Tuesday, 7 June 2016

New law could affect JIT auto deliveries

Truck operators handling containers could face additional delays at ports as from 1 July shippers will be required to weigh and certify the contents of containers.

This new measure, part of steps to stiffen up 'safety of life at sea' requirements, could have implications for vendors of automotive components, including large and heavy components such as castings, for gongs and even complete engines.
Critical are components supplied to vehicle assembly plants that use Just-in-Time (JIT) procedures as part of vehicle assembly.
Effective 1 July 2016, any shipping container leaving from any port in the world must be accompanied by a shipping document signed either electronically or in hard copy by the shipper on the bill of lading listing the verified gross mass of a container in order to be loaded onto a ship.
The container weight mandate from the International Maritime Organization (IMO) under the Safety of Life at Sea (SOLAS) convention comes after misdeclared weights contributed to maritime casualties such as the breakup and subsequent beaching of the MSC Napoli on the southern UK coast in 2007 and the partial capsizing a feeder ship in the Spanish port of Algeciras in June 2015.
The weighing must conducted in one of two approved ways, called Method 1 and Method 2, on scales calibrated and certified to the national standards of the country where the weighing was performed. Many of finer points of the new regulation have not yet been finalized, such as enforcement, and what happens to a container that arrives at a port without the necessary documentation or if the VGM (verified gross mass) declaration for a container turns out to be false or incorrect.
On 1 July 1 rule becomes not just international law under the IMO but national law within the 162 countries that are signatories to the SOLAS convention. The new law therefore affects container ports world-wide.
The shipper is legally responsible party for providing a verified gross mass (VGM) signed either electronically or on paper. Carriers will not load containers anywhere in the world unaccompanied by a VGM, because doing so would leave their ships out of compliance with flag state and insurance rules.
Approximately 300,000 container weights need to be certified each day globally, and roughly half of all booking requests and shipping instruction submissions each day are non-digital, in other words, in paper form. Drayage operators in the US are particularly concerned.
Marine terminals may in some cases offer weighing services if it can be done without disrupting regular terminal operations, but this will not be in all cases, as some terminals, such as Maher Terminals at New York-New Jersey, earlier this year said it does not have the capacity to offer weighing services for non-compliant containers and won't in-gate any container without the VGM already received via EDI.
Overall, at close of first quarter 2016, shippers world-wide were busy determining how they will be in compliance, but many questions remain even the introduction of the new scheme has been in the pipeline for some time.
Many US terminals like Florida International Terminal already weigh containers to meet U.S. Occupational Safety and Health Administration and other federal standards, so the decision to provide container weights to help shippers meet the IMO’s new SOLAS rule does not represent a change in operating procedures.
However, other US ports are not so well equipped to deal with the situation.
The new rules have implications of truckers not only in the US as precise weights will be known for containers thus operators will be aware of overweight containers which could infringe maximum gross vehicle weight requirements that are limited to 80,000lb in the US (roughly 36,000 tonnes).
In the UK the maximum weight on six axles is 44 tonnes, or 40 tonnes on five axles, although in Germany the maximum is 40 tonnes.
Also, carriers could find themselves caught in the middle of the new ‘safety of life at sea’ requirement. The argument is that although shippers are the clear target of the new safety amendment, trucking operations could face extra costs and delays.
The potential problem facing drayage operators is what to do when they are left with a load that has not been certified by a shipper.

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