Shippers, freight forwarders and other links in the local logistics chain are hoping to head off another potential roadblock in containerized goods movement through Port Metro Vancouver (PMV).
“If we don’t get it right,” said Bonnie Gee, Chamber of Shipping of British Columbia (CSBC) vice-president, “there is the potential for delays in moving containers and definitely things coming in by rail.”
The “it” referenced by Gee is compliance with new International Maritime Organization (IMO) shipping-container weight regulations scheduled to come into effect on July 1. The SOLAS (Safety of Life at Sea) Convention amendments, which will require packed shipping containers to have a verified gross mass before they can be loaded on a ship for export, are aimed at improving container ship safety. Accurate container weights are critical to determining how a ship’s cargo is stowed. Mistakes or falsely declared container weights can upset cargo balance and reduce a ship’s seaworthiness.
Institution of the new requirements is still months away, but local shippers have raised numerous compliance concerns. They include lack of clarity over who will be responsible for verifying container weights, the infrastructure needed to check loaded container weights, how the system will be policed and how complying with the new rules will affect container movement efficiency.
Any goods movement disruptions in either PMV or the Port of Prince Rupert would be bad for what continues to be a growing business for B.C.’s Asia-Pacific gateway.
PMV, the third-largest container port on North America’s west coast, now handles approximately 2.8 million 20-foot equivalent container units annually, more than double its total at the turn of the century. As of November 2015, it had posted a 6% year-to-date growth in containers handled compared with the same period in 2014.
Prince Rupert, meanwhile, is one of North America’s fastest-growing container ports. According to Prince Rupert Port Authority numbers, its 2015 containerized cargo increased 26% compared with 2014’s.
But, as recently as 2014, PMV container movement was disrupted by an ongoing fight over container truck rates and wait times at terminals.
The port’s retooled truck licensing system, rolled out in early 2015, was among several initiatives aimed at resolving the still--simmering dispute. (See “Companies claim government wrongfully turning back time on minimum rates for port truckers – page 29.)
Ironing out the potential kinks in the local supply chain caused by new container weight regulations is therefore a priority for the local shipping community.
The CSBC hosted a workshop on the issue in January. Gee added that it has also helped organize a working group of shippers and other main supply chain players to determine “what else we need to resolve, and a lot of it comes down to all the information [being] relayed on a timely basis so the movement of the goods doesn’t get disrupted.”
But many other issues need to be resolved.
For example, in an opinion piece published earlier this year in the U.S.-based Journal of Commerce, Gary Ferrulli, president for Unicon Logistics in North America, wrote that, aside from the added time and cost of complying with the requirements, the real concern resides outside the U.S., because while such countries as Canada and Australia have requirements for transporting packaged goods labelled with weights, “those ‘niceties’ don’t exist in many exporting nations, and truck scales there are anything but abundant.”
Ferrulli pointed out that if a freighter finds a container that doesn’t comply with the new weight rules, “it can inspect the offending box and refuse to ship it, resulting in significant costs, delays … .”
He concluded that there remains “great doubt about how countries will implement [the new rules] and even if they can.”
In Vancouver, David Montpetit, chairman of the Western Canadian Shippers’ Coalition, said the new SOLAS rules are a hot-button issue for members of his organization, which export forest products via containers and in break bulk.
For example, he said, there are about 2,000 export containers shipped via truck daily through PMV.
“We believe it is logistically and physically impossible to weigh these individual containers every day without disrupting the fluidity of the supply chain.”
He added that only one PMV container terminal has a weigh scale on site, and there are only “between 10 and 15 scales within city limits, and most transload facilities used by exporters do not have any on site.”
According to Fitch Ratings, implementation of the IMO weight verification requirements “is generating uncertainty at U.S. ports."
A February 11 press release from the U.S.-based credit ratings and research company stated that “Fitch-rated ports have neither designated facilities for weighing containers nor the systems for the verification of container weights. This could raise already chronic congestion at the ports that are slowed by chassis management issues, higher cargo loads from larger vessels and inadequate inland or intermodal links.”
While DP World, the Dubai-based company that owns Prince Rupert’s Fairview and Vancouver’s Centerm container terminals, has upgraded its scale at Centerm to comply with Transport Canada and Measurement Canada requirements for the new SOLAS rules, and plans to add a second scale, GCT Canada, which operates PMV’s Vanterm and Deltaport container terminals, has no plans to install a similar scale at either terminal.
Louanne Wong, GCT’s manager of market initiatives and development, said in an email that “current practices legally require container weights to be identified prior to arriving to the terminal. When the new SOLAS regulations come into effect, the responsibility remains with the shipper to verify weight prior to arrival.”
Maksim Mihic, DP World Vancouver’s general manager, said what could be a multimillion-dollar investment in new container weight scale technology makes sense for DP World, which operates 70 terminals in 31 countries.
Some of those countries have few port resources and container export facilities, so he said it would be prudent to provide the container weight measurement option at terminals to customers throughout DP World’s global operations.
In Port Metro Vancouver, Mihic expects the new container regulations will create few terminal complications for forestry companies and the other larger customers that use containers for exporting products.
“But where you have problems [will be] with the mom-and-pop shops. There are not enough scales around, and they have to find solutions, and that is where we are going to come in.”
Transport Canada senior communications adviser Mélany Gauvin confirmed that shippers will be responsible for weighing the containers and the verified weight must be signed by a person authorized by the shipper.
She added that penalties for violating the new weight verification requirements will range from $600 to $12,000 per infraction.
