Cash Market Moves

By Mary Kennedy
DTN Cash Grains Analyst

There have been some new developments concerning Safety of Life at Sea (SOLAS) mandatory weight reporting since my blog titled "SOLAS Deadline Nears; Still No Clear Picture on Implementation" was posted on June 20. https://goo.gl/…

On that day, the Agriculture Transportation Coalition (AgTC) put out a press release saying, "The Ocean Carrier Equipment Management Association (OCEMA) officially announced that their member ocean carriers will accept the marine terminal weights, so that exporters do not have to provide the combined cargo/container weights to the carriers. There is still work to be done, particularly for containers arriving at terminals without going through the gates, by on-dock rail." OCEMA is an association of 19 major U.S. and foreign flag international ocean common carriers. Here is a link to the announcement by OCEMA: http://goo.gl/…

I asked Midwest Shippers Association (MSA) Executive Director Bruce Abbe if the picture was a little clearer since OCEMA’s announcement. "Yes, I would say so," he said. "I’m guessing now that with this option being now through OCEMA as a noted, endorsed method that many, if not most ports and terminals will offer it. And for others, they had best inform anyone shipping through them what their policy will be. I expect there will be differing levels of adoption, but the trend is for many of them to provide it. And then will the carriers accept it? I expect most will."

However, Abbe also said he expects many freight forwarders will not want to take any chances with shippers container cargo come July 1 and many of them will probably try to provide some kind of VGM (verified gross mass) weight reporting via whatever the system is the carriers will each provide.

"Hopefully, someone or all of them will track and inform shippers/forwarders what systems are available at the different ports and systems," he said. "If terminal-weighing will be done, that’s probably what should be used. But if not, shippers/forwarders should plug in something."

"There was also some uncertainty when it came to on-dock rail container service," said Abbe. In the case of on-dock rail, most of those containers are not weighed at some (not all) ports. Charleston, SC, for example, doesn’t have on-dock rail so everything gets weighed now anyway (to meet OSHA requirements, has been for 25 years.) Seattle, which serves our region, has what some call on-dock rail by BNSF at SIG (Seattle International Gateway) but in fact it isn’t true on-dock rail because the boxes have to be pulled off and put on chassis for a short run over to the terminals of choice/booking. So maybe they are weighed at the terminals. Hope so."

Abbe said he recommends shippers/forwarders should provide a VGM weight, according to whatever the carrier makes available for their systems and that they tell/email the forwarder to say they are providing a VGM. He added that if the terminal is going to weigh and report it, they should go with that one.

"I just don’t have a good handle on how this will all be adopted and played out over the next few days ahead of July 1," said Abbe. "I would not advise shippers to just do nothing new unless they know for sure that their shipment is going to go through a port where the terminals will provide the VGM. In time, I think that is what will be the case … what the system will adopt.

"And the shippers/forwarders/logistics providers ought to be concerned enough and informed enough to make sure there is no slacking on this. Plus, with the International Maritime Organization (IMO) recommending ‘more flexibility’ at the beginning of VGM requirements the first three months, that hopefully things will go ahead without major interruptions in the U.S."

What will happen overseas is still very unclear Abbe told me, because many countries and ports haven’t given any indication yet on what their systems will be. "It’s been a confusing mess getting here."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

(CZ/BAS)