Jun 21

Container lines back using current weighing process to meet SOLAS

| Jun 20, 2016 2:57PM EDT  JOC.com

U.S. exporters finally achieved the carrier uniformity they were seeking on the SOLAS container weighing requirement when 19 major container serving the U.S. gave their support for the use of on-terminal scales to comply with the international rule that takes effect on July 1.

The Ocean Carrier Equipment Management Association, which represents 19 of the largest container lines in the U.S. trades, stated that it “strongly supports the use of on-terminal scales to obtain the verified gross mass of containers, as required by the Convention on Safety of Life at Sea.”

The OCEMA announcement is significant because it should allay the concerns of exporters that each line would attempt to impose its own requirements on customers for submitting a VGM. Furthermore, since U.S. ports and terminal operators for years have been using on-terminal truck scales to weigh containers in order to meet Occupational Safety and Health Administration safety requirements, exporters can feel comfortable in knowing that there will be no process changes or delays in the loading of their containerized shipments onto vessels.

“While this is expected to alleviate much of the confusion surrounding VGM and simplify the process for most stakeholders, there may be operational constraints that require different processes for determining and transmitting VGM,” OCEMA said in a statement. “In cases where the Terminal Weighing Approach is not feasible, OCEMA will continue to evaluate ways to achieve VGM compliance.”

Under the International Maritime Organization’s Safety of Life at Sea amendment, passed in May 2014, container lines are obliged to only load containers with a VGM onto a ship. The rule is aimed at cracking down on misdeclared container weights, which have contributed to maritime accidents.

Agricultural exporters meeting in Long Beach at the weekend, three days before the OCEMA terminal-weighing approach was announced, had expressed concerns about a lack of uniformity among the almost two-dozen major container lines in the U.S. trades.

Peter Friedmann, executive director of the Agriculture Transportation Coalition, said as recently as last week AgTCmember companies had been receiving disparate messages from individual carriers as to whether the use of terminal scales was acceptable, or whether the exporters had to sign off on the weights that had been provided by the ports or terminal operators to the shipping lines at the time of loading onto the vessel.

The South Carolina Ports Authority, which operates the marine terminals in Charleston, took the lead among port authorities back in February when Jim Newsome, president and chief executive officer, said Charleston would continue to weigh the combination truck-container units at its in-gates, as it had been doing for the past 25 years, and would provide the weight to the shipping line for use in calculating the VGM.

Newsome told the AgTC conference that exporters at the Port of Charleston will not have to sign each VGM separately. “We will file a tariff rule. The shipper using our port authorizes us to submit the VGM,” Newsome said.

Charleston is one of a half-dozen South Atlantic and Gulf Coast ports that have filed for permission from the Federal Maritime Commission to form a discussion agreement through which they will develop a uniform approach on the VGM requirements, further assuring exporters that processes will be uniform from port to port in the region.

The OCEMA announcement that carriers will accept on-terminal weighing as fulfilling the International Maritime Organization’s SOLAS requirement is important because the regulation specifically states that the shipper is responsible for assuring that the VGM is submitted to the ocean carrier. However, thanks to an “equivalency”declaration by the U.S. Coast Guard, which states that there are a variety of paths to comply with SOLAS, it became clear that a third party could submit the VGM on behalf of the exporter. The Coast Guard is the U.S. enforcement agency for the SOLAS regulation.

Ocean carrier executives realize that in their industry, where company headquarters are scattered throughout Asia and North America, mixed messages were being delivered to U.S. exporters. Richard Craig, CEO of MOL America, said that in the U.S. trades carriers were working with OCEMA on developing a common approach. The process took some time, but exporters should now be assured that carriers all support the OCEMA terminal weighing approach. “We’re in full agreement here,” Craig said.

George Goldman, president of Zim Integrated Shipping Services America, said the common approach of carriers on the terminal-weighing process should also relieve exporters of the fear that carriers would each go their own way on SOLAS in order to seek a competitive advantage. “It is not in our best interest, or yours, to go off on a competitive binge,” Goldman said.

Contact Bill Mongelluzzo at bill.mongelluzzo@ihs.com and follow him on Twitter: @billmongelluzzo.

Apr 30

SOLAS Alternative Weighing Methods Accepted by US

WASHINGTON — The U.S. Coast Guard Thursday gave its stamp of approval to two alternative methods for obtaining certified container weights to comply with new international regulations: one proposed by agricultural shippers and another proposed by the South Carolina Ports Authority.

The move paves an easier path for exporters, particularly agriculture shippers, but it’s not yet certain how container terminals and carriers will respond individually. The announcement from the USCG, the U.S. agency tasked with implementing the SOLAS amendment, comes just 62 days before the rule takes effect July 1.

“That statement may trigger some further consideration by terminal operators about their policies on providing SOLAS-compliant container weights using their existing scales,” John Butler, president and CEO of the World Shipping Council, said in a statement Friday.

In a letter sent to the International Maritime Organization, the USCG repeated its stance that there are multiple ways to meet the IMO’s new SOLAS rule mandating no container shall be allowed to board a vessel without an accompanying verified gross mass, or VGM. Shippers, carriers, terminals and maritime associations have outlined multiple acceptable methods for providing VGMs to carriers, the agency said in a statement Thursday.

“A couple examples are: (1) the terminal weighs the container, and when duly authorized, verifies the VGM on behalf of the shipper, and (2) the shipper and carrier reach agreement whereby the shipper verifies the weight of the cargo, dunnage and other securing material, and the container’s tare weight is provided and verified by the carrier.”

The first method is one that was originally floated by the SCPA. The authority announced in February that it would be willing to weigh containers on site in order to help shippers comply with the new IMO rule — making the Southeast port the first and only U.S. port to do so to date.

Under the plans that Jim Newsome, SCPA president and CEO, has drawn up and circulated to customers, the Port of Charleston would offer to weigh export containers with its weigh bridges currently used to comply with existing Occupational Health and Safety Administration rules. The cost to the shipper will be $25 per container.

Newsome has repeated on a number of occasions that the service is not significantly different from the operations and procedures already in place, due to OSHA regulations.

“This practice has occurred for over 20 years and represents what can legitimately be called a ‘best practice’ in the safe loading of vessels in the U.S.,” Newsome told JOC.com.

More controversial, however, is the second method that the USGC outlined in its statement Thursday.

That method, known as the “rational” method among certain shippers, has been a matter of some debate in recent months.

Under the so-called “rational” method proposed by the Agriculture Transportation Coalition, U.S. exporters would certify the weight of their cargo and packing materials, while container lines would certify the weight of the containers that they own, control and manage. The liners would then combine the two weights to create a VGM that is submitted to the terminal operator before loading.

AgTC has argued that the method takes into consideration that shippers cannot and should not be heldliable for the weight of the container itself, which they neither own, lease nor operate.

But the group and its proposed method have met pushback, from the likes of APL and the Ocean Carrier Equipment Management Association, which has explicitly said it will not accept VGMs obtained via the “rational” method.

In a handbook released just last week, APL said the IMO law does not allow the carrier to add the tare weight of the container to cargo weights provided by shippers to obtain a VGM.

The USCG’s statement Thursday does not have any effect on the guidance provided by either APL or OCEMA. The U.S. agency has said itself that the IMO regulation should be handled as a “business practice” instead of through regulatory enforcement.

That being so, individual carriers can stipulate in their business agreements with shippers that they will or will not accept a certain method. However, the USCG’s position simply states that carriers are allowed to permit any of the multiple acceptable methods for providing VGMs to carriers that have been proposed — so long as a VGM is provided using certified scales.

And the agency does say in its statement that all presently certified container-weighing equipment now in use in the states should allow U.S. exporters to comply with the SOLAS regulation.

“For the purposes of determining the VGM of a container, any equipment currently being used to comply with federal or state laws, including the Intermodal Safe Container Transportation Act and the container weight requirements … are acceptable for the purpose of complying with SOLAS,” the agency said.

It was this detail that the WSC said may spark future debate in the shipping industry.

WSC’s Butler said the announcement itself “is consistent with the Coast Guard’s prior statements and does not break any new ground. What is of interest is the Coast Guard’s statement that container weighing equipment being used today to meet other regulatory requirements is acceptable for SOLAS purposes.”

The council, which represents 90 percent of global container ship capacity and was a key player in the drafting of the SOLAS amendment, did not say how it felt the industry would respond.

AgTC Friday applauded the USCG’s announcement, saying in a statement that the news “frees individual ocean carriers to develop, in concert with their customers, means of compliance that make economic and operational sense for both.”

The group did point out that the agency’s statement does not require carriers to act independently in their own interests. “However, the AgTC strongly encourages them to do so, and remains available to facilitate such dialogue.”

Contact Reynolds Hutchins at reynolds.hutchins@ihs.com and follow him on Twitter: @Hutchins_JOC.