The new SOLAS regulations came into force in July 2016, so have they caused the uproar in the industry that was prophesied?
From the end of 2015 through to the implementation of the new SOLAS (Safety of Life at Sea) regulations, The Mover published story after story about the impending doom that would come from the requirement to weigh containers before they were loaded on the vessels. Indeed the FIDI conference held a panel discussion on the very subject. But since its introduction, nearly a year ago, it’s all gone quiet. What’s happened?
Well, it didn‘t go away, as some probably hoped it would. Whether it has proved to be the predicted nightmare, or a total non-event, differs depending on a company’s location and the type of business it conducts. The long-term effect, however, is more likely to be related to costing rather than practical operations. To find out more, The Mover did a trawl of opinions from around the world to find out where it’s working and where it’s causing real grief.
In Germany, for example, Matthias Tischer from Carl Hartmann, said that the implementation went much easier than expected. He said that most export containers transit through the rail/truck combined system and nearly all rail terminals immediately installed facilities to weigh the containers. “We bill an average of €150 for weighing the container plus a SOLAS administration fee of €15 which were accepted by customers. Out of around 5,000 – 6,000 containers shipped we have only had two or three picked for re-weighing.”
James Broggi, from Global Corporate Relocations in Spain, also said that the containers are weighed at the port, but it was “… just another headache in what is already a very complicated process.” He said that it comes with heavy consequences if not done properly so he now has to be even more careful with new recruits just starting off their careers in the moving industry.
James also said that he didn’t trust the weights from the ports. “The weights are always spot on perfect – 1850 kilos, 1700 kilos - perhaps they are just rounding up, though I am waiting to get a dispute from the US at any time for an incorrect weight declaration. "The weighing costs around Euro 60 which James builds into his quotations“… rather than adding more complicated jargon into quotations and confusing clients.”
George Naumann from Swiss Moving Service said that he has not heard any negative reports about the handling of traffic in Switzerland. He said that the cranes at the inland terminals, that load the containers in Switzerland on trains, barge or trucks for transit to the port of departure, all have accurate weighing scales.
Stephen Denning from Fox Moving and Storage was instrumental in alerting the UK industry to the change in the regulations and took a very active role running up to the launch date. But he said that the effect has proved to be insignificant – even though the solution didn’t emerge until the eleventh hour. “Just before the start date last year, the ports got their acts together and all of them geared up to weighing within the port,” he said. “We got involved with Destin8 and NCS who are responsible for the port communication systems across all the UK ports and they set up the ability to notify ports at the point of booking in the container, as to whether the container needed to be weighed, or whether it had a VGM already.”
Stephen said that it’s turned out to be “… a very easy and modestly-costed service which has caused the industry very few issues since its inception.” He added though that the ports were adamant that they would not provide the service until close to the date, when they suddenly advised that they had the ability to do it and at reasonable cost. “I seemed outrageous when it was blatantly obvious that they couldn’t avoid it and that they were at the only viable point in the process that it could be carried out.”
Kirk Dugard from Simpsons in the UK agreed. “With just a few months to go before it was implemented, SOLAS and the verification of gross mass (VGM), appeared to be an accident waiting to happen,” he said. “The shipping lines were publicly washing their hands of it, leaving the onus with the port operators and the transport industry to take the lead. Then, with just weeks to go, we learnt that the port operators planned to provide a weighing service for loaded containers prior to shipment. Applications were rapidly completed and sent to the two main port community network system operators. Once approved, we waited for the live start date on 1 July 2016. It came and went, and, apart from a few initial teething problems with some of the shipping lines getting to grips with recording data provided to them, it went without a hitch and quickly became routine for our staff. The relatively low costs mean that we have been able to absorb these inside our rate structure.”
Outside Europe the SOLAS regulations seem to have been accepted and implemented without much of a flicker. In Australia is seems to have been accepted as a ‘non-event’. Terry Head from IAM said that it had had “little effect from an operations point of view in the USA.” Ed Wickman, from Wickman Worldwide Services in Indiana agreed that the implementation of SOLAS in the USA was more of an inconvenience with another step in the process rather than a physical obstacle. “Many of the larger agents have truck scales at their facility and, if not, are within easy access at any of a number of truck stops.” Patrick Ohara from GINTER in Brazil agreed that it had not affected his operations as they were already required to weigh containers.
In India, however, the transition wasn’t so straightforward. Rohington Kasad from the Writer Corporation said that his company had started work on meeting the SOLAS requirements in April 2016. “After doing the trial runs for a period of one month we became aware of the problems, especially for weighing of loaded FCL containers. This was overcome and complete training, right down to the executive at the warehouse, was conducted. Implementing SOLAS requirements has increased the workload at the warehouse/port and the documentation to be submitted.” His company weighs both the empty vehicle and the full vehicle at calibrated weighbridges then adds the net figure to the container tare weight to achieve the VGM (Verified Gross Mass) required by SOLAS. He said that although it is a lot of work it is worthwhile, considering the objective of SOLAS to protect the lives of the ship’s crews.
Many outside the US thought this was going to be an operational disaster, however the more long-lasting effect is likely to be related to costing, not operations. The cost of packing and shipping household goods is directly related to the volume, however, the USA has always used weight as the preferred unit of measurement as it is considered to be more reliable (you can’t fake a weight). To bring the dichotomy together, and make it easier when quoting for contracts, the industry has always used a density factor of 6.5lbs/cu ft (or the metric equivalent). This would mean, for example, that a full TEU would be billed at around 6,500lbs. Now that the containers are physically weighed it has emerged that this density is higher than today’s average and corporate customers are not prepared to pay the higher figure.
Terry Head said that this has caused some questions and changes in billing and audit procedures. “I have had a number of enquiries from both commercial and government freight audit companies trying to understand the SOLAS policy and procedures,” he said. “I think we will likely see some changes in contract language going forward.”
James Broggi was also concerned. “We are now having to bill based on the weight shown on the VGM/BOL, which often goes in their favour than ours ... we have to bill on the lower bracket, even though the packing material and labour was exactly the same. Perhaps IKEA will start making their furniture with heavier materials!”