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TRADING PLACES 54 THE JOURNAL OF COMMERCE www.joc.com Peter Tirschwell APRIL 4.2016 AS WE GO to press, the industry is just more than three months away from the July 1 implementation date of the new container weight verification rule under the Safety of Life at Sea convention. The indus- try seems to have come a long way from last fall when panic-stricken shippers, carriers and forward- ers wondered how a new type of rule applied to container ship- ping would have any hope of being implemented without disrupting trade. Those fears have abated some- what. Carriers have made clear that under the rule, they can't load a container without a verified gross mass as SOLAS requires. This is related to maritime rules where to ensure compliance with its flag state and insurance rules, a ship must be in complete compliance with all aspects of SOLAS. Carriers may cut corners daily when it comes to offering extended free time or rate discounts to cus- tomers, but this is a compromise they can't make. Large multina- tionals that are the world's largest container shippers, and thus are the first to receive concessions from carriers, seem to have gotten this message. They have rolled up their sleeves and seem a lot more comfort- able now versus a few months ago that they will avoid disruption to their supply chains. Others, including U.S. export- ers, continue to take issue with basic elements of the rule, arguing that delays will result from any devia- tion from existing practice where exporters provide the weight of the cargo only. The SOLAS rule requires t he submission of a combined weight that includes the cargo, packing materials and the container. Relying on comments from the U.S. Coast Guard, the exporters say that submitting the cargo weight as they do today, and having the carrier add the weight of the container to create the official verified gross mass, is the only way delays to export cargo can be avoided. This remains a disagreement, because at least as it applies to the U.S. export trades, the carriers, speaking through the Ocean Carrier Equipment Management Asso- ciation, are insisting the exporter provide the complete VGM, even as they insist they will not hold the exporter legally responsible for any variances to the VGM resulting from any inaccuracies in the tare weight of the container. "If a shipper accurately uses the tare weight shown on the container door in calculating the VGM, the carrier position on the law is that the shipper and verifying person are not liable for inaccuracies in actual container tare weight versus tare weight printed on the container door," OCEMA Executive Director Jeffrey Lawrence told The Journal of Commerce. "If the VMG vari- ance is solely due to a difference bet ween act ua l conta iner ta re weight and the printed tare weight on the door, the shipper has a valid defense to a claim that it reported an incorrect weight." Also still unresolved, at least in the U.S., is the question of where the VGM will be created, before the container arrives at the port or when it gets there. Some terminals at Los Angeles-Long Beach are insisting in calls with shippers that they won't admit any container through their in-gates without a VGM. Others, such as Port of Charleston head James Newsome, say they will create the VGM on behalf of the shipper, using the port's existing process of weighing every export container. But many other North Ameri- can terminals, which already face congestion from mega-ship calls, remain clearly uncomfortable with the idea of having to create a VGM on behalf of the shipper, whose responsibility it is under the SOLAS rule to create and submit the VGM to the carrier. As GCT CEO Ste- phen Edwards told the recent TPM Conference, "I would urge that exporters find a way to weigh your box as it enters the supply chain," in other words, prior to its arrival at the port. Many shippers plan to do just that, and indicate they are mak- ing progress in their preparations for July 1. In early January, Bjorn Jensen of Electrolux said: "I am immensely frustrated, as is every other shipper I have talked to, by the near total lack of industry coordination, and indeed by the feel- ing I'm getting that even carriers have no idea how this is going to play out." But more recently, on March 10, Jensen said he was making progress. "Generally, it seems to me that if, as a shipper, you take this seriously and dedicate the right resource, who understands what needs to be done, this is not an insurmountable task." Other shippers have told us they are preparing EDI connections and creating backup hard-copy redundancies to ensure there is no disruption to their supply chains. My JOC colleagues and I are cover- ing this issue intensively — readers can expect regular, almost daily, updates as we learn more. JOC Contact Peter Tirschwell at peter.tirschwell@ihs.com and follow him on Twitter: @petertirschwell. MUTED PROGRESS ON SOLAS

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