United States: U.S. Coast Guard Comments On SOLAS Verified Gross Mass Rule Implementation

Michael Cavanaugh is a Partner and Eric Lee an Associate in Holland & Knight's Washington D.C. office

HIGHLIGHTS:

  • Pursuant to recent amendments to the International Maritime Organization's (IMO) Safety of Life at Sea (SOLAS) Convention, shippers will be required to provide ocean carriers with a certificate of verified gross mass (VGM) for each loaded marine container tendered for shipping.
  • Various interest groups have suggested that the implementation date of July 1, 2016, must be delayed because the United States shipping industry is not ready, noting that shippers and their service providers do not have certified, calibrated equipment to weigh the volume of containers moving in export trades.
  • At a recent Federal Maritime Commission (FMC) "listening session," the U.S. Coast Guard (USCG) Assistant Commandant for Prevention Policy said that delayed implementation is not an option and that the USCG does not plan to adopt or publish an allowable error variance.

Pursuant to recent amendments to the International Maritime Organization's (IMO) Safety of Life at Sea (SOLAS) Convention, Chapter VI, Regulation 2, effective on July 1, 2016, shippers will be required to provide ocean carriers with a certificate of verified gross mass (VGM) for each loaded marine container tendered for shipping.

Various interest groups have suggested that implementation must be delayed because the United States shipping industry is not ready for the impact of this requirement, saying that it will cause delays and make U.S. exports less competitive. They note that shippers and their service providers, including marine terminals and logistics service companies, do not have certified, calibrated equipment to weigh the volume of containers moving in export trades.

Some also have raised questions about whether shippers would be liable for certifying container weight if the tare weight of the container printed on the door is incorrect, whether the certificate process would delay negotiation of export letters of credit, and whether the U.S. Coast Guard (USCG) will impose fines or publish an acceptable error tolerance percentage (such as the 5 percent allowance announced by the United Kingdom). Others stated that the rules prevent the shipper from amending a VGM certificate once delivered to the carrier, even if a revised weight figure became available before sailing.

U.S. Coast Guard Positions

The Federal Maritime Commission (FMC) sponsored a "listening session" at which various U.S. shipper and logistics service provider interest groups raised the foregoing questions and concerns. In particular, U.S. agricultural commodities shippers questioned the need for the rule, and sought a delay in the effective date of the rule to allow for preparation time.

The USCG Assistant Commandant for Prevention Policy, Rear Adm. Paul Thomas, heard all the issues and questions. At the conclusion of the FMC meeting, he stated the following USCG positions and observations:

  1. Delayed implementation is not an option. SOLAS is an international convention ratified by the U.S. and most major flag states that applies to vessels, not ports or shippers. Most vessels loading in the U.S. are foreign-flag ships from IMO signatory countries. Those countries will implement the VGM requirement as to their vessels, and the U.S. has no say in that.
  2. USCG will not impose fines under SOLAS with respect to inaccurate weight certificates because USCG does not believe it has any enforcement authority to do so.
  3. USCG does not plan to adopt or publish any allowable error variance.
  4. Regarding enforcement, USCG observes that a container without a compliant VGM certificate will be subject to a hold order and can't be loaded, but there will be no fines. Once the container is weighed or the shipper provides a certificate, the container can be loaded.
  5. The ultimate message from USCG is that the shipping industry must find business solutions. USCG is not convinced it needs to or has any jurisdiction to take any steps, but will continue to listen and facilitate such solutions if possible.

Additional Comments

Other commentators, including representatives of the World Shipping Council (WSC) and the Ocean Carrier Equipment Management Association (OCEMA), commented that there is nothing in the SOLAS regulation precluding amendment to a VGM certificate at any time, and that it would be up to the carrier to manage the procedure. The WSC also noted that under SOLAS a shipper is entitled legally to rely on the tare weight of the container in calculating VGM under SOLAS "Method 2" (weight of goods and packing materials plus tare weight printed on the container). OCEMA has a technical committee that is developing recommended uniform best practices for implementation by carriers, shippers and other parties, and may publish its results in about a month. They are recommending a 24-hour VGM certificate rule to match other existing "no-document-no-load" rules.

It does not appear that there will be any further pronouncements from the U.S. government on VGM implementation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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