Is There Much Margin For Error When Implementing SOLAS Regulations?

Shippers have now less than two months to comply with the SOLAS container weighing regulations which, from 1 July 2016 will require shippers to provide a verified gross mass (“VGM”) of a laden container to the ocean carrier and port terminal. While this all seems straightforward enough, the Marine Department of Hong Kong (“MARDEP”) has recently published a guidelines document which suggests that for those intending to use Hong Kong’s thriving container terminal, it is not as simple as merely weighing containers by one of the two prescribed methods. Shippers need to consider how much margin for error these provisions really provide.

The MARDEP guidelines have added some much needed ‘practical flesh’ to the somewhat lean SOLAS bones. Some of the more important points of detail include the following:-

•MARDEP is the body responsible for enforcement of the legislation.

•For containers containing more than one shippers cargo, for the purpose of the Regulations, the “shipper” required to provide the VGM will be the entity that consolidates, seals and delivers the container to the carrier.

•The declaration of the VGM can either be signed manually or electronically.

•Prescribed wording for shippers Method 1 and Method 2 declarations.

•A VGM under method 1 (weighing the laden container) can only be obtained using a MARDEP approved weighing scale. All such approved weighing scale operators will be listed on the MARDEP website.

•A shipper intending to obtain the VGM via Method 2 (by weighing all the different components individually) must submit its proposed procedure for approval by the Marine Department and then apply for a shipper’s registration. Guidance on what information is required for a Method 2 registration is available here.

•Shippers are entitled to a tolerance of +/- 5% for VGM’s over 10 tons, (or a +/- 0.5 ton for VGM’s of 10 tons and under).

This more strict adherence to the SOLAS Regulations being adopted by MARDEP can be contrasted with the US position, where the US Coast Guard has formally recognized a third “rational method” in addition to Method 1 and 2, whereby the shipper verifies the weight of the cargo and packing material, while the container tare weight is provided and verified by the carrier. If implemented, this would mark a significant departure from the regime envisaged by SOLAS which places the entirety of the VGM burden onto the shipper.

Steps that should be taken now include:

•Inserting clauses into standard term contracts and carriage documents to deal with cost and liability consequences arising from the new legislation.

•Terminal contracts should be reviewed to ensure they address how to deal with late declared / non-declared containers and non-shipped containers.

•Carriers should also try to raise shipper’s awareness of these imminent changes perhaps with an announcement on their website or with reference to the Regulations and their implementation date in any booking confirmations sent out.