Author: Allan Foran
This post was written prior to our January 2017 merger, under our previous firm name, Aikins, MacAulay & Thorvaldson LLP.
It has long been understood that vehicle, trailer and container weights have had an impact on the transportation system. We have focused on overweight charges, highway and infrastructure damage, and weight restrictions in previous articles.
A new challenge has come to the forefront: the impact of container and content weights on global shipping.
Canada is a signatory to the International Convention on Safety of Life at Sea (SOLAS) which is a treaty that implements standard rules for vessel safety. For the past number of years various shipping associations have worked to enhance the treaty’s regulations regarding weight verification of containers. Part of the impetus for this initiative was the breakup of a container ship approximately 10 years ago. Inaccurate information about the container weights was found to be a key contributing factor in the structural failure of the vessel. Reforms were advocated to require better certification of weights and verification of container contents on bills of lading and shipper forms. It had been estimated that over an average of 500 containers a year are lost at sea as a result of accidents and the goal of the enhanced weight reporting was to minimize safety risks of moving containers on vessels.
Amendments to SOLAS requirements will become law in Canada through the existing regulations in the Canada Marine Act which make the treaty apply in Canada. The key change is the requirement that before a container is loaded onto a ship for international transportation, the shipper must verify its gross mass for the purposes of the shipping documents. The new regulations will come into force on July 1, 2016.
A “shipper” is defined to include both the person named as such on the bill of lading and an entity that has concluded a contract of carriage with a shipping company. For those in the trucking industry that receive intermodal freight, transport to terminals, act as freight forwarders or are intermediaries or principals in the movement of containers, there may well be some chain of control responsibility that arise as a result of these SOLAS amendments. The shipping document itself must be signed by a person authorized by the shipper. In many instances, these signatures can be missed or signatures applied at some point in supply chain. The amendments could lead to new legal issues and require diligence by trucking companies. Trucking companies may need to exercise greater vigilance to confirm that a shipper has signed and identified the verified gross mass weight of the cargo. Missing or improper documentation could result in delays or rejected deliveries at port.
While the trucking industry has always been careful in relation to overweight movements, this new obligation to verify weights for vessel movement is an additional matter to consider.
Intermediate parties (such as trucking companies, railways and terminals) are all part of the chain of control and their role could be looked at in the event of a mis-identified weight. Many shippers have started to question trucking carriers about their ability to weigh containers and equipment. Obligations with respect to the loading/unloading of containers are anticipated to be an ongoing matter of discussion and the subject of commercial arrangements between shippers and truck carriers.
The new requirements will allow for shippers declarations to be accepted as verification of weight. Currently there is no obligation on a trucking company (or a terminal) to weigh the container prior to loading onto a vessel. The obligation rests with others in the supply chain (and currently the shipper or its representative through the verification process). It has been proposed by Transport Canada that two methods may be utilized to verify weights. Each requires the use of certified and calibrated equipment.
The SOLAS amendments are arguably positive for the trucking industry insofar as they reduce overweight issues and associated safety risks and damage.
As the goal is to better calculate weights, equipment and due diligence costs may result in additional compliance costs (but could also minimizing administrative costs and duplication of weighing). All of this is for the goal of safety. New technology is being developed for use by shippers and trucking carriers to expedite the weighing of the containers, contents, and packing material. This includes equipment that monitors cubed weights, considers center of gravities and weight distribution, operational data and even weighing mechanism that can be fitted to containers to measure their weight and contents. It is anticipated that shippers will seek input from intermodal carriers as to how they may assist in compliance with the updated SOLAS requirements. We anticipate that larger shipping contracts will include terms with respect to verification of weights.
Additional costs and expense as a result of these amendments may include changes to information technology systems required by carriers to receive and transfer intermodal freight. While it is contemplated that carriers may rely on the verification on a shipping document, it is always possible that the carrier would be named in subsequent complaints if it knew or ought to have known that there was a failure to weigh accurately, there was a mis-identification of the weight that was apparent, or if the carrier itself was involved in weighing. It would be prudent to review contracts of carriage to determine if existing liability and indemnity provisions are sufficient to cover this verification requirement.
Transport Canada has indicated that for intermodal movements, the container may be weighed with the chassis or trailer and the verified mass of the container is then determined by subtracting the mass of the chassis or trailer obtained using certified scales. Under Transport Canada’s proposed procedures, two containers carried on the same vehicle will need to be weighed separately.
Transport Canada has proposed to allow for a five per cent variation in gross mass of a loaded container as a threshold for compliance and enforcement. In the event of a violation, Transport Canada may impose a penalty (on the “shipper”) in the range of $600 to $12,000. Any damages that are incurred downstream in the supply chain as a result of mis-verified weight could also expose parties to further legal claims.
Safety is an ultimate objective in the movement of containers and the trucking industry has been at the forefront of this goal. The updated SOLAS requirements extend and strengthen the current weight requirements. As the industry moves to implementation of these new weight criteria, it is hoped that all will enjoy “smooth sailing.”
Allan Foran is a partner with Aikins Law and practices in the area of transportation law. Reach him at email@example.com.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.