In Port News 01/07/2016
Source: Livemint
Indian ports loading cargo containers are bracing for a global rule, starting 1 July, which mandates shippers to verify and declare the weight of a container before loading it on a ship for export.
India’s maritime regulator, the Director General of Shipping (DGS), which is tasked with implementing the rule in India, has given more time to shippers to comply with the requirements. This is in line with a “practical and pragmatic” approach advised by the International Maritime Organization (IMO), the global body shepherding the regulation aimed at boosting maritime safety by checking wrong declaration of container weights and preventing fatalities.
In November 2014, the IMO, the agency of the United Nations tasked with regulating international seaborne trade, approved amendments to the Safety of Life at Sea Convention (SOLAS) 1974, which will require verification and documentation of loaded containers (verified gross mass, or VGM) before they can be loaded on to vessels. This can be done by either weighing the loaded container with calibrated and certified equipment, or weighing the cargo prior to loading and adding it to the weight of the empty container. The purpose of the VGM regulations is to assure the safety of the vessel, as well as that of the dock workers and other cargo handlers by preventing overweight or otherwise misrepresented containers from jeopardizing movement of shipment or containers.
Responding to global concerns over practical aspects of compliance during the initial days of the new rule, the IMO advised maritime administrations and port state control authorities worldwide to be “practical and pragmatic” for three months beginning 1 July by allowing packed containers that are loaded on a ship before 1 July and are transhipped (at some other ports) on or after 1 July to be shipped to their final port of discharge without a VGM.
The IMO said this was being done to provide flexibility to stakeholders in containerized transport to refine procedures for documenting, communicating and sharing weight information.
India’s maritime regulator has allowed shippers (exporters) to obtain the VGM of their containers using all weighbridges/weighing appliances with valid certification from the Department of Legal Metrology of the state/union territory through the end of August, according to a 24 June notice issued by the DGS. The guidelines issued by the regulator in May had stipulated that only electronic weighbridges with a valid “quality management system certificate” should be used for the VGM process.
The DGS has further allowed shippers time until 30 September to use the physical format (hard copy) for transmitting the VGM information ahead of progressing to the electronic mode in this regard.
“There is going to be a lot of chaos because a lot of people don’t know how the new rule will pan out,” said R. Venkatesh, president of the Western India Shippers’ Association, a body representing exporters and importers in India’s western region.
“It has not clearly been spelt out how it is going to happen. The DG has issued a guideline on what is to be done. It has also given some time till September for certain things to happen. In the meantime, the shipping lines have decided their own set of rules. God alone knows what’s going to happen. There is likely to be a certain amount of chaos worldwide, not just in India,” Venkatesh said.
Shippers say that the “practical and pragmatic” approach suggested by IMO and followed by DGS has not been defined clearly.
“At the end of the day, it is the master of the ship or the shipping line who will decide whether they will load the container or not, whatever be the variance in weight declared by the shipper and its actual weight. The authority is with them really,” said Venkatesh.
He added that in reality, whatever the IMO is trying to do is fine but the way the Indian government is trying to do it is completely wrong.
The Federal Maritime Commission (FMC) of the US has issued a notification asking terminals to weigh the containers and declare the weight. “This is the best way to do it,” he said.
Global container terminal operators such as DP World Ltd, APM Terminals Management BV and PSA International Pte Ltd have announced plans to offer weighing services at their facilities in India as part of a worldwide roll-out. But Venkatesh said this was not enough.
“The terminals have the provision but the unfortunate part is at this point in time, they are not asking the terminals to submit the weight to the shipping lines. They are saying the shipper should declare the weight. Life will become easier if they tell the terminals to weigh the container and declare the weight,” he said.
“If the weight is going to be declared by the terminal, the cost is probably going to be drastically reduced because it is at the last point of handover. Because there is a volume related to the amount of containers terminals handle, the cost automatically comes down because of economies of scale,” said Venkatesh.
“Today, if you do it on a weight bridge outside, it costs Rs.200-500 a container. Let us assume, the terminal is going to charge Rs.500 for this, it still makes sense because at least the process will be smooth. You are not going to have a thousand people in between who are involved in this whole thing,” he added.
The DGS guidelines will add extra costs to the shippers.
“The DGS circular has actually made it a business. There are people who have formed a company for weighing services who are saying they will charge Rs.15,000 for first registration. Another company says they will charge Rs.1.5 lakh to install the software program in the office of shippers,” said Venkatesh.
“Shipping lines are saying they will charge me $70 to convert my manual VGM to electronic. It is more than the freight to some places. Some container freight stations (CFS) are saying they will charge Rs.2,600 a container for issuing weight certificates.
Once you put it on terminals, the rates won’t go up because at least the terminals at major ports (owned by the union government) are regulated by the Tariff Authority for Major Ports or TAMP. There will be some form of oversight,” Venkatesh added.
Source: Livemint
