To Tare or not to Tare – Should the VGM match the Bill of Lading Weight..??

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..

tare weight of containerA 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..!!

Why..??

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..

  1. 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
  2. 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..??

trading by weightThis 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 Bill of Lading 1874of 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..

What is your opinionBut 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..??

 

What did you think of the above article..?? Comment below..

17 comments on “To Tare or not to Tare – Should the VGM match the Bill of Lading Weight..??

  1. Harry says:

    Hi mohamed imchichi, in a situation where there is no weigh bridge facility, the viable option would be to use the declared gross weights on the packing list + tare weight of the container to come up with your VGM. Since it may be difficult to always be on site to verify the weight of each specific container I would further suggest erring on the side of caution & assume the heavier tare weight eg for a 20GP instead of the average 2250kg I would assume around 2450kg tare
    I would also further suggest that is a glaring opportunity to diversify your business by building a weighbridge and get it accredited.

  2. Nadia says:

    Don’t forget that VGM is gross of cargo + container tare + lashing material weight

  3. A very good explanation of the whole scenario. The tare weight cannot be included in the bill of lading weight. There has to be an alternate solution. It might sound beneficial for the purpose of vessel planning, but is not at all convenient for the beneficiaries of these services. Neither the buyer nor the seller would be willing to take the loss when it comes to including tare weight in the bill of lading.

  4. hassan says:

    Dear Mr Hariesh
    i think that it is not important to show vgm Weight on bill of lading because it is not important , the shipper send the vgm declaration to shipping line and vessel planner or third officer has payload list with all weights to stack the container on vessel , but if the shipping line show vgm weight in b/l
    what is the problem in it ?

    i am still confuse in something , the buyer pay money for buying the weight of cargo only without weight of bottle or cans or pallets ?

    Thanks

    Hassan

  5. The weight mentioned on a bill of lading has to correspond with the VGM.

    The weight on the B/L is used in vessel planning. imagine if a ship planner has to look up the weight of a container to add that to the weight of the cargo so that the stowage of cargo on a ship can be planned.

    Yes the ship can take on ballast to even keel the ship. Read an article recently that stated that every 35000kg was 1 cm draft. A 20′ container has a mass of about 2000kg. never mind the reefer, open top, flat racks, 40′ containers plus high cubes which are all on board the vessel all of which weigh more than the 20′ GP.

    Remember the MSC Napoli plus other ships which have been lost due to incorrect weight of containers being declared. It is your supplier’s invoice and packing list which should be used declaring the weight of the cargo, not the bill of lading.

    The whole reason for the VGM is this miss-declaring of weights of container shipments.

    1. Shantharuben says:

      Hi All, Can Someone please Explain whether the Weight Mentioned in the BL and the Weight Mentioned in the VGM Should be Same for all Shipments?

  6. Khoo Jui Fang says:

    The weight in BL is only cargo weight + pallet weight no need include tare weight

  7. Dickens says:

    Good explanation and thank so much. you have made me understand. Please keep on educating us.

  8. Kkwaku Duah-Anane says:

    I think that the Bill of Lading must not be used as a receipt but only as a contract of carriage so that the invoice weight and value can be used for duty purposes.

    1. Hi Kkwaku, bill of lading as a receipt of goods is one of the two functions that will not change irrespective of how it has been issued.. And also may I remind you in container shipment, a bill of lading will never be a contract of carriage, only “evidence” of contract of carriage..

  9. inocencio says:

    This is an awesome article. I think you managed to convince me in believing that the two weights has nothing to do with the other.
    Therefore, if the two weights are to be shown on the BL – they can be shown separately.

  10. Marisa Vermaak says:

    I personally feel that the Bill of Lading would have to be amended to show the weights as a split
    Cargo gross weight as well as container weight separately. That way precise safety on weight regulation will be more accurate

  11. jayaram GA says:

    May be, the structure of BL is going to change. Additonal column or a box may be introduced to declare VGM.

  12. Hanna Partanen says:

    This is a very good article, thank you. We have been stumbling with this question, until we understood that VGM is a separate thing, and the gross weight on the invoice and Export declaration is another thing.

  13. Samuel Tan says:

    Dear Hariesh Manaadiar,

    I wish to point out that the purpose of the VGM weight (tare weight of container + shipper’s specified weight is solely for stowage planning onboard vessel by Carrier.

    However the gross wt in BL i.e. weight o cargo + packing + pallet etc must always be identical to the invoice, packing list and LC, if any. In this respect, if the VGM weight is to be indicated iin the BL, it will caused much problem to the trade as it will affect the bank and LC.

    Example, if the invoice value of the goods is basis per kg or per mteric tons, then the figures will not tally.

  14. I’ve exported for the US government since 1998. I’ve always used the tare weight on my bills of lading. Net Weight of Product + Packaging + Dunnage + Tare= Gross Weight of BL.

    Of course, I designed our bills of lading to accommodate and show the subtotals as well. It’s a pain, but I would never want to be responsible for a ship to red line.

    1. mohamed imchichi says:

      we are container terminal operator the middle east country namely Umm Qasr, Basra, Iraq. we are facing the flwg issues : there is no acredited weighing body in Iraq for the shipper to weigh his cargo outside the port and produce a certificate and we do not have a weigh bridge as of now. what can we do in this situation. thanks

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