Source : www.lexology.com
Some confusion and uncertainty has arisen in the international ocean shipping and logistics industry following several public statements and FAQs released by the U.S. Coast Guard in the past few days regarding the impending implementation of the IMO’s SOLAS Convention container weight regulation. Under SOLAS Chapter VI, Regulation 2, effective July 1, 2016, IMO flag-state containership operators and the marine terminals at which their vessels load must receive a shipper-signed weight certificate stating the "verified gross mass" (VGM) for each container before loading to the vessel. Major carrier and shipper stakeholders have interpreted the Coast Guard's remarks as questioning whether the requirement is mandatory, whether it applies to shippers or will be enforced at U.S. ports, and what the Coast Guard will do to implement the rule. Industry stakeholders are continuing to engage the Coast Guard in an effort to clarify the Coast Guard’s position regarding application and enforcement of Regulation 2, e.g., the World Shipping Council’s March 3, 2016, letter to Admiral Paul F. Zukunft, Commandant of the Coast Guard.
A review of SOLAS Chapter VI, Regulation 2, the recent Coast Guard statements and Coast Guard FAQs, as well as interpretations of the Regulation 2 amendments by ocean carriers and authorities worldwide, makes it clear that: 1) the SOLAS verified gross mass certificate (VGM) is mandatory for IMO flag-state vessels operating in international trade; 2) the VGM requirement will be implemented by July 1 for such vessels loading at U.S. ports; and 3) IMO "Guidelines" for implementation are not mandatory, so carriers and shippers have some flexibility to work out acceptable procedures. Although the Coast Guard now questions whether the SOLAS regulation applies to shippers or terminals in the United States, and sees little or no enforcement role for itself in the process, there is no dispute that it applies to the IMO flag-state vessels engaged in international trade, and thus the vessel operators may, and presumably all will, implement the shipper-signed weight document requirement as of July 1 at U.S. ports.
Regulation 2 Mandatory Requirements
Regulation 2, which is mandatory for IMO flag-state vessels (the U.S., most major shipping nations and international registries, e.g., Panama, Liberia, Marshall Islands, Bahamas), requires that shippers must verify by a reliable method the weight of each container tendered, that shippers must timely provide to the vessel's master and the terminal a "shipping document" signed by the shipper's representative verifying such weight, and that no container may be loaded to an IMO flag-state vessel for international carriage unless the shipper has provided the vessel operator and terminal with such document. Fully parsed out, the three short paragraphs of Regulation 2 covering this topic require the following:
If all the above are not done, then the carrier shall refuse loading. Note that Regulation 2 does not state the time by which the document must be provided. That may be established by the terminal or the carrier.
Possibly leading to some of the current confusion is uncertainty regarding the IMO's "Guidelines Regarding the Verified Gross Mass of a Container Carrying Cargo" issued June 9, 2014. The Guidelines are not mandatory, but they provide a more detailed discussion and definitions, and are "intended to establish a common approach for the implementation and enforcement of the SOLAS requirements regarding the verification of the gross mass of packed containers."
Taken as a whole, Regulation 2, the IMO Guidelines and the Coast Guard's statements and FAQs indicate that international shippers must provide signed VGM documents meeting the minimum procedural and content requirements of the regulation, and that vessels engaged in international trade will not load containers for which no such signed document has been provided prior to loading. Beyond this, however, the exact manner and arrangements by which carriers, shippers and regulators will implement and enforce Regulation 2 is flexible. Parties can cooperate to use any methods or procedures, as long as they satisfy all of the clear requirements of the regulation.
Additionally, note that Regulation 2, paragraph 6 states that "if the shipping document, with regard to a packed container, does not provide the verified gross mass and the master or his representative and the terminal representative have not obtained the verified gross mass of the packed container, it shall not be loaded on the ship." If a container scheduled for loading has no document, paragraph 13 of the Guidelines suggests that the carrier or terminal themselves, or a subcontractor, could weigh it using Method 1 (weighing the loaded box) and proceed to load. In such a case, the carrier or terminal likely would impose a charge, which could be billed to the shipper if the parties had an arrangement in place, or the carrier or terminal might have the ability to charge the cargo based on a tariff, a bill of lading or other applicable terms.
Furthermore, paragraph 184.108.40.206 of the IMO Guidelines states that sealed packages arriving for shipment that have accurate weights marked on them do not need to be reweighed. Thus, a carrier receiving LCL items could rely on the package weight and use Method 2 to determine VGM prior to loading.
In addition, some ports, such as Charleston, have announced they will have weighing equipment available.
Coast Guard Position
In more recent statements, the Coast Guard questions whether Regulation 2 applies to shippers or terminals in the U.S. However, on its face, Regulation 2, which the Coast Guard confirms is mandatory, expressly states that shippers must determine container weight by Method 1 or 2, and must provide the weight document to the vessel master and terminal before loading. The World Shipping Council, which represents containership operators and participated along with the Coast Guard in the IMO process leading to adoption of the recent amendments, has sent a strong letter to the Coast Guard demanding further clarification of the agency’s interpretation.
For now, the Coast Guard’s position appears to mean the agency itself will not act to enforce the SOLAS regulations, and will not impose fines or take other regulatory action as to missing or inaccurate shipper weight certificates. However, this controversy may not have any material effect on shippers’ weight certificate obligations at U.S. terminals. The vessel operators – which the Coast Guard agrees are subject to the mandatory SOLAS regulations – are on track to implement the requirement on July 1, with or without Coast Guard compliance activity.