July 1 is rapidly approaching and the world is still waiting for a magic solution in order to implement the Safety-of-Life-At-Sea (SOLAS)/Verified Gross Mass (VGM) rules. Exporters are in good shape in this country according to the US Coast Guard, which is our regulatory agency in the USA. Importers, however, are subject to the individual laws of the country where the cargo is loaded, and may not have as easy a path to compliance. We recommend that importers alert their suppliers that the rule is coming July 1 with little chance of delay, and instruct them to do what is necessary to be in compliance with local rules and regulations. Our suggested format for both importers and exporters to instruct their suppliers can be downloaded here.
While we have seen a steady movement in the direction of implementation by port operators, terminals, and the ocean carriers themselves, it is apparent that we are not ready, nationally or globally. With just over a month left until implementation, there has been painfully little standardization in required message sets, no common form, and a lot of announcements from carriers that regurgitate the rules without providing specific procedures to be followed. In fact, of the 160+ countries that ratified these rules as members of the International Maritime Organization (IMO), most remain silent when it comes to roll-out, process, and enforcement. The World Shipping Council (WSC) has been tracking this woefully slow progress, where the requirements, if any, of each member nation are posted, along with the regulatory agency for that country, if assigned.
On the Home Front
Behind the scenes there has been much discussion, argument, and legal objection to SOLAS/VGM process in the U.S. There has been testimony in front of Congress and the Senate by industry leaders, particularly in the agricultural trade, that has been effective in getting some action on the part of the Coast Guard. As the world watches the U.S. for answers, the Coast Guard has been at odds publicly with the WSC and IMO on the need for this new regulation. The Coast Guard has stated on several occasions that the requirement of providing accurate weights to ocean carriers is not new, and in their estimation, has been running just fine up until now. They do not see any changes needed to the current process for weight declaration on exports from the U.S.
Further to this point, in a 4/18 Maritime Safety Information Bulletin, the Coast Guard states “…U.S. laws and regulations for providing verified container weights are equivalent to the requirements in SOLAS…” and “…have outlined multiple acceptable methods for providing verified gross mass…” These additional methods include the terminal weighing the container, or shipper verified weight within the container only with the carrier adding container tare weight to calculate VGM.
The very late announcement from the Coast Guard forced the IMO to review their requirements and subsequently draft new guidance to provide “…flexibility to all stakeholders in containerized transport to refine, if necessary, procedures for documenting, communicating and sharing VGM information.” This new wording remains in draft form, but suggests the basic premise of the VGM regulation is flawed.
At the same time, in a letter to Mario Cordero, Chairman of the Federal Maritime Commission (FMC), Senator John Thune, Chairman of the Committee on Commerce, Science, and Transportation, instructs Cordero to research and inform the committee of any appropriate actions to prevent unnecessary disruptions, delays, or burdens to our nation’s supply chain by the end of May. In his letter to Cordero, Senator Thune asks what steps the industry is taking to comply, and whether carriers and terminal operators are acting within their obligatory boundaries on agreements they have on file with the FMC.
We do not believe the SOLAS/VGM regulations will be rescinded, nor do we believe they will be delayed. Instead, we are hopeful for a softer landing of enforcement as the industry continues to work through processes, solutions, and data message sets–all of which are still in development. Meanwhile, we are optimistic that the rest of the world will follow our lead of leniency on DO NOT LOAD messages–a form of punishment for non-compliance–and their associated cost.
In the interim, we recommend that you inform your suppliers of the requirements, and gain their acceptance that accurate weight reporting is the goal of SOLAS. The sooner they can supply accurate weights, the better off all dock workers, rail and truck transporters, and personnel on container ships will be.
Rich Roche is Vice President, International Transportation for Mohawk Global Logistics.
Read more about Rich here.