Policy & Compliance
Continued from page 13
weight (VGM) is not automatically ‘pushed’ to the party who requires it, to provide this information to the carrier. The shipper or forwarder has to actively monitor systems until the VGM becomes available and then provide it to the carrier. The noteworthy point is that the port acts on behalf of the party that is required to submit the VGM, but if it is incorrect it is the freight forwarder or shipper that will be liable for any penalties. Providing an accurate VGM, which is used in ship stowage plans, is essential to comply with SOLAS. Whilst UK operations seem to generally ensure a greater compliance than elsewhere in the world, errors can potentially occur. We can only encourage Members to review their activities against their statutory obligations as detailed in The Merchant Shipping (Carriage of Cargoes) Regulations 1999 . The first essential point to review is how the VGM is established. Where weighing equipment is used, procedures covering its use, calibration and record keeping are essential. If weighing is outsourced, an agreement should be in place covering these functions plus, where applicable, warranties and indemnities. If a VGM is provided using Method 2, Members must check that the party providing it is authorised to do so. Lastly, Members should discuss with their insurers to ensure cover is in place for any liabilities that result from a VGM-related incident. VGM-related issues are relatively infrequent, but their impact is substantial as we have seen. One case resulted in lengthy and expensive litigation, and the other in a substantial loss of cargo and damage to a containership. In neither case was a freight forwarder at fault, but it should be remembered that a Member may find itself in a situation where it is held liable. Prevention, being better than cure, dictates that reviewing existing procedures and ensuring adequate cover for any potential liabilities is the best approach.
line’s own internal errors that created the issues leading to a stack collapse. Potential liability But what are the liabilities of BIFA Members should they be involved in a situation when an error has been made and which leads to substantial damage and cost? From the writer’s perspective, there are two main scenarios to consider: • Where the freight forwarder acts on behalf of its customer, who has provided the VGM, Or • When the freight forwarder has loaded a groupage container and establishes the VGM itself. The regulations place responsibilities on both shippers and forwarders and failing to supply or provide a correct VGM (knowingly or recklessly) is an offence. It will be for the courts to decide on the correct level of the penalty. Currently the onus is on the party submitting the VGM, not the recipient. This has created a rather one-sided situation, and it will be interesting to see how the law develops on this subject. From a contractual viewpoint, under Clause 17 of the BIFA STC, the Member’s customer is required to provide an accurate weight (VGM) to the BIFA Member. Shipping lines will have similar contractual warranties regarding VGM and the losses that may be claimed if these are breached. As few Members have weighbridges large enough, many make use of the port weighing facilities to establish the correct VGM. We have been advised that some ports weigh all arriving containers to cross- check the booked weight against the VGM. Member feedback is that the port established
“ Prevention, being better than cure, dictates that reviewing existing procedures and ensuring adequate cover for any potential liabilities is the best approach
14 | May 2025
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