PostHeaderIcon SOLAS amendments and associated guidelines

Starting from 1st July 2016, a packed container will no longer be allowed to be loaded on board vessels unless its Verified Gross Mass (VGM) has been provided by the shipper named in the Bill of Lading, to the ocean carrier and/or the terminal representative.


SOLAS amendments and associated guidelines

The Maritime Safety Committee (MSC), at its ninety-fourth session (17-21 November 2014), adopted, inter alia, amendments to SOLAS regulation VI/2 (see resolution MSC.380(94)), to require the mandatory verification of the gross mass of packed containers.

In addition to the amendments to SOLAS regulation VI/2 and with a view to establishing a common approach for the implementation and enforcement of the SOLAS requirements regarding the verification of the gross mass of packed containers, the Maritime Safety Committee approved the Guidelines regarding the verified gross mass of a container carrying cargo (MSC.1/Circ.1475).

The aforementioned SOLAS amendments introduce two main new requirements:

  1. the shipper is responsible for providing the verified weight by stating it in the shipping document and submitting it to the master or his representative and to the terminal representative sufficiently in advance to be used in the preparation of the ship stowage plan; and
  2. the verified gross mass is a condition for loading a packed container onto a ship.

The shipper is defined as a legal entity or person named on the bill of lading or sea waybill or equivalent multimodal transport document (e.g. "through" bill of lading) as shipper and/or who (or in whose name or on whose behalf) a contract of carriage has been concluded with a shipping company (see paragraph 2.1.12 of the Guidelines regarding the verified gross mass of a container carrying cargo (MSC.1/Circ.1475)).

Availability to both the terminal representative and to the master or his representative of the verified gross mass of a packed container sufficiently in advance to be used in the ship stowage plan is a prerequisite for the container to be loaded onto a ship to which the SOLAS regulations apply.  However, it does not constitute an entitlement for loading.  Nothing in the SOLAS regulations limits the principle that the master retains ultimate discretion in deciding whether to accept a packed container for loading onto his ship.

The verification of the gross mass can be achieved by either of two methods:

  1. weighing the packed container; or
  2. weighing all packages and cargo items, including the mass of pallets, dunnage and other securing material to be packed in the container and adding the tare mass of the container to the sum of the single masses, using a certified method approved by the competent authority of the State in which packing of the container was completed.

The amendments to SOLAS regulation VI/2 were accepted on 1 January 2016 and will enter into force on 1 July 2016.

Contingencies for containers received without a verified gross mass

Notwithstanding that the shipper is responsible for obtaining and documenting the verified gross mass of a packed container, section 13 of the Guidelines regarding the verified gross mass of a container carrying cargo (MSC.1/Circ.1475) contains contingencies for containers received without a verified gross mass.

In order to allow the continued efficient onward movement of such containers, the master or his representative and the terminal representative may obtain the verified gross mass of the packed container on behalf of the shipper.  This may be done by weighing the packed container in the terminal or elsewhere, but whether and how to do this should be agreed between the commercial parties, including the apportionment of the costs involved.

National and industry guidance

The UK Maritime and Coastguard Agency has issued MGN 534 (M+F): CARGO SAFETY - Guidance on the implementation of the SOLAS VI Regulation 2 amendment requiring the verification of the gross mass of packed containers, which can be downloaded at:

Industry guidelines developed by WSC and CEFIC/CLECAT/ESC/GSF, independently of each other, were submitted to the Sub-Committee for Carriage of Cargoes and Containers, at its second session, with a view to informing the Sub-Committee. The aforementioned industry guidelines can be downloaded from the following links:

In addition, a coalition of industry experts, jointly lead by the WSC, the TT Club, ICHCA and the GSF, has compiled a list of frequently asked questions (FAQs) and their answers.  The FAQs can be downloaded from any of the following links:


PostHeaderIcon New Ocean Alliance deal made with CMA CGM, Cosco, Evergreen and OOCL

CMA CGM, Cosco, Evergreen and Orient Overseas Container Line have signed an agreement to form the Ocean Alliance enabling them to blunt the power of the mega alliance of Maersk and the Mediterranean Shipping Company (MSC). the world's first and second biggest shipping companies.

The stated aim of the new Ocean Alliance is to provide comprehensive service networks covering the Asia-Europe, Asia-Mediterranean, Asia-Red Sea, Asia-Middle East, Trans-Pacific, Asia-North America East Coast, and Trans-Atlantic trades, said the joint communique.

"This is a milestone agreement among four of the world's leading container shipping lines. Each line will offer best-in-class services to customers with fast transit times, competitive sailing frequencies, and the most extensive port coverage in the market," said the statement.

"Shippers will have an attractive selection of frequent departures and direct calls to meet their supply chain needs, including access to a vast network with the largest number of sailings and port rotations connecting markets in Asia, Europe and the United States," said the statement.

The Alliance will also bring service reliability and the most efficient integration of the latest vessels in a fleet of over 350 containerships.

Initially the deployment will cover more than 40 services globally mostly connected with Asia, including about 20 services each in the US and Europe related trades.

Subject to regulatory approvals of competent authorities, the new alliance plans to begin operations in April 2017. The initial period of the Alliance shall be five years.

This development comes in the wake of newly-merged China Shipping Cosco Group as other carriers in Asia and Europe prepare to lineup of five operators to share capacity

The world’s biggest operators have been meeting with the US Federal Maritime Commission, the American regulator, the European Commission and China’s Ministry of Transportation on an agreement expected to set a new landscape in container shipping following consolidation moves since the end of last year.

Chinese regulators have already approved the Cosco-China Shipping merger which resulted in a new Shanghai-based entity called China Shipping Cosco Group, reported the Wall Street Journal.

"An announcement is expected from Shanghai, likely tomorrow where China Shipping Cosco Group will announce its proposed partners," one of those people said. "Talks with the regulators are continuing and substantial changes in the composition of existing alliances may happen."

Two other people involved in the matter said the new grouping may comprise China Shipping, Cosco Group, France’s CMA CGM, Hong Kong-based Orient and Singapore’s Neptune Orient Lines.

Such an alliance would control around 26 per cent of the trade between Asia and Europe, the world’s busiest container shipping lane.

Regulatory reviews can take three months or longer. In the past, alliances got the green light from regulators if their combined market share was below 35 per cent

"I expect three main alliances instead of four going forward, and anyone not making it into those groupings won’t be able to survive in five years time," said Lars Jensen, chief executive of Copenhagen-based SeaIntelligence Consulting.

"No matter how this pans out in the coming days, I expect more consolidation to come, which will again change the alliances landscape."


PostHeaderIcon GENEVA's Mediterranean Shipping Company (MSC) has removed 13,000-14,000-TEU vessels

GENEVA's Mediterranean Shipping Company (MSC) has removed 13,000-14,000-TEU vessels from its Silk service and replaced them with 4,800-9,500 TEU ships, reports Alphaliner.

The move to slash the Silk service's average weekly capacity to 9,700 TEU, down from 13,500 TEU in July is further evidence of flagging demand on the Asia-North Europe trades and depressed freight rates.

Alphaliner also said that over the slack season, the Swiss carrier will use the 4,814-TEU MSC Manu - its smallest ship on the Asia-Europe run.

The report also said the carrier's Asia-North Europe Lion service has switched some of its 13,000-14,000-TEU ships for 8,000-9,500-TEUers that were taken from the Asia-Mediterranean Dragon and Tiger services. It said the Dragon and Tiger services are now each deploying vessels with an average capacity of over 13,000 TEU, owing to higher rates on this trade.

"As MSC is to receive 20 new ships of over 10,000 TEU in the course of the next 12 months, the shipping line will have the possibility to bring back rapidly its existing Far-East to Europe strings to the 13,000-14,000 TEU level for the next high season," it said.


PostHeaderIcon THE CKYHE alliance, combining Cosco, "K" Line, Yang Ming, Hanjin and Evergreen, is scrapping one weekly Asia-Europe string

CKYHE members lines said the measure would "optimise efficiency and enhance service quality", and would take effect from the end of this month, reported IHS Media.

Following service shuffle, the CKYHE Alliance will provide five Asia-North Europe services (NE2, NE3, NE5/CEM, NE6, NE7) and four Asia-Mediterranean services (MD1, MD2, HPM/MD3, FEM), adjusting port coverage across Asia, North Europe, and the east and west Mediterranean.

As part of the service restructuring, the China-Europe Shuttle (CES) service will be shelved, decommissioning ten 8,500-TEU vessels. The CES service used to call at Felixstowe, Hamburg, Rotterdam, Le Havre, Colombo, Taipei, Ningbo, Shanghai, Shenzhen-Shekou and Colombo.

As a result, 6,000 TEU per week will be removed from the route, but it will be partially compensated by the phasing in of new buildings on another Asia-Europe loop.

Evergreen will provide tonnage on the NE7 service to compensate for the CES closure, contributing five newbuildings of 14,354 TEU, chartered from Costamare, to run alongside five of Yang Ming's 14,080-TEUers. The Evergreen newbuildings will replace five of Cosco's 13,092-TEU vessels on this loop.

On the flip side, the leading CKYHE ocean liners have added new capacity to their Mediterranean trades, said Alphaliner.

The revised CKYHE strings are as follows: the NE2 operated by ten 14,000-TEU vessels, calling at Hong Kong, Nansha, Kaohsiung, Shenzhen-Yantian, Ho Chi Minh, Singapore, Rotterdam, Felixstowe, Hamburg, Antwerp, Piraeus, Singapore and back to Hong Kong.

The NE3 (eleven 13,000-TEU vessels)rotate through Xingang, Dalian, Qingdao, Shanghai, Ningbo, Singapore, Felixstowe, Rotterdam, Hamburg, Antwerp, Shanghai and Xingang.

NE5/CEM (ten 14,000-TEU ships) rotates through Kaohsiung, Shanghai, Ningbo, Taipei, Shenzhen-Yantian, Tanjung Pelepas, Rotterdam, Felixstowe, Hamburg, Rotterdam, Colombo, Tanjung Pelepas and back to Kaohsiung.

NE6 (nine 13,000-TEU vessels): Busan, Shanghai, Shenzhen-Yantian, Singapore, Algeciras, Hamburg, Rotterdam, Algeciras, Singapore, Shenzhen-Yantian and back to Busan.

NE7 (ten 14,000-TEU ships) rotates through Xiamen, Ningbo, Shanghai, Shekou, Colombo, Piraeus, Felixstowe, Hamburg, Rotterdam, Antwerp, Piraeus, Xiamen.

The MD1 pendulum service (fifteen 10,000-TEU) vessels to call at the ports of Qingdao, Shanghai, Ningbo, Hong Kong, Nansha, Shenzhen-Yantian, Singapore, Port Said (west), Ashdod, Piraeus, Genoa, Piraeus, Port Said (west), Port Kelang, Singapore, Ho Chi Minh, Hong Kong, Shenzhen-Yantian, Long Beach, Seattle and back to Qingdao.

The MD2 with ten 8,500/14,000 TEUers rotate through Xiamen, Ningbo, Shanghai, Kaohsiung, Shenzhen-Yantian, Singapore, Piraeus, Genoa, Barcelona, Marseilles-Fos, Piraeus, Colombo, Singapore, Hong Kong and back to Xiamen.

HPM/MD3 pendulum service (15 x 10,000-TEU box ships) rotates through Busan, Kwanyang, Ningbo, Shanghai, Shenzhen-Yantian, Singapore, Jeddah, Port Said (West), Malta, La Spezia, Valencia, Barcelona, Genoa, Malta, Jeddah, Singapore, Shenzhen-Yantian, Shanghai, Kwanyang, Busan, Long Beach, Oakland, Seattle and back to Busan.

And the FEM with eight 5,500/7,500 TEUers on a port rotation of Qingdao, Shanghai, Ningbo, Taipei, Shenzhen-Yantian, Shenzhen-Shekou, Singapore, Tanjung Pelepas, Ashdod, Alexandra, Piraeus, Jeddah, Tanjung Pelepas, Shekou, Kaohsiung and back to Qingdao.


PostHeaderIcon Hyundai and Korean Development Bank speed plan to restore HMM's health

HYUNDAI Merchant Marine (HMM), South Korea's second-biggest shipping company, and No 15 worldwide, plans to write down its capital by 86 per cent after losses mounted from excess capacity, and weak global demand led to a plunge in shipping rates.

HMM will reduce its capital to KRW173.2 billion (US$143 million) from KRW1.2 trillion as of April 21 to help improve its balance sheet, the company said in a regulatory filing, reports Bloomberg News.

Trading of Hyundai Merchant shares will be halted from April 20 to May 4, and will resume May 6, the company said in a statement to the stock exchange in Seoul.

These are elements an accelerating recovery programme to meet the exigencies of HMM's liquidity crisis which include the sales of Hyundai Securities, its bulk business augmented by personal donations.

"All our plans for HMM's recovery are on the right track and likely to be completed within March if there are no conflicting variables," said a Hyundai Group statement.

Korean Development Bank chairman and CEO Lee Dong-geol told a press conference that the bank concurs with HMM's restructuring plan.

Moreover, he told the press on February 18 that the bank will fully support HMM once satisfactory ship charter termination terms are secured from foreign shipowners.

Charter cut negotiations began February 22 with a goal to complete talks by mid-March at which time a creditors' meeting will be held.

So far, revenues from sales total KRW540 billion (US$449.6 million) including liability of KRW420 billion. On February 18, HMM made a public posting saying that Hyundai Group chairwoman Hyun Jeong-eun will donate KRW30 billion of her personal funds through a third-party allotment.

Competition for the same of Hyundai Group's three financial affiliates including Hyundai Securities, is intensifying in comparison to last year's M&A attempt, fuelling the high expectations around the HMM plan, said the company.

It is rare to find such large financial companies in the M&A market, and the management rights can be obtained by acquiring only 22.56 per cent of the stakes.

Korea Investment Holdings and KB Financial Group have already submitted a letter of intent and are now conducting due diligence.

"Additionally, major local securities, financial groups and foreign strategic investors are reportedly joining hands with Korean PEFs [private equity funds] to take part in the M&A race," said the company statement.

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