NEW YORK - Apr 14, 2016
The GT Nexus Shipper Council is calling for clear and standardized processes for upcoming regulations on declaring cargo weight, defining a single global weight tolerance, and delivering unified VGM communication that accounts for the reality that containers are often turned in to terminals within minutes of loading.
Of the 162 countries that were signatories to the SOLAS treaty, only 10 have had guidelines and regulations published, which are all at different levels of finalization. Add in multiple ocean carriers and port terminals that must be involved in the information exchange and the risk of massive disruptions to international cargo flows and global trade becomes a real possibility.
The GT Nexus Shipper Council is a business collaboration community, representing over 70 major shippers who collectively move over 7 million TEUs of containerized freight each year. It recently formed a subcommittee that is leading efforts to address concerns and find operational solutions related to the SOLAS regulation, or Safety of Life at Sea.
New SOLAS requirements go into effect on July 1, 2016, stating that all packed containers must have verified gross mass weights reported to the carrier before loading. Shippers, beneficial cargo owners or non-vessel-operating common carriers are responsible for verifying weights. Shippers are required to communicate verified weights in a shipping document. But confusion looms over all parties.
Despite recent guidance from OCEMA, there continues to be a general lack of clarity among the shipping community as to acceptable tolerances, who is legally responsible, how or if ports and terminals will be involved, and what happens in situations such as near-dock loading, street turns, and supplier compliance. Considering that there are multiple ports, countries and carriers each developing their own guidelines, the need for a global process standard is critical.
The GT Nexus Shipper Council is finding that some ports are trying to find ways to engage while others are leaving it to the individual terminals to determine their own best practices and ways to enforce the policy.
"This can and will impact shippers and carriers heavily if ports or terminals require VGM to be reported before containers can be gated in," said Michelle Cummings, VP of Ocean Services at GT Nexus. "This has the potential to create global port and terminal congestion that could make the recent historic West Coast port slowdown look tame."
Many key specifics remain unclear, such as:
- Why should shippers certify the weight of equipment they don't own?
- Can shippers use an estimated or "generic" tare weight to allow VGM submission prior to cargo loading?
- How can shippers communicate VGM fast enough to ensure containers loaded a short distance from the terminal don't arrive at the terminal gate before the VGM information does?
"Cargill supports efforts to increase the safety of the container supply chain," said Duncan McGrath, Global Container Freight Lead, Americas at Cargill, who's also leading the GT Nexus Shipper Council efforts to address the SOLAS requirement. "But in a global industry it's not practical for each country, carrier and terminal to establish their own tolerance, tools and procedures for compliance. Such a patchwork approach greatly increases the risk of congestion and higher costs of trade."
Jochen Gutschmidt, Head Global Logistics Procurement at Nestle Operational Services Worldwide, commented that, "Currently, as written, it seems to be the shipper's responsibility to incorporate the tare weight of a container into the VGM. Most shippers believe they should only be responsible for cargo and dunnage, basically anything that goes inside the box. Ocean carriers should be responsible for verifying and reporting all additional weights."
About The GT Nexus Shipper Council
The GT Nexus Shipper council is a group of executives from large importers and exporters who came together because they all share GT Nexus as their global supply chain technology platform. The group is focused on driving improved partner relations, data quality and business processes. The Shipper Council participants come from a collection of companies that have over $1.7 trillion in revenues, and moves several million TEUs of ocean freight annually. For information on the Shipper Council, visit http://www.gtnexus.com/global-supply-chain/our-customers/shipper-council/.