A lot Ado About VGM – Common Cargo

Sigh no extra, women, sigh no extra,
…
And be you blithe and bonny,
Changing all of your sounds of woe
Into Hey, nonny nonny.

–William Shakespeare’s A lot Ado About Nothing

The brand new verified gross mass (VGM) rule went into impact on Friday. Regardless of issues across the globe about attainable interruptions to cargo move at ports, implementation has gone easily to date.

Experiences around the globe present few to no disruptions at ports because of the new rule requiring shippers to supply the weights of loaded transport containers with the intention to get cargo containers loaded onto ships.

We gained’t fairly sing, “Hey, nonny nonny” but (if that’s even a factor individuals truly do).

Implementation of the brand new rule has solely simply begun, so it’s too quickly to say for sure the VGM rule won’t trigger or contribute to port congestion at port terminals around the globe, however all indicators level to a easy transition to the brand new rule.

Whereas the VGM rule implementation didn’t carry the identical mass panic of Y2K, or the 12 months 2000 Downside, on the flip of the millennium, one can’t assist however see similarity between the constructing fear every non-disaster produced, which resulted in a lot ado about nothing.

There may be one subject, which shippers aren’t completely satisfied about, being created by the brand new VGM rule:

Charges.

Identical to individuals discovered methods to revenue from Y2K with corporations and consultants charging different corporations cash to guard them from the Millennium Bug, some carriers, port terminals, and freight forwarders are charging charges for dealing with the brand new VGM paperwork.

Shippers really feel that in these conditions, corporations are profiting from the VGM rule to unjustly enhance the revenue they make off of shippers.

The World Shippers’ Discussion board (GSF) introduced a few of these VGM related charges to life, calling them unacceptable, in a press launch:

Regrettably GSF members, primarily in Asia and Africa, report that some carriers and different ‘service suppliers’ seem like exploiting the introduction of the brand new VGM guidelines by imposing exorbitant and unjustified expenses for questionable and unspecified “administration charges” and different “companies”.

The GSF is asking for these expenses to be withdrawn instantly. The GSF is presently inspecting the next examples offered by members and shall be taking them up with the service suppliers:

• China: The worldwide forwarding firm Kuhne and Nagel is charging a VGM administration price for all Ok&N shipments booked in China – particularly USD 12.75 for full containers if shippers are utilizing the Ok&N digital VGM system, or USD 25.00 for handbook information entry. Equally, OOCL Logistics have introduced that they are going to be charging a Verified Gross Mass (VGM) Administration Price of USD 15 per doc for all exports from China.
• Nigeria: The logistics and transport agency Grimaldi Company Nigeria have notified clients that they may weigh containers on departure at a price of N20,000 per 20 foot container and N40,000 per 40 foot.
• Sri Lanka: GSF members have suggested that transport traces are contemplating charging shippers USD 25 for submitting the VGM, and, in instances the place the ultimate weight differs from the booked weight, an extra cost of USD 50 for amending the VGM.
• UK & Eire: The ports group DP World, which owns each Southampton and London Gateway ports, impose a £1.00 cost for VGMs offered previous to arrival (rising to £3.00 after field arrival however earlier than 24 hour minimize off).

Chris Welsh, GSF Secretary-Common, mentioned: “Shippers worldwide help the security objectives of the container weighing necessities and are dedicated to fulfilling their regulatory necessities, however this shouldn’t be utilized by provide chain companions as an excuse to impose unjustified charges.

A pleasant article from the Journal of Commerce highlights shippers’ frustrations on the problem of VGM-related charges, but in addition brings stability by sharing a protection of the charges from one such firm charging them:

Forwarders, corresponding to DB Schenker, have defended the brand new charges, arguing that the keying in of VGM information requires additional time and effort. The forwarder added there was additionally a substantial, and as but unexplored, monetary threat and authorized angle to the SOLAS rule.

“It begins with the price of easy exception administration in instances of VGM discrepancies or the inevitable late submission of VGMs, corresponding to ensuring containers don’t roll, amending manifests, customs declarations,” Joerg Hopp, DB Schenker director and head of Ocean Freight for North and Central China, informed JOC.com earlier this week. “And it ends with the VGM additional firming up the chain of obligation and custody in case of accidents involving containers. In spite of everything, NVOCCs (non-vessel-operating frequent carriers), corresponding to DB Schenker, are legally performing because the shipper of document and as such have to supply an accurate VGM to the carriers.”

Whereas Mr. Hopp’s argument appears affordable, I’m not offered on the concept that shippers needs to be charged additional charges in the case of VGM, particularly in the event that they do all of the work of offering the burden of their loaded transport containers themselves.

Freight forwarders are employed to ensure all of the intricacies, together with paperwork, of worldwide transport are dealt with for shippers. VGM paperwork doesn’t appear to be such a burden that freight forwarders would wish to cost additional for it.

Right here at Common Cargo, we’ll be monitoring the VGM scenario because the transition to the brand new rule continues. If VGM-related disruptions do begin occurring, we’ll maintain you updated. We’ll even be watching to see who wins this debate over VGM-related expenses.