This Week in Logistics News (June 13-17, 2016)

My wife and I are off to my daughter’s 2nd grade class this morning for their end-of-year workshare, where we’ll see highlights of the projects they worked on this year, with a slideshow and other fun activities mixed in. A great way to start a Friday.

But before I head out, here’s the supply chain and logistics news that caught my attention this week:

The big news this week was Microsoft’s acquisition of LinkedIn, which on the surface doesn’t have much to do with supply chain and logistics, but as I wrote in yesterday’s post, this deal has the potential to push the needle forward in how we leverage social networking technologies to communicate and collaborate at work — and since people-to-people communication and collaboration are critical for supply chain success, especially when exceptions occur, we might look back on this deal as a milestone moment.

For the past few months, there’s been a lot of angst and confusion over the Safety of Life at Sea (SOLAS) regulation, which is scheduled to go into effect in just a couple of weeks on July 1, 2016. Most of the confusion and uncertainty centers around the Verified Gross Mass (VGM) requirement, whereby all packed containers must have verified gross mass weights reported to the carrier and terminal before loading. For more details and insights, read the following guest commentaries we have published in recent months:

C.H. Robinson also published a post on SOLAS this week on its blog: Your SOLAS Questions Answered – How to Move Forward Now

The following excerpt from a Journal of Commerce article published this week illustrates the variability and uncertainty shippers are facing:

U.S. container terminals and ports are taking different approaches to the SOLAS rule. The Port of Charleston was the first to say it would offer a container weighing service, followed by other Southeast ports. Others, such as the APM Terminals’ facility in New Jersey, have said they will allow boxes without a VGM in the terminal but won’t let them be loaded onto ships, per the IMO [International Maritime Organization] requirement. At Los Angeles and Long Beach, meanwhile, the response has been more nuanced: terminal operators early on said they would not allow containers past their gates without VGM documentation already in tow, but they are now saying they may potentially offer container weighing services.

The guidance from operating ports, carriers, terminal operators and nation states has been variable and prone to change. How the VGM is conveyed, who can weigh a container, who can verify that weight, who can certify scales, what sort of variance between the VGM and actual weight of a box is permitted and the cost of fines, penalties and fees associated with all those factors vary from country to country, port to port and carrier to carrier.

U.S. Federal Maritime Chairman Mario Cordero proposed this week (per the JOC article) “using the weight taken at terminal gates for the purposes of satisfying requirements of the Occupational Safety and Health Administration under U.S. law [as] a simple and efficient solution for assuring the continued smooth flow of export cargoes.” That’s one possible approach to meeting the VGM requirement, but it’s not the only one.

It’s also important to note that this is a global requirement from the IMO. Jonathan Gold, vice president for supply chain and customs for the National Retail Federation, stated it best in yesterday’s Wall Street Journal: “Less than two dozen of the IMO member nations are putting forth guidance and the regulations are all different depending on which country they’re coming from…It’s all over the board.”

It’s unlikely that all of this confusion and uncertainty will get cleared up in the next two weeks, so expect some choppy seas in the weeks and months ahead as SOLAS takes effect, along with port delays and perhaps missed shipments as everyone in the shipping community set sail on a steep learning curve.

Speaking of learning, it’s time for me to head to my daughter’s school. Have a happy weekend!

Song of the Week: “Wish I Knew You” by The Revivalists

Note: C.H. Robinson, Descartes, GT Nexus, and Transplace are Talking Logistics sponsors.