Presented to Harbor Transportation Club May 12, 2016 Presented by - - PowerPoint PPT Presentation

Presented to Harbor Transportation Club May 12, 2016 Presented by Cameron Roberts, Roberts & Kehagiaras LLP

 According to the JOC:

• MSC Napoli;
• 660 containers off loaded without water;
• +25% or 137 containers varied from the manifest

by more than 3M tons;

• 1container was 20M tons heavier than manifested.

 JOC Article, IMO Container Weight Proposal Pits Carriers Against Shippers, October 8, 2013

 In May 2014, the Maritime Safety Committee

• f the International Maritime Organization

approved certain Guidelines Regarding the Verified Gross Mass of a Container Carrying Cargo (the “IMO Guidelines”).

 Agriculture and forest products;  Causes significant competitive disadvantage

to US exporters;

 Shipper knows weight of cargo. Shipper does

not know container weight.

 The rule imposes on shipper liability to certify

equipment which is owned/leased/controlled by the carrier.

 Tare Weights printed on the back of the

container typically not accurate;

 Does not account for container or weight

variance;

 The unique US supply chain means that the

SOLAS documentation requirements will disrupt the flow of cargo through the ports;

 No means currently exist to facilitate

transmission of essential Verified Gross Mass (VGM) data;

 Cost of implementation imposes significant

new costs on all participants in US export supply chain.

 “The responsibility for obtaining and

documenting the verified gross mass of a packed container lies with the shipper.”

 Under the IMO Guidelines, “[s]hipper means

a legal entity or person named on the bill of lading or sea waybill or equivalent multimodal transport document (e.g. ‘through’ bill of lading) as shipper and/or who (or in whose name or on whose behalf) a contract of carriage has been concluded with a shipping company.”

 The "shipper" is the party that appears in the

Shipper/Consignor field on the Master Bill of Lading or an equivalent document issued by the VOCC and may be any of the following people/entities:

 The Beneficial Cargo Owner (i.e. the owner of

the goods or the exporter);

 NVOCC; or  For consolidated cargo, the entity that

consolidates the cargo (i.e. the "Master Loader").

 Shippers or third-parties

can:

• Weigh a loaded container, or
• add the weight of the cargo and

the container's tare weight.

• For certain commodities, such

as scrap metal, unbagged grain and other bulk cargo the loaded container must be weighed.

• Use of the second method may

be subject to certification by the IMO Member State in which the packing and weighing took place.

 The requirements of the “State” in which the

equipment is being used, i.e. weighing equipment used must meet national certification and calibration requirements.

 29 CFR 1918.85(b)(8)

• Any scale used within the United States to weigh

containers for the requirements of this section shall meet the accuracy standards of the state or local public authority in which the scale is found.

 UK - Coast Guard variation of +/- 5% of the

loaded container weight.

 JP authorities – a variation between +/- 2 and

5%.

• http://agtrans.org/wp-

content/uploads/2016/02/AgTC-SOLAS-position- paper.pdf

 NZ – Maritime variation of +/- 60kg (0.1%).

• http://www.maritimenz.govt.nz/Consultation/Cont

ainer-verification/Container-Weight- Verification.pdf

 “Individual, original sealed packages that

have the accurate mass of the packages and cargo items clearly and permanently marked

• n their surfaces, do not need to be weighed

again when they are packed into the container.” IMO Guidelines, paragraph 5.1.2.1.

 Example: Original sealed packages (e.g., flat

screen TVs that have their weight (e.g. X kg.) marked by the manufacturer on the box containing the TV).

 The IMO Guidelines are clear that the shipper

named on the ocean carrier bill of lading is the party responsible for providing the container’s verified gross mass. IMO Guidelines, paragraph 5.1.3. Thus, the “master” forwarder named on the ocean carrier’s bill of lading is responsible for the accurate cargo weight verification of all the cargo from all the co-loading forwarders using the container. NO PASS ON WEIGHTS.

 As a Nation

ational is l issue, f fin ines an and

• th
• ther p

penalt ltie ies w will ill be e imp impos

• sed und

under na national le legis isla latio ion.

 As a Commercial issue, the

penalties may involve repacking costs, administration fees for amending documents, demurrage charges, delayed

• r cancelled shipments etc.

 The new SOLAS requirements

apply equally to both under and overweight containers.

 Th

This is is is a Nation ational l is issue, and each State will determine who is the appropriate regulator.

 “At a meeting hosted by the Federal Maritime

Commission, the Coast Guard said it was up to shipping lines to enforce the new requirement. Carriers could then call on the Coast Guard to block or remove containers from ships if they aren’t certified, but the shippers wouldn’t be penalized by law enforcement, said Adm. Paul Thomas, who oversees inspections and compli- ance.”

 http://www.wsj.com/articles/container-weight-rule-wont- carry-penalties-in-us-coast-guard-1455835575

 US Coast Guard issued a Marine Safety

Information Bulletin, April 28, 2016;

 Acceptable VGM methods are: (1) the terminal weighs the container, and when duly authorized, verifies the VGM on behalf of the shipper, and (2) the shipper and carrier reach agreement whereby the shipper verifies the weight of the cargo, dunnage, and other securing material, and the container’s tare weight is provided and verified by the carrier.

 https://www.uscg.mil/msib/docs/009_16_4-28-2016.pdf

 US Coast Guard issued a Marine Safety

Information Bulletin, April 28, 2016;

• For the purposes of determining the VGM of a

container, any equipment currently being used to comply with Federal or State laws, including the Intermodal Safe Container Transportation Act and the container weight requirements in 29 CFR 1918.85(b), are acceptable for the purpose

• f

complying with SOLAS.

 https://www.uscg.mil/msib/docs/009_16_4-28-2016.pdf

 Intermodal Safe Container Act 1992

• Reimbursement of costs
• Liens on cargo
• Impounds of trailer
• State law enforcement – fine or

penalty  Overweight container penalties - CA Vehicle Code § 42030(a)

 1918.85(b) Container weight.

No container shall be hoisted by any lifting appliance unless the following conditions have been met:

 (1)

The employer shall determine from the carrier whether a container to be hoisted is loaded or empty.

 (2) For a loaded container: (i) The actual gross weight shall be plainly

marked and visible to the crane …; or (ii) The cargo stowage plan or equivalent permanently recorded display serving the same purpose, containing the actual gross weight and the serial number or other positive identification of that specific container, shall be provided to the crane … (3) Every outbound container received at a marine terminal ready to load aboard a vessel without further consolidation

• r loading shall be weighed to obtain the actual gross weight, either

at the terminal or elsewhere, before being hoisted.

 1903.15 The Area Director shall determine the amount of any

proposed penalty…

 $200 http://www.oshrc.gov/decisions/html_2009/08-1428.htm

 The duly authorized contact person of the shipper (by name and

signature provided in the statement) hereby certifies, that the above mentioned shipment details have been evaluated carefully and according to the requirements of the International Convention for the Safety of Life at Sea (SOLAS); as they have been published in Chapter VI, Part A, Regulation 2 - Cargo Information.

 We understand and confirm that missing, incorrect and/ or belated

VGM statements may result in non-acceptance of the shipment by the vessel operating ocean carriers and a delay in the originally planned schedule. Any a addit dditio ional c l cost c caused by d by de dela lay due ue to to non non- accept ptance o

• f the s

shipm ipment by by the carrie rrier t to be be covered by d by VGM GM de decla lari ring pa part rty (as u unde dersig igned a abo bove).

 (c) Customer acknowledges that it is required to provide verified

weights obtained on calibrated, certified equipment of all cargo that is to be tendered to steamship lines and represents that Company is entitled to rely on the accuracy of such weights and to counter-sign

• r endorse it as agent of Customer in order to provide the certified

weight to the steamship lines. The Customer agrees that it shall indemnify and hold the Company harmless from any and all claims, losses, penalties or other costs resulting from any incorrect or questionable statements of the weight provided by the Customer or its agent or contractor on which the Company relies.

 Sign and swear to any document and to perform any act that may be

necessary or required by law or regulation in connection with the lading, or endorse or countersign weight certificates or tickets provided by grantor or grantor’s designee, or operation of any vessel or other means of conveyance.

 “The shipping document shall be: .1 signed

by a person duly authorized by the shipper; and .2 submitted to the master or his representative …”. SOLAS Chapter VI, Regulation 2, paragraph 1.

 This is a Commercial issue.  Verified gross mass is required

in order to prepare the stowage plan of the ship prior to

• loading. Deadlines will differ

according to a number of factors; shippers should obtain information on documentary cut-off times from their carriers in advance of shipment

 One major US reefer

shipper states:

• “The cost of attempting to

weigh every container at the port would add a minimum of $200-$250 /Container. Annually that would cost our company $4.7 – 5.7 MM.”

 http://agtrans.org/wp- content/uploads/2016/02/ AgTC-SOLAS-position- paper.pdf

 http://www.imo.org/en/About/Conventions/ListOfConventio

ns/Pages/International-Convention-for-the-Safety-of-Life- at-Sea-(SOLAS),-1974.aspx

 http://www.worldshipping.org/industry-

issues/safety/SOLAS_CHAPTER_VI_Regulation_2_Paragraphs_ 4-6.pdf

 http://www.worldshipping.org/industry-issues/safety/cargo-

weight

 http://agtrans.org/wp-content/uploads/2016/02/AgTC-

SOLAS-position-paper.pdf

 http://www.dbschenkerusa.com/ho-

en/products_services/ocean_freight/New_container_weighing _rule_.html

Cameron W

• W. Rober

erts, s, Esq. Robe bert rts & Kehag agiara iaras L LLP 310-64 642-980 9800 www.trad radean andcarg dcargo.co .com