Less Than 60 Days to the July 1st ‘No VGM, No Load’ Implementation

With less than 60 days to go to VGM implementation the U.S. Coast Guard (USCG) have made its position on a few things clear.

1. Existing U.S. laws and regulations for providing verified container weights are equivalent to the requirements in SOLAS regulation V1/2.
2. The IMO’s SOLAS VGM regulation should be handled as a ‘business practice’ instead of regulatory enforcement.
3. The carrier is allowed to permit any VGM determination method they choose so long as the VGM is provided using certified scales.
4. The USCG has no plans to delay implementation.

There are multiple ways to meet the IMO’s SOLAS ‘No VGM, No Load’ directive.

a. Method 1: Weighing – The container can be weighed upon completion of packing and sealing. Weighing can be performed by the shipper or by a third party contracted by the shipper (See Chapter 5.11 of the SOLAS guideline).
b. Method 2: Calculating – All packages and cargo items may be weighed individually (including the mass of any / all packing materials) and must be added to the container tare weight visible on the exterior of the container (See Chapter 5.1.2 of the SOLAS guideline).

Ocean carriers have also made it clear in cases where no VGM has been reported, or reported late, the shipper will be responsible for any and all fees including port and carrier storage, and any possible fines which may result when a container is not loaded due to non compliance.

USCG Identifies Alternative Methods of VGM Determination

Note: While the USCG may recognize the alternatives as viable methods of determining the VGM, carriers and others in the industry are quick to take exception. APL and the Ocean Carrier Equipment Management Association (OCEMA) quickly pointed out they will not accept VGM’s obtained via the rational method. APL states IMO law does not does not allow the carrier to add the tare weight of the container to the cargo weight provided by the shipper to obtain the VGM.

In addition to methods 1 and 2 noted above, on April 28th the USCG gave its approval to two alternative methods for obtaining certified container weights as proposed by agricultural shippers and the South Carolina Port Authority respectively.

The first alternative method (‘rational’ method) requires U.S. exporters to certify the weight of their cargo including all packing materials while the container line would certify the weight of the container they own. The carrier would combine the two weights to determine the VGM. The second alternative method involves the terminal operator weighing the container and verifying the VGM on behalf of the shipper for a fee.

Port Authority / Ocean Carrier Stance on VGM Requirement

Currently with the exception of the Ports of Baltimore, Savannah, and the South Carolina Port Authority, terminal operators will not accept or weigh containers that do not have a VGM upon arrival. While handling will vary in the United States by port terminal and ocean carrier, most terminal operators and ocean carriers have advised a “No VGM, No Acceptance” policy will be enforced as the terminal operators simply do not have the infrastructure to efficiently provide container weighing services.

Port terminals already on record stating they will not be providing container weighing services includes but is not limited to the following: the 13 port terminal operators located in Los Angeles & Long Beach, California, Maher terminals in New York and New Jersey and the port of Houston among others.

The Need for a Level Playing Field

European logistics groups are calling on national authorities to coordinate their actions regarding VGM enforcement to ensure a level playing field so no one recognizes a competitive advantage upon implementation.

European organizations representing the interests of a variety of industry service providers are pushing national authorities to work toward commonly accepted guidelines to minimize distortion of competition and facilitate smooth SOLAS operations. Their statement calls for countries around Europe to adopt similar standards on certification of weighing equipment which do not adversely impact the supply chain. Further, it cited the importance of national authorities communicating the accepted tolerance level for weighing equipment regarding the declaration of a VGM (e.g. 5% or an acceptable variation) in advance of the July 1st implementation.