April 1, 2016

To Our Valued Customer,

As you may be aware, the International Maritime Organization (the “IMO”) has amended the Safety of Life at Sea Convention (“SOLAS”) to require that, as a condition of loading aboard ship, every export container first have a shipper submitted “verified gross mass” (referred to as a “VGM”). The VGM is simply the total of the container’s tare weight plus the weight of the cargo stuffed inside. The SOLAS requirement takes effect July 1, 2016.

With the approach of the July 1st deadline, SGL has been working on ways to help its customers’ comply.

CALCULATING THE VGM

There are two permissible methods for calculating the VGM.

1. Method No. 1 is to weigh the container after it has been packed.
2. Method No. 2 is to weigh all the cargo and contents (the mass of pallets, dunnage and other securing material) of the container and add those weights to the container’s tare weight as indicated on the door end of the container, estimated weights are not permitted.

CONSEQUENCES OF FAILING TO SUBMIT A VGM

The consequences of failing to provide a VGM include but are not necessarily limited to the following.

1. If a container’s VGM is not timely submitted, the container is not allowed to be loaded onboard ship.
2. Even if a container with no VGM submitted is somehow mistakenly loaded aboard ship, the transshipment port or port of delivery terminals might refuse to handle it; or the container or vessel might be held or delayed by local authorities.
3. If the terminal at the port of loading has adopted a “No VGM, no gate-in” policy, a trucker who arrives at the gate with a container for which no VGM has been submitted will not be allowed to gate-in. The customer could incur the costs of: a wasted round trip if gate-in is denied; or a long wait for the VGM to be submitted.
4. Even if the terminal allows a gate-in without a VGM already submitted, there could be extra shifting charges assessed against the customer if the VGM has not been submitted when the terminal must finalize the stowage plan.
5. Although rail carriers have taken the position that the VGM requirement does not affect rail transportation, there could be substantial costs to the customer if an IPI export container arrives at the terminal before submission of the VGM, and the terminal has a “No VGM, No gate-in” policy.

To view the complete OCEMA article about SOLAS, go to: http://www.ocema.org/

To view a summary of the IMO’s VGM requirements, go to: http://www.worldshipping.org/industry-issues/safety/cargo-weight

SGL will continue to update you on this situation.

Regards,

Barbara Pupa

Vice President, International Logistics

SUMISHO GLOBAL LOGISTICS (USA) CORPORATION