Shippers’ group moves regulator over extra levy on overweight containers

The first sign of resentment over a rule adopted by the International Maritime Organization (IMO) requiring container weights to be verified before they are loaded onto ships was evident last week when an Indian shippers’ group petitioned the port tariff regulator against a move by one of India’s top container terminals to collect extra charges on this count.
The new global rule, adopted in 2014, will come into force from 1 July 2016. It requires all containers to be weighed to confirm that the weight declared by the shipper is accurate; this would lessen the risk that unweighed and misdeclared containers pose to stakeholders in the global container supply chain.

Gateway Terminals India Pvt. Ltd (GTI), the container terminal run by Denmark’s APM Terminals Management BV at Jawaharlal Nehru port, India’s busiest container gateway located near Mumbai, has decided to implement the rule much earlier.

GTI, India’s single biggest container terminal, loading close to 2 million standard containers a year, said in a client advisory notice that it will start collecting penal charges in respect of all over-weight export containers gated-in at its facility from 11 May. The terminal will begin offering container weighing services to help identify mis-declared weights, integrating it with its normal operations.

The Western India Shippers Association (WISA), a body representing India’s exporters and importers in India’s western region, says that GTI did not observe the customary practice of consulting the stakeholders nor did it take the port rate regulator’s approval for collecting the extra levy.

The new levy does not find any place in the terminal’s tariffs approved by the Tariff Authority for Major Ports (TAMP), WISA said while seeking the regulator’s intervention to prevent GTI from collecting the extra charge immediately.

This face-off was bound to happen, particularly in India where run-ins between shippers and terminal operators and shipping lines over charges are all too well documented. Besides, shipper groups both in India and elsewhere have always resisted efforts to introduce mandatory container weighing, arguing that such a requirement would add extra costs and require costly infrastructure to weigh the containers. However, container lines and terminal operators have pointed to accidents, including the breaking up of the container ship MSC Napoli on the southern coast of the United Kingdom in January 2007, as proof of the need for mandatory container weighing.

To ensure the safety of the ship, the safety of workers both aboard ships and ashore, the safety of cargo and overall safety at sea, the International Convention for the Safety of Life at Sea (SOLAS), amended in 2014, requires that the gross weight of a packed container is verified prior to stowage aboard ship. The shipper is responsible for the verification of the gross weight of a container carrying cargo. The shipper is also responsible for ensuring that the verified gross mass is communicated in the shipping documents sufficiently in advance to be used by the ship’s master or his representative and the terminal representative in the preparation of the ship stowage plan.

In the absence of the shipper providing the verified gross mass of the packed container, the container will be denied loading onto a ship unless the master or his representative and the terminal representative have obtained the verified gross mass through other means.

The SOLAS regulations have prescribed two methods for verifying the weight of a container. One, after packing and sealing a container, the shipper can either himself or through a third party weigh the packed container.

Under the second method, the shipper himself or through a third party, weighs all cargo individually. This is subject to certification and approval by a competent authority in the country where the containers are packed and sealed.

However, disputes between the shipper, the shipping line and the terminal operator could arise in situations where a container is delivered to a port terminal without the shipper having provided the required verified gross mass of the container. As per SOLAS regulations, such a container cannot be loaded onto a ship.

“In order to allow the continued efficient onward movement of such containers, the (ship’s) master or his representative and the terminal representative may obtain the verified gross mass of the packed container on behalf of the shipper. This may be done by weighing the packed container in the terminal or elsewhere. The verified gross mass so obtained should be used in the preparation of the shiploading plan. Whether and how to do this should be agreed between the commercial parties, including the apportionment of the costs involved,” according to the SOLAS regulations.

Any costs associated with the non-loading, storage, demurrage or eventual return of the container to the tendering shipper should be subject to contractual arrangements between the commercial parties. The concerns raised by Indian shipper groups such as WISA on extra costs needs to be addressed to ensure the effective implementation of the new scheme.

This article has been taken directly from here