Brazil is (almost) ready for the VGM

Grupo Guia’s Seminário VGM has cleared out some doubts, and marked two of the main concerns among shippers: costs and liability


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The new VGM rule, integrated as an amendment to IMO’s SOLAS convention has been in the top themes read on the daily Guia Marítimo News. Based on the records achieved by analytics, Grupo Guia predicted the urge to promote a specific seminar to discuss and debate the new global regulation of container weighing, then promoting the Seminário VGM, that took place in São Paulo last Friday.

Yet in the opening, Grupo Guia’s managing partner, Martin von Simson, observed how rare are the opportunities to gather shippers, providers and carriers, nevertheless, the theme itself was strong enough to bring up the need for a collective work of enlightenment and preparation. “By means of all digital tools available, just like it happens to other media channels, today Guia Marítimo is able to map out the most impacting news to the market, and promote specific events to clarify all doubts arisen amongst the community”. Von Simson also emphasized Guia’s interaction feature, through questions and answers that can be published on the online portal, with the guidance of specialists.

To the VGM seminar, Guia hosted carriers, terminals, regulatory entities and representative associations of ocean carriers, shippers and providers, with one single goal that would be to reach out for application means and solutions to the possible hindrances the new SOLAS regulation may cause as it gets globally effective, on July 1st.

Safety and prevention

From the shipowner’s point of view, MSC’s General Manager Cesar Centroni, highlighted safety aspects of the new regulation, bringing about examples, such as the MOL Confort sinister, in the Indian Ocean, the DNEB, which sank in 2011, still docked at the Port of Algeciras, and the MSC Napoli itself, in 2007. In all investigations, according to Centroni, investigations pointed out to discrepancy between the reported weight and the actual figures, which caused the stowage to be unbalanced. In the specific case of Napoli, an investigation by the British Council verified that the containers loaded on the vessel differed by 3 tons per unit in the average, reaching up to 20 tons above the informed, what summed over 300 tons of discrepancy”.

Centroni mentioned how close the Brazilian regulation kept to the SOLAS guidelines (issued by the Navy Department of Ports and Shore, DPC), “claiming that the key purpose was not to cause any further costs or bureaucracy with data interchange”. DPC did stay as close as possible to the original IMO regulation, however, as the debate would show, costs are inevitable.

Electronic Solutions

With an eye on the needs of interaction between shippers and carriers on the VGM emission (which, according to both the regulation and DPC’s Brazilian version, will have to be submited upfront and preferably by electronic means), the electronic marketplace INTTRA has developed a specific tool for data interchange that complies with the SOLAS VGM. In Brazil, INTTRA is involved in the 85% of shipments, and Product Director Ed Ordway, told the audience how impressed he was with the lack of consistency among the regulating entities around the world. “I’ve been personally involved in meetings with a number of groups, from the World Shipping Council up to world associations like SMDG, FIATA, CLECAT, CESAC, Transpacific Stabilization Agreement, and I could realize there are no consistent standards, and the regulation is still premature, being several of them still in draft or comment stage”, Ordway said, claiming to be impressed by the preparedness of Brazilian terminals and the involvement of the whole logistics communities in the search for solutions.

Ed Ordway explained how the new INTTRA eVGM will work in practice, and how it is going to submit information to carriers, terminals and shippers, integrated to third-party platforms. Ordway also presented the Online Forum organized by INTTRA, with 400 members of 200 companies that gather online on weekly basis to discuss the problems, challenges and solutions to the IMO rule implementation.

No VGM, no gate

Despite we have, in Brazil, very few terminals that do not weigh containers already, as their ordinary procedures, the world scenario is different, what led some of the countries to adopt the “no VGM, no gate” motto. This is not the case of Brazil, the reason why and Caio Morel, from Santos Brasil Terminal, was brief and pragmatic: “we won’t have such a maxim [no VGM, no gate] especially because we guess most weights will match”. However, he suggested the certified re-weighing to be adopted in cases of discrepancy, especially for safety reasons. Basically, he announced that the terminals in Brazil will keep weighing containers, as they have always done, but with no certification provided. And, when certified weighing is required, they will do it at a cost – which was already expected – and feared – by shippers.

On behalf of the shipping companies’ representative entity Centronave, Claudio Loureiro provided historic and technical aspects of the SOLAS measure. Centronave was directly involved with DPC in issuing the Brazilian version of the rule, and Loureiro claimed to be very satisfied with the repercussion of Guia Marítimo’s initiative, for understanding that ocean transportation is “largely important to the economy, yet with a very poor visibility to the public opinion, source of a number of problems the country has been dealing with”.

Delicate as a loaf

By comparing the ship to a loaf package, Loureiro brought up how hostile the oceanic environment can be, and how powerful the strengths act on it. “The structure compromised by the loading plan is comparable to a loaf: in the course of its trip, the vessel twists, changes its format in a number of ways, depending on the forces involved and how they are sailing… one should not think that, only because it’s made of steel, it won’t work”, he explained, bringing the crowd to laughter as he pulled a piece of loaf from underneath the pulpit.

Then, he raised one of the most critical issues to the new determination: “it was dramatic to have rules so the container had its weight verified, and for someone to be liable for it”. After the cost issue, liability is one of the points shippers are most concerned about.

Another doubt that would come up is how early the VGM should be submitted. In Claudio Loureiro’s oppinion, this question varies from port to port, from contract to contract. Ed Ordway, on the other hand, gave a more practical advice, saying that the VGM should have a dedicated deadline: “along with the booking, it can be too early; along with the Shipping Instruction, maybe too late”, he said. Both regulations (IMO’s and the Brazilian DPC’s) state: “sufficiently in advance”.

Loureiro was glad to notice, however, that the issue has brought Brazilian regulators closer to the private operators, while providing more proximity between shippers and providers. “This process will contribute to make their relationship more mature, just like this kind of seminar, that helps us all in approaching to the community and debating common issues”.

Neither here, nor in China

“Among the very well placed comments here, I missed any mention of one key entity: the cargo”, said cargo agents’ representative Aguinaldo Rodrigues, by Sindicomis/ACTC. According to Rodrigues, agents simultaneously hire and provide services, reason for which they must be ready to participate, be involved and negotiate all stages of the shipping operation – regarding to both cargo movement and information flow.

Thankful for Guia Marítimo’s initiative for gathering the community around such a delicate theme, Aguinaldo Rodrigues emphasized that shippers are worried about two main issues: liability and costs. “At every step we take, a very clear concern gets deeper: there are representatives who will respond for it”.

By showing price tables the market intends to charge after the new rule is implemented (regarding weighing, certification, re-weighing and extra warehousing periods), Aguinaldo Rodrigues warned the audience that operations may expect some delays and the shippers must speak up in negotiations, even fully aware of the safety reasons of the measure. Sinister and freight insurance is also a concern to the shipper, and the shippers’ overview is that there will be visible cost increase. “So what are supposed to tell the cargo? And, in case of a sinister, who will be to blame, if the cargo did not take part in negotiations when IMO established such a convention?”, he asked.

And, as an answer to the international question the media has raised globally, Rodrigues stated: “No, we are not ready. Neither here, nor in China – literally”.

No big of a deal

Brazilian national agency of waterway transportation ANTAq was represented by the entity’s diretor Fernando Fonseca, who seemed to be very confident about the adequacy of the country to the new rules: “I even thought the theme shouldn’t be addressed such a concern, once Brazil is fairly advanced in terms of weighing, requiring only some fine tuning”.

Among his (few) concerns are road transportation integration, which the rule refers to with some not very feasible solutions, such as weighing trucks at the gate of terminals, subtracting their tare and fuel (?) – and the double trailer trucks, which must be disconnected and go through the same mathematic procedure.

Fonseca reminded that ANTAq can (as it always could) be appealed to by any part that may consider to be jeopardized, including abusive costs over non transparent basis or that do not reflect the complexity and prices of the activities. Many of the infractions are already included in the agency’s regulation, and are subjected to port authority measures.

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