SOLAS VGM (sigh.!!! oh please, not another article about it !!!!!!!!!!! I hear some say..) maybe the most spoken about topic in container shipping history right now, more than the Chinese slump, more than Brexit, more than the idling container ships and definitely more than the mergers happening between container shipping lines..
While SOLAS VGM has been implemented to tackle the specific problem relating to weight mis-declaration, it seems to have also inadvertently created some confusion among the container shipping fraternity..
A burning question (read confusion) that is circulating currently is whether the Tare Weight of a container should be included in the weight shown in the Bill of Lading or not..!!
This confusion seems to have been born out of statements from certain quarters that the VGM weight and Bill of Lading weight must tally..
This WILL NEVER HAPPEN..!!
In one of my previous articles I wrote about the difference between the various weights used in shipping, where I covered the difference between two Gross Weights..
- Gross Weight – (when referring to a cargo) is the total weight of the raw cargo (example – Peppadews) + the weight of bottles or cans that it is packed in.. If the bottles and cans are further packed into cartons which are placed on a pallet, then the weight of the peppadews + bottles + cartons + pallets = gross weight of the cargo
- Gross Weight – (when referring to a container) is the total gross weight of the cargo + the tare weight of the container
Historically and even currently, the weight displayed on the bill of lading has/is always been the Gross Weight of the cargo (in green above) including the weight of the packaging material of the cargo, and never the Gross Weight of the container (in red above)..
Why is it so..??
This dates back to several centuries when most commodities were traded by weight..
The bill of lading being a receipt for the goods, always showed the weight of the cargo and monies were exchanged based on this..
As an example have a look at a copy of a Bill of Lading from the year 1874 which shows a trade of 184 pounds of Seeds at 85 francs per ton..
You can see some more examples here..
So this trading by weight tradition continued even after containerisation, and even now in a lot of cases (mostly in the commodity trades), the buyer pays the seller “X” amount per kilo or ton of cargo that is traded..
Imagine a buyer is buying 20 tons of Chrome Ore and the negotiating/qualifying document used is the bill of lading.. Let us say this bill of lading shows the weight as 22.25 tons including container tare weight (but it is not mentioned separately)..
The buyer will end up paying for 2.25 extra tons (tare weight of container) which she is not actually receiving from the seller whereas the seller will benefit from this extra weight he has charged..
Therefore the weight of the cargo is of paramount importance to both buyer and seller and the weight of the container is not considered in this equation.. A container is merely a receptacle used for the safe transportation of the cargo and does not form part of the cargo itself..
So based on above, the VGM cannot match the Bill of Lading weight in its current format..
But will the implementation of SOLAS VGM and the possible confusion between Bill of Lading weight and VGM influence a change in this tradition..??
What is your opinion..??