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South African containerized exports are facing an uphill battle

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South African containerized exports are facing an uphill battle

Willemien Viljoen, tralac Researcher, comments on the implications of the pending amendments to the IMO Safety of Life at Sea Convention for South African exporters

Soon containerized exports will have to comply with new regulatory hurdles. This is due to new international regulations which require container weight to be verified prior to containers loaded on ships for export. The aim of these regulations is to ensure that the weight of containers is not mis-declared, something which is not just detrimental to the safety of vessels and their crew, but such mis-declaration (due to overweight containers) have also contributed to containers themselves ending up in the sea. Although the purpose of the amendments is not disputed, many shippers, forwarders and exporters in South Africa have expressed concerns regarding the timeframe for implementation of the new requirements, seeing that the first official guidelines by the South African Maritime Safety Authority (Sama) were only circulated at the end of January this year.

On 1 July 2016 the amendments to the International Maritime Organization (IMO) Safety of Life at Sea Convention (SOLAS) comes into effect. The main areas of concern for exporters regarding these amendments include:

  • The shipper is responsible for the verification of the weight of a packed container before it can be loaded on a ship for export.

  • After 1 July it will be a violation of SOLAS to load a container onto a vessel if the vessel and marine terminal operators do not have the verified gross mass of the container prior to the vessel being loaded.

  • Containers can be weighted by one of two methods: either weighting the container after it has been packed or weighting the cargo and contents and adding this weight to the tare weight of the container.

  • If the marine terminal has the necessary equipment and if agreed upon by the commercial parties, the verified gross mass can be obtained by weighting packed containers in the terminals.

It is still unclear for many shippers in South Africa how the mechanics of these amendments will work. Many concerns highlight practical problems which will make it difficult to meet the 1 July deadline. These concerns pertain to the cost of weighbridges for medium and small sized shippers, weighting equipment to be ordered, installed, calibrated and certified by the South African National Accreditation System (Sanas) before 1 July; each weigh point and shipper using the method of adding the mass of items in the container to the tare weight of the container need to undergo an audit by the Sama appointed third party to verify the weighing process; the indication by the Transnet Port Terminals (TPT) that it will not allow containers to be weighed in Ports prior to loading; the capacity of Transnet to meet the deadline to have the additional verified gross mass declaration on its port management system; and that the VGM requirements will become effective on 27 June 2016 at all South African port terminals to accommodate for the transit time through the terminal stacks to the ship’s side.

Due to the costs associated with obtaining the necessary weighing equipment and the timeframe for approval and audits forwarders and export organizations have indicated that the best short-term solution will be to allow for containers to be weighed in port by the Port Authority which is allowable in terms of SOLAS. Although Port Authorities in numerous countries, including the United States have agreed to do the weighing for containers and verify the weight of containers on behalf of the shipper to comply with the SOLAS regulations this will not be the case in South Africa. According to the Transnet National Port Authority it will not involve itself in the verified container weight issue and that responsibility for it will rest solely on the shipper. Furthermore, trucks carrying cargo destined for export will not be allowed to enter ports without the correct verified gross mass information. However, this stance does carry merit – depending on Port Authorities not only to weigh all containers entering ports for export but also to verify the container weight will require changes in operations and additional capacity and infrastructure to safeguard against congestion in ports and ship departure delays and agreements to be put in place allowing the Port Authority to obtain the verified container weight.

Although the amendments serve a credible purpose, the short timeframe is problematic and all indications are that 1 July is a hard deadline with no possibility of extension. Come 27 June the new regulations will not only add to the cost of exportation, but also create a logistical nightmare for shippers and congestion around ports. All of which can have a detrimental impact on exports which will trickle through to vital export earnings, the trade balance and economic growth.

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Sources:

Business Day (http://www.bdlive.co.za/);

International Maritime Organization (http://www.imo.org);

Freight & Trading Weekly (http://www.ftwonline.co.za/)

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