INTTRA confronts new challenge posed by SOLAS regulations

The pending implementation of Safety of Life at Sea (SOLAS) verified gross mass (VGM) regulations will add yet more complexity to the troubled global ocean container industry.

Already facing issues ranging from overcapacity, downward pricing pressure, and more brand consolidation, carriers must now confront shipper’s concerns about regulatory mandates that will likely result in more seaport congestion.

A substantial majority of shippers responding to a survey conducted by INTTRA recently indicated that they lack confidence in carriers – and all stakeholders – to address the challenge with a efficient strategy.

As reported in Logistics Management, the regulations stipulate that containers cannot be loaded onto ships until their weight has been verified and certified.  

Only 30 percent of survey respondents said they expected that their company and/or their customers will be prepared for compliance when the regulations are implemented in July 2016; 48 percent said they “have their doubts,” and 10 percent said no.  Two-thirds of respondents, or 66 percent, said they expected either a moderate or major disruption in the industry.   Respondents foresee the most disruption in Asia-Pacific (42 percent), followed by Africa (22 percent).

The findings mirror observations made by Christopher Koch, senior advisor to the World Shipping Council, who told U.S. West Coast shippers to prepare early for SOLAS-related disruptions.

Also underlining the urgency of the issue is the fact that the Transpacific Stabilization Agreement (TSA) and the Agriculture Transportation Coalition (AgTC) is engaging an in unprecedented partnership in preemptive actions this spring.

The latest INTTRA survey quantifies those concerns and outlines a wide range of ocean-shipping concerns.

As a neutral, central party in the ocean industry, INTTRA has launched the eVGM Initiative to facilitate a smooth, collaborative transition to industry-wide VGM compliance through digital means.  The initiative is bringing together experts from carriers and NVOCC’s, freight forwarders and shippers, terminal operators and Port Authorities, government regulators, and rail and trucking operators. 

To date, more than 100 industry participants are registered in the eVGM Forum, an online discussion group for shipping professionals. Several companies are actively engaged in the Initiative, including APL, BDP International, CEVA, Damco, Hapag Lloyd, Hamburg Sud, Kuehne + Nagel, UASC and other INTTRA carriers. 

Participants in the initiative will not be required to work with any specific vendor to execute their compliance operations, however.    

“Some have said that SOLAS VGM could be to the ocean shipping industry what Y2K was to the broader business world,” said Inna Kuznetsova, President of INTTRA Marketplace.  “These survey results are consistent with that, as they reflect concerns over potential disruption and lack of preparedness. We believe that coordinated action can facilitate a smooth transition.  That is the basis of the eVGM Initiative.”  

She noted that the world’s largest NVOCC, Kuehne + Nagel, expressed concerns that unless global VGM communication standards and practices are adopted quickly, the VGM requirements might create confusion and chaos when implemented in June/July next year. Otto Schacht, Kuehne + Nagel’s global director of Seafreight operations, therefore, fully supports INTTRA’s eVGM efforts by making the company’s resources available to the development of eVGM.

“For this system to work efficiently and reliably, shippers, freight intermediaries and ocean carriers have to work on solutions which are practical and in full compliance of the VGM requirements,” Schacht said in a statement.