Who Must Weigh In?

  • Date: 07/12/2015

In the last issue of Containerisation International TT Club’s Peregrine Storrs-Fox examined the implications of the Amendment to SOLAS (the Safety of Life at Sea Convention) mandating the Verification of Gross Mass (VGM) of containers, which comes into effect on 1st July next year.  Now, in Part Two of his examination he details the responsibilities of the various parties in the container supply chain.

The implications of this relatively modest change to SOLAS, that in essence reiterates the shippers’ existing responsibility to declare gross mass accurately, are reverberating through the international transport community. July 2016 is not far away, particularly when one considers the importance to the industry to see that consistency is developed as to the acceptable ways, and common standards, to confirm calibration and certification for both weighing the packed container (‘Method 1’) and ensuring the correct calculation of the sum of all constituent parts of a packed unit (‘Method 2’) as called for in the amendment.

As often, the ‘devil is in the detail’ of implementation and there are various stakeholders who bear levels of responsibility to ensure that the venture is successful. Although the amendment mandating VGM only overtly names the ‘shipper’, the ‘master’ and the ‘terminal representative’, and – by implication – the competent authorities, there are a plethora of potential players in the supply chain that are not specifically drawn into the scope of the new regulation but must still be aware of the need for accurate certification.

The shipper
By the complex nature of all things logistics, the ‘shipper’ may encompass a range of people involved in the contracting, packing and transporting of cargo. However, the key commercial relationship in question is between the entity whose name is placed on the ocean carrier’s bill of lading. Thus, in many cases, the responsibility for actual ‘verified’ declaration will rest with a freight forwarder, logistics operator or NVOC.

Apart from having a sustainable method by which the gross mass is verified, the shipper also needs to communicate it (‘signed’ meaning that there is an accountable person) in advance of the preparation of the ship’s stow plan. The information will be sent by the shipper to the carrier, but with joint service arrangements there may be a number of shipping companies involved in issuing an ocean bill of lading, with just one taking overall responsibility to consolidate the manifest information, in addition to communication with the terminal. Adding a level of complication, there is no precise time by which the information needs to be communicated, due to differing requirements around the globe – although Advance Cargo Information requirements may already be bringing timing forward for many shipments.

The master
This character in the process is not only the person standing on the ship’s bridge but also a number of functions within the carrier’s organisation.  With joint services, the actual operator of the ship will be the one taking the lead role.

Implicit in the SOLAS amendment is that the carrier sets in place processes that ensure that VGM is available. Arguably, each carrier will need to amend both systems and processes to capture additional information (such as whether the shipper is using Method 1 or Method 2 and fields for booked, declared, verified and even measured gross mass). It is likely to be too simplistic just to amend the booking process so that the gross mass information is left blank in the system until ‘verified’ data are available. This would only be effective if it is clearly understood by all service partners with whom the carrier communicates. Clear and enforced procedures would be key. However, while some information may be transmitted in unstructured format, key elements of the process are captured in EDI messaging, for which new standards are being developed and will need to be commonly implemented amongst the carriers and terminals.

The explicit obligations of the master are to ensure that VGM is used in planning the ship stow and ensuring that a container for which the VGM is not available is not loaded. Scotching one confusion, this does not mean that a container with a VGM is guaranteed to be loaded, since that would derogate from the traditional rights of a master.

The terminal representative
Recognising the pivotal nature of the port interface, the terminals have been drawn into the new regulation as recipients of information for ship stow planning and, critically, in a joint responsibility not to load a container on board a ship if the VGM is not available.

There has been considerable debate as to whether terminals need to position themselves to be able to weigh containers, not least because of the cost of creating appropriate infrastructure, and amending systems and procedures, with an uncertain return on investment. In most terminals, the commercial relationship is with the carrier alone, although there are many parts of the world where containers are packed at the port, in which case the terminal activities will in future include assisting the shipper in producing the VGM.

Competent authority
Responsibility is placed on the national administrations to set up or implement appropriate standards for calibration (generally under weights and measures regulations) and ways of certifying for both methods within the SOLAS amendment. The named parties will rely on this to work smoothly and, preferably, consistently on a global basis in order that trade is not disrupted.

Clarity of such processes needs to be matched by consistency in enforcement. Talk of ‘tolerances’ is disingenuous. SOLAS calls for accuracy. Everyone appreciates that some cargo and packing material may be hygroscopic, thereby potentially increasing mass during the journey, but that need not mask fraudulent activity, nor entice over-zealous enforcement. The UK Marine Guidance Note* may be instructive here, stating that enforcement action will only be volunteered where the difference between documented and actual weight exceeds a threshold. However, the industry stakeholders should recognise that this amendment seeks accuracy in order to improve safety through the supply chain; common sense demands honest efforts to obtain and use accurate VGM.

Success of the revised SOLAS regulation will include not only safety of containerised movements, but also free movement of boxes through all modes of surface transport. Such success will require a shift in behaviour and culture throughout the unit load industry, for all stakeholders must ‘step up to the plate’ and own the entire process.

*MGN 534 published by the Maritime & Coastguard Agency

Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority and is authorised in the UK by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority.

The UK VAT Identification number for Through Transport Mutual Insurance Association Limited is: GB 564 5244 35 and for TT Club Mutual Insurance Limited is: GB 564 3375 30. The Italian VAT Identification number for TT Club Mutual Ltd is: 03627210101.