Container weighing could hit the man in the middle hardest

It is too early to tell what problems that will ensue from the implementation of the SOLAS verified gross mass (VGM) regulations for container shipping.

However, experts suggest that these will most likely arise from mis-declarations or negligent reporting and those most at risk may be those in the middle of the supply chain such as the freight forwarders.

Clyde & Co partner at its Hong Kong office Anthony Woo told Seatrade Maritime News that, "in my view the party most exposed would those that are in between". He explained that the loading parties at the top of the chain would have the best idea as to the weight of the cargo while at the other end the carriers and terminals will most likely have the facilities to verify the weight.

On the other hand the ones caught in the middle will usually be the least equipped to do this and as a result will be the most vulnerable. Woo suggested that they should take steps to enable themselves to independently verify the cargoes. However he did concede that they will face a challenge since they are already under tremendous cost and time pressure and the extra step will exacerbate this.

In addition, Woo also recommended that freight forwarders ensure they are adequately insured to cover their risk. With their main liability against the shippers, many of whom have minimal assets and are not insured, they would have very limited recourse and could potentially be unable to recover any losses if they are not covered themselves.

This risk is especially relevant in the current poor business environment, Woo said, where the freight forwarders may take on business even though they are not very sure of the cargo as commercial considerations outweigh risk.

Posted 07 July 2016

© Copyright 2019 Seatrade (UBM (UK) Ltd). Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Seatrade.

Vincent Wee

Asia Editor, Seatrade Maritime News

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