FMC chairman: Agency watching SOLAS closely; will step in to ensure fair practices if necessary

The U.S. Federal Maritime Commission (FMC) will, if necessary, take a more direct role in regard to a hotly debated container-weight amendment to the Safety of Life at Sea (SOLAS) treaty, but it won't intrude on the U.S. Coast Guard's jurisdiction over implementing and enforcing the rule in the United States, FMC Chairman Mario Cordero said.

The amendment to the 102-year-old SOLAS treaty requires shippers to certify in writing the accuracy of the "verified gross mass" (VGM) of outbound containers. Effective July 1, shipping lines may not take on board containers that do not have a certified VGM. Shippers have argued that it is unrealistic for them to certify the tare weight of equipment they don't own or control.

In an April 14 interview with DC Velocity, Cordero said the agency "may get involved and play a more direct role" if it finds, for example, that the language in VGM-related communications issued by carriers does not comply with the carrier agreements filed with the FMC, he said. This has not been the case to date, he emphasized.

Cordero spoke prior to his keynote presentation at the Coalition of New England Companies for Trade (CONECT) 2016 Northeast Trade and Transportation Conference in Newport, R.I.

"The FMC will continue to play its role of protecting the interests of U.S. shippers," and any actions by carriers, terminal operators, and ports that the commission deems anticompetitive "would raise a red flag," Cordero said.

The FMC will get directly involved if, as many shippers fear, the VGM process leads to congestion and bottlenecks at terminal gates and on the docks, Cordero said. "Our mission is to foster a fair, efficient transportation system," and the agency will take appropriate action if VGM implementation has a negative impact on that system, he said.

For his part, Cordero called the language regarding shippers' responsibility for verifying the container's tare weight and certifying the gross mass "rather ambiguous."

Cordero said the FMC would "almost certainly" support any measures that stakeholders agree on that will create efficiencies. Possible, but as yet unproven, examples include weighing and certifying containers at marine terminals and using technology to facilitate the acquisition and sharing of weight data.

U.S. port authorities should get involved in addressing the VGM issue, he continued. Whether they are terminal operators themselves or so-called landlord ports, it's the ports' own reputations and overall efficiency that will suffer in the event of bottlenecks. "If you're going to take the hit, you should be at the table" and help to mitigate the impact of changing practices, he said.

Cordero declined comment on whether SOLAS could be met by ocean carriers adding their certification of container tare weights to shippers' verification of cargo weights, as recently suggested by exporters and Coast Guard officials. "The FMC is viewing this as part of the overall issue of congestion, which has (been) and continues to be a major policy issue for us. If there are solutions that are in the interest of efficiency, then we will definitely support them," Cordero said. He added, however, "we want to make sure there is nothing here that exacerbates congestion. ... The Coast Guard is in charge, and we will be conscientious about following protocol."

Stakeholders fear that if an efficient process to verify VGM isn't developed soon, the result will be massive port congestion and equally major supply chain disruptions.

"This can and will impact shippers and carriers heavily if ports or terminals require VGM to be reported before containers can be gated in," said Michelle Cummings, vice president of ocean service at GT Nexus, a technology provider. "This has the potential to create global port and terminal congestion that could make recent historic port strikes look tame." GT Nexus' shipper council, which represents more than 70 shippers that collectively move more than 7 million 20-foot equivalent units (TEUs), recently issued a communiqué calling for clear and uniform procedures for SOLAS compliance. An approach that effectively leaves each country, carrier, and terminal to establish its own protocols does not work in a global business like the maritime industry, the group said.

Other issues related to the amendment that have yet to be sorted out include whether the carrier, terminal operator, or port authority could provide written certification; who would pay for the service; whether terminal operators have the infrastructure to support weighing activities; and whether terminal operators should accept and hold containers without VGMs, or turn them away at the gate.

In February, the FMC hosted a meeting of the Coast Guard, shippers, carriers, and terminal operators to begin discussions on how to implement the amendment.

Mark B. Solomon contributed to this report.