Print PDF

Ag Group Warns of Port Congestion from Pending Container Weight Rule

Friday, February 12, 2016
Sandler, Travis & Rosenberg Trade Report

A group claiming to represent the majority of U.S. ocean exports is urging public and private sector stakeholders to work together to ensure that a container weight verification requirement slated to take effect worldwide July 1 does not create congestion at U.S. ports and marine terminals. The group also states that the new rule does not reflect reality and was promulgated without sufficient input from the shipping community.

Under the new rule, which was agreed by the 170+ members of the International Maritime Organization, shippers (importers and exporters) of packed cargo containers will have to certify and submit the verified gross mass (the combined weight of the cargo and the container) to the ocean carrier and port terminal operator sufficiently in advance of vessel loading to be used in the preparation of the ship stowage plan. The VGM will be a condition for loading a packed container aboard a vessel for export, and vessel and terminal operators will be prohibited from loading a packed container aboard a vessel for export if it does not have a VGM.

The Agriculture Transportation Coalition, which states that its members constitute the majority of U.S. agriculture and forest products exporters, issued this week a white paper stating that this rule represents a dramatic change from existing practices and would be problematic to implement. Shippers are currently only responsible for accurately reporting the weight of their cargo but the new rule would make them liable for certifying equipment (containers) that they do not own, control or maintain. Shippers cannot rely on the tare weight marked on the container, the paper states, which is typically not accurate and does not account for container or weight variance. Further, there is currently no way to facilitate the transmission of VGM data. The paper warns that imposing this requirement on the “unique” U.S. supply chain will “disrupt the flow of cargo through the ports” and impose “significant new costs on all participants in the U.S. supply chain.”

The AgTC also protests that the rule was never submitted to Congress, reviewed or approved by a federal agency or published in the Federal Register and that there was no input from the U.S. shipping community.

To protect U.S. exporter competitiveness while meeting the intent of the rule, the coalition makes the following suggestions.

- Exporters should only be responsible for certifying and submitting the weight of the cargo they put into the supply chain and steamship lines should be responsible for submitting the weight of their containers.

- A weight variance of +/- five percent (per the UK model) should be included for cargo weight in recognition of the natural changes typical for agriculture and forest products during transit.

- A list of accepted container weights should be published that shippers could add to the cargo weight for the certification required by the rule. For example, a 20-foot dry container would be assigned a weight, a 40-foot refrigerated container would be assigned a weight, etc.

- The U.S. should not implement this rule until its top 15 trading partners, as measured by ocean container volumes, have implemented it.

- The Coast Guard should provide a means to receive public comment and delay enforcement of the rule until such input is collected, all stakeholders agree on best practices for VGM implementation, and the Coast Guard is satisfied that U.S. commerce will not be detrimentally impacted.

- Congress should examine the IMO process, the means by which the U.S. can be bound, and how this rule was adopted without U.S. exporter or importer notice or input or consideration of the impact on the U.S. economy.

To get news like this in your inbox daily, subscribe to the Sandler, Travis & Rosenberg Trade Report.

Customs & International Headlines