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Lack of concern over looming container weight rule, polls find

Source: CargoSmart

The majority of shippers and logistics providers in a CargoSmart survey had no plans to comply with the new container weight rule that will be in effect from July 1, and Drewry found that none of 20 non-vessel operators the analyst met during an April tender process were ready to comply.

With just over two months before the SOLAS amendment’s global roll out, the findings give a disturbing picture of an industry heading for trouble. Drewry has even urged container exporters to plan for likely port and logistics delays from July 1.

“Many of the stakeholders are not only too late in communicating how shippers and NVOs can meet their new obligation of declaring a verified gross mass, but there is a complete lack of standardization and coordination,” Drewry said in a briefing.

This was supported by the findings of a poll by CargoSmart. The shipment management firm received 820 responses from its customers to the survey, 38 percent from shippers and 57 percent from logistics service providers.

The majority of the respondents either had no plans or had not yet finalized their plans to comply with new requirements. Thirty-six percent of the respondents had not yet started planning, 20 percent were not aware of the new requirements, and 20 percent were in the discussion stage with several parties. Only 4 percent of respondents had a solution in place, the survey found.

The U.K. P&I Club also said some terminals and shippers seemed unprepared or even unaware of the SOLAS amendment, and it warned that unless practical steps were taken, chaos and commercial disputes could be expected in July. So far, only DP World has committed itself to providing weighing services across its global terminal portfolio.

This hardly signifies a plan coming together. The SOLAS convention requires shippers to obtain the VGM of laden export containers and communicate that data to ocean carriers sufficiently in advance for the ship to plan its stowage. Carriers and terminal operators will be legally obliged to ensure containers without a VGM are not loaded on to a ship in all 162 states that are signatories to SOLAS and are required to enforce the new law.

However, only 11 signatories have issued guidelines with official information on how the various parties can prepare for compliance. Of greatest concern to the container transport supply chain is the complete lack of information from China where most of Asia’s export boxes are generated.

Edoardo Podesta, Dachser managing director, air and sea logistics for Asia Pacific, said the problem was not that there were no solutions to weighing containers. “To weigh a container is not complicated, but to weigh millions of containers in places like Shenzhen, Ningbo or Hong Kong in the peak season — which starts from July 1 — without disrupting the supply chain, that is the challenge,” he said.

"At a place like Dongguan in Guangdong Province, there are simply no facilities. It is not even a question of who pays or doesn't pay — it is impossible to weigh every container on the way to a port. There will not be a full implementation from the beginning, that is now clear."

The scale of the challenge in China is immense. In the Pearl River Delta last year, Shenzhen handled 24 million twenty-foot-equivalent units and Guangzhou handled 17.6 million TEUs. If even half of those containers are for export from factories in South China, that is 20 million boxes that will have to be weighed with equipment that is not in place now and will require massive investment to install.

Container weighing solutions company Conweigh gave an example of what would be required to weigh all export containers exiting through the Australian Port of Melbourne. The port exported 863,473 full containers in 2012 to 2013, which means that each day, 2,366 containers would require weight verification. That equated to 98 containers per hour, or 1.6 containers every minute, that needed weight verification.

Conweigh said if it took 10 minutes to weigh a box, then an equivalent of 16.5 days was needed to weigh and verify all 2,366 containers required per day at the port of Melbourne. The vastly larger ports in China are faced with an impossible task.

“I don’t see how it can happen that every container loaded on a ship from July 1 will have gone through the correct weighing procedures and the weight will be correct as declared," Podesta said. “I just don’t believe it will be possible.”

In China, the Maritime Safety Administration that falls under the Ministry of Transportation is believed to be the agency that will administer and enforce the VGM rule. The Maritime Safety Administration has issued a notice of “5 things you have to know regarding new container weight requirements of SOLAS,” but it outlines broadly what is required without going into the specifics the industry is desperately searching for.

Contact Greg Knowler at greg.knowler@ihs.com and follow him on Twitter: @greg_knowler.

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