SOLAS effective 1st July 2016 : ocean container weights will need to be verified by exporters before loading on to an ocean vessel
Effective July 1st 2016, the International Maritime Organisation (IMO) is enforcing the Safety of Life at Sea (SOLAS) Convention and new regulations will be in effect for shippers to report the Verified Gross Mass (VGM) of container. The main purpose of the VGM regulations is to make sure accurate cargo and container weights are used for ship loading purposes. Essentially all shippers and manufacturers are strongly encouraged to ensure they declare accurate shipment weights and have adequate, calibrated and serviced weighing equipment for both FCL and LCL shipments. Without a VGM containers will not be shipped by shipping lines.
What does this mean for exporters and shippers?
It will be a requirement for loading a packed container onto a ship for export, that the container has a verified gross mass weight (VGM). The shipper (listed as “shipper” on the bill of lading/sea waybill) will be responsible for the verification of the packed container’s weight, together with an authorised signature, and to provide this to the carrier in reasonable time prior to the vessel being loaded.
What is a container VGM?
The VGM consists of cargo weight including packaging and dunnage (securing) materials and the tare weight of the container.
2 methods to determine VGM:
1. Weigh the packed/laden container using calibrated and certified weighing equipment.
2. Weigh all packages, packaging, including pallets, dunnage material and securing material and add those weights to the tare weight of the container (shown on the outside of the container door) using a certified method approved by the UK ‘Maritime & Coastguard Agency’ (MCA).
For further info please visit: https://www.gov.uk/government/publications/verification-of-the-gross-mass-of-packed-containers-by-sea.
Method 1 can be arranged by the shipper on a weighbridge but is not specifically practical for shippers after containers are live loaded at their premises unless they are geared up for high frequency of container exports.
For method 2, shippers must apply to the UK Maritime and Coastguard Agency to become a ‘certified shipper’. Any trade looking to do this must submit an application by e-mail to email@example.com. Currently this is only open to companies that have weighing and calibration processes established as per Annex 3 of UK National FAQ sheet 1st June 2016 on the above government link. If this is not possible method 1 can only be used to supply the VGM.
The VGM is required by the line and port operator 24 hours prior to vessel arrival (a buffer of 248 hours is suggested in the first 3 months during early ‘teething’ stages).
It is possible for shippers to provide a certified VGM through electronic messaging prior to arrival at the port if preferred, EDI connections or email.
Will you be able to weigh containers at the port of loading?
Shipping lines and all major UK port operators appear to have finally concluded they will offer a weighing service under method 1 at the UKs main ports of loading and found common ground. There will be a charge for this, currently rumoured to start around £25 before other line administration charges (subject to further development). As this develops the information will become available.
EFS held back from providing information about SOLAS until logical solutions were found, the main ports in the last few weeks now confirming they will offer container weighing services at their terminals. We feel the port based solution to be the best option for obtaining VGM’s:
- Equipment is calibrated and monitored by the MCA on site
- VGM determined at port terminal will automatically be transmitted to the carrier – less chance of miss-communication / mislaid data
- Subsequently, delays in shipments or fines for incorrect declarations are minimalized.
We expect newer ports with weigh cell equipment on loading cranes to be able to adopt & execute this new requirement without much delay or disruption, however at more established ports where a weigh bridge is used it could be extra lead times need to be built into containers being delivered to the port to connect on to export vessels to accommodate queues & additional waiting times caused by this new requirement.
- EFS customs brokerage dept issues over 100 T1’s (TADS) in January 2021 wks 2,3,4
In house customs brokerage dept for EFS raised over 100 T1’s (transit guarantees) and EAD’s (export entries) in weeks 2 to 4 of January 2021 for EU exports. EFS has facilities at all major UK ro-ro ports as well as an EU network of customs offices to discharge T1s and provide clearance solutions. Keeping UK exports moving. Of course EFS can also discharge T1’s for inbound imports through Dover and customs clear shipments.
- Peak Season Surcharge increase for Far East sea imports.
Further to earlier notice 12th November. FCL rates from the Far East will see a further escalation of costs in their PSS (peak season surcharge) for December. Space and equipment shortages continue to be a large challenge to the industry and shipping lines, putting continued pressure on the freight rates ongoing for December. Effective 1st December all sailings ex the Far East will have an additional £20wm applied to all LCL shipments, further to increases already announced 12th November and in addition to those earlier increases. Felixstowe emergency surcharge remains currently at £4wm. Southampton arrivals now have the same charge applied as earlier Felixstowe conditions have migrated across southern ports.
- Getting ready for BREXIT on 1st January.
Getting ready for Brexit 1st January 2021. There are a number of actions that businesses trading in goods between the U.K. and EU can be taking now to prepare for January 1, 2021 and the start of the U.K.’s new trading relationship. We fully expect delays at Dover during January and early February as teething issues are worked through. If a business does not have an EORI number it will need to get one in place ASAP. An EORI (Economic Operators Registration and Identification) number is an importer/exporter ID number. Customs declarations will be mandatory. There are some misunderstandings as to what the impact or benefit of a “deal” would be. Import and export declarations will be required for trade in goods between the U.K. and EU. Once the Brexit transition period ends, the U.K. will be outside of the EU and will no longer be part of the Customs Union or Single Market. Goods that move into the U.K. from the EU after January 1, 2021 will be considered imports in place of an intra-EU acquisition. Import value-added tax (VAT) and customs duties will be payable and customs declarations will need to be made. If there is a “deal” it would likely alter the rate of duty payable on eligible goods but it would not remove the need for import and export declarations. If there is “no deal” duty will be at WTO levels. There will be charges associated with customs declarations (aka ‘clearance filing’ or ‘entries’). European movements – practical advice from the start to all exporters/importers check list. Commercial Shipping invoices will be required for each shipment (eg. same as for exports to the USA or imports from China) For UK-EU movements a Shipper’s/Consignor’s Shipping invoice and packing list to be given at time booking to EFS (whether import or export), zero rated of VAT, HS code detailed per line item (commodity code dictates the duty level), incoterm and country of origin detailed. EORI# to be added to consignor and consignee address clearly and visible to aid smooth clearance (make sure you get this info from your suppliers and customers alike) Suggest regular importers from the EU through Dover ferry port look at acquiring their own deferment account to pay customs duty and import VAT for imports cleared through Dover. This is the most seemless payment mechanism whereby the importer can defer payment of duty and VAT to customs to the 15th of the following month from their deferment account linked to a trading bank account. The deferment account number is lodged against the clearance entry. Importer’s should consider Postponed VAT accounting for imports (see below). Customs declarations & the need to raise commercial shipping invoices for exports will require shippers to adjust their sales admin processes as well as allow extra lead time for door to door transits. For export shipments (road or express parcel courier) please provide your shipping paperwork at the time of booking transport to ensure an export customs entry (declaration aka EAD) is filed timely. Import shipments & clearances. Shipping documents must be given at time of booking & clearance instructions must be given to the clearance clerk. The declaration must be pre lodged before the vehicle leaves the EU ferry port. In practical terms our clearance team need copy of shipper’s EAD (with MRN barcode) plus the vehicle details (reg and trailer number and country of registration of the vehicle). Standard clearances. Import Duty and Import VAT payable immediately. A full clearance at Dover for road arrivals whereby duty and import VAT are payable immediately at the border cleared against a deferment account. A charge will be levied for clearance filing. If shipments are cleared against the EFS deferment account because the importer (declarant) does not have one, import Duty and import VAT monies are required to be paid to EFS immediately and a fee will also be levied for use of the deferment account itself. New clients or high outlay amounts – until funds are received, delivery could be stopped which could also incur additional penalty charges in itself. Alternatively, importers can use their own deferment account, avoid delays, and defer payment of the duty until the 15th of the following month to customs as detailed earlier. VAT registered businesses can choose to use postponed VAT accounting, see below. Express parcel couriers (eg. DHL, Fedex..) will arrange clearance filing on arrival from Europe by air as they do already for international arrivals – their rates may increase to allow for clearance filing. They will contact the importer and have their own processes in place for deferment admin and associated charges and payment of import duty and VAT. Deferred Declarations & Simplified procedures. Import Duty and Import VAT can be deferred for up to 6 months. An importer will firstly be required to obtain an authorisation from customs to be able to use this procedure in the form of a CFSP style authorisation. EFS will only use this clearance procedure for importers against written instructions from the importers CEO/MD/Owner and only using an importers own deferment account for the clearance. Postponed VAT accounting must be used. EFS will not allow this procedure to be used on its own deferment account. A charge will be levied for each part of clearance filing. EFS can raise front declarations to get goods cleared at the border (Dover) and also supplemental declarations (the actual clearance) , although will not be involved in any monitoring part. Postponed import VAT accounting. From January 1, 2021, import VAT will no longer be required to payable when goods enter into the U.K. Instead, postponed VAT accounting can apply to all goods imported by VAT registered importers to the U.K., including those from the EU. Under postponed accounting, import VAT will be declared and recovered on the VAT return rather than having to pay it upfront and then recover it later, which will lead to an improved cash flow position for businesses. No authorisation Read More