Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user

SOLAS: More Money, More Problems

Join McKinsey & Company, NewTimes Group, Arvind Limited, Asmara, Google, Bluesign, the Retail Prophet and more at Sourcing Journal’s Virtual Sourcing Summit, R/Evolution: Overhauling Fashion’s Outmoded Supply Chain, Oct 14 & 15.

cargo_port_ship

SOLAS is coming and costs will go up.

The new amendment to the Safety of Life at Sea regulation requires that U.S. exporters verify container weights prior to loading their goods to be shipped. And though the rule takes effect Friday, freight forwarders are still surprisingly clueless about what to do next.

Some major carriers aren’t even clear or set up to accommodate the change.

Shippers are supposed to determine a container’s Verified Gross Mass (VGM) in one of two ways: by weighing the container packed or weighing the container’s contents and adding that to the container’s mass.

According to the Maritime Commission—which seems to be utterly confused about the frenzy the regulation change has caused—shippers should use weights already taken at terminal gates to verify the mass.

But according to a Los Angeles-based freight forwarder familiar with the situation, it’s not so simple.

For one, everything about the situation is still hazy three days out.

“The carriers are leaving it up to the freight forwarders to comply with the VGM requirements, and the carriers are not even sure of the process,” the source, who requested anonymity, said. “We had to apply online for the VGM form, which we just received today, so we are trying to figure it out. This is by carrier, so the filing goes straight to the carriers record.”

Each major carrier has its own online system for the VGM filing, so the freight forward has to file separately with each for the goods they have to ship.

And here’s where things get stickier.

Container weights have to be verified before loading, meaning the VGM has to be filed online before the goods go to the dock. Which means waiting to weigh containers at the terminal won’t really work. Containers will likely have to be weighed in advance if there’s any chance of avoiding mismatches on shipping documents that could draw fines and delivery delays. Then the question becomes: who’s going to pay?

Since most companies don’t have weigh stations and cargo weights on shipping documents must match the container’s verified weight, truckers are seeing signs of opportunity.

“Truckers are now advising that they can get the container weighted at a local CAT Scale location [where truckers go for certified weighing] before and after loading to get an accurate weight of the cargo,” the source said. “Light and Heavy scale tickets [light weight is the truck before the cargo is loaded, heavy is after] will be $75 each, total of $150 per container.”

An additional cost of $150 per container for companies that are shipping en masse is no small fee.

Add to that, some freight forwarders are already passing on SOLAS costs to their customers.

ECU Worldwide sent a notice to clients last week saying, “The fluid situation leading up to the implementation of the SOLAS program has caused ECU Worldwide in the USA to re-assess our initial position on the applicable fees. ECU Worldwide will now implement a flat SOLAS Administration fee of $10 per bill of lading.

The company said unless it’s notified otherwise, it will deem weights listed on shipping documents as certified, using those weights to submit a VGM for the containers.

Clients who want to use ECU’s certified scales to weight their containers will be charged a weigh service fee of $7 w/m minimum $25 per dock receipt for less than container loads (LCL), or loads that are shared with other clients, and for full container loads (FCL), clients will be charged the direct cost of a certified scale ticket plus a weigh service fee of $15 per container.

Non-compliance with SOLAS is expected to be costly, not to mention likely “inviting increased scrutiny,” as Federal Maritime Commission chairman Mario Cordero put it.

United Global Logistics (UGL) sent a notice to shippers last week warning them about mismatched weight data on their shipping documents.

“If the certified VGM is not provided or incorrect data to the carrier before loading, the affected containers will not be loaded on carrier’s vessel,” the notice said.

The Los Angeles freight forwarder seconded the sentiment. “If the weights do not match when the container arrives to the terminal, no one knows what will happen then,” the source said.

Related Articles

More from our brands

Access exclusive content Become a Member Today!