NEWS FLASH: Ocean carrier group outlines VGM best practices

The OCEMA working group published recommendations for how and when shippers should submit SOLAS container weight verification data ahead of the July 1 implementation deadline.

NEWS FLASH: Ocean carrier group outlines VGM best practices

The OCEMA working group published recommendations for how and when shippers should submit SOLAS container weight verification data ahead of the July 1 implementation deadline.

NEWS FLASH: Ocean carrier group outlines VGM best practices

The OCEMA working group published recommendations for how and when shippers should submit SOLAS container weight verification data ahead of the July 1 implementation deadline.

 
A group of 18 ocean carriers on Monday outlined what they consider best practices for shippers to submit container weight verification data to comply with a forthcoming amendment to the International Maritime Organization's Safety of Life at Sea (SOLAS) convention.
    The SOLAS amendment requires that shippers certify the verified gross mass (VGM) of loaded cargo containers to carriers prior to them arriving at container terminals, and is due to come into force July 1, 2016.
    The VGM requirement has been decried by beneficial cargo owners as onerous on U.S. exporters, and shippers and forwarders have also bemoaned a lack of clarity regarding implementation and enforcement of the rule.
    The 18 carriers, under the auspices of the long-running Ocean Carrier Equipment Management Association (OCEMA), have been meeting for five months to provide clarity surrounding how and when the container weight verification data should be submitted.
    On Monday, OCEMA released a set of recommendations and a process map to help shippers understand how VGM data should be submitted. Though the suggestions are not binding in and of themselves, OCEMA said in no uncertain terms that carriers would not load cargo without the VGM being submitted in the prescribed timeframe.
   “Similar to the concept of ‘no docs/no load' that is already in place, if the ocean carrier does not receive VGM prior to the VGM cutoff time, the container cannot be loaded aboard the vessel,” OCEMA said. “Instead, it will be sidelined until the next available sailing by which time the shipper must have made arrangements for the provision of VGM. The treatment of any costs or other circumstances arising out of a shipper’s failure to timely provide VGM will be a matter for individual ocean carriers to determine in accordance with their applicable tariffs and service contracts.”
    According to the recommendations, the VGM can be submitted either electronically as an electronic interchange data message (an EDI message called VERMAS with a code of 304 has been established for VGM), via electronic ocean freight portals such as INTTRA, GT Nexus, and CargoSmart, or via the carrier’s own electronic portal.
    “(For electronic bookings) when the receiving cutoff time is determined to be at the close of the business day, VGM cutoff will be at noon of that day,” OCEMA said. “Regardless of the receiving cutoff time, the carrier will advise the shipper of VGM cutoff at time of booking. For VGM submitted through alternative methods, VGM cutoff will be determined by the ocean carrier, but will typically be earlier than for electronic submissions to allow time for processing.”
    OCEMA specified that electronic submission of VGM is “preferred and will expedite transmission of data,” noting that “some carriers may only accept VGM in electronic form.”
    As for how export shippers go about verifying the weight of the container, OCEMA sought to bring clarity surrounding one of the two methods the VGM rule allows. The so-called calculation method stipulates that shippers or forwarders total the weight of all cargo and packing materials inside the container and add the tare weight of the container. Export shippers have argued they shouldn’t be held responsible for verifying the weight of equipment they don’t own or maintain.
   “It is acceptable for shippers to rely upon the tare weight being made available by the ocean carrier,” OCEMA said. “The shipper would not be certifying the accuracy of the container tare weight printed on the container.”
    OCEMA’s recommendations have been eagerly awaited by an industry seeking some sort of direction as to how to proceed with the IMO requirements. The process has been even more fraught in recent weeks as the countdown to the deadline approaches and the U.S. Coast Guard stated it would not police shippers regarding VGM submission. That has left the responsibility to enforce the IMO guidelines in the hands of ocean carriers. The USCG has said it can only regulate U.S. flagged vessels, and that submission of VGM was a commercial matter between shippers and carriers.
    “The new rules will require all industry participants to make some changes, but the OCEMA Best Practice is intended to make the process as painless as possible for all stakeholders,” said Robert Cannizzaro, vice president of marine and terminal operations, Hamburg Süd, who chaired OCEMA’s VGM special working group.
    The working group OCEMA conferred with industry stakeholders on various technical aspects of the best practice in recent months. Awareness of the rule seemed to intensify in December, when INTTRA released results of study suggesting a significant lack of preparedness for the VGM rule.
    Two weeks ago, INTTRA released a new eVGM product aimed at helping shippers and forwarders submit the data to carriers in both parties’ preferred formats. Other technology companies, such as CargoSmart, have suggested they are ready to proceed with an electronic submission product once the variables surrounding the matter have been further clarified by the industry.
   “Industry stakeholders have raised questions and asked for clarification of the VGM rules,” said Frank Grossi, chairman of OCEMA and executive vice president of COSCO Container Lines America. “OCEMA aims to address these questions with practical, common sense guidance.”
    What is not up for debate, OCEMA asserted in the recommendations, is that VGMs must be submitted for a container to be loaded onto a ship.
    “Carriers are faced with a clear legal obligation not to load a container aboard their vessels without the VGM as defined under the IMO rule,” said OCEMA Executive Director Jeff Lawrence.
    “That said, OCEMA and its special working group want to do so with as little disruption to existing processes as possible," he added. "We have 100 days until the rule goes into effect so we need to work together. The Best Practice will help the U.S. export industry and service providers reach the goal of efficient implementation of this important safety initiative.”
    OCEMA’s best practices largely relate to how export boxes will be handled at U.S. ports for outbound sailings, but questions still linger about how the VGM rule will be implemented and enforced in foreign nations.
   Jon Gold, vice president of supply chain and customs policy for the National Retail Federation, said “there are still a lot of questions about how the VGM will be implemented and enforced around the globe. U.S. importers are still waiting for information from their carriers on how this will be achieved at foreign ports.
    "With less than four months until the July 1 implementation deadline, these questions need to be addressed so importers and their partners can make sure they are able to comply,” said Gold.
    OCEMA members include APL, ACL, CMA CGM, COSCO Container Lines, China Shipping, Evergreen Line, Hamburg Sud, Hapag-Lloyd, Hyundai Merchant Marine, “K” Line, Maersk Line, Mediterranean Shipping Co., MOL, NYK Line, OOCL, UASC, Yang Ming, and ZIM.

In the face of Brexit uncertainty, shippers are expected to start moving their distribution hubs and warehouses from the U.K. to the European Union. Assets based in the EU will start becoming a safer investment, avoiding any U.K. logistics delays caused by Brexit. Cash-flow problems are also expected for U.K. shippers in the event of a no-deal Brexit.

Demand for air cargo grew by 3.5 percent in 2018, a significant deceleration from 9.7 percent growth in 2017, while January 2019 saw a year-over-year drop of 1.8 percent, according to IATA.

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NEWS FLASH: Ocean carrier group outlines VGM best practices

The OCEMA working group published recommendations for how and when shippers should submit SOLAS container weight verification data ahead of the July 1 implementation deadline.

on Mar 21, 2016AmericanShipper.com

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NEWS FLASH: Ocean carrier group outlines VGM best practices

The OCEMA working group published recommendations for how and when shippers should submit SOLAS container weight verification data ahead of the July 1 implementation deadline.

on Mar 21, 2016AmericanShipper.com