NCBFAA: Don’t let terminals, carriers pass VGM costs to shippers

In a letter to the Federal Maritime Commission, the National Customs Brokers and Forwarders Association of America urged acceptance of an agreement between carriers and six U.S. ports, but noted that shippers shouldn’t bear the cost of the regulation.    The National Customs Brokers and Forwarders Association (NCBFAA) is urging the Federal Maritime Commission (FMC) to ensure that costs associated with compliance of a forthcoming rule requiring that container weights be verified prior to vessel loading not be passed on to U.S. exporters or logistics providers acting as shippers.
   The rule, called verified gross mass (VGM), is an amendment to the International Maritime Organization’s existing Safety of Life at Sea (SOLAS) convention. The application of the amendment, due to go into force July 1, has been a source of controversy in recent months, as shippers and logistics companies grapple with the costs and potential disruptions associated with compliance.
   In a letter to the FMC sent late Wednesday, NCBFAA General Counsel Edward Greenberg urged the commission to accept an agreement between the Ocean Carrier Equipment Management Association (OCEMA) and six major East and Gulf coast ports to establish a process for transmitting VGM data to the carriers prior to loading export cargo from the United States.
   OCEMA represents 19 carriers in North America.
   Under the proposed agreement, “marine terminals would weigh a container on certified terminal scales and that weight could then be used to fulfill the VGM requirement and develop the necessary stow plans without requiring any additional certifications from shippers,” the letter notes.
   This approach makes marine terminals responsible for a container’s certified tare weight and “would alleviate shippers’ concern relating to certifying information pertinent to the equipment they do not own, avoid the need for exporters and (non-vessel-operating common carriers) to perform redundant weighing procedures and, hopefully, eliminate the need for those parties to pay additional costs that may otherwise be associated with literal adherence to the VGM guidelines.”
   The letter said its support for the OCEMA agreement with certain ports shouldn’t be interpreted “as giving its imprimatur to the controversial VGM Guidelines or any conclusion that the carriers’ insistence on literal compliance is consistent with or lawful under the Shipping Act.”
   Greenberg wrote that NCBFAA still believes the VGM amendment is not enforceable as carriers argue it is based on the U.S. Coast Guard’s determination that existing U.S. laws are equivalent to the VGM guidelines. Carriers have consistently said they will not allow containers to be loaded without the VGM data. OCEMA subsequently said cut-off times for VGM submissions would be established at the time of booking.
   “Until now, the vessel operating carriers, both individually and through the World Shipping Council have publicly taken the position that 100 percent literal compliance with the VGM Guidelines is mandated by applicable U.S. law,” Greenberg wrote. “Yet, the VGM Guidelines are a part of SOLAS, which is a non-self-executing treaty, and as such is unenforceable in the United States unless regulations adopting the requirements are promulgated by the U.S. Coast Guard.”
   “The U.S. Coast Guard has consistently refused to promulgate these regulations and instead insisted that there was no obligation for shippers to change their practices with the respect to the reporting of the weight of their cargo because the existing regulatory regime already imposes requirements equivalent to VGM.”
   Greenberg added that the NCBFAA considers the VGM amendment to not be a part of domestic U.S. law, and ‘the carriers’ assertion to the contrary appear to be excessive, and unreasonable, and potentially contravene several sections of the Shipping Act of 1984.”
   He also urged the FMC to make clear that any authority under the OCEMA agreement with the Gulf and East Coast ports does not grant carriers, ports or marine terminal operators the right to collectively establish charges for weighing containers or transmitting VGM data that could be passed on to shippers or NVOs in their capacity as shippers.