In case you just woke from a 12 year nap, SOLAS is an international treaty (Safety of Life at Sea) and has a new amendment going into effect 01July2016 requiring shippers to have a system to VGM (verify gross mass). Maritime operators are sick of the safety risk of handling over weight containers with misstated weights. After 01July shippers and NVO’s will have to declare the weight to the ocean carriers, well in advance of port entry, in an easy data friendly way. As the plans stands right now, no VGM, no load to vessel, no load to vessel, no entering the port with the container.
CargoSmart Limited https://www.cargosmart.com/en/default.htm did a survey to see how many shippers and logistics providers were all ready with a system to comply with the new SOLAS weight container rule that will go into affect 01July of this year. CargoSmart asked its customers if they were ready and stunningly most of the 820 replies said …”nope”. Even scarier 20% of the respondents said, “What’s a SOLAS weight requirement?” Only a whopping 4% said they were ready to go. Not overwhelming by any means test. As a matter of fact most of the non vessel operators Drewry http://www.drewry.co.uk/ the maritime consultant questioned earlier this month had no plans to comply at all.
This is the biggest game of transportation ‘chicken’ we could ask to see unfold. Lines and terminals are slow to step in with weighing systems, many shippers and NVO’s are betting someone else will make their problem go away, and the SOLAS Convention does not seem to be saying there is an extension coming. As it stands right now all members (treaty signers), which is more than 160, would have to legally enforce the SOLAS requirement starting 01July. Of this writing only 11 signatories have even issued guidelines and China isn’t one of them! China for the most part issued a ‘5 things you should know about SOLAS’ memo and called it a day. If you thought the west coast ports were messed up when there were labor disputes, wait until you see all of our ports globally, especially ports with mega ships calling, unable to load containers by law.
I know… I know…you are thinking.. big deal. What is there to weighing a container and transmitting the data? And you are right. It’s not a big deal. Not a big deal until you think about weighing millions of containers in remote locations worldwide without a global supply chain hiccup, then it becomes quite complex. The first question in a world of nickels and dimes is who pays? It won’t be allot per container, but how about 500, 5,000, or more, containers as part of a contractual deal that did not consider SOLAS? Hard to see disagreements coming on that front, isn’t it?
In some places loading locations can be quite remote with no facilities to weigh anything not to mention a container. Weigh on the way to the port? Not likely considering the sheer numbers of containers and the lack of weighing equipment just not where it needs to be. Want to hear scary? According to The JOC,http://www.joc.com/ Shenzhen Port handled 24 million containers last year. That’s over 65,000 containers a day based on 365 days. If it only took 10 minutes to weigh each container and transmit the data, it would create and additional 10,833 labor hours per day for just the Shenzhen Port traffic alone related to the SOLAS agreement mandate. Yeah, Boom.
If something dramatic does not change there will be a global container traffic mess and supply chains will stop. If you are in the USA the good news is 01July falls on the Friday before the 4th of July Holiday and you should already have all your beer and burgers in the fridge. The timing would almost insure the stock market wouldn’t crash until Tuesday 05July. You see, always a silver lining when you look for it. In this game of chicken I am one of the guys sitting back thinking someone will blink. Not blinking means container-geddon in a world economy not all that healthy to start off with.
Who will blink? The ‘blinker’ will be the one who understands the true impact of not blinking and who has the ability at this late stage. My guess would be an extension issued by SOLAS will be the short term answer. If not, the ocean carriers may try coming up with a collective work around. Although ocean carriers are pretty broke right now having a hard time making the rent as it is. If the ocean carriers try and step in I can’t see it being more than half measures that buy the world another 90 days-ish with no plan behind it if SOLAS isn’t on board. That would put us back in harm’s way again 01October2016 and only lead shippers to believe someone will always save the world for them. I don’t believe enough shippers will be able to put themselves in a position of being able to comply by working together. Controlling shippers is like trying to coral a crowd of two-year-olds full of Red Bull screaming ‘mine’. The decentralized nature of two-year-lds make a collective effort unlikely. That pretty much leaves the SOLAS Convention to save the world as we know it.
Who wants to go into business with me? We will buy up as many portable scales as we can and set up an EDI (Electronic Data Interchange) with every ocean carrier and terminal. Then set up ready for business on major interstates leading to ports. Our scales will be the 25th hour SOLAS solution for shippers who will absolutely hate us for how much we charge them to weigh the container and report the data. Yes, you bet I would.
What you don’t know about SOLAS can hurt you.
You can real more about SOLAS here:http://www.imo.org/en/About/Conventions/ListOfConventions/Pages/International-Convention-for-the-Safety-of-Life-at-Sea-(SOLAS),-1974.aspx