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TradeInFocus   Our compilation of news to keep you in focus on key trade matters

OCEMA Clarifies VGM Tare Weight Liability Issue
American Shipper - May 12, 2016
A group of 19 ocean carriers operating in US trades said they are issuing a tariff rule confirming that shippers would have no liability for damages resulting from inaccurate carrier-provided container tare weight to calculate the verified gross mass (VGM). The notice from the Ocean Carrier Equipment Management Association (OCEMA) comes amid confusion over exporters" role in verifying the tare weight of containers to comply with a new rule this summer.

Submission of verified container weights will become a requirement for shippers globally as of July 1, when the VGM amendment to the existing Safety of Life at Sea (SOLAS) convention goes into effect. The amendment mandates that shippers verify the weights of their containers to carriers prior to loading on a vessel.

One of the methods for verifying container weights is to calculate the total weight of cargo, packaging and dunnage, before adding that to the tare weight of the container itself. Exporter groups have derided this method, arguing that it essentially requires them to provide weight verification of equipment they neither own nor maintain. That, they said, would expose them to liability that many companies simply wouldn't be able to accept, especially since the final step in the VGM process is a signature from an authorized person from the shipper or a shipper's representative.

Carriers have emphasized in recent weeks that the VGM rule must be adhered to, that shippers and consolidators must provide the data to carriers before a stipulated VGM cutoff date either through the calculation method, or by physically weighing laden containers and then submitted that data via email, online portals or EDI. The VGM data is necessary for terminal operators and vessel operators to properly plan stowage of ships. Containers without VGM will be denied loading, though various US ports and terminals in recent weeks have sought to provide shippers with ways to collect VGM data for boxes that arrive at terminals without VGM.

In March, OCEMA issued a set of best practices for VGM submission to carriers. "This issue has been cited by some shippers as the primary reason they cannot comply with VGM requirements," OCEMA Executive Director Jeff Lawrence said. "The OCEMA Tariff is intended to fully address shippers concerns." Though the tariff is intended to address exporter concerns about liability associated with the verification of container tare weights, US export groups have called the new rule an unnecessary procedural step. They argue that exporters already provide container weight information sufficient to allow terminals and vessel operators to plan stowage. The VGM amendment, which was ratified in late 2014 by International Maritime Organization member nations, goes into effect globally July 1. The rule gives individual nations flexibility in terms of enforcement and compliance methods.

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APMT to Offer VGM Support Services at 29 Terminals
American Shipper - May 11, 2016
The container terminal operator APM Terminals (APMT) said it will provide container weight verification services at 29 of its facilities globally to help shippers comply with new rules set to come into effect July 1. The rule, called verified gross mass (VGM), is an amendment to the International Maritime Organization's Safety of Life at Sea convention, and requires exporters to provide verification of the weights of containers they discharge at marine terminals. Containers for which VGM data has not been submitted to carriers by a stipulated cutoff will be denied loading by the terminal and vessel operator.

APMT, a top four global terminal operators and subsidiary of the A.P. Moller-Maersk Group, said boxes without VGM data previously submitted will not be turned away from its facilities. "Export containers which are received at APM Terminal facilities with a valid VGM will be accepted as per current local operational procedures," the company said. "Those export containers which arrive at APM Terminal facilities without a valid VGM will be generally accepted, but as they are ineligible to load on a vessel, may be segregated and subject to additional re-handling and storage requirements."

Notably, the list of APMT facilities for which containers without VGM data will be allowed does not include the company's terminal in the Port of Los Angeles. The full list includes:
Aarhus, Denmark; Abidjan, Ivory Coast; Aqaba, Jordan; Bahrain; Bremerhaven, Germany; Buenos Aires, Argentina; Callao, Peru; Cotonou, Benin; First Container Terminal, Russia; Rade, Tunisia; Fos, France; Gothenburg, Sweden; Mumbai, India; Helsinki, Finland; Itajai, Brazil; Izmir, Turkey; Lazaro, Mexico; Moby Dick, Russia; Pecem, Brazil; Pipavav, India; Port Said, Egypt; Petrolesport, Russia; Pointe-Noire, Congo; Santos, Brazil; Tanjung Pelepas, Malaysia; Ust-Luga, Russia; Vado, Italy; Vostochny, Russia; and Wilhelmshaven, Germany.

APMT said it will aim to add further locations where VGM support services can be offered. "Our first priority remains to ensure safe and efficient operations for the supply chain," APMT Head of Global Operations Jack Craig said in a statement. "It is crucial that these regulations are met in a way which does not create congestion bottlenecks that ultimately impose additional risk and cost for all stakeholders."

The company also noted it is in dialogue with local regulatory authorities to provide clarity on national rules governing how to ensure compliance. "APM Terminals is planning to provide VGM data management capabilities in most facilities through accepting EDI transmissions of VGM information into terminal operating systems from the shipping lines prior to vessel load planning."

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Port of Virginia Switches Position on SOLAS Compliance
American Shipper - May 11, 2016
The Virginia Port Authority (VPA) on Tuesday reversed its position on implementation of new international container safety standards, saying it will continue to accept containers at the truck gate and rail yard even if shippers haven't electronically provided information about the weight of the container. The change was in response to an April 28 US Coast Guard bulletin stating the agency considered existing methods for weighing containers under US law and regulations as equivalent to an amendment to the International Maritime Organization?s (IMO) Safety of Life at Sea (SOLAS) convention, which goes into effect July 1. The IMO requirement is for shippers to provide a verified container weight to vessel operators, and by extension marine terminals, in advance. The aim is to curtail instances of overloaded containers from destabilizing vessels, falling from mooring or being dropped on land and potentially jeopardizing safety on the water or the docks. The Port of Virginia will weigh export containers on scales near the gates and provide the measurement to shipping lines according to longstanding protocols. Previously, the VPA said it would not accept containers that did not have the verified gross mass prior to arrival. Industry officials have indicated that terminals did not want to store boxes for an undetermined period on congested property waiting to collect the information. The VPA did not indicate whether it will charge for the service, adding that a more detailed operating policy will be issued soon.

Last week, the Port of Savannah and the Port of Charleston, citing the Coast Guard's statement, declared they would help shippers comply with the new rules by providing the weight data to them and the carrier. The Port of Charleston plans to charge $25 when shippers request the info, while the Georgia Ports Authority said it will provide the service free of charge. Private terminal operator Ports America has similarly said it will offer scale services to shippers at the Port of Baltimore, as needed.

VPA Chief Innovation Officer Joseph Ruddy said in April that weigh-in-motion scales are not precise enough to meet the IMO requirements, but the Coast Guard's determination of equivalency led the state agency to change its mind. Weighing containers at the Port of Virginia "will keep our throughput high, allay our export customers" concerns, and help ensure the safety of mariners,- VPA Executive Director John Reinhart said in a statement.

Under the IMO's amended safety convention, shippers can weigh the loaded container or weight the cargo, including packing materials, and add it to the tare mass of the container. Shippers are allowed to use third parties to meet the requirement, but in all cases must sign the manifest, shipping instructions or separate document confirming the VGM. The option of adding the tare weight has proven controversial, with some exporters complaining it is unfair and burdensome for them to tally the weight of the empty box that belongs to the carrier.
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Safety of Life at Sea Convention (SOLAS) Verified Gross Mass Requirement (VGM)
There is substantial confusion in the industry regarding the implementation of SOLAS weight verification regulation since it is an international requirement and not regulated, overseen or otherwise guided by a single governing body. Each of the 160 SOLAS signatory countries may choose how to enforce it, and each line and terminal may choose how to implement it into their business process. While this is a global requirement and not something mandated by the US Coast Guard, it is important for you to discuss and understand what each marine carrier will require (there could well be variances that you do not want to hold up cargo).

In short, the shipper shown on the carrier's bill of lading is responsible for reporting the verified gross mass on their shipping documents along with an authorized "signature" in time for vessel stowage planning purposes. The carrier in turn must provide this to the terminal, which has the responsibility of ensuring that any container without a VGM is not loaded. The VGM requirement will go into effect on July 1, 2016.

The mandatory requirements are that the VGM be acquired in one of the two methods outlined below and the regulation further states that the VGM be stated on the shipping document and that document will be signed by a person, authorized by the shipper. Such document shall be submitted sufficiently in advance to be used for ship stowage purposes.

US Retailers Lay Out Case for TransPacificPartnership
American Shipper - May 11, 2016
A sweeping free trade agreement linking 12 nations on four continents but awaiting ratification would have a positive impact on US retailers and consumers, according to a new study by the National Retail Federation, North America's largest association of retailers. The NRF's report, "Trans-Pacific Partnership Agreement Holds Potential for Retailers and American Families," notes that prices of imported retail merchandise are driven up considerably by tariffs, which the NRF calls "hidden taxes" on consumers that can range as high as 67.5 percent on footwear or 32 percent on apparel, for example. Tariffs on goods from TPP countries totaled nearly $6 billion in 2015, and nearly all would eventually be eliminated after the measure is enacted, which would benefit consumers through lower prices. The report also found that international trade is a major supporter of US employment, accounting for 6.9 million US jobs in the retail industry.

-The TPP will have a significant positive impact on American families, workers and the retailers who seek to provide them with a wide range of goods at affordable prices,- according to the report, which was prepared for NRF by The Trade Partnership. "It will lower costs across global supply chains in the TPP region, and those lower costs will be reflected in US price tags". Families will benefit from greater spending power both from lower prices and higher wages."

In addition to the economic value of eliminating tariffs, the report noted labor and environmental protections in the agreement that would be valuable to US retailers. TPP opposition groups in the US have highlighted what they consider to be negative impacts the deal would have on jobs in the manufacturing, and environmental and labor conditions issues posed by TPP members that don't have laws similar to those in the United States. "TPP will make it much easier for retailers to ensure that factories in TPP countries adhere to labor and environment conditions in their codes of conduct," the report said, citing prohibitions against child and forced labor and protections for endangered species.

The NRF and other pro-trade groups have long argued the importance of the TPP and other trade deals in minimizing barriers to lower consumer prices and job creation related to imports and exports. Congress appears to be in a wait-and-see mode until the presidential election in November, but trade advocates remain hopeful the deal as currently constructed will eventually pass. Congress last year gave the president renewed power to negotiate trade deals such as TPP. Granting that power and then blocking the ratification of the TPP is seen by many as hypocritical.

"This report shows the importance of international trade to the U.S. economy and how TPP creates economic growth and opportunity in the United States," NRF President and CEO Matthew Shay said. "Congress should move quickly to approve this agreement so American workers, consumers and businesses can begin to realize those advantages as soon as possible."

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Services Trade with TPP Countries = Surplus for US Economy
It's World Trade Month ? The services sector is vital to the US economy and future US economic growth. Services industries support approximately 100 million American jobs, and US services exports totaled $710 billion in 2014 - generating a $233 billion surplus in cross-border trade. The TPP countries already are the major overseas markets for US services exports - collectively, they imported 25 percent of all US services exports in 2014. In addition, US services trade with the TPP countries accounted for 34 percent of the 2014 US services trade surplus.


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.