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International Survey Reveals Cargo Owners Are Unprepared for New Weight Verifications

In August, OCEANAIR asked if you were “ready for major upcoming changes in container weight verification requirements.” Based on global survey results from the online shipping portal INTTRA, you might not be prepared for the new rules that take effect on July 1, 2016. The survey results concluded that roughly only a third of respondents are ready to meet full compliance when the new container requirements come online next year.

The fallout from delaying the incorporation of these new changes could lead to major disruptions in global shipping as more than two-thirds of cargo owners are or are doubtful they will meet the deadline due to a lack of preparedness. Many predict the most disruption in the Asian-Pacific region followed by Africa and North America. Under the International Maritime Organization’s (IMO) Safety of Life at Sea (SOLAS) treaty, the new verification of gross mass (VGM) regulations requires weight certification of every packed export container before being loaded onto a ship. The IMO specified the two methods of verifying weight could use certified and calibrated equipment to weigh the packed container or a calculated weight method, which is more complicated. Both methods require the tare weight of the loaded container for verification. However, these requirements cause several problems for shippers because they may not know the exact weight until after stuffing the box. Adding to the problem of complying with these changes are the wide-ranging business methods and the computer systems of carriers, freight forwarders, shippers, terminals, and other contributors in the supply chain.

Additionally, archaic paper-based practices are insufficient in expeditiously reporting VGM of packed containers, leading to strong calls for an e-commerce solution. INTTRA is doing more than just surveying cargo owners, and the US-based multi-carrier e-commerce company is taking a leadership role in working towards solutions for the new regulations under the SOLAS treaty. The online shipping portal formed a group with logistics providers called the eVGM Initiative to develop industry standards and digital solutions to meet the VGM compliance requirements from the IMO. The group hopes to find consensus on a technology standard and business process for digital documentation of VGM submissions.

INTTRA usually serves as an intermediary between carriers and cargo owners, so it is no surprise that its group has over a hundred participants, including APL, BDP International, CEVA, Damco, Hapag-Lloyd, Hamburg Sud and Kuehne + Nagel. To quickly adopt will VGM communication standards and practices, each provider will participate in the eVGM Forum, an online discussion group. Many parallel the SOLAS treaty requirements in the shipping industry to the Y2K problem that the business world faced. Without the current initiative, the new requirements might create confusion and chaos when implemented next year.

Even though these survey results focused on replies from INTTRA’s clients, its findings serve as a warning to ensure we are all on pace to meet the new container weight requirements. The results coincide with similar data released by the Freight Transport Association in October and confirm that shippers should start planning for delays thanks to the lack of readiness by the industry. Until there is an efficient and reliable system ensuring shippers, freight intermediaries, and ocean carriers are in full compliance with the VGM requirements, concerns regarding the possible disruption associated with the new legislation will continue to grow. Hopefully, the eVGM Initiative can agree on actions and standards soon to facilitate a smooth transition.

If you have any questions, please contact our compliance department at compliance@oceanair.net or (781) 286-2700.