With the SOLAS Verified Gross Mass (VGM) rule officially in effect as of July 1, shippers around the world must comply with the new regulation or risk shipment delays and other setbacks. To help companies tackle the rule’s most technical details, Andrea Morreira, international logistics manager at Orchard Supply Hardware joined a panel of ocean shipping analysts for the recent Are you prepared for the SOLAS container weight rule?, Logistics Management webcast.
During her presentation, Morreira addressed these four technical questions that all impacted shippers should be thinking about:
1) How do we have to weigh our shipments?
Morreira kicked off her portion of the webcast by discussing the two different weight methods, which are:
Method One: Take a loaded container over a weighbridge, subtract the weight of the truck, chassis, and fuel to get the weight of the packed container.
Here’s the equation:
-Truck, Fuel, etc.
Method Two: Weigh each item – including its packaging, palleting, dunnage, and other packing and securing materials – that’s going into the box. Add that sum to the weight of the container to find the weight of the packed container.
Regardless of which method you choose, the scales used during the process must be certified and calibrated in line with the national standards of the country where the weighing occurred. “And method two is subject to national certification and approval,” Morreira noted. All shippers are required to provide a document to the shipping line and terminal (paper or electronic), that is signed by the shipper and that declares that the entity verified the weight and that it was weighed properly.
2) How do SOLAS regulations vary by country?
As an example of the country-by-country technicalities, Morreira highlighted the different approaches to VGM currently being used by China and Hong Kong. Here are a few of the key differences that she talked about:
- Shipping authorities will randomly check whether the shipment provides valid or certified VGM declaration
- Lists of authorized weighing organizations will be announced for the proper channels
- Shipping authorities will accept the VGM of a packed container with tolerance of +/-5% or one ton of the total gross weight – whichever is smaller
- The shipper shall submit the shipping document with VGM used in the ship stowage plan in advance to the terminal and shipping line by means of electronic data interchange (EDI) or electronic data processing (EDP) transmission, or paper copy
- VGM through Method One is done by the authorized weighing scales enlisted in the Maritime Department’s website
- A tolerance of +/-5% between the VGM declared by the shipper and the VGM obtained by the Maritime Department, carrier, or terminal is acceptable
“As you can see, the new regulations are country- and terminal-based,” said Morreira, who pointed out that tolerances can vary significantly by country. The terminals’ ability to weigh containers (using Method One) also varies greatly according to the specific ports. Where one port in China may have those full capabilities, another may not have them at the port itself and may instead refer the shipper to a third party (at the port of Hong Kong, for instance, the Marine Department is currently “working on a list” of these third-party options).
3) Who is enforcing the new SOLAS regulations?
The SOLAS amendment will be enforced by the Coast Guard or other agency responsible for SOLAS regulations in any given country and punishments for violations will vary by country, according to Morreira.
In the case of non-compliance, she said, “there are all kinds of possibilities for what could happen to the box that failed to provide the certified weight document, but none are settled (yet).”
For example, terminals may choose to hold a container or send it back. “Whatever happens,” she added, “the ship will leave and the container will not.”
The IMO announced a 90-day Grace Period on May 20, 2016, because the IMO recognized there remained confusion as well as unsettled concerns related to SOLAS. This Grace Period was to allow for stakeholders in the process to refine, document, communicate, and share the VGM information.
The 90-day Grace Period states that the data still needs to be submitted, otherwise the shipper may not get their containers loaded, although there is the grace periods as relates to the enforcement of the regulations.
4) What internal process changes do we need to make?
To shippers that are unsure about how to comply with the new SOLAS regulations, Morreira said the best approach is to use your existing resources, work with freight forwarders, and open the lines of communication about the changes and the requirements. “Educate your buyers on the amendments, and focus on process refinement,” said Morreira, who admitted that tracking the requirements across 171 nations could be a cumbersome process, particularly for shippers that are moving high volumes of freight around the world.
In wrapping up her presentation, Morreira said the shippers that take the time to understand the new regulations and train employees/buyers on the fine points of compliance will probably face the least number of challenges. “Select the appropriate weighing method that meets the VGM requirements and appoint an authorized person to sign the VGM declaration,” she advised. “Then, adjust your supply chain to meet the required VMG deadlines and submission cutoffs.”
This webcast was on Thursday, June 30 2016. You can view the recording on demand here.