The SOLAS Controversy

The Safety of Life At Sea (SOLAS) rule, which came into effect on the 1 of July, has caused shippers a great amount of irritation as they question the necessity of the SOLAS Rule since the industry has survived for hundreds of years without it. According to AgTC Executive Director, Peter Friedmann, “This SOLAS container scheme was concocted by carriers, shippers didn't want it, (the U.S. Coast Guard) said it was unnecessary, and now they want to profit by imposing a fee?”, “This feels like the carriers' discussions of a congestion surcharge during the height of the West Coast port meltdown two years ago, to which the (Federal Maritime Commission) responded informally but forcefully to protect U.S. importers and exporters from such an ill-conceived and inappropriate concept.” Although shippers are against the SOLAS Rule freight forwarders seem to be in favor of the concept,   “It starts with the cost of simple exception management in cases of VGM discrepancies or the inevitable late submission of VGMs, such as making sure containers don’t roll, amending manifests, customs declarations, and it ends with the VGM further firming up the chain of legal responsibility and custody in case of accidents involving containers. After all, non-vessel operating common carrier (NVOCCs), such as DB Schenker, are legally acting as the shipper of record and have to provide a correct VGM to the carriers,” says Joerg Hoppe DB Schenker, director and head of Ocean Freight for North and Central China.

It’s hard to say who is correct on this issue, but regardless of the correctness, SOLAS has gone into effect and all must abide by it. The US Coast Guard and the IMO’s Safety at Life of Sea amendment have sanctioned two different methods of obtaining a VGM (verified gross mass) of a container. The first is by allowing the ports to weigh the container where there may or may not be a fee involved. The alternative method would be instead of weighing the container as a whole unit, the shipper would weigh every item that is going to be placed inside of the container, then add the “empty weight” of the container. Acquiring the VGM has become a very important step when shipping items and because of the new SOLAS rule some ports will not ship items or will even reject the shipments if they do not have the proper VGM.  “Examples of fees that drew GSF’s ire include Kuehne + Nagel’s VGM transmission fees, OOCL Logistics' $15 fee for Chinese exports, Grimaldi Agency Nigeria’s charge of nearly $71 to weigh 20-foot containers and $141 for 40-foot containers and DP World’s $1.30 charge for VGMs provided by shippers that can rise to $4. GSF has also heard some container lines calling Colombo, Sri Lanka are considering charging shippers $25 per VGM submission and slapping them with a $50 fine if the weight submitted differs from the final weight.” (JOC)

The new regulations have caused an unbalanced shock wave in the shipping business with some ports wanting to charge fees for weighing containers while others will do it at no cost to the shippers. Essentially this could cause friction between the ports themselves. From one side, we have the shippers who fail to see the need for the new regulations and then the freight forwarders who have become responsible for the freight in the shipping process that are trying to avoid any tragedies that could arise from incorrect weight distribution onboard the vessels. So how do we determine who is correct? Is the new regulation just a ploy to get more money out of the shippers or is it an important regulation that could save thousands of human lives? Moot point regulations are just that - a regulation that everyone will have to adjust to whether it is for better or for worse.

Allyn Contibutors: Lilian Farias and James Diehl

 

References:

Szakonyi, Mark. "Shipper Frustration with VGM Fees Intensifies."Shipper Frustration with VGM Fees Intensifies. N.p., 1 July 2016. Web. 5 Aug. 2016.

Morley, Hugh R. "NY-NJ Port Terminal to Offer SOLAS Weighing to Shippers for a Fee." NY-NJ Port Terminal to Offer SOLAS Weighing to Shippers for a Fee. N.p., 10 May 2016. Web. 5 Aug. 2016.

"SOLAS – Safety of Life at Sea." Cosconcouk RSS. N.p., 9 June 2016. Web. 16 Aug. 2016.