Are VGMs Back?
Client Alert
Two years ago, on behalf of the National Customs Brokers and Forwarders Association of America (the NCBFAA), GKG Law worked with the US Coast Guard (USCG) to challenge the attempts of the ocean carriers that would have required NVOCCs and shippers to provide a Verified Gross Mass (VGM) Certificate to the carriers in advance of tendering cargo. As you may recall, the VGM issue arose due to efforts by the International Maritime Organization (IMO), after several vessels capsized for unknown reasons, to adopt a method that would provide greater certainty about the weight of containers being loaded on vessels.
After a number of meetings on the topic, the IMO issued what are called VGM Guidelines which were adopted by most trading nations. The VGM Guidelines take the position that it is the shipper’s responsibility to verify the weight of loaded containers and require any party tendering cargo to provide a VGM certificate that has been obtained from a certified scale in advance of the tender. However, we contended that turning what had been Guidelines into mandated regulations amounted to an inappropriate attempt by the vessel operators to transfer significant operational burdens and liability to NVOCCs and shippers. Moreover, as US ports already had certified scales and were fully capable of weighing containers before or during the loading process, this would essentially be a redundant process that drove up costs unnecessarily.
Despite significant lobbying efforts in the United States, the carriers were not successful in getting the USCG – – which has jurisdiction over maritime safety issues – – to adopt the VGM Guidelines. Instead, the USCG was persuaded that the carrier’s attempts to make this a requirement in the US, regardless of what other nations decided, were unnecessary and inappropriate.
Consequently, the USCG declined to make the VGM Guidelines a requirement and the carriers’ attempts to circumvent this decision by putting VGM rules in their tariffs were met with disfavor by the FMC.
Nonetheless, we have heard recently indicating that some carriers may be requiring NVOCCs to provide VGM Certificates as a condition to accepting cargo and is seeking information on the topic. If your company is being required to provide the VGM Certificates to the vessel operators, we would be interested in knowing about it and suggest that you provide us with the names of the carriers that have imposed this requirement.
If you have any questions, do not hesitate to contact Ed Greenberg at 202.342.5277 or egreenberg@gkglaw.com.