Challenges and Costs Associated with the Implementation of the SOLAS VGM Requirement

In November 2014, the International Maritime Organization (IMO) amended the Safety of Life at Sea Convention (SOLAS) Chapter 6, Part A to include a condition that all full containers loaded onto a vessel for export require a verified weight called Verified Gross Mass (VGM). This VGM requirement became legally effective on 1 July 2016 for all 163 member countries that signed the present SOLAS Convention of 1974, but leaves the details of implementation at their national level. Although the shipper is legally responsible for providing the VGM, it must be received by the vessel operator prior to loading. Therefore, it involves all supply chain stakeholders who organize and/or perform the transport of containerized goods and are enabled to transmit the VGM. Consequently, this regulation affects not only shippers, but ocean carriers and freight forwarders, too.
The paper elaborates the implementation process of VGM in Austria, the Czech Republic and the Netherlands backed by an initial review of 106 trade press articles in English and German, followed by an online survey with a total of 136 respondents. Therewith, we identify the anticipated challenges and costs associated with the adoption of the VGM requirement for container exports and compare them with the actual challenges and costs companies faced. Our results are divided into three categories. First, we investigate whether there are significant differences in expected and actual challenges and costs between shippers, freight forwarders and ocean carriers. Second, we examine whether there are significant differences based on the rate of adoption to the VGM requirement as an Institutionally Driven Administrative Innovation (IDAI). Third, we identify differences between companies in the three countries of the online survey.