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DP World Lays Out VGM Scaling Fee for Vancouver, Prince Rupert
American Shipper - April 12, 2016
The Dubai-based terminal operator will charge $245 Canadian for boxes arriving at the West Coast ports by truck or rail without verified gross mass data after the new International Maritime Organization rule goes into effect July 1. The container terminal operator DP World will charge a fee of $245 Canadian (roughly US $190) to weigh containers that arrive at its terminals in the Canadian ports of Prince Rupert and Vancouver without a verified gross mass (VGM) data, American Shipper has learned.

The VGM weighing service is part of a set of tariffs released by DP World at the beginning of April. Under new guidelines adopted by the International Maritime Organization that go into effect worldwide July 1, carriers are required to collect VGM data, essentially a separate verification of the weight of the container, or refuse loading. The guideline allows each individual nation to implement and enforce the VGM requirement as they see fit.

According to DP World, the VGM service includes ?placing the containerized cargo on the scale, issuing a scale ticket after each weighing and placing the cargo into the appropriate section, ready to load to the vessel. Container scales used in this service are calibrated and serviced by technicians approved by Measurement Canada. VGM information for export containers will be updated in Express prior to vessel loading and VGM certificate will be issue to the shipper for recording purposes. The terminal may have limitations for this service and reserves the right to set up appointments based on volume, cut offs and other operation requirements."

JC Chartrand, senior manager of strategic sales for DP World in North America, said it?s crucial to maintain the flow of cargo coming in to the operator?s Centerm terminal in Vancouver. ?We have a big gate operation in Vancouver and we have to maintain our velocity at the gate,? he said. ?Therefore we are modifying our gate reservation system and we will add one feature when a trucker goes online to make a reservation. It will ask for their VGM number - if they don't have it, it will prompt them for charges guarantee, which they or the shipper can pay by credit card or if already have credit with us, or the trucker can choose Paypal if they want. As they gate in, they will only need to swipe their card.?

Chartrand said if the shipper has provided the VGM information to the ocean carrier, that would appear at the time of gate reservation. ?All traffic to be weighed will be staged in an area and at night we will scale all the units and then have them located in the proper stack for vessel loading,? he said. ?The key is to keep the flow at the gate and in the yard during the busy shifts.?

As for rail traffic arriving at Centerm without a VGM number, Chartrand noted that the lines will have two to seven days (based on rail transit times) to identify the units to be scaled. In this scenario, DP World would charge the lines while they secure their own payment from the shipper. ?One question remains and its traffic arriving on the cut-off day,? he said. ?I?m not sure yet if the carriers will choose to advance their inland and local cut-off day if their booking gets jeopardized.?

At Prince Rupert, nearly every box arrives via rail. ?We have very little gate traffic in Prince Rupert. It?s mostly an (inland point intermodal) port facility but we will still offer the service for the local folks that arrive without their VGM. (Like Vancouver), rail takes between two and seven days to get to Prince Rupert from US and Canadian inland terminals. Ocean carriers will therefore have time to identify which units need to be weighed.

Chartrand also detailed VGM fees at DP World?s terminal in Caucedo, Dominican Republic, the company?s other facility serving North America directly through short sea shipping to the US Gulf and East coast ports. ?We will have two processes in place,? he said. ?All export loads through the gate will be weighed at the gate to confirm the declared weight and if the customer has no VGM or the VGM is out of range by one ton or more, we will rescale inside the terminal for $50. "Since Caucedo is also a Logistics Park in a free trade zone, we will offer shippers within the compound (the option to scale all units for $50 inside their terminal).?


Non-Compliance with Box VGM Weight Rule in UK a Criminal Offence
Journal of Commerce ? April 15, 2016
Failure to comply with the new container weighing safety regulations in the United Kingdom will be a criminal offence, punishable by a heavy fine or a prison term, according to a UK law firm. Giles Searby, a partner in the litigation and dispute resolution team at Keeble Hawson with experience of shipping, said the wording in the law rendered the offender liable "on summary conviction to a fine not exceeding the statutory maximum or, on conviction on indictment, to a prison term not exceeding two years or a fine or both."

?If a valid weight certificate is not supplied, the container will not be loaded on the intended ship, with an obvious commercial cost including repacking, detention etc, as well as causing delays, which may heap additional financial penalties on the shipper. Such penalties are in addition to criminal punishment,? he said.

In the UK, the amendment will become law without the need for an Act of Parliament and will be enforced by the Maritime and Coastguard Agency. Japan is the one jurisdiction that has spelled out the punishment for those guilty of non-compliance. Violators to be fined $2,600 per case, with an acceptable discrepancy between the VGM and actual weight of a container set at plus-minus 5 percent. The UK has also set the threshold at plus-minus 5 percent, and India has set the maximum variance at plus or minus 200 kilograms.

?As for other jurisdictions ? beyond those like Japan, which obviously want to highlight it ? it's not immediately obvious what level of penalty will apply in other jurisdictions and it is just added to their criminal codes or whatever may be the case,? he said. ?What I think we can be certain of is if we have a significant container ship casualty in the months after the implementation, wherever that may be, there will a lot of IMO pressure on the port state to lay down a serious marker and make some examples of offenders.?

An amendment to the SOLAS Convention was approved by the International Maritime Organization?s Maritime Safety Committee in 2014 and will be enforced from July 1. Most coastal states worldwide are signatories to SOLAS, which was first convened in 1914 following the sinking of the Titanic two years earlier.

The law requires a container?s weight to be verified by two prescribed methods ? weighing the entire loaded container (Method 1) or weighing its individual contents and adding that weight to the tare, pallets and securing materials (Method 2) ? before it can be loaded on to a ship. The weighing of packed containers must be by calibrated and certified equipment although, in limited circumstances, pre-weighed packages may be placed into the container and added to its tare weight.

Although SOLAS already demands shippers declare container weight on the Bill of Lading and associated paperwork, it is estimated that more than a third of the 130 million containers transported around the word each year are overweight, which has clear safety consequences.

When the MSC Napoli sank off the coast of Cornwall in 2007, it was discovered that 20 percent of the containers on board were at least 3 tonnes (3.36 tons) more than their declared weight, and some were as much as 20 tonnes heavier.

In addition to the penalties for non-compliance, there is an urgent need for liability to be established between the various parties in the container supply chain with revised terms and conditions that spell out the changes, Searby told JOC.com. ?Essentially there needs to be a clear definition of roles and responsibilities, and potentially some provision for an additional charge for weighing services,? he said. ?The responsibility to declare weight lies with the shipper and so the question of who is named as shipper on the bill of lading or waybill is more important than ever?.

?A freight-forwarder may wish to define itself as being only a ?booking party? to ensure the liability remains down the chain from them. If weighing services are to be offered at a cost, then obviously T&Cs will also need to address this and whether they are offering Method 1 or Method 2. T&Cs should also reflect the consequences of VGM not being supplied in terms of additional costs that might be incurred as a result.?

Some container terminals have offered a weighing service to shippers, but Searby said this did not mean the terminals would automatically assume liability for the VGM and become the de facto shipper. ?If a terminal offers weighing services, it does not alter the liability on the shipper, save that a shipper might have a potential claim on the terminal if it were negligent in the weighing, for example,? he said.

DP World appears to be taking the lead on offering a weighing service at its terminals. DP World Southampton has committed itself to providing a weighing service to customers and will fit its entire fleet of straddle carriers with a Strainstall-supplied weighing system. The terminal operator and Strainstall declined to disclose the size of the investment, and there is still no word on what shippers will be charged per container for the weighing service. DP World is also installing scales at its British Columbia and Dominican Republic terminals and plans to charge a $245 fee for containers the company must weigh to ensure compliance.

But Searby said there was still some debate around terminal?s weighing boxes. ?In some situations there is a danger that weighing in terminal could be too late and the carrier will need to be advised in shipping instructions of the VGM in advance of loading, which adds to the risk of shipping slots being missed,? he said.


NYK Rep Reiterates No VGM, No Load
American Shipper ? April 15, 2016
NYK's Bill Ferguson told the Critical Commodities Conference this week that carriers must refuse loading to a container without Verified Gross Mass data submitted or risk insurance issues. A representative of the ocean carrier NYK Line this week told a conference in New Orleans that if the verified gross mass data is not submitted for a container, the carrier will not load that container when it arrives at a US port.

Bill Ferguson, vice president, security services and environmental affairs for NYK Line (North America) reiterated a stance made by carriers in recent weeks as enforcement of the International Maritime Organization?s Verified

New Dates For Atlantic Trade Deal Talks
The Hill - April 13, 2016
The Office of the US Trade Representative said Tuesday that US and European Union officials will meet for the next round of Transatlantic Trade and Investment Partnership Negotiations talks in New York from April 25-29.
Details: thehill@email.thehill.com

Speaking of Trade Deals:
The Hill - April 13, 2016
Rep. Kevin Brady (R-Texas) said he would like Congress to consider an expansive Pacific Rim trade deal if lingering issues can be resolved. The chairman of the powerful House Ways and Means Committee said there are several problems with the Trans-Pacific Partnership (TPP) that the White House must settle to get the agreement through Capitol Hill before President Obama leaves office.

"If the White House can solve the problems, and there's about four or five key ones left -- if they can solve those problems and build support, I'd like to see this move sooner rather than later," Brady said Tuesday on CNBC.com's "Speakeasy with John Harwood." The trade deal won't likely move until after the November elections, and Ohio Gov. John Kasich (R) is the only remaining presidential candidate who supports TPP.


tradeinfocus is a summary of news and events on the trade policy front for clients, trade & legislative colleagues, and professional friends of W.J. Byrnes & Co.