New SOLAS Verified Gross Mass Rules Effective July 2016 -Top Five Things You Need to Know

You may have heard that effective July 1st, the International Maritime Organization has amended the Safety of Life at Sea (SOLAS) convention, and new rules will be in effect for reporting of verified gross mass (VGM) of containers. To help you prepare, here are 5 things you should know:

WHAT DOES THIS MEAN FOR ME AS A SHIPPER?

Before a packed container can be loaded onto a ship, its verified gross mass must be determined through weighing; currently there is no exception to this requirement.

 A. WHAT ARE THE ACCEPTABLE METHODS FOR DETERMINING VERIFIED GROSS MASS (VGM)?

Method 1: Weighing/scaling the fully loaded container using calibrated and certified equipment; or

Method 2: Weighing all packages and cargo, including pallets, dunnage and any securing material to be used in loading the container and adding those weights to the tare weight shown on the container’s exterior.

B. KEY POINTS:

  • Accuracy is currently the only concept with which the shipper needs to be concerned – this is a physical weighing requirement and estimating of weights is not permitted
  • All equipment used must meet the accuracy standards and requirements of the State in which the equipment is being used.
  • The only exception is “Individual, original packages that have the accurate mass of the packages and cargo items (including any other material such as packing material and refrigerants inside the package) clearly and permanently marked on the surface, do not need to be weighed again when they are packed in the container. A good example is a flat screen TV that has their weight (e.g. X kg) marked by the manufacturer on the box”.
  • SOLAS requirements will apply to both FCL and LCL shipments.

WHAT HAPPENS IF THE VGM IS NOT PROVIDED AT THE DEADLINE REQUIRED BY CARRIER? WHEN IS THE DEADLINE?

 It is currently a violation of SOLAS to load a packed container aboard a vessel to which SOLAS applies without a proper weight verification. There is currently no exception to this requirement. In the absence of a shipper providing a verified gross mass of a packed container, that container “shall not be loaded on the ship”. Shippers should obtain information on documentary cutoff times from their carrier in advance of the shipment.

HOW CAN RCL HELP YOU BE COMPLIANT?

  • RCL can assist with recommendations of Certified Scale Companies in your area
  • RCL can review your submitted documentation and communicate to your nominated personnel SOLAS requirements to ensure the Verified Gross Mass and appropriate signatures are included. Thus, avoiding rejection of the container upon arrival at the port for non-compliance of SOLAS
  • RCL can investigate opportunities to scale your container at the receiving port. If service is available, RCL can implement the process on your behalf.

WHAT ARE THE DOCUMENTATION REQUIREMENTS?

Shipper’s weight verification is compliant with the SOLAS requirement when it is “signed”, meaning by a specific person representing the shipper and is named and identified as having verified the accuracy of the weight calculation on behalf of the shipper. The shipping document shall be (1) signed by a person duly authorized by the shipper and (2) submitted to the master or his representative.

HOW CAN RCL HELP YOU?

  • RCL can submit your signed documentation in a timely manner as required avoiding possible rejection of container loading under the new SOLAS requirement.
  • RCL can capture the VGM data you provide and present it varying reporting processes to assist management in quarterly / year end analysis and compliance.
  • RCL’s seasoned staff is cross-trained to communicate and educate; first and often with our clientele.

 HOW WILL THIS BE ENFORCED? WILL THERE BE PENALTIES APPLIED?

Nationally legislated enforcement agencies may implement measures to check compliance, such as documentation checks, auditing, or random weighing. Enforcement policies may require shippers using method 1 to produce weight tickets or other documentation upon request. Fines and other penalties could be imposed under national legislation. Penalties could include repacking costs, administrative fees, demurrage and delays or cancellations of shipments. If the shipper has not provided a VGM, the vessel master should not load the container, and additional costs such as pier demurrage, roll fees etc. could occur. The new SOLAS requirements apply equally to both under and overweight containers.

 WHO IS RESPONSIBLE FOR COSTS FOR THIS NEW REQUIREMENT?

Since the shipper is legally responsible to obtain and provide the verified gross mass, it may be expected that any third party service provided would seek re-reimbursement of the cost of weighing; this is Commercial issue and will be a matter to be determined by the parties involved.

 

As with any new regulations, we can expect there to be further updates and amendments to SOLAS as we approach the effective date and thereafter- be assured that RCL will continue to monitor implementation of this new SOLAS amendment as it evolves. With over 30 years experience in International Transportation, you can count on RCL Agencies to guide and assist with all your transportation needs while providing the right solutions at the right time!

 

**Resources:

http://www.worldshipping.org/industry-issues/safety/cargo-weight
http://www.worldshipping.org/industry-issues/safety/WSC_Summarizes_the_Basic_Elements_of_the_SOLAS_Container_Weight_Verification_Requirement___January_2015_-3-.pdf
http://www.worldshipping.org/industry-issues/safety/faqs/SOLAS_VGM__Industry_FAQs_Dec_2015_US_letter_WEB.pdf

Cybersecurity Guidelines for Ships Released

A set of guidelines to help the global shipping industry prevent major safety, environmental and commercial issues that could result from a cyber-incident on board a ship has been released,  according to the Shipping Herald.

The cyber guidelines are a first for the shipping industry and were developed by international shipping associations comprising BIMCO, CLIA, ICS, INTERCARGO and INTERTANKO, with support from a wide range of stakeholders.

“The aim of  guidelines is to provide the shipping industry with clear and comprehensive information on cyber security risks to ships enabling shipowners to take measures to protect against attacks and to deal with the eventuality of cyber incidents,”  said Angus Frew, Secretary General of BIMCO.

Cyber-threats are changing all the time and BIMCO and the other industry associations will regularly update the cyber guidelines to ensure shipping companies have the latest information available.

The guidelines will be able to help companies take a risk-based approach to cyber security that is specific to their business and the ships they operate.

The Guidelines on Cyber Security Onboard Ships are free to download from the BIMCO website.

Stay informed with RCL Agencies updates about global shipping and trade regulations.

Global Port Operators Partner on International Environmental Initiative

Five major global port terminal operators, along with Port of Rotterdam Authority (PRA), have partnered on a program called “Go Green” to address environmental issues facing the marine transportation industry.

The five terminal operators backing the initiative with the Port of Rotterdam authority are DP World, Hutchison Port Holdings Limited (HPH), APM Terminals, PSA International and Shanghai International Port Group (SIPG).

APM Terminals said in a statement that this would be “first ever joint industry initiative of this magnitude to promote environmental awareness and make a sustainable difference in the communities in which they operate.”

The program, which will take place Sept. 14-21, will focus on three main themes: re-use and recycling, climate change, and the local communities of the respective port terminal operators.

The local business units of participating port operators will organize a variety of activities covering all three themes to promote global awareness, as well as identify potential local partners in the effort to improve the environment.  Activities will include “creating and upgrading local green spaces, launching educational programs, adopting waste recycling measures and community engagement.”

“ By continuing to focus on our ecosystem using innovation, new technologies and seeking behavioral change, the industry can make a major contribution to the well-being of our planet. This campaign is a watershed for marine terminal operators – it marks the beginning of a joint effort to bring about positive change to the lives of our people”,  said  DP World Chairman HE Sultan Ahmed Bin Sulayem about the “Go Green” program.

Source: ihs maritime 360

CONTAINER WEIGHT VERIFICATION REQUIREMENTS TO TAKE EFFECT IN 2016

Major changes regarding verification and reporting of loaded container weight are being implemented – and these changes will affect all shippers, freight forwarders and NVOCC’s.

The International Maritime Organization (IMO) has amended the Safety of Life at Sea Convention (SOLAS) to require certified weight verification for all containerized cargo prior to loading on board a vessel. On July 1, the World Shipping Council (WSC) released a guideline for implementation of the new requirements regarding weight verification. The WSC consists of 26 members that represent approximately 90 percent of the global liner vessel capacity and they partner with governments and stakeholders and play an active role in the development of programs to improve maritime security and safety. Their complete summary of the requirement can be found below.

The new verification requirements go into effect July 1, 2016 and will require shippers of all containers to provide a certified weight certificate showing gross weight of the container and its contents. Verification must be provided to the ocean carrier (who will provide to the port terminal operator) sufficiently in advance of vessel loading so that the verification can be used n preparing vessel stowage plans. As the requirement now stands, NO containerized cargo will be loaded onto a vessel after July 1, 2016 unless the shipper has provided a signed weight certificate to the ocean. According to the guidelines, this requirement will apply to NVOCC’s and freight forwarders as well as cargo tendered by direct beneficial cargo owners. Even when the underlying shipper has provided weight verification, the forwarder/ NVOCC will be required to separately verify container weight and provide signed documentation to the ocean carrier whenever the forwarder/NVOCC is considered the shipper in relation to the ocean carrier.

Some of the main points of the guidelines are:

  • Obtaining and documenting the verified gross weight of a loaded container is the responsibility of the shipper
  • The ocean carriers will consider whoever tenders the cargo to them as the shipper
  • Verified weights will be used for ship stowage planning
  • If verified weights are not received by the ocean carrier in advance, containers cannot be loaded onto any ship that is subject to SOLAS regulations
  • Costs incurred due to shipper’s failure to comply will be for the account of the cargo

The SOLAS regulations allow for 2 methods to be used to obtain the gross container weight. The first would be to weigh the entire loaded container, using calibrated and certified equipment. Whether done by the shipper directly or at an outside service the shipper chooses, the scale equipment must meet applicable accuracy and calibration requirements of the State where the scale equipment is located.

A second method involves weighing all of the packages / items loading into the container, including pallets / dunnage / packing material and then adding the tare weight of the container. For cargo such as loose grain, scrap metal, or other bulk cargoes this method is considered inappropriate and impractical.

It is important to note that the “shipper” as named on the ocean bill of lading will be the party responsible for providing verified gross weight to the ocean carrier. The World Shipping Council’s current position is that NVOCC’s or master loaders on co-loaded cargo must themselves verify the container weight. This would mean that NVOCC’s will need to obtain authorization from their customer to separately verify or endorse the shipper’s weight certificate, or the NVOCC would have to independently obtain the necessary weight certificate.

Estimating the weight of any portion of the contents of the container will not be acceptable, and the party packing the container cannot use a weight provided by another party except under certain strict guidelines. Carriers and port operations who suspect that verified weights are erroneous will be able to take necessary action in the interests of safety with the current assumption that any charges incurred would be for the account of the cargo.

Overweight containers (exceeding the maximum permitted gross weight) will not be loaded. Weight verification can be provided as part of the shipping instructions provided to the ocean carrier, or in a separate declaration. The certification must be signed by a person so authorized by the shipper; electronic signatures will be allowed for EDI transmissions.

As the implantation date is a year away, there is a possibility that changes to some of the minor points could occur – but it seems clear that this regulation will go into effect next year. Shippers, NVOCC’s and forwarders should begin considering the implications and how this regulation will affect their shipments.

RCL will be monitoring this issue closely, and will provide updates if and when they become available.

Summary of new weight verification requirements as provided by World Shipping Council that go into effect July 1, 2016.

Why Sailing Schedule Changes Matter

Despite claims by shipping lines that most of their containerships operate on fixed-day weekly schedules, a large survey recently revealed that over 40% of the vessels deployed on worldwide liner services arrive one or more days behind schedule.  Managing sailing schedule changes is challenging and can have a costly impact to shippers and logistics service providers.

The  unreliability of liner schedules can be explained by a number of factors. Common reasons for vessel delays include bad weather at sea or at ports, congestion or labor strikes at the different ports of call, as well as a domino effect of delays suffered at previous ports. More serious delays, leading to significant time-losses for the cargoes involved or even the loss of the cargo altogether, can be caused by fire or mechanical incidents , ship collisions or ship groundings. In addition, the daily schedules are constantly can be by affected changes in vessel status: vessels are not ready for transit or changes in orders; changes in the restrictions of the vessels due to cargo or visibility or deficiencies of the vessels.

Low schedule reliability can be caused by a number of factors, many of them beyond shipping lines’ control, and can have serious consequences for various actors in the supply chain.  It is vital to follow the  most current vessel schedule for shippers as well as for consignees.

First, let’s look from at the shipper’s perspective. If you are not accessing the latest sailing schedules, you could be making bookings and plans based on outdated departure and arrival dates.  Each time a schedule is changed, you may need to notify your trucker of the new pickup and delivery times at the port. If you are not aware of the schedule changes, you may incur demurrage charges for having the container wait at the port too long before vessel departure.

If schedules are changed to depart earlier than originally planned, you may miss carriers’ critical cut-off times. Your cargo may not be loaded on the vessel if the deadlines are not met. Conversely, if you find out that schedules are delayed, you could have more time to prepare your containers.

When a schedule changes from its original plan, the route’s schedule reliability decreases. Unreliable routes make it harder to minimize risk and downstream costs in the supply chain. A lack of visibility to schedule performance makes it more challenging to determine the schedules that are the best fit for your transportation needs.

As an importer, you may also incur extra costs if you are not aware of the vessel schedule changes. 

Each time a schedule is changed, you may need to notify your trucker of the new pickup and delivery times at the port. The sailing schedule changes may require you to adjust the timing of trucker appointments. If you are not aware of the schedule changes, you may incur extra costs from your truckers for empty runs.

A lack of visibility to schedule changes and finding out about delays too late to implement contingency plans can result in late deliveries, missed sale dates, or factory shutdowns.

Having access to the vessel schedules updates can help you respond faster and make better decisions in order to improve the chances of on-time deliveries and minimize costs. You can find the link to the latest vessel updates on our website under the Shipping tools or by contacting us directly at 973-779-5900

 

 

Source:

http://www.palgrave-journals.com/mel/journal/v9/n3/full/9100182a.html

http://www.cargosmarton.com/6-reasons-why-sailing-schedule-changes-matter/

 

US and Singapore signs customs agreements

According to the information provided by the Journal of Commerce, the United States have signed three Customs agreements with Singapore, ensuring greater cooperation and mutual assistance on Customs enforcement and the facilitation of lawful trade and travel.

U.S. Customs Border and Protection Commissioner signed a U.S.– Singapore Customs Mutual Assistance Agreement and a Mutual Recognition Arrangement, providing mutual recognition of the U.S. Customs-Trade Partnership Against Terrorism program and Singapore’s Customs’ Secure Trade (STC) Partnership. The U.S. now has mutual recognition agreements with 72 countries.ent.

Trusted trader programs reward users that can show customs agencies that their supply chains are secure with faster clearance. As a result, the agencies can focus its limited resources on targeting high-risk shipments.

The mutual recognition arrangement between C-TPAT and Singapore’s STC will link the two industry partnership programs, so that together they create a unified and sustainable security posture that can assist in securing and facilitating global cargo trade. The new program, known as Trusted Trader, includes the additional perks of reduced inspections from the Food and Drug Administration and Consumer Product Safety Commission.

The agreements signed by the United States and Singapore mark a significant milestone in collaboration on security, and the facilitation of trade and travel between the two countries.

Stay informed with RCL Agencies updates about the global shipping and trade regulations.

WTO members reached key trade agreement

Last week the 160 members of the World Trade Organisation have agreed to implement a historic global trade agreement reached in Bali last December.

 The member states had adopted two texts: the Trade Facilitation Agreement (TFA), aimed at streamlining global customs procedures, and one on the management of food stockpiles.

These two texts were agreed upon late last year in Bali, but had been stalled since July, when India refused to endorse the pact unless its food stockpiles were exempted from possible punitive measures.

India and its supporters in the developing world have argued that food stockpiling is essential to ensure poor farmers and consumers survive in the cutthroat world of business.

But stockpiling and subsidies for the poor are considered trade-distorting under existing WTO rules.

Finally, India and the United States said earlier this month that they had resolved the row.

According to analytics, the historic agreement could cut the cost of trade by up to 15 percent, boost the global flow of goods, accelerate economic growth and add up to 20 million new jobs, most of them in developing nations.

An estimated $1 trillion will be added to the global economy through new rules on customs and cross-border trade that were reached at the WTO’s Trade Facilitation Agreement (TFA) in Geneva on Nov. 27, the organization said in a statement.

The measures included would eliminate paperwork, make rules more transparent, fast-track some low-risk shipments, and create ‘single windows’ for importers and exporters to pay fees and submit documents.

The approach agreed upon by both countries was endorsed by the WTO general council.

The Bali Package of reforms is the largest trade deal in the WTO’s history and intends to improve global standards and procedures for expedited shipments and create a single window for the submission of manifests to all relevant government agencies.

The Agility CEO said by salvaging the agreement, the WTO received “much-needed credibility” and restored viability in the multi-lateral trade negotiation process.

Stay informed with RCL Agencies updates about global trade and international shipping.

General Average

Making Importers and Exporters aware of the risk of General Average, what it stands for and how it can effect your Customer’s bottom line if they do not purchase Marine Cargo Insurance. Even the most restrictive marine cargo policy covers this risk.

GA is a system founded on a principal of justice to all, making good ocean marine losses voluntarily incurred for the safety of the ENTIRE VENTURE, that is SHIP, FREIGHT AND CARGO. During a voyage, the property of one party may be sacrificed to save all. Following such a sacrifice and the ship safely reaches port, then the fortunate party whose cargo was untouched should contribute to the loss of the party whose cargo was sacrificed.

GA cases have a few essential ingredients. First is the common adventure; that is SHIP, CARGO, FREIGHT must be imperiled, and any sacrifice must be extraordinary in nature. If for example the ships gear is lost whilst being used for it’s original intended purpose, the loss is not General Average. The G.A. act must be voluntary and intentional (i.e. throwing overboard cargo to lighten a waterlogged ship) The act must also be reasonable. For example in jettisoning cargo for the common safety of the adventure, the master of the ship must excercise reasonable care in the selection of goods to be thrown overboard. Then, the adventure must be saved, as the essence of G.A. is sacrifice by one to save all.

WHO PAYS FOR THE GOODS SACRIFICED OR THE EXTRAORDINARY EXPENSES

As the sacrifice is to benefit the common venture, ALL MUST CONTRIBUTE TO THE LOSS. In simple terms the contribution is levied on arrived values of SHIP, CARGO AND FREIGHT. Arriving at these values is no easy task as many factors have to be considered. Cargo ships involved in regular trade often have goods shipped under 1500 bills of lading, which creates voluminous basic work in establishing the arrived values. As well a number of shipments may have arrived damaged, and may have been discharged in different ports in different countries.

The owners of the property sacrificed, or those (usually the owners) who have incurred an extraordinary expense, must as with the practice of insurance be made whole, i.e. Put back into the same financial position had the loss/G.A. not occurred in the first place.

Let us assume that an entire shipment is jettisoned in a General Average sacrifice and that it’s value at destination would have been $1,000, while the owner of the cargo is made whole, they too must contribute to the loss so that all parties are in the same position. This owners contribution is assessed on the $1,000 value

WHAT IS AN AVERAGE ADJUSTER?

The preparation of G.A. adjustments is, as a rule, entrusted to professional Average Adjusters. Although usually appointed by the ship owner they remain quite independent. Their goal is to do justice to all whom had an interest in the voyage.

Please find below a simplified example of final figures in a General Average Adjustment

LOSS
G.A. sacrifice (cargo jettisoned) …………………………… $45,000
G.A. expenditure …………………………… $15,000
G.A. loss of freight (on jettison) …………………………… $7,000
Total …………………………… $67,000
CONTRIBUTORY VALUES(NET ARRIVED VALUES)
Ship …………………………… $300,000
Freight …………………………… $75,000
Cargo …………………………… $300,000
Total …………………………… $675,000
GENERAL AVERAGE CONTRIBUTION
Ship Pays …………………………… $30,000
Freight Pays …………………………… $7,500
Cargo Pays …………………………… $30,000
Total …………………………… $67,500

Calculation of the factor applied to contributory values: $67,500 divided by $675,000 = 0.1 (ship $300,000 x 0.1 = $30,000)

ALWAYS REMEMBER THAT THE MOMENT YOURS OR CUSTOMERS CARGO IS PLACED ABOARD A VESSEL THAT YOU HAVE AN INTEREST IN THE WHOLE VENTURE AND NOT JUST YOUR OWN CARGO

Source: CBMU “Marine Insurance: The Silent Export”

How many Shipping Containers are Lost at Sea Each Year?

Proper packing, stowage and securing of containers is very important to the safety of a container ship, its cargo and its crew, to shore-based workers and equipment, and to the environment.However,  a number of factors ranging from severe weather and rough seas to more catastrophic and rare events like ship groundings, structural failures, or collisions can result in containers being lost at sea.

Obtaining an accurate assessment of how many containers actually are lost at sea has been a challenge. In an effort to gain some clarity on this issue, in 2011 and again in 2014, the World Shipping Council (WSC) undertook a survey of its member companies to obtain a more accurate estimate of the number of containers lost at sea on an annual basis.

In the 2011 survey, the WSC member companies were asked to report the number of containers lost overboard for the years 2008, 2009 and 2010. The carriers that responded represented over 70% of the 2011 global container ship capacity. WSC assumed for the purpose of its analysis that the container losses for the 30% of the industry that did not respond to the survey would be roughly the same as the 70% of the industry that responded.

The total annual figure reported was adjusted upward to provide an estimated loss figure for all carriers, both WSC members and non-members, and arrive at a total industry figure.

Based on the 2011 survey results, the World Shipping Council estimated that on average there were approximately 350 containers lost at sea each year during the 2008-2010 time frame, not counting catastrophic events. When one counted the catastrophic losses, an average annual total loss per year of approximately 675 containers was estimated for this three year period.

In order to expand and update the estimate of containers lost at sea, in 2014, WSC surveyed its members for the years 2011, 2012 and 2013. In the 2014 survey, WSC received reports from carriers representing 86% of the 2014 global container ship capacity. WSC again assumed for purpose of its analysis that the container losses for the remaining 14% of the industry would be roughly the same as the 86% of the industry that responded and again adjusted the total annual figure upward to produce a total estimated loss for all carriers, including member and non-member companies.

The survey of the years 2011, 2012 and 2013 estimates that there were approximately 733 containers lost at sea on average for each of these three years, not counting catastrophic events. When one includes catastrophic losses (as defined above) during these years, the average annual loss for the period was approximately 2,683 containers.

This larger number is due primarily to two factors: the complete loss in 2013 of the MOL Comfort in the Indian Ocean and all of the 4,293 containers on board – the worst containership loss in history; and, in 2011, the grounding and loss of the M/V Rena off New Zealand, which resulted in a loss overboard of roughly 900 containers. These incidents involved complete and total vessel losses.

Analysis of the Survey Results Combining the results of the two WSC surveys over the six year period from 2008 to 2013, the WSC estimates that there were on average 546 containers lost at sea each year, not counting catastrophic events, and on average a total of 1,679 containers lost at sea each year including catastrophic events.

The data demonstrates that container losses in any particular year can vary quite substantially based on differences in weather and based on the extent to which there may be one or more catastrophic vessel losses. For example, in 2011 (the year of the loss of the M/V Rena) there was a total annual loss of 1,514 containers. In 2012, there was a total loss of 958 containers. In 2013, there was a total loss of 5,578 containers – 77% of which occurred with the sinking of the MOL Comfort in the Indian Ocean.

 

Source: World Shipping Council

China Rejects P3 Network

The Chinese Ministry of Commerce (MOFCOM) did not  approve a long-term operational vessel sharing agreement that was proposed by three ship lines: Maersk, Mediterranean Shipping Co. (MSC) and CMA CGM. The MOFCOM’s decision was made  “following a review under China’s merger control rules,” according to a statement posted on all three carriers’ websites.

In a statement, the P3 partners said that they had taken note of and respected MOFCOM’s decision, and have subsequently agreed to stop all  preparatory work on the P3 Network.

P3 was introduced by the three ship lines on June 18, 2013, as a long-term operational vessel sharing agreement on the East-West trades. Under the initial proposal, the P3 Network was designed to improve the service quality for shippers and well as provide what the three shipping lines say would be more frequent and reliable services.

The rejection was surprising since the p3 agreement had already been approved by the US Federal Maritime Commission and the EU Commission.

Analysts had predicted that the alliance would have massive implications for the global container shipping market and generate a player that would be a force in the shipping line industry.