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Feb.8, 2016

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BENEATH THE SURFACE THE JOURNAL OF COMMERCE 65 Gary Ferrulli IN HIS JAN. 14 Journal of Commerce commentary ("Industry Anxiety"), Peter Tirschwell defined well the "how did we get here" aspects and the trepidation among many ship- pers concerning the International Maritime Organization's container weight verification mandate. Speaking from my 43 years of experience that spans virtually all aspects of the supply chain, I can state unequivocally that, starting on July 1, complying with the requirement will require more time and money. But how much additional time will depend on where you're ship- ping to and from, and what you're shipping. Those in the U.S. export- ing to almost anywhere will have, relatively speaking, the least dis- ruption and additional cost because virtually all packaged goods already have some form of weight on the packages a nd in databases for shipping purposes. The individual container weights are also visible on the outside and inside of the con- tainer, and available in the carrier's or lessor's database. There undoubtedly will be some challenge for loose, bulk and baled commodities, because shippers will have to go through a weighing process, and that will add time and expense. But the bigger issues will come outside the U.S. Although some exporting areas in Europe, Asia, Australia and Canada also have requirements for transporting packaged goods labeled with weights — especially those destined to the United States — these "niceties" don't exist in many exporting nations, and truck scales there are anything but abundant. The IMO requires the shipper to certify that the stated weight of the container and its contents are cor- rect and that certification be signed. This puts the onus on an individual within the exporting company. Thus, a company with regular ship- ping patterns and documented shipping should experience mini- mal impact on its existing shipping practices. Those shippers currently not in compliance with existing rules of weight limitations, intentionally or otherwise, still will be able to issue false certifications. But if a carrier finds a container to be out of com- pliance, it can inspect the offending box and refuse to ship it, resulting in significant costs, delays and per- haps some level of future censure. A carrier, for example, could require 100 percent reweighing of the ship- per's containers until it's convinced of better compliance practices. In the U.S. and other regions that have existing weight-labeling requirements, the big fear among exporters is being disadvantaged because they can comply, while some competitors in other countries can't or won't. A second perspective that isn't getting any play or discussion is that the requirement is coming well after the horse has left the barn. In other words, the industry is trying to do something about deaths, injuries and ship damages resulting from excessive weights and related stow- age issues. For years, when these events occurred, we saw a brief splash in industry publications on the specific incident, but no reme - dial action was taken and only those directly affected recall it happening. Those of us who have been in the industry for any length of time have seen or heard about containers breaking or being damaged because of excessive weights of box goods. To be sure, a small percentage of shippers are offenders. Some of it results from ignorance, with the view, "We'll use the whole container, and the weights don't mean anything." In other cases, shippers are trying to avoid fees and charges related to overweight containers, or trying to avoid having the con - tainer stopped at the port and not allowed over the road because of excess weight. Regardless of intent and rationale, it happens far too often, and the consequences are far too serious to ignore. It's happened since Malcom McLean put contain- ers onto ships. So here we are at the doorstep of the IMO reg ulations taking effect, with great doubt about how countries will implement them and even if they can. For those who can, there's the time and cost elements to consider as well as the concern about being different from others that can't comply. Are those reasons to do nothing or to comply when convenient? JOC Gary Ferrulli is president-North America for Unicon Logistics. Contact him at AN INCONVENIENT TRUTH So here we are at the doorstep of the IMOregulations taking effect, with great doubt about how countries will implement them and even if they can.

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