New Rules on Weighing Cargo Could Pound Ports

0

New regulations aimed at protecting the massive vessels that carry goods across the seas are set to go into effect July 1, sending shippers using the ports of Los Angeles and Long Beach into panic mode. They warn of added costs and massive delays as companies head into the preholiday shipping season.

The new rules, which apply to all international ports, would require containers loaded for export to be weighed at the port of departure. But neither local port has the infrastructure to weigh containers according to the guidelines, which were agreed to as part of an international treaty signed last year.

“It’s going to delay the whole export process significantly,” said Norman Harris, president of the Los Angeles Customs Brokers and Forwarders Association Inc.

Representatives of the ports of Los Angeles and Long Beach declined to comment.

The regulations will be enforced by the U.S. Coast Guard, which will cite shippers that don’t have a certificate showing they abide by the new container-weighing requirement.

While the Coast Guard will have jurisdiction, the regime of penalties for noncompliance is still undefined, further adding to shippers’ anxiety.

“The U.S. Coast Guard is working on its policy. I don’t know when it’s going to be finalized but we’re not going to delay the implementation of this,” said Lisa Novak, a spokeswoman for the Coast Guard.

The required certificates can be issued by a third-party company that has certified equipment to weigh an outgoing container. But having third-party companies assume this responsibility is not going to help, according to Harris.

“If it requires weighing containers in a third-party facility, it’s going to increase the expense and time that it takes to get the container to the terminal for export,” he said.

With less than three months to go until implementation, many businesses seem baffled by the whole process.

“I wanted to understand tactically how this is going to be implemented, so I went to my carriers and the silence was deafening,” said Maryanna Kersten, senior manager of logistics at Del Monte Foods Inc. of Walnut Creek.

The new rules came in the wake of the loss of the MOL Comfort in 2013. The container ship, underway from Singapore to Jewddah, Saudi Arabia, split in half during a storm 230 miles off the coast of Yemen in the Indian Ocean. No crew members were lost, but some 4,000 containers went to the bottom of the sea. Authorities later said it was overloaded. 

The reaction came in the form of the Safety of Life at Sea Convention, or Solas, and the United States is one of 162 countries that has signed the convention. But even though Solas was ratified in 2014 and the regulations are not new, the deadline for implementation appears to have taken many shipping companies by surprise.

“What’s going to happen when you bring a container to the terminal for shipping is that you’ll have to turn in a certain document with the container,” said Mark Hirzel, chairman at the Compton office of freight forwarder A.N. Deringer Inc. “If you don’t have it, the container will be kicked out.”

He added, “Many in the industry were caught by surprise by this new rule. No one was really following it.”

Added weight

Under current regulations, shippers are required to weigh only the cargo they are shipping; they need not supply the combined weight of the cargo and container. Starting July 1, shipping companies will need to supply the total weight before goods can be loaded on a vessel.

Complicating matters is the fact that while containers come in standardized sizes – known as 20-foot equivalents, or TEUs – they do not have standard weights. 

As a result, complying with the new rule will be a costly, time-consuming, and complicated process, according to Del Monte’s Kersten, whose company imports and exports products from China, Thailand, and Latin American countries.

“You don’t know what container you are going to have,” she said. “You can broadly know if it’s a 20-foot or 40-foot container or go on a carrier website and randomly choose one to have a more accurate weight.”

Still, the rule is crucial for vessel operations because some shipping companies report inaccurate weight for their cargo, Hirzel said. The difference between the number on a sticker and an actual weight might be between 500 and 1,700 pounds a container.

Today’s ships docking in the ports of Los Angeles and Long Beach hold as many as 13,000 TEUs. A generation of bigger ships, which cannot traverse the Panama Canal, will start calling on local ports this week and can carry as many as 18,000. Given the scale of the ships, the variance in weight can add up fast.

“Some shippers underdeclare their cargo value so that they can get it on the ship and maximize the cargo that they are able to move to the supply chain,” Hirzel said. “When you have thousands of containers and that becomes a real number.”

John Butler, chief executive of the World Shipping Council, said shipping companies need to comply with the regulation rather than fight it. 

“People have to ask themselves: do I want to continue to fight if I need to comply with an international regulation or do I want my cargo to move? It’s really a choice,” he said. “We couldn’t possibly have a problem of that magnitude if everybody weighed their cargo.”

No posts to display