Container Weighing: Do Costs Outweigh Benefits?

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Cowen and Co. reveals that the time and complications from the new Ocean Container Weight Rule may boost operating costs from Los Angeles to Shanghai by 14%.

Cowen and Co., a New York City-based financial services firm, analysed and reported that cost of transporting goods may sharply rise, together with delays.  The total cost of shipping an ocean container from Los Angeles to Shanghai could increase by approximately 14%.  This cost may include fees for weighing shipping containers and charges for holding goods while information on the goods is collected and verified.

The new requirement was adopted by the International Maritime Organization, the United Nations body that regulates ocean transport, as part of the Safety of Life at Sea Convention, known as SOLAS.  It requires shippers in about 170 countries include the “verified gross mass,” or weight, of all containers and any filler material before they are loaded on to ships.

Currently, companies only must provide an estimate of the weight of goods when handing off shipments to shipping lines or third-party handlers.  That has led to improperly loaded containers, regulators say which can lead to collapsing container stacks at sea and potentially catastrophic damage to vessels.

The apparel importers will be highly hit when the rule takes effect from July 1 since they will be moving new clothing lines to stores for the fall.

The report also alerts that, “Extended shipping times could result in greater airfreight usage for key back-to-school deliveries and potential inventory markdown or cancelled orders risk from delayed shipments.”

Source: WSJ

 

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