SOLAS VGM CONTAINER WEIGHING LAUNCHES SMOOTHLY – WHAT’S NEXT?

It looks like it has been smooth sailing so far for the implementation of the new international safety laws under SOLAS, requiring the Verified Gross Mass of seaborne containers to be filed in advance of loading. Since coming into force on 1 July, most carriers reported that only a very limited number of containers were rolled and on average 95% of containers were reckoned to be ‘fully’ VGM compliant.

There are however some points to note: Most national and port authorities have taken the advice of the IMO to adopt a ‘pragmatic’ approach to enforcement initially. In several cases this was essential, because national procedures and infrastructure were not ready (Vietnam being just one exemplar here) or, in the case of Ecuador, because of problems resulting from the recent earthquake.

Enforcement is on the way

Most nations now know what they are doing and the necessary infrastructure is being put in place, so from 1 October we can expect to see enforcement of the VGM rules, which will be much more strictly monitored. Transgressors can expect appropriate penalties varying from simply rolling the container, to criminal prosecution with fines. Amongst other countries, China and Indonesia have already upped their game.

In these first months it has often been sufficient that VGM filings have all their fields filled with plausible data. As more terminals acquire their own weighing scales, we can expect to see programmes of check-weighing to verify the data, on a random or a targeted basis, and the authorities will rapidly become less lenient. If a shipper gains a reputation for non-compliance, they can only expect to attract verification delays.

Weights and filings

One lesson from this early experience is that it is not enough for the shipper to have carried out VGM correctly – complete, accurate and timely filing is also essential. The whole process is not a one-off ‘tick the box’ exercise: it has to be right for every container, every time. That makes VGM compliance potentially more burdensome, and more costly, than some shippers currently realise. Add in the fact that national rules and implementations are still evolving and there is a clear economic argument for many shippers to engage the services of a specialist to guarantee VGM compliance and ensure their boxes are loaded.

The real costs of VGM

It is understandable that firms may feel that if some external agency has imposed new rules, some other external party should pick up the costs, but sadly that is not how the world works. VGM is not an excuse for third parties to skim off a profit – there are real, if highly variable, costs involved, from those of the physical weighing process to charges for filing with carriers and port authorities, and the costs of altering IT systems and training staff. It is a process which will continue as long as local rules and interpretations continue to be refined.

These costs will accrue whether the shipper carries out their own VGM or uses a third party. VGM compliance for complex supply chains could involve firms in a lot of direct cost and management distraction, and for many it will be both easier and more economic to outsource the matter to a third party. This should give access to world-wide information, tested and proven systems, continued monitoring, training and development, and to a guarantee of compliance. One such party is Damco and to date, around three-quarters of Damco’s regular global customers partnered with us to ensure VGM compliance.

Controlling the cost

Controlling the extra costs of VGM compliance is as important for Damco as for our customers. We are continuing to invest towards performing 100% automatic VGM filing and also to the provision of our own weigh scales and systems wherever these are needed or appropriate. In addition, we are committed to managing the ‘exceptions’ as effectively as we do the ‘normal’ flows. For example, there are landlocked countries, which are just realising that even though their exit ports are hundreds of miles away in a different country, ensuring VGM compliance in the location where the box is stuffed is a good idea. There are other nations, and indeed carriers, where it will be some time before they can offer fully compliant VGM procedures themselves. Damco can help in these situations.

VGM compliance is neither an optional extra nor a one-off exercise. But shippers who select and work with an appropriate and knowledgeable partner can sleep well at night, knowing that costs are under control and their containers are being loaded.

Damco has been regularly briefing customers as the SOLAS VGM regime has unfolded. You can visit http://www.damco.com/solas or contact your nearest Damco office for more information on Damco VGM compliance services.