Damco eGuide
A SHIPPERS’ GUIDE TO THE IMPLEMENTATION
OF SOLAS REGULATIONS ON VERIFIED GROSS
MASS OF CONTAINERS
Simone Kraal, Damco Global Ocean Operations
Manager
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‘Maritime Law changes from 1 July’ is not an announcement likely to make headlines around the world.
But the latest amendment to the SOLAS Convention will affect 99 per cent of the 150 million TEUs of
container traffic shipped globally. In this eGuide we will explain the new amendment, how it affects
shippers, and what shippers need to do to comply. Every shipper that is exporting containerised traffic
via international waters will need to understand the implications.
WHAT IS SOLAS?
SOLAS is the International Convention on Safety Of Life At Sea. It is a consolidation of International Laws compiled in its
present form in 1974, and since frequently amended. In the modern era SOLAS is the responsibility of the International
Maritime Organisation, a United Nations agency with 171 Flag State members.
An important point to understand is that when an amendment to SOLAS has been passed, it becomes enforceable
International Law from the agreed date of implementation – this does not depend on individual member states passing any
domestic laws or regulations. As will be shown later on in this eGuide, member states have chosen to develop national rules
governing how they will ensure compliance.
SOLAS includes Chapters of Law on vessel construction and equipment, fire protection, life-saving equipment,
communications and other aspects of safety, both on board and at dockside. The part we are interested in is Chapter VI,
which covers the carriage of cargos.
WHAT DOES THE NEW AMENDMENT COVER?
The amendment to Chapter VI, regulation 2, is intended to reduce the loss of containers from vessels, provide assurance
to parties in the supply chain, and improve the safety of the workforce, vessel and equipment. In order to achieve this, the
Shipper is as of 1 July 2016 responsible for verifying the gross mass of any container offered for loading, and for notifying
this weight to the carrier. The carrier must not load the container until they have received this notification of gross weight, the
Verified Gross Mass (VGM).
It may seem surprising that this requirement hasn’t been made law before. In fact, under the Hague-Visby Rules (a development
of the Hague Rules of 1924) the shipper has an obligation to describe a cargo, including its weight, to the carrier through the
Bill of Lading – honestly and accurately. However there are problems with this approach: it only covers cargos moved wholly
by sea (so excludes multi-modal traffic), it barely recognises the concept of containers, and more fundamentally it forms part
of contract law – a carrier suffering damage can take an action against the shipper in contract, but the rules do not give any
party the right to intervene if they believe a cargo has been mis-declared.
Arising from this it has often become practice to offer estimated or average weights. In the case of containers, these can be
dangerously wide of the mark, for various reasons: the shipper may not be the packer and may not know the full contents;
the shipper may for convenience be using the weight declared for Customs or similar purposes, thus ignoring both the tare
weight of the container and that of dunnage and packaging; or a cargo may be divided between containers for different
customers, some of which may have part loads, some full, and the weights of which may have been declared as an average.
There is also of course the possibility that some shippers have simply been lying.
Under the new amendment, providing a gross container weight including that of the box itself and any packaging/dunnage is
a legal, not just a contractual, requirement. The VGM must be the result of an accurate, physical, weighing process.
(As an aside, Hague-Visby rules will continue to apply to purely contractual disputes. The VGM amendment will not affect
Bills of Lading, or indeed Customs declarations – that remains a separate process).
WHAT IS THE VGM PROCESS?
VGM is the declared weight of a full export container. That includes standard sea freight containers, but also tank containers,
flat racks, and bulk containers. VGM has to be declared before loading onto the sea-going vessel. In multimodal operations,
it doesn’t apply to rail, road or inland waterway legs, or to transshipments within a port. Depending on the supply chain, the
Shipper can decide to obtain the VGM before the container is embarked on one of these preliminary modes.
The VGM process is complete when the carrier has received the VGM and the container is boarded on the vessel. There is
no requirement to reweigh containers at the destination or at a point of transshipment. This also means that the possibility of
the weight changing at sea because of humidity changes, for example, is not an issue.
It is the responsibility of the ‘Shipper’ to provide the VGM data to the carrier. However, the ‘Shipper’ may be the originator,
importer or exporter of the cargo, or some intermediate logistics service provider such as a consolidator, NVOCC, or a
co-loader. Technically, the ‘Shipper’ is the legal entity or person named on the Bill of Lading or sea waybill, although
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as mentioned above, the VGM is an entirely separate piece of data from any weight declared on the BoL. The new law
recognises two different ways of ascertaining VGM.
Method 1 involves weighing the complete, packed and sealed, container. Under Method 2, it is permissible to weigh
separately the cargo or pieces of cargo, the packaging and dunnage, and add the tare weight of the container. Cargo and
packaging weights must have been physically and accurately obtained; for tare weight the shipper is entitled to rely on the
weight declared, usually, on the end door of the container – although if this is obscure or illegible, the container itself may
have to be weighed. You do have to use the declared weight, not a nominal, design, or average weight.
If your container is on board ship by 1 July the shipment can go ahead without the VGM being declared – however if the
container is still at dockside, or in transshipment to or from a mother or feeder vessel, then the new rules apply in full. It will
be important for shippers to talk to their carriers and forwarders to be sure of the exact status of their containers on 1 July.
THE IMPACT ON SHIPPERS
Lead Times - in Method 1 the full, packed and sealed container is weighed – this could occur at any convenient location
with suitable facilities: at the warehouse, at some third party on the way to the terminal, at or around the terminal’s container
in-gate, depending on what facilities are available. Offering weighing as a service at terminals will be a commercial decision
for terminal operators. Method 1 creates another process step and, particularly if weighing facilities are in short supply, may
affect lead times.
Under Method 2, the goods and the packing materials can be separately weighed, and added to the tare weight of the
container. This has the advantage that the process can be completed and the VGM declared quite early in the supply chain
process and any lead time effects can be managed out.
Communication and documentation - The new rules only require the VGM to be shared with the carrier. Supporting
certificates or documents are to be kept by the shipper for auditing and investigation purposes. Based on international audit
guidelines, you should plan to retain documents for up to seven years.
As to how to communicate the VGM, most carriers prefer to receive advice by EDI. As a global standard, the VERMAS
message has been created, which is an EDIFACT message set and contains, besides the VGM, the signature of the party
providing the VGM, the verification date, the name of the shipper, and references such as container ID and ocean carrier
booking number.
Carriers will also accommodate shippers who wish to communicate the VGM by the carrier’s website. Sharing the VGM via
e-mail will also be accepted, but is less preferable. In some countries, further requirements have been set for the information
to be shared with the carrier. As an example, the UK has introduced a requirement that the party conducting the weighing
be certified and that certification number will also be needed in the data field.
Costs - It is difficult to generalize about the additional costs implied by the obligation to measure the VGM. At least initially,
this will be dictated largely by the availability of and demand for weighing facilities.
There may also be costs arising from an extra step in the shipping process requiring containers to go out of their way,
incurring extra time and mileage. Delay, and therefore cost, may accrue if ports or countries impose onerous check-weighing
regimes; on the other hand more pragmatic spot check systems should allow operations to continue smoothly.
There will also be some one-off costs involved in integrating the new requirement with existing IT systems. An important point
here is that the VGM does not necessarily bear any relation to the Customs-Declared weight, or indeed any other weights
your system may be using so it does require its own data field.
As to penalties for non-compliance, some countries are working on schemes of fines or even greater penalties. Many, however,
seem to take the view that the risk of having your container stranded dockside may provide sufficient encouragement.
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LOCAL IMPLEMENTATION
The way in which the new rules will be applied already can be seen to vary between countries that have announced their
plans (and many have not). Do not be fooled, however – as stated above these rules will constitute International Law across
all IMO member countries, regardless of whether they have enacted any local interpretations.
To keep abreast of individual country rules and requirements as they emerge, we recommend bookmarking the World
Shipping Council site at: www.worldshipping.org/industry-issues/safety/
Different national rules may include enforcement methods and penalties, the need for certification of weighing parties, rules
on calibration of scales, and allowable margins of error or tolerances, if any. To take one example, allowable tolerances range
from zero (Australia) to more pragmatic positions by the UK and the Netherlands which have a tolerance of 5%.
SCALES
Some countries have included in their national guidelines requirements for the class of scales to be used. For example,
Austria and the Netherlands will require the use of scales with precision class III or higher according to EU Guideline 2009/23/
EG.India requires scales that meet the ISO 9001:2008/2015 standard.
The way in which terminals handle containers offered with or without a VGM is also a local decision, although commercial
rather than regulatory. In the UK, several terminals have announced they will accept containers without the VGM but these
will be segregated into a separate stack. Authorities in Mumbai will integrate the VGM in their normal yard operations. The
major Brazilian ports are already offering weighing as a service to the shipper, while most US ports are taking the approach
of “no VGM is no gate in”. Keep in mind that weighing at the terminal, even if it is offered, is not necessarily the cheapest or
most effective solution.
Damco itself is working actively with partners around the world to ensure the local provision of weighing services and the
accompanying documentation support.
ACTION LIST
There are several checks that shippers should conduct to ensure their compliance from 1 July onwards and avoid their
containers being left on the quayside.
• Firstly, consider whether Method 1 or Method 2 is most appropriate to your traffics and where you will carry this out,
bearing in mind the availability of weighing facilities and any costs or penalties in terms of increased lead times, mileage
and otherwise.
• How well does this fit your own internal processes in terms of time lines, cut off times and so forth? Method 2 weighing
of components within the warehouse may have cost and lead time advantages, but will it disrupt other processes?
• Check what national regulations are being brought in – what margins of error are allowed, do weighers need to be
registered, and so on.
• Check that you know who ‘the shipper’ is in terms of these rules – if you are using a third party service provider it may
not be you, and you will require assurance that this party is geared up to be compliant with the new rules.
• Check with carriers and third parties on any new cut-off dates. At the time of writing there have been no significant
announcements, but it is evident that the VGM will now have to be supplied before the carrier can draft a loading plan,
so there may be changes.
• Talk. Talk to colleagues and competitors (join your local shippers’ association); talk to your carriers, your terminal
operators, local and national authorities. And talk to us!
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FREQUENTLY ASKED QUESTIONS
General
Will the terminals and shipping lines weigh and verify all containers?
No, Terminal operators and Carriers are not required to check or question the VGM. But if they suspect that the VGM is
incorrect, they are allowed to check.
Will the implementation be fully done by 01 July or will it happen gradually?
Whatever the status of the implementation of the SOLAS regulations at national level, the SOLAS amendment will be effective
in full from 1 July 2016. This starting date is applicable to all 171 IMO member and associate member countries.
Is SOLAS applicable for LCL shipments?
Yes, the SOLAS amendment is applicable for FCL and LCL shipments.
Will the Master Bill of Lading still contain the product gross weight or will the VGM be the new weight on shipping
documents?
The Carriers have announced that they are not planning to update the MBL with the VGM.
VGM
Who is responsible for the Verified Gross Mass?
The shipper named on the bill of lading is responsible for providing the carrier and the terminal operator with the Verified
Gross Mass of a packed container.
What happens if you do not comply with the new SOLAS regulations for VGM?
Fines and other penalties may be imposed under national legislation. As a commercial issue, the penalties may involve
repacking costs, administration fees for amending documents, demurrage charges, delayed or cancelled shipments.
The bottom line is that no VGM means no loading.
Can the VGM be amended after submission?
If the VGM needs to be amended before the document cut-off it will be limited to a document amendment. If the VGM is to
be changed after the cut-off, it is up to the Carrier to decide how to act upon this.
Will there be any additional charges in connection with submitting the VGM?
Yes, getting the VGM using method 1 or 2 requires additional effort, process and cost hence it will come as an additional
service and at a price.
How about containers in transshipment on / after 1 July; do they also need to have VGM?
In order to avoid containers stranded in transshipment, Carriers would need to receive the VGM before 1 July. Carriers have
not yet announced how much earlier they will be able to receive it.
Would the terminal accept container gate-in without a VGM?
This is the decision for the terminal operators to make at port level. Some ports say “No VGM = No Gate-in”, while SOLAS
regulations focuses on “No VGM = No Loading”. As the contract of carriage is between the shipper and the shipping
company and not between the shipper and the port terminal facility, the shipper meets its obligation under the SOLAS
regulations by submitting the VGM to the shipping company.
Is there any tolerance or margin of error for VGM accuracy?
National standards and requirements will determine the acceptable level of accuracy of the weighing equipment used. There
is no provision in SOLAS for any margin of error; this is a physical weighing requirement, not a system of estimation. Gross
mass derived using compliant equipment and procedures will meet the legal requirements. If, however, the packed container
is weighed, for whatever reason, and the VGM is different from that provided by the shipper by an amount deemed to be
material, then the carrier and terminal operator will have a process for determining which value to use.
For the latest information you can check the World Shipping Council website. ( http://www.worldshipping.org/industryissues/safety/global-container-weight-verification-rule-effective-july-1-2016 )
For Ex Works collections, does the Incoterms decides who needs to provide the VGM?
The Incoterms govern the sale of goods and not the transport. Shipper on the Master Bill of Lading is responsible.
Country-specific regulations
What website can you use to check the guidelines per country?
Please visit this webpage.
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Which country’s legislation applies; the origin country or discharge country?
The country of the port of loading (the port state) has a role to play in ensuring that vessels of any nationality calling at its ports
are complying with SOLAS as well as any other IMO regulations. The relevance of the country of container loading is if that is
where the VGM is established then the weighing equipment used to establish the VGM should meet the accuracy standards
and requirements of the country in which the equipment is being used.
Does the vessel’s flag play a role?
The flag state of the vessel has a role to play in ensuring that vessels of that nationality are complying with SOLAS as well as
any other IMO regulations.
VGM Data Transmission
How should the VGM be submitted - EDI, Email, Internet, external platform etc?
The VGM is to be provided to the carrier preferably by electronic means such as EDI. Most carriers will also open up their
website to provide the VGM.
If there’s a deviation between actual weight and original packing list or customs declaration sheet, should the
packing list or customs file be updated?
The VGM will be treated differently from the weight declared on Customs documentation. So, there is no need to update
either the customer file or the packing list.
Is there a standard form or template to be used for submitting the VGM?
There is no global template developed that needs to be used to communicate the VGM with a Carrier. VGM is a separate
documentation flow with the Carrier. It can be shared at the same time as the Shipping Instructions are sent (if the time line
matches). VERMAS is the standard for EDIFACT messages.
What is the deadline for providing the VGM?
There is no SOLAS prescribed time deadline for the shipper’s submission of the VGM other than that such information is to
be received in time to be used by the master and the terminal representative in the ship stowage plan. The cut-off can be
different per Carrier and Terminal. So far, carriers have provided indication that the cut-off can be in between 24 hours before
vessel arrival at Port of Loading or container gate-in.
Weighing methods
For method 2, is it possible to use fixed average weights per container type?
No, it is not allowed to estimate weight. The tare weight of the container can be found on the door of the container.
Do the weighing stations need to meet certification standards or be certified in some way?
It is up to the local enforcement agency to decide what if any certification process will apply to weighing parties.
MORE INFORMATION
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•
•
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World Shipping Council Guidelines
World Shipping Council: Country’s implementation guidelines and regulations
World Shipping Council: VGM Industry FAQs
Industry Guidance for the Implementation Of Solas Chapter VI, Regulation 2 and the Associated IMO Guidelines
Regarding The Verified Gross Mass of a Container Carrying Cargo
• Published by Damco:
- Damco SOLAS information page (www.damco.com/solas)
- 45-minute explanatory webinar: New Container Weighing Regulations - What you need to know (SOLAS)?
- Filling In The Grid For Solas Implementation (26 February 2016)
- Translating SOLAS Amendments Into Day-To-Day Operations (28 January 2016)
- Preparing for SOLAS - Where things stand Today (9 December 2015)
- Five Things You Need to Know about The New SOLAS Regulations (1 September 2015)
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About the author
Simone Kraal is Damco’s Global Ocean Operations Manager based out of the headquarters in The Hague,
The Netherlands. She is responsible for the project portfolio of Ocean Operations. Before joining Damco,
Simone has worked in multiple operational oriented roles for Maersk Line.
About Damco
Damco, one of the world’s leading third party logistics providers, specialises in delivering customised freight
forwarding and supply chain solutions. The company has more than 300 offices in over 100 countries and
employs 11,000+ people. Damco is part of the Maersk Group. More information about Damco can be found
on www.damco.com
Disclaimer
This eGuide reflects Damco’s view only, is based on the information available at the time of publication and is subject to
change when more (country) legislation becomes enacted. Damco makes no warranty, expressed or implied, as to the
results obtained from the use of the information on this blog and shall have no liability for the accuracy of the information
and cannot be held liable for any third-party claims or losses of any damages.
All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without prior written permission of Damco International BV.
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