Six months on – SOLAS Container Weight Verification: an update
It has been six months since SOLAS VGM regulations (the “Regulations”) came into force on 1 July 2016. Now that the ‘grace period’ is over and the regulations have had time to bed in, the industry is able to assess the impact of the Regulations, both to date and going forward.
Reports suggest that contrary to pre-implementation fears, the full enforcement of the Regulations has not caused any major disruption to liner operations. Reviews conducted by CargoSmart have shown that concerns about delays caused by mandatory reporting of container mass proved unfounded. The new SOLAS requirement has not impacted average vessel arrival delays, berth times or departure delays. This suggests that the additional work which shippers, forwarders, carriers and terminals must do to comply with the Rules has not disrupted vessel schedules.
CargoSmart also reviewed port performance at six ports in different geographical locations; Jawaharlal Nehru (Nhava Sheva) and Tanjung Pelepas in Asia, Rotterdam and Felixtowe in Europe and Los Angeles and Savannah in North America. The Review covered March-May 2016 and from July-September 2016; so before and after the Regulations came into force. It was found that although vessel size distribution has remained largely the same, the overall vessel arrivals at the six ports analysed by CargoSmart fell from 3,444 in March-May 2016 to 2,834 in the July-September 2016 period. Whether this is due to the Regulations or, perhaps more likely, a reflection of market conditions and operational hardship is not clear.
The issue that seems to be causing most difficulty for those involved in the liner trade is the timely and efficient communication of the VGM information to all relevant parties and the accuracy of this information in certain less well regulated jurisdictions. In the last few months, we have seen a number of new attempts to tackle these ongoing issues.
All those involved in the industry have their own different systems and processes. Operational costs at every stage are significant, ranging from administrative requirements to weighbridge and new port charges. The requirements and additional obligations imposed on shippers, especially in relation to the transmission of VGM information to all stakeholders, sending multiple forms of documentation (documentary requirements vary from jurisdiction to jurisdiction) and waiting for responses prior to the loading of the containers have opened up a US$4 billion market for digital platforms and systems that allows VGM information to be shared with multiple parties swiftly and effectively.
One entity which has successfully entered the digital platform market is SOLAS VGTM, a software platform developed by Marine Transport International in partnership with a big data company, Black Swan. The platform enables shippers to submit VGM information of multiple containers to multiple parties directly through one portal. This allows VGM information to be shared securely with carriers, port operators and forwarders at the same time.
Innovative companies are also finding ways in which container weighing procedures can be improved or provided in more remote areas by introducing portable container weighing systems. One such solution is a four-corner hydraulic jack system, which was launched in May by engineering firm, Hy-Dynamix, in collaboration with Dynamic Load Monitoring (UK) Ltd. (DLM). Another approach is that of BISON C-Legs, which uses self-contained scales that attach to and lift a laden container just clear of the chassis to assess the VCM. The software then transmits the container weight data via Bluetooth to a smartphone app. This enables shippers to “accurately weigh containers on chassis in any location, without reliance on capital-intensive weighbridges, cranes and container handlers, which are not always available at the right time or in the right place”. However, those utilising these less expensive mobile VGM services must ensure that they are properly certified and approved by the relevant local jurisdictions. This is an important point to check as in some jurisdictions, including Hong Kong, the local authorities require those entities providing VGMs to shippers to be accredited and registered.
It is of course early days. However the industry appears to have adapted well to the new legislation, save for the frustrations shippers share over what they see as new dubious charges in connection with Regulations. Examples include Kuehne + Nagel’s VGM transmission fees and exports and logistics and shipping firm Grimaldi Agency Nigeria’s charge of nearly $71 to weigh 20-foot containers. Shippers’ groups such as the Hong Kong Shippers’ Council have criticized freight forwarders for imposing administrative charges for the handling of VGM data, stating that the keying in of VGM data is too little work to justify the charges. As for enforcement, significant fines and penalties imposed on shippers have not yet been reported. As always, change has created opportunity and innovative systems and solutions are emerging to assist shippers with their VGM requirements. It remains to be seen what other major effects the Rules will have and we will continue to monitor developments throughout the next six months. Keep an eye on our Twitter feed for the latest updates on the SOLAS VGM Regulations and other Regulatory and Compliance stories and developments in 2017.