The 19 ocean carrier members of the Ocean Carrier Equipment Management Association are collaborating with six U.S. ports to establish a harmonized container weighing process.
Shippers could be off the hook from providing certified container weights to carriers under a new harmonized process being worked out between ocean carriers and a half dozen U.S. ports.
The 19 ocean carrier members of the Ocean Carrier Equipment Management Association (OCEMA), in conjunction with six major East and Gulf coast port authorities, said Thursday they have established a plan to use port scales to provide the verified gross mass (VGM) of containers that shippers will be required to provide to carriers before their cargo is loaded on ships as of July 1.
The port authorities include the South Carolina Ports Authority, the Georgia Ports Authority, the North Carolina State Ports Authority, the Port of Houston Authority, the Port of Virginia and the Massachusetts Port Authority.
Marine terminals would weigh a container on certified terminal scales, pursuant to the equivalency declared by the U.S. Coast Guard. This weight could then be used to fulfill the U.S. exporter’s requirement to provide the container weight, if the exporter desires.
OCEMA administrator Stacey Normington said that details regarding exactly how the program would work at each terminal still need to be discussed and that the carriers and port authorities filed an agreement with the Federal Maritime Commission (FMC) Thursday so those discussions could take place.
In addition, OCEMA is initiating similar discussions with West Coast terminals through its agreement with them called the Pacific Ports Operational Improvement Agreement, Normington said.
John Cushing, the president of the PierPass affiliate of the West Coast Marine Terminal Operators Agreement (WCMTOA), said “At this time, the WCMTOA members are discussing internally how to address SOLAS. There are many considerations, including legal issues as well as how to ensure that any steps taken will not contribute towards creating congestion.”
OCEMA has also been and will be reaching out to other ports as well, Normington added.
The collaborative solution “is a bit of a game changer to make the process as common and streamlined as possible,” Normington said in an interview.
The International Maritime Organization’s amended Safety of Life at Sea (SOLAS) convention mandates the verification of container weight prior to shipping. The rule was implemented to eliminate mis-declared container weights, either because of inaccurate estimates or purposeful efforts to lower shipping costs. The maritime industry insists that overweight containers pose a safety hazard at sea because ship masters endeavor to evenly balance cargo weight to maintain vessel stability and structural integrity. Industry officials say overweight containers have been contributing factors in several accidents and can also endanger dockworkers during vessel loading.
Experts believe that 20 percent of containers at any given time are mis-declared, and that upwards of two-thirds of all cargo claims may be attributed to mis-declaration and poor container packing, according to a fact sheet published by law firm Cox Wooton Lerner Griffin & Hansen.
Under the IMO rule, which the United States has adopted as a signatory to SOLAS, the shipper bears ultimate responsibility for weight verification. The rule says the shipper must communicate the verified weight to the carrier in advance and that the carrier must not load the container – unless the carrier or terminal can obtain the verified weight through other means.
Shippers can obtain the weight by weighing the fully loaded container on a large scale (Method 1) or by summing the tare weight of the empty container, the packing materials and the cargo contents (Method 2). Some shippers have vehemently objected to carrier insistence that they provide the tare weight of the container, saying they shouldn’t be held accountable for attesting to the weight of equipment they don’t own or control. And some U.S. exporters say they are being tagged with an extra administrative cost when U.S. rules already exist for weighing of outbound loads at ports.
The U.S. Coast Guard recently approved the use of port scales under the existing regulatory regime for purposes of compliance with SOLAS, opening the door for carriers to receive the data through other means.
The South Carolina, Virginia and Georgia port authorities immediately said they would accept containers without the VGM and weigh them on port scales, as is currently done to meet U.S. regulations. But confusion remained as to whether the data would have to be funneled to the shipper to give to the carrier through an EDI transmission.
That seems less likely, now, according to Normington and the port authorities.
“I think the concept is to transmit directly to the vessel operator, but the details are forthcoming,” she said.
The South Carolina Ports Authority this week withdrew a proposal to charge a $25 fee to provide the VGM to exporters, upon request. Officials say the extra step is unnecessary now and measurements will be transmitted directly to carriers.
At the Virginia Maritime Association’s annual conference in Norfolk, Va., last week, R. Murray Bishop, STIHL Inc.’s export and logistics manager, urged ports to come together on a national, or at least East Coast, standard for how marine terminals handle container weight verification.
Ashley Craig, a trade attorney with Venable LLP who has provided counsel to some freight consolidators and carriers, suggested port authorities and marine terminal operators might be able to achieve some sort of uniformity by going through the FMC and seeking anti-trust immunity to discuss a common implementation plan.
“OCEMA’s members greatly appreciate the leadership shown by the six operating ports that are joining with us in this agreement. With the issuance of the U.S. Coast Guard’s recent Maritime Safety Information Bulletin’s equivalency provisions, this represents an unprecedented effort by major ports and carriers to develop a common VGM framework that will simplify procedures for shippers, carriers, and terminals and promote terminal fluidity,” said Frank Grossi, chairman of OCEMA and executive vice president, COSCO Container Lines America, Inc.
Meanwhile, the Global Shippers Forum (GSF) said that implementation of new container weight verification rules was discussed at this week’s meeting of the International Maritime Organization (IMO).
GSF, whose members include the National Industrial Transportation League in the U.S., said as the July 1 deadline approaches for the implementation of the new rules, international companies are finding it challenging to establish the requirements for providing the VGM for containers.
“Some countries are using slightly different approaches,” said GSF, which urged members of the IMO to use international standards as far as possible for their “Method 2” audit authorization process, such as ISO 9001 or similar quality management standards. GSF said this will enable businesses to produce accurate container weight information with minimal impact on trade.
In the longer term, GSF encouraged member states to consider mutual recognition of each other’s “Method 2” authorization, similar in principle to bilateral arrangements between countries on customs issues.
In a related development, the ocean shipping portal INTTRA said it will provide a means for Germany’s Hamburg Süd to receive VGM submissions from shippers. Hamburg Süd was a founding member of INTTRA’s eVGM Initiative, and Paul Wenger, global head of customer order management at the carrier said “INTTRA eVGM Service allows an easy integration for carriers, helping to minimize disruption.” INTTRA announced a similar deal with MSC in March.
OCEMA collaborates with six ports on VGM
