation Coalition (AgTC) is also asking the Federal Maritime Commission to step forward and discourage carriers and terminals from imposing fees for VGM compliance in the United States.
   GSF gave these examples of fees:

     • Global forwarding company Kuehne + Nagel (K+N) is charging a VGM administration fee for all K+N shipments booked in China – specifically $12.75 for full containers if shippers are using the company’s electronic VGM system, or $25 for manual data entry;
     • Logistics and shipping firm Grimaldi Agency Nigeria has notified customers in Nigeria it will weigh containers on departure at a cost of 20,000 Nigerian Naira (U.S. $70.73) per TEU  and N40,000 per FEU;
     • Shipping lines in Sri Lanka are considering charging shippers $25 for submitting the VGM, and, in cases where the final weight differs from the booked weight, an additional charge of $50 for amending the VGM;
     • DP World is imposing a 1.00 euro charge (U.S. $1.33) in the U.K. and Ireland for VGMs provided prior to arrival, rising to 3.00 euros after box arrival but before the 24-hour cut off.
   “Shippers worldwide support the safety goals of the container weighing requirements and are committed to fulfilling their regulatory requirements, but this should not be used by supply chain partners as an excuse to impose unjustified fees,” GSF Secretary General Chris Welsh said.
   “This is particularly concerning for developing countries, especially in Africa and Oceania, which according to the United Nations Conference on Trade and Development, pays 40-70 percent more on average for the international transport of their imports than developed countries,” he said, citing the 2015 UNCTAD Maritime Report.
   GSF said it was pleased to note “flexible and equivalent weighing and reporting methodologies that have emerged in recent weeks” and said it expected “the overwhelming majority of VGM service providers will act ethically and will only charge for actual third party services provided to the shipper at reasonable prices that reflect the cost of providing those services.”
   In New York, terminals belonging to the New York Terminal Conference (NYTC) posted a schedule of rates, noting they may charge a $10 fee for transmitting container weights, but Bethann Rooney, assistant director of the port department of the Port Authority of New York and New Jersey, said she thought these were “placeholders” and that it was unlikely that the terminals would actually impose the charge.
   Peter Friedmann, the executive director of the AgTC, said that in the U.S., “The tide has turned, after 8 months of intensive effort by the AgTC and the US exporters of agriculture and forest products, reason is prevailing. The shipper will NOT have to calculate and provide the carrier with a VGM.”
   He lauded the suggestion first proffered by Jim Newsome, the executive director of the South Carolina Ports Authority, that the existing scales at U.S. terminals be used to calculate VGMs, an approach allowed when the Coast Guard issued a declaration of equivalency. The AgTC named Newsome its “Person of the Year” at its annual meeting last year.
   “Virtually all carriers have issued formal announcements that for containers arriving by truck in-gate moves, they will accept terminal’s container weights as VGM,” Friedmann said. “The means that shippers will not have to provide the VGM, the AgTC’s longstanding objective we have been working so hard to achieve. This is something carrier organizations swore was impossible only a couple months ago. Maersk has helpfully published a list of terminals at which it calls, that have agreed to weigh each container and provide the VGM to it.”
   He said an increasing number of carriers are offering a “workable solution” for containers arriving by rail at their terminal. He said Hyundai Merchant Marine, “K” Line, MOL and Maersk have all done so “and we expect more, are following. Together, these approaches will prevent the port disruption that was predicted by maritime analysts earlier this year.”
   Friedmann said “major NVO’s which had as recently as last week been informing exporters as to their fee schedule for submitting VGM to carriers, are revoking those alerts and saying they will not charge – because the shipper will not have to provide the VGM to the carrier.”
   “Hard to believe, but some carriers and some terminals are threatening to impose fees for each container they weigh and VGM they convey,” said Friedmann.
    “This SOLAS container scheme was concocted by carriers, shippers didn’t want it, USCG said it was unnecessary, and now they want to profit by imposing a fee!?” Friedmann said. However, the Coast Guard on its website describes itself as “America’s voice in the IMO.”
   “This feels like the carriers’ discussions of a congestion surcharge during the height of the West Coast port meltdown three years ago, to which the FMC responded informally but forcefully to protect the US importers and exporters from such an ill-conceived and inappropriate concept,” said Friedmann. “The AgTC is now asking the FMC to step forward, as it did so effectively 3 years ago, to discourage carriers and terminals from imposing fees for VGM compliance.”