Talk about unintended consequences.
The Verified Gross Mass (VGM) rule promulgated by the International Maritime Organization (IMO) on July 1, 2016 is intended to make cargo and ships safer, by making sure that container weights are properly recorded. when you are loading a ship, it’s good to know how the weight is distributed. if people give you containers overfilled, you won’t have the right balance on your ship. A ship might turn over, or other containers might be damaged if there’s a shift in cargo.
But the rule has created an entire industry and a plethora of fees being charged by supply chain partners. they’re presumably to offset ‘costs’ of the rule. But there is a concern that they are merely ways of increasing profits. And the fees certainly add to the complexity and cost of a container shipment, and even of identifying the best route for my cargo.
This story about India’s experience highlights some of the bad experiences shippers are having. And it is affecting which ports are used and which carriers. Will there ever be rationality in this area? Everyone agrees we want correct weights of containers, unless we want to cheat, but how complex can it be?
The downside of IMO’s container weighing rule
Source: Shipping Tribune
Shippers want service. If you mess up, they won’t stay with you. It’s the new reality. And it includes all kinds of service from pickup to final destination of the cargo.
Splash24/7 has some good articles. This one is by Sam Chambers.
Disgruntled shippers are leaving in their droves from the company that used to be known as China Shipping Container Lines (CSCL) following its merger with Cosco earlier this year. CSCL joined forces with Cosco Container Lines to form China Cosco Shipping this March – a move pushed by Beijing which has been aiming to get […]
Source: Disgruntled former CSCL customers leaving China Cosco Shipping in their droves – Splash 247
Bill Mongelluzzo writes about an attempt to get the labor situation at West Coast Ports under control. The two sides are meeting at the urging of a cargo owner and shipper group that was drastically affected by the last strike.
Ocean carriers last time were quite critical of the Pacific Maritime Association, the negotiator for the terminals, and how they handled the negotiations, blaming them for the length of the disabling strike. The strike alone probably accounted for half the diversion of traffic toward East Coast ports. The Port of Los Angeles has just barely recovered.
The union, the ILWU, was just doing what they are supposed to; pick a crucial business period, and strike if the PMA did not negotiate in what they view as good faith. That’s what labor unions do; it’s how they make progress for their members, the port workers. What other strategy can they have? By ironing out difficulties in advance, the hope is that when the strike period comes around again the agreement can be adjusted to everyone’s satisfaction easily without a work stoppage.
East Coast Ports are doing the same kind of pre-negotiation. Everyone is afraid of a shutdown like the last one in prime shipping season.
Source: ILWU caucus to determine future of West Coast labor peace | JOC.com