The new verified gross mass regulations under the International Maritime Organization's Safety of Life at Sea (SOLAS) treaty go into effect July 1 of next year.
Only 30 percent of the 410 companies that responded to the INTTRA survey expected they and/or their customers will be prepared for compliance when the regulations are implemented, while 48 percent said they “have their doubts,” and 10 percent said they would not be prepared.
Respondents foresee the most disruption in the Asia Pacific region (42 percent), followed by Africa and North America (both 22 percent). They also expressed a strong preference for e-commerce solutions.
INTTRA has launched an “eVGM Initiative” (with VGM standing for verified gross mass) that will seek to develop an industry community that can agree on a technology standard and standard business process for digital documentation of VGM submissions.
According to INTTRA, APL, BDP International, CEVA, Damco, Hapag Lloyd, Hamburg Sud, Kuehne + Nagel, UASC and other INTTRA carriers have formed a working group, while more than 100 shipping professionals have registered to participate in the eVGM Forum, an online discussion group open to all industry participants.
“Some have said that SOLAS VGM could be to the ocean shipping industry what Y2K was to the broader business world,” said Inna Kuznetsova, President of INTTRA Marketplace. “These survey results are consistent with that, as they reflect concerns over potential disruption and lack of preparedness. We believe that coordinated action can facilitate a smooth transition.”
"Failure is not an option," said Kuznetsova, noting that the regulation was created to improve safety and will be enforced by agencies such as the U.S. Coast Guard. "It is imperative that everybody gets ready," she said.
Otto Schacht, global director of sea freight operations for Kuehne + Nagel, the world’s largest NVOCC, said K + N supports the eVGM initiative. “For this system to work efficiently and reliably, shippers, freight intermediaries and ocean carriers have to work on solutions which are practical and in full compliance of the VGM requirements,” said Schacht.
Kuznetsova noted that shippers today are required to provide weight of cargo when they send shipping instructions, and may be required or encouraged to provide weight when they book cargo.
But the new regulations require the weight of the loaded container, including the tare weight of the container, even though the shipper may not know exactly how much the container will weigh until it arrives at the warehouse or other location where it stuffs the box.
The varied business processes and computer systems of shippers, carriers, terminals, forwarders and other participants in the supply chain will make complying with the regulations challenging, said Kuznetsova.
The insurer TT Club this week also emphasized the importance of preparing for the VGM regulation in a newsletter, saying, "There remain many conversations between the stakeholders to be had – everyone with national authorities, lines with shippers/forwarders, lines with terminals; time is running short."
TT Club said the VGM regulation is "in reality, but one solid step in the direction of making the unit load industry more certain and safer. There are other specific changes afoot relating to the Convention for Safe Containers and related regulations/circulars as well as ISO standards for handling and securing containers.
"Another topic close to TT Club’s heart is heightening the awareness of the dangerous consequences of improperly packed containers," the firm added. "TT Club’s own claims experience shows that 65 percent of incidents involving loss or damage to cargo can be attributed, at least in part, to poor or incorrect packing.
"Insufficient knowledge and inadequate skills are the main causes of such claims, and result not just in cargo being lost or damaged but also in damage to equipment, property and the environment, as well as injuries to workers and the general public."