If you are an exporter, you are probably aware of the coming new requirements around reporting container weight information to carriers. Beginning July 1, 2016, all shipping containers must be accompanied by a shipping document that lists the verified gross mass (VGM) of the container before it can be loaded onto a containership.
What is less clear are the details on how to best comply and execute these new requirements. Recent statements from the US Coast Guard and others indicate that there are no specific detailed guidelines, and that compliance procedures will be up to the parties involved. This means that exporters must work closely with carriers and terminals to ensure costs and delays are avoided after the rules are in place.
The key parties involved in the new requirements are:
– Shipper (The cargo owner, exporter, NVO, freight forwarder or agent that is making arrangements to stuff and/or transport the container.)
– Ocean Carrier/Vessel Operator (The steamship line with which the Shipper is contracting to transport the container.)
– Marine Terminal Operator (The operator of the facility where the container will be loaded aboard the vessel.)
Now is a good time to review the requirements, and have a plan in place for compliance.
What are the Export Reporting Requirements?
The International Maritime Organization (IMO) has issued some guidelines to help shippers better understand the requirements. Here is an excerpt from that document:
“To ensure the safety of the ship, the safety of workers both aboard ships and ashore, the safety of cargo and overall safety at sea, the International Convention for the Safety of Life at Sea (SOLAS), as amended, requires in chapter VI, part A, regulation 2 that packed containers’ gross mass are verified prior to stowage aboard ship. The shipper is responsible for the verification of the gross mass of a container carrying cargo (hereinafter “a packed container”). The shipper is also responsible for ensuring that the verified gross mass is communicated in the shipping documents sufficiently in advance to be used by the ship’s master or his representative and the terminal representative in the preparation of the ship stowage plan. In the absence of the shipper providing the verified gross mass of the packed container, the container should not be loaded on to the ship unless the master or his representative and the terminal representative have obtained the verified gross mass through other means.”
- The shipper must verify the gross mass (VGM) of each container
- The container gross mass must be stated in a “shipping document”, (electronic or physical) signed by the shipper (or shippers representative).
- The VGM weight cannot be estimated, and must be obtained by using one of two Methods:
Method 1 – weigh the loaded container using equipment that is calibrated and certified per local requirements at point of weighing
Method 2 – weigh goods and packing/dunnage, and add to tare weight of the container (printed on the container’s door)
If the VGM is not reported to the carrier, the carrier is not allowed to load the container.
Weighing equipment that is used to determine the VGM must be certified and calibrated according to local requirements.
Why are the Export Reporting Requirements Changing Now?
The requirement for shippers to provide the gross mass of cargo units loaded on board ships has been in place since the beginning of SOLAS in the 1970’s. These provisions have recently been updated by the IMO introducing amendments which require the shippers to verify the gross mass of the packed container.
Several serious containership accidents over the years has shown that the incorrect reporting of container weight is a key safety issue. With bigger and bigger container ships, and increasing volumes of cross border trade, the impact of this risk also grows.
And as trade volumes increase, the importance of integration and harmonization of supply chain data also increases. Exporters with integrated ERP and Supply Chain systems are in a much better position to reduce the cost associated with meeting changing information requirements.
Options to Consider for the Requirement Changes
The key components and challenges of the new requirements are the physical collection of the container weight, and the transfer of this data to the carrier. As a shipper here are some of the key considerations to evaluate to meet the requirements:
- Consider what method (1 or 2) for collecting the weight data is best for each one of your shipping locations. In some countries, method 2 may require an approval process by a certification authority.
- Work now to identify bottlenecks and potential time delays between your door and the CY terminal. If you are planning to utilize services of a 3rd party weighing service, understand that these locations will be in increased demand by other exporters as well. And don’t assume the container can be weighed at the port/terminal. Some ports do not offer this service, and most others don’t have enough equipment to handle the expected demand.
- If you already have weighing equipment (such as a weighbridge) in place, determine how this could be used to meet the weighing requirements.
- Determine the best way to communicate the VGM information to the carrier. Electronic submission of VGM is preferred and will expedite transmission of data and the booking process. The main communication methods are:
- EDI message (Edifact VERMAS, or ANSI 304 shipping instruction message)
- Portal Service (INTTRA, Nexus, CargoSmart, or others)
- Using the Ocean Carrier’s web portal specifically designed to accept VGM
- Alternative methods to be determined by the Ocean Carrier, such as Fax, etc.
- Some carriers may only accept VGM in electronic form, so you should check with carriers to verify messaging options.
- Determine what document type will be used for communication. This may be largely dependent of the communication method. The data can be part of the shipping instructions to the carrier, or a separate communication such as a weight certificate. It is important to note that the documentation must indicate that the gross mass listed is the “verified gross mass”.
- Contact your service providers, steamship lines and terminal operators to align business processes, and understand any unique requirements. A key part of this discussion will be agreement on the timing of when the VGM information is communicated.
- If you have outsourced vendors ensure they are able to support your requirements as a shipper, and include this in any supply agreements.
- Make sure everyone involved in the process clearly understands the requirements, and the importance of compliance.
- Update your policy and Standard Operating Procedure manuals to reflect updates from the new processes.
- As with any compliance activity, record-keeping procedures may need to be updated in order to record documentation that you may need in the future.
The options you take as a shipper will vary, depending on your volume of shipments, and existing systems and infrastructure. However you approach it, key to success is to get the right support and resources to address this issue in the best way for your business.