Countdown to VGM: What We Still Don't Know
There are fewer than thirty (30) days before the Verified Gross Mass (VGM) amendment to the Safety of Life at Sea (SOLAS) treaty goes into effect. As the deadline approaches at lightening speed, so do the glaring inadequacy of both operational and policy answers to the VGM implementation questions. Will the next 30 days bring answers to what we still don't know? "Unanswered" Operational Questions:
How do I submit VGM? This seems like a rudimentary question and what should be paramount for shippers and carriers alike. Unfortunately, not all carriers have launched an electronic option for VGM submission. With time running out shippers and logistics service providers feel left in the dark hoping that carriers provide them with the tools needed to meet the VGM submission requirements before the deadline.
What about transhipments? SOLAS allows for each signing country to implement the VGM standard autonomously. Each signatory country has defined their VGM practice; some countries could be considered more robust than others. In fact, Australia has recently expressed their concern that other countries aren't taking VGM compliance as seriously as they should. Meanwhile, Taiwan and Japan are requiring exporters to register with the government in order to submit VGM. The inconsistency in VGM practice has many exporters concerned that their US exports passing through a foreign port may be impacted by that foreign government's "individualized" VGM requirements. A truly valid concern. Currently, once cargo is tendered to the carrier it is the carrier's responsibility to ensure the loaded cargo complies with all applicable regulations. It stands to reason that the VGM reporting responsibility in the tranship port is the responsibility of the carrier. In the current environment where logistics and logic do not seem to be driving the regulation, it is understandable that shippers are looking for firm guidance on the issue. Unfortunately, such guidance has yet to be seen.
"Unanswered" Policy Questions:
Will implementation be delayed until October 1st, 2016? At the end of May the Maritime Safety Committee circulated a draft advice to all parties of the SOLAS treaty. In this tease of a final document was the suggestion that implementation should be delayed by three (3) months in order to allow for signatory countries to refine their policies. Interestingly enough the "practical aspects" of the implementation specifically call out transhipped containers and VGM communication as "Member State concerns." Since the release of the initial draft communication, very little additional guidance has been promulgated by the Maritime Safety Committee. Will we see anything more before the deadline on a potential delay? A better question yet to be answered is: If there is a delay in implementation by the Maritime Safety Committee - would US carriers who have previously strictly held to the World Shipping Council's Best Practices implementation guidance vice U.S. Coast Guard guidance – extend the deadline for full implementation or hold to the current deadline?
Will the Federal Maritime Commission (FMC) report have any impact? In mid-May the Senate Committee on Commerce, Science and Transportation requested FMC involvement in addressing VGM concerns voiced by shippers. While Allports is extremely hopeful that greater FMC involvement will prove to be invaluable in helping to bring more clarity for shippers - we also believe that a more “unified” and collaborative approach by all parties in solving the identified issues is absolutely essential. All of us now find ourselves in a period of “bureaucratic limbo.” Fortunately, the FMC has responded positively and has accepted the Senate Committee's call to action. It is anticipated that this task will take 45 days to complete. Should this report by FMC be the shipper's “VGM Rosetta Stone”, regrettably the timelines just don't add up and the FMC report may not be issued in time to provide any benefit to US shippers prior to the scheduled deadline.
As we count down the last days to the planned implementation of the SOLAS treaty amendment - it certainly feels that there are even more questions than answers. There can be no argument that safety of life at sea is paramount. In the case of VGM, what you don’t know - can indeed hurt someone and ultimately cost lives and property. We firmly believe that the fact that implementation of this new requirement in fewer than 30 days away combined with so many “functional” unknowns is completely unacceptable. Allports is fully engaged in helping to solve all of our customers logistic needs and stands ready to help all of our clients navigate the upcoming challenges as a result of the implementation of the impending SOLAS treaty amendments.