In order to assist the implementation of the VGM amendment to SOLAS, which comes into effect on 1st July, the IMO has agreed on certain enforcement guidelines and is expected to issue a Circular to all Member States this week. Freight insurance specialist, TT Club welcomes the move, which crucially urges governments to engage with the industry in their jurisdictions to assist with compliance and to share best practice with other national authorities.
London 23rd May 2016
At an International Maritime Organization (IMO) Maritime Safety Committee session in London that culminated on Friday, delegates agreed on guidance and advice to both those active in the container supply chain globally (shippers, carriers and port operators), as well as governmental representatives (so-called Competent Authorities) tasked with enforcing the regulation. The soon to be issued Circular will urge ‘practical and pragmatic’ enforcement of VGM over the first three-month settling-in period, partly in respect of transhipment containers but also recognising the probability of ‘teething’ problems in documenting, communicating and sharing VGM information.
TT Club, as an insurer closely involved in risk mitigation and safety measures pertaining to container transport welcomes this IMO guidance. “Like many others in the industry, we have been disturbed by the apparent confusion over how shippers will comply with the amendment to the Convention on Safety of Lives at Sea (SOLAS), making it mandatory for all packed containers to obtain and communicate the Verified Gross Mass (VGM) as a precondition to loading onto a ship”, says TT Club’s Risk Management Director, Peregrine Storrs-Fox.
“Moreover we have been particularly concerned about the patchy guidance given by national authorities to assist shippers and operators in minimising expense, delays and errors in complying with the regulation. This clarifying statement from the IMO is therefore welcome”, he said.
One area of potential confusion has been eradicated. Packed containers that are loaded on a ship before 1st July but are trans-shipped on or after that date for carriage to their final port of discharge, will be permitted to do so without the VGM specified in the new regulation.
With regard to enforcement, given the difficulties to achieve uniformity of interpretation by authorities around the world and therefore a lack of the consistency that shippers (and others in the industry) clearly require, the IMO is urging a policy of ‘practical and pragmatic’ enforcement by authorities over the first three months.
Once more Storrs-Fox applauds the move, “There are no doubt still a number of grey areas. In order to give time for these to be resolved the IMO’s intent is that any party who has done its level best to comply, even if it has not technically fulfilled the letter of the law, may expect to be treated with understanding. Those, however who have done little or nothing can expect to be penalised”.
The four industry organisations (TT Club, World Shipping Council, ICHCA and Global Shippers’ Forum) that produced the ‘Industry FAQs’ in December 2015 are also intent on issuing supplementary guidance in advance of 1st July.
In recognition that the revised requirements in relation to VGM are simply a part of the broader set of international safety requirements relating to the carriage of cargo, including the CTU Code (IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units) also approved during 2014, the IMO’s Maritime Safety Committee emphasised that safe operation of ships is not limited to the provision and use of VGM information.
Crucially in order to bring the clarity of interpretation and consistency of implementation of VGM across all trading jurisdictions, the Maritime Safety Committee is delivering a strong message from its meeting last week. This is summed up by TT Club’s Storrs-Fox, “National governments, the signatories to SOLAS, need to engage closely with the container supply chain industry to assist shippers, terminal operators and ship masters in reaching compliance. Governments are also urged to liaise with each other to share best practice, towards which a number of key authorities have already made significant progress”.
ENDS
About TT Club
The TT Club is the international transport and logistics industry’s leading provider of insurance and related risk management services. As a mutual insurer, the TT Club exists to provide its policyholders with benefits, which include specialist underwriting expertise, a world-wide office network providing claims management services, and first class risk management and loss prevention advice.
Customers include some of the world’s largest shipping lines, busiest ports, biggest freight forwarders and cargo handling terminals, to companies operating on a smaller scale but whose operations face similar risks. TT Club specialises in the insurance of Intermodal Operators, NVOCs, Freight Forwarders, Logistics Operators, Marine Terminals, Stevedores, Port Authorities and Ship Operators. The TT Club is managed by Thomas Miller. www.ttclub.com
Thomas Miller is an independent and international provider of insurance, professional and investment services. Founded in 1885, Thomas Miller’s origins are in the provision of management services to mutual organisations, particularly in the international transport and professional indemnity sectors; where today they manage a large percentage of the foremost insurance mutuals. Thomas Miller also manages insurance facilities for all the self-employed barristers in England & Wales, as well as trustees of pension schemes, patent agents and housing associations.
Principal activities include: Management services for transport and professional indemnity insurance mutuals
- Investment management for institutions and private clients
- Professional services
- Building defects insurance