Coast Guard Raises Controversy on New Container Weight Rule

What’s going on with this new Verified Gross Mass (VGM) rule?

Somehow the answer to that question is getting less clear as the July 1st rule change concerning VGM draws near.

Ripples of shock spread through the packed crowd, as well as the panel of experts, at the Journal of Commerce’s16th annual Trans-Pacific Maritime Conference in Long Beach, CA on March 1st when panelist Paul Thomas, Rear Adm. of the Coast Guard said the SOLAS guidelines on container weight verification going into effect in July are not mandatory.

A Journal of Commerce article quotes him as follows:

“They are not mandatory under SOLAS, they are not mandatory under any U.S. regulation. It says that right on top — these are non-mandatory guidelines.”

“The guidelines in this case provide one path to compliance with the mandatory amendments, but it is not the only pathway and the guidelines themselves are not part of the mandatory SOLAS requirements,” he said in an email after the panel.

As far as the Coast Guard was concerned, complying with the VGM rule was a business procedure issue. “SOLAS places no legal obligation on the shipper. It places a legal obligation only on the vessel subject to SOLAS. So if you need to meet that obligation by working on a better business practice with your partners, that’s where you need to focus,” Thomas said.

This is welcome news to shippers, especially exporters in the U.S., who were looking at procedural changes to get the tare of each container of goods they exported or get all those loaded container weighed to provide VGM.

There has been much worry about how this might slow down the supply chain and even be impractical for shippers.

But the World Shipping Council is angry about Thomas’ comments and the Coast Guard’s apparent position on the new regulation.

JOC quoted WSC’s reaction:

“The decision of what is required is not a matter for business discussion, it is not a business practice issue,” [Christopher Koch, senior advisor and former CEO of the World Shipping Council] said. “The Coast Guard’s position is that SOLAS regulation does not apply to shippers and require them to provide a signed VGM, and terminals are not required to enforce what the SOLAS regulation says.”

Koch called the Admiral’s comments a “stunning revelation,” considering the IMO guidelines were submitted by a working group shared by the U.S. Coast Guard, and in a paper co-sponsored by the U.S.

Of course, while shippers welcome the idea of not having to change their business practices, this episode is creating confusion on whether or not that will have to happen.

In the wake of Thomas’ controversial statements about the new SOLAS regulation, the Coast Guard posted an FAQ page (from Thomas’ desk) to provide clarity on this issue.

Here’s a highlight on what the Coast Guard says there about shippers’ responsibility in this new VGM regulation (I added the bolding):

How do SOLAS requirements apply to U.S. domestic shippers?

The USCG’s flag state and port state authorities only extend to U.S. and foreign-flagged ships. The USCG has no authority over domestic shippers. Domestic shippers may be impacted by SOLAS requirements because their domestic and international business partners, who run ships, interpret their obligation to meet SOLAS requirements.

In the case of the SOLAS Regulation VI-2 amendments regarding container weight, some carriers have determined they need to change their operational or business practices to meet the requirements of their flag states (foreign and domestic). As such, domestic shippers may be called upon to change their business practices with these international partners in the global supply chain. This is a business-to-business requirement. For the U.S., the USCG believes that carriers currently comply with SOLAS, and are therefore not requiring domestic shippers to make changes in existing practices.

Proper, accurate weight of shipping containers must be provided to comply with SOLAS and prevent future incidents such as loss of life, loss of vessels, and loss of cargo because of misdeclared cargo weight, which has happened in the past.

The question is how will U.S. shippers make sure they are in compliance with this. And are they already?

Expect more debate on this issue to rage on between now and July 1st.

Continued Reading:

New Shipping Rule Shippers Must Follow to Get Containers Loaded

Source: UC Blog