New container weighing rules: GSF says unjustified VGM charges are unacceptable

The new container weighing regulations which took effect globally from 1 July, were introduced to enhance maritime safety and reduce the dangers to containerships, their crews and all those involved throughout the maritime supply chain.

Recognising the crucial importance of safety in the maritime sector, the Global Shippers’ Forum (GSF) has consistently taken a constructive approach to the verified gross mass requirements and played a key role in IMO in securing flexibility in the requirements to enable shippers to make accurate VGM declarations at minimum cost and disruption to international trade. As a result, shippers have two methods of providing a VGM; by weighing the fully loaded container using calibrated and certified equipment or by using a calculated weight method where the shipper can sum the cargo items, packing and securing materials and add the tare of the container.

GSF has worked with shipping, terminal and cargo handling associations worldwide to ensure shippers and supply chain partners are aware of the requirements and has developed joint industry guidance to assist shippers and other maritime industry stakeholders with compliance and implementation of the new rules. This guidance is available on GSF’s website www.globalshippersforum.org.

GSF is especially pleased to note the flexible and equivalent weighing and reporting methodologies that have emerged in recent weeks.

Its expectation is that the overwhelming majority of VGM service providers will act ethically and will only charge for actual third party services provided to the shipper at reasonable prices that reflect the cost of providing those services.

The new rules merely require the shipper to provide an accurate VGM to the carrier or the terminal operator using the prescribed methods in the IMO rules. Where the shipper undertakes the weighing process himself to determine the VGM and notifies this to the carrier or terminal operator in the agreed manner, there is no justification for any VGM charge to be applied.

The maritime sector has sought the introduction of these new rules to enhance maritime safety. It is a reasonable expectation of shippers that carriers and terminal operators will put in place procedures for acceptance of a VGM. This is no different to arrangements previously in place prior to 1 July, except that the shipper must now provide an accurate VGM in compliance with the new rules. There is consequently no justification for carriers and terminal operators to apply any charge for a shipper making an accurate VGM declaration.

Regrettably GSF members, mainly in Asia and Africa, report that some carriers and other ‘service providers’ appear to be exploiting the introduction of the new VGM rules by imposing exorbitant and unjustified charges for questionable and unspecified ‘administration fees’ and other ‘services’.

The GSF is calling for those charges to be withdrawn immediately. The GSF is currently examining the following examples provided by members and will be taking them up with the service providers:

n China: The global forwarding company Kuhne and Nagel is charging a VGM administration fee for all K&N shipments booked in China – specifically $ 12.75 for full containers if shippers are using the K&N electronic VGM system, or $ 25.00 for manual data entry.

nSimilarly, OOCL Logistics have announced that they will be charging a Verified Gross Mass (VGM) Administration Fee of $ 15 per document for all exports from China.

nNigeria: The logistics and shipping firm Grimaldi Agency Nigeria have notified customers that they will weigh containers on departure at a cost of N 20,000 per 20 foot container and N 40,000 per 40 foot.

n Sri Lanka: GSF members have advised that shipping lines are considering charging shippers $ 25 for submitting the VGM, and, in cases where the final weight differs from the booked weight, an additional charge of $ 50 for amending the VGM.

n UK and Ireland: The ports group DP World, which owns both Southampton and London Gateway ports, impose a £ 1.00 charge for VGMs provided prior to arrival (rising to £ 3.00 after box arrival but before 24 hour cut off).

GSF Secretary-General Chris Welsh said: “Shippers worldwide support the safety goals of the container weighing requirements and are committed to fulfilling their regulatory requirements, but this should not be used by supply chain partners as an excuse to impose unjustified fees.

“This is particularly concerning for developing countries, especially in Africa and Oceania, which according to the United Nations Conference on Trade and Development (UNCTAD) pay 40 to 70% more on average for the international transport of their imports than developed countries (UNCTAD Maritime Report, 2015).”

Simplify regulation to declare container weight, demands Shippers’ Council

From left: SL Shipper’s Council Vice Chairman Chrisso De Mel, SL Shipper’s Council Chairman Sean Van Dort, SL Shipper’s Council Immediate Past Chairman Dinesh De Silva, SL Shipper’s Council Secretariat Manori Dissanayake – Pic by Shehan Gunasekara

By Himal Kotelawala

The Sri Lanka Shippers’ Council (SLSC) last week vowed to protest at the highest level internationally if steps are not taken to simplify a regulation for shippers to declare the weight of a container prior to be rolled on to a vessel.

Issued by the International Maritime Organisation (IMO) and circulated in 2013 as part of its Safety of Life at Sea (SOLAS) convention, which Sri Lanka is signatory to, the regulation reads ‘Before a packed container can be loaded onto a ship, its weight must be determined through weighing’ and became legally effective on 1 July this year.

Speaking to Daily FT on the sidelines of the SLCS’s 46th annual general meeting Thursday (29), SLSC Chairman Sean Van Dort said that international service-providers charge different amounts, ranging from $ 25 to $ 50, from local shippers when submitting a container weight certificate via a web portal. This, he said, is not required, as it’s a simple process of just communicating the weight of a container.

“We’ve been engaging the authorities (on this). But they’re making it complicated day by day. They’re not taking our suggestions into consideration. Specifically foreign based service providers whose principles are abroad are trying to make a collection point of this. If we make a slight mistake, the tolerance factor is 5% for 1 tonne of increased weight. Even that if you amend, they will charge a cost,” he told Daily FT.

The Director General of Merchant Shipping had given a format to send the weight certificate manually, but certain international freight forwarding companies have their own process through their web portal, Daily FT learnt.

The Merchant Shipping Secretariat states the following in an instruction manual on the submission of the weight certificate:

Excerpt: “This document can be part of the shipping instructions to the shipping company or a separate communication. In either case, the document should clearly highlight that the gross mass provided is the ‘verified gross mass’. Shippers should submit a Verified gross mass certificate as per Annex 4 to the carrier signed by the shipper or an authorised senior official of the shipper including a weight certificate produced by the shipper or a certified third party weigh station in case... Electronic transmission of the ‘verified gross mass’ as per Annex 4 certificates with electronic signatures shall be accepted by all relevant authorities.”

“We’re not for any charges, because this is a simple notification. We take the certificate at our cost and we give it to them 24 hours before the vessel’s arrival,” said Van Dort.

The SLSC seeks to have the regulation simplified.

“It is between shipper and consignee. We have given a lot of recommendations. These aren’t good enough, because that might prune the revenue earning avenues for the state regulator,” an SLSC member who did not wish to be named told Daily FT.

“Major shipping lines like Maersk and APO have issued a simple format to shippers. But they’re compelled to say if there is a law of the land, you may follow that; ‘we cannot overrule your national regulation’,” he added.

Speaking at the AGM, Van Dort said that though the SLSC was thankful to both the previous government and the present government for their help with the import export trade, it was ‘very disgruntled’ at the speed witch which things seemed to be moving.

“The speed is not even snail pace. We expected greater reform, greater transparency. But we find ourselves fire-fighting every day. What was confirmed yesterday is changed today. But we’ll continue to lobby the government and to engage with them. We can only engage with these people. We cannot write the law. We engage to ensure a fair and equal trade practice. Which is as important as good governance,” he said.

Calling the SOLAS regulations a ‘new monster’ that has walked into the shipping industry, Van Dort charged that parties with vested interests were trying to capitalise on the issue.

“They are once again trying to go back into unethical margins or bargains to reap additional costs at the shipper of this country. There is a simple IMO regulation; today has become a money-making racquet for many people. We’re not going to sit down and take this lightly,” he said.

“A majority of these charges are coming from international players. So we’re going to confront them in the best possible way to ensure that our shippers are not penalised. We have been engaging the Director Merchant Shipping, the terminals, the port, but it seems like it’s fallen on deaf ears. We have given recommendations. We had so many meetings with the authorities. We will continue to push,” he told the gathering.

“It is very pathetic that after so much hard work. We will protest at the highest level to ensure that our members are not held to ransom and ensure fair trade again,” he added.