Ag shippers call for “reality check” before new shipping law is enforced

When the Agriculture Transportation Coalition [AgTC] convenes its annual meeting in Long Beach this June, they hope that one issue will have been resolved before it causes shipping havoc the following month.

On July 1, 2016 an amendment to the International Maritime Organization’s Safety of Life at Sea (SOLAS) convention will go into effect requiring all shippers (importers and exporters) to certify and submit the Verified Gross Mass (VGM) – the combined weight of the cargo and the container – to the steamship line and terminal operator in advance of loading the container aboard a vessel.

“This is a dramatic change from current shipping practices,” notes AgTC’s executive director, Peter Friedmann. “Currently, the shipper is responsible to accurately report the weight of its cargo. The shipper does not own, control, or maintain the containers which are owned/leased by the carriers.

The amendment was created as a response to claims that there have been incidents of damage caused by overweight containers, although the International Maritime Organization’s SOLAS committee did not reference any instance where a ship had been damaged or sunk exclusively due to overweight under reported containers.

As reported in LM, shippers, along with steamship lines, terminal operators, and governments are scrambling to create best practices and implementation guidance for this new rule.

AgTC members are not exclusively reliant upon Pacific Rim shipping, they constitute the majority of U.S. agriculture and forest products exporters and thus the majority of U.S. ocean exports.

“We believe that unless thoughtfully considered, by individuals with intimate familiarity with the export supply chain process, this rule will create major turmoil at the marine terminals and a very significant impediment to U.S. exports,” warns Friedmann. “This rule was never submitted to Congress, no committee or subcommittee of Congress ever reviewed it. It was not reviewed or approved by a Federal agency, nor published in the Federal Register. There has been no input from the shipping community.”

Brian Conrad, Transpacific Stabilization Agreement (TSA) executive administrator, told LM that he agrees there’s work to be done on the West Coast.

“Industry is not yet fully prepared for compliance with the new SOLAS container weight certification rules, but supply chain parties are coming together in various working groups, and are making good progress in pursuing a fair, standardized set of weighing and documentation solutions,” he says.

According to Conrad, overweight containers have been a concern dating back to introduction of simplified per container rates for heavier cargoes in the 1980s.

“There is general agreement on the need to limit loading of containers beyond their maximum weight limits in the interest of worker safety, vessel stability, and reducing the potential for cargo and equipment damage,” he adds.

Surprisingly, the physical weighing of loaded containers may prove less a problem than certification – when and how the proper documentation is delivered to the carrier and the terminal, and the chain of custody and liability.

“Once these are fully addressed with the right technologies and processes, we may find that the exercise has also produced a more robust, integrated, efficient supply chain over time,” Conrad concludes.

The AgTC seems to agree with this possibility, but is also calling upon “a reality check” by the federal government to avoid the port congestion that stymied West Coast cargo gateways two years ago.

“We believe this situation – and the need to avoid similar circumstances in the future – warrants a Congressional inquiry into the International Maritime Organization process, the means by which the United States can be bound, and how this rule was adopted without U.S. exporter or importer notice or input, or consideration of impact on U.S. economy,” says Friedmann.