Furniture retailers looking to import products will have to take into account the latest changes to the International Convention for the Safety of Life at Sea, or SOLAS. The amended regulation requires all shipped merchandise to include a verified gross mass (VGM). Until now, shippers have only been required to provide an estimated weight.
To find out more about the new SOLAS regulation and its potential effects on the furniture industry, read on.
What is VGM?
VGM reflects the weight of a shipping container packed with goods, as well as the container’s measurements. The certified VGM for a packed container must be documented on the bill of lading, a legal form that provides information regarding the types of goods being shipped, the quantity, and destination. The form must also include the signature of an authorized shipping employee. The signature can be electronic. Under SOLAS, having all of the above allows shippers to load the container onto a vessel for export.
When does the new rule go into effect?
All parties must comply with the new SOLAS rule by July 1, 2016. However, the International Maritime Organization (IMO), the entity charged with enforcing the regulation, will offer a three-month grace period to help shippers achieve full compliance. The length of time is expected to give companies ample opportunity to update software systems and implement processes for accurately calculating the VGM of shipments.
Does the regulation apply to prescheduled shipments?
Shipments that have already been loaded onto ships prior to July 1st will not be subjected to the amended SOLAS rule. They may remain on ships without a VGM and will be exported as scheduled, regardless if the shipment is slated to depart after July 1st.
What are some ways to measure the VGM of a packed container?
There are three potential options for calculating the VGM of a packed shipping container. The first involves a weigh bridge that allows a truck driver to park their vehicle momentarily. It takes the weight of the entire truck. Designated personnel then subtract the weight of the tractor, driver, fuel, and chassis to come to an accurate VGM for the packed container. The second option involves the use of equipment that lifts the packed container off a truck to weigh it for a precise VGM. The final method involves adding up the weight of the shipped items, including pallets, packaging, and the goods themselves, and adding this sum to the weight of the empty container.
What fees are associated with the new rules?
As of June 2016, an industry fee structure has not been announced. However, companies should expect to absorb all expenses associated with developing and carrying out VGM processes. This includes fees for integrating software and employing personnel to handle VGM measurements.
How will any VGM costs affect pricing?
It is the responsibility of companies to calculate the fees they will incur due to the new SOLAS rule. Taking these costs into account, importers can update their pricing structure to reflect any higher shipment fees, thus offsetting operational expenses.
Should delays be expected?
While there will be a three-month grace period for all parties to comply, it will likely take time to iron out the challenges that may arise from these new regulations. Shippers will require additional training and practice to ensure the rules are followed correctly and VGMs are documented accurately. If VGM paperwork is not received, logjams at ports could occur. Incorrectly measured containers may also cause problems and delays as well. All these factors will likely slow loading processes and may cause confusion if shippers have to figure out where to store packed containers until proper documentation is received.
How can a company avoid delays?
Importers should do their due diligence by contacting their supplier in advance to discuss SOLAS requirements. Both parties can determine what measures are necessary to have VGMs ready, as well as assess the impact of early cut-off shipment times. It is likely that shipping will take longer no matter what process is implemented, so importers should inform their clients.
Will truckers be affected?
Depending on the company and the equipment owned, the new regulation may have limited impact. Truckers that own their own chassis do not need to worry if a container cannot be delivered due to paperwork issues. They can unload their freight and continue on to their next destination. Unfortunately, this can cause issues for an importer, who will be awaiting merchandise that is now sitting at a location other than the port where it is supposed to depart.
What other challenges may arise from the new rule?
There is a possibility that ocean carriers will depart from port without all their cargo, if shipments don’t have the required paperwork. This may occur if suppliers fail to provide VGMs before transporting shipments to ports. However, the goal is to have all companies involved in shipping streamline communication and procedural processes, so that all shipments will have the required VGM paperwork. This way, ocean carriers will be able to set sail with all cargo on schedule.