In a little less than one month from now, a new weight ruling from SOLAS (Safety of Life at Sea) Convention will take effect. This regulation will require shippers whose names are on the Bill of Lading (BoL) to verify the gross mass of cargo container, because of safety issues that occur when containers are overfilled with bulk items such as paper, agricultural goods, or scrap metal. Trade via the ocean is vast and runs 24/7. Each day, an estimated 300,000 container loads will be moving through the ocean waters. Roughly 44% of all international trade occurs via ocean freight – and unsafe, overfilled containers can put an entire ship in danger. The International Maritime Organization (IMO) is not the only one who will be enforcing this new law. SOLAS Convention signatories (162 countries) will also adopt this ruling, though the enforcement will likely vary between different countries and ports.
An Unsafe History
This new container rule is inspired by dangerously overfilled containers that are often seen. Why would someone fill a container to the brink of danger? Money, as usual, is a great motivator. Because of the way shipping containers are priced, it is quite tempting to fill the container with as much cargo as it can carry. This way, each individual unit will be more profitable. For many goods, such as electronics or anything pre-made, this is not an issue because even with a filled container there is plenty of extra space which does not translate to more weight. A container filled to the brim with shoes will not be dangerous – however, a container that is filled to the brim with a bulk item could be very dangerous. There is a reason that safety specifications were created in the first place.
If a container exceeds weight limits, it can collapse, crush containers beneath it, or cause entire stacks of containers to topple over. The property damage caused by an overloaded container is huge, but pales in comparison to the danger one of these rogue containers can cause the people working aboard the ship and in the terminals. If a pile of containers were to topple over as they were being unloaded, the damage to the ship, port, and to the people nearby is easy to imagine. Even the ship itself could be threatened by an overfilled container – it is, after all, a boat and if unbalanced it could (worst case scenario) sink. In 2007, a vessel named the MSC Napoli was deliberately beached after the crew was forced to abandon ship during a gale-force wind storm. One of the causes was a severe list due in part to overweight containers.
The Bottom Line
This new ruling states that it is the responsibility of the shipper to verify the weight of the container in which their goods are packed in. Even if the shipper is using a freight forwarder, they must still confirm the safe weight of their container. A Verified Gross Mass (VGM) will be needed for every container, or it will not make it onto the ship.
How To Weigh Your Container
There are two methods that can be used, subject to national standards and approval. The first is to load your packed container onto a truck, and then weigh the truck at a weigh station. Subtract the weight of the truck (including fuel) from the total weight. A second method is to weigh every single item and its packaging and any other materials (pallets, dunnage) that might be included in your container before it is loaded. Add the total weight of materials to the weight of the container itself. For both of these methods, the process must be calibrated and approved by the country where the weighting will take place. After the weighing is complete, you will need to provide a signed document to the shipping line and terminal that says you have weighed your shipment properly.
Which Method Should You Use?
The method you choose to weigh items will be determined by the type of goods being weighed. If the goods do not change from shipment to shipment, like much of the imported products that US retailers ship, method #1 will be easier. But if you are shipping a product that can change weight, like grain or other bulk agriculture, method #2 will be a better bet. If you think it seems like both methods are not something an average small business owner could do on their own, you’re right.
What’s the Impact on Shippers?
Most shippers won’t be able to get weighing done on their own. This ruling likely means they will have to pay a service to weigh their container. Freight forwarders are a likely candidate to provide the weighing service, and some estimates say it will increase the cost of shipments by an average of 10%. Some ports in Europe and Asia have already announced that they will be offering this service, although terminals in the US are hesitant because it will require new machinery and increase the already bad traffic in ports.
What’s the Impact on Freight Forwarders?
While the demand for this service will differ depending on each freight forwarders, we can assume many will still benefit. For a freight forwarder that never actually physically touches clients’ container loads (just handles the paper work), the VGM document that verifies weight will just be another piece of paperwork that they must have from the client. The ruling does not outline the exact relationship the two parties must have, so it will be up to one another to make sure they are complying with the law with little or no guidance from outside. One of the big worries for freight forwarding companies (especially ones that are named as the shipper on a client’s BoL) is whether they would be responsible for a document that has the incorrect weight of a shipment. Can they be held responsible if the client gave them an incorrect weight? For now, the experts believe they cannot, but express that the ruling will need to be clarified in court. Many freight forwarders who are named as shippers on the bill of lading are just deciding to weigh the container loads again, just in case.
Because shippers must weight their shipments, and freight forwarders are the ones who can conduct weighing, this new ruling may allow forwarders to charge for the service. Ultimately, the amount of fees that are possible will be determined by market forces or what shippers are willing to pay. Shippers who already use a third-party to pack and load their shipment may also have that company weigh the shipment, another opportunity for that vendor to raise costs for their services. As with most business, the more business a shipper conducts with a freight forwarder or a third party vendor, the more likely it is that they will be able to procure a better rate for this new weighing service.
Who Else Will Be Impacted?
The ruling has left the definition of the relationship between all parties vague. We know that the shipper must weigh the load and provide a signed VGM, and that a container without a VGM cannot be loaded onto a ship, but the finer details are not outlined. In order to implement all the changes that will stem from this ruling, the parties involved (shippers, freight forwarders, carriers, terminals, etc.) will have to figure it out themselves and are likely to incur new costs.
If a shipper, who is ultimately the responsible party, is using a third party’s weighing process, they’ll have to be sure it is accurate. Yet if a carrier who is named shipper wants to continue to ship goods in the same manner, they will have to be the responsible party for the VGM. The terminal will also have to act responsibly to ensure that containers without VGMs are left off the boats, since their own liability for accidents caused by an overfilled load is huge. This is going to be quite a challenge since documents, such as a VGM, are still hard copies for about half of the world’s container loads. How to get a VGM to a port in time for a container to be loaded when this same document must also be used for other parts of the process will prove challenging. It may even be a cause to push companies towards electronic means of sending documents.
What Are The Ramifications of Non Compliance?
If there is not a signed VGM to go with a container load, it is likely that the container will be left on the dock as their ship sails away. Some ports will be able to weigh the container themselves if they have equipment. Do not count on this, however. It is important to know about this ruling in order to keep business running smoothly. It won’t be long until 162 countries and the IMO will enforce this new ocean shipping weight rule, so familiarize yourself with best practices here and choose third party vendors and freight forwarders who can help.
References: Implications of the new IMO Weight Verification Rule - Journal of Commerce