Presentation by Mr Llew Russell, Chief Executive Officer, Shipping Australia Limited to the Chain of Responsibility Co

1. Presentation by Mr Llew Russell, Chief Executive Officer, Shipping Australia Limited to the Chain of Responsibility Conference Sydney, 23-24 June 2008 Shipping industry and the chain of responsibility

2. I will be addressing the following issues • Background to the shipping industry’s involvement • Industry code of practice • Current examples of overweight containers • Compliance issues • How to progress from here?

3. Shipping industry has been concerned about mis-declared container weights for over 11 years • Shipping industry raised mis-declared container weights as an issue back in 1997 and we were subsequently involved in the TWU call for all containers to be weigh-bridged. • The reason for the shipping industry’s concern is not necessarily containers over road limitation weights (clearly a matter of concern) but rather mis-declared weights which can see the wrong size truck being delivered to pick up the container and other problems. • Road traffic authorities are more interested in import containers than export but the shipping industry vitally concerned with both. • This issue affects almost all links in the through transport container chain from ships stability, overloading trucks, serious stevedoring accidents and so on.

4. Why are containers overloaded? • Whilst there could be cases of deliberate overloading eg. to reduce the total number of containers required, a more rational explanation in many cases is simply a lack of concern. • Failure to properly calculate weights taking into account, different units of different products, packaging, dunnage, the tare weight of the container etc. Access to weighing facilities an issue. • You would have already heard a lot about the National Compliance and Enforcement legislation and where it currently sits amongst the various jurisdictions but early in the piece we worked with Meyrick and Associates in developing a voluntary code of practice for this industry. • A copy of the code is included with your papers for this conference but regrettably it has never been officially recognised. • SAL continues to promote its observance as a means of mitigating potential liability.

5. Why are containers overloaded? • Needs to be implemented in conjunction with action by those arranging road transport for example eg. careful examination of commercial documents prior to producing a Container Weight Declaration is advisable. • Consignees and consignors should be made more responsible. • Legislation relates to overloading not accurate weights. • Ensure overseas suppliers include content and tare weight on packing lists, for example, for all future shipments. • Sometimes difficult to even determine what is supposed to be the average weight of a container if a number of containers are included in the one Bill of Lading and only an overall weight may be provided. (Packing lists should provide this detail) • Important in the future perhaps that weight of each container is accurately identified.

6. Current examples of overweight containers • During this year in Australia we have experienced problems with mis-declared weights with containers which have been discovered overseas when the container has been weighed. • There have been famous cases this year of the Annabella and the MSC Napoli which highlighted the problems of overweight containers and the problems they cause for vessels and crews.(Feeder and overseas) • In the case of the Annabella the stack of 30 foot containers collapsed into the hold of the 868 feeder, because weight limits had been exceeded for these non ISO containers. • Interestingly the incident could have been far more serious as the top three containers in the stack were carrying butylene gas. • During a UK conference on the Annabella this year the interesting point was made that crew also needed to be included in the information chain and to me this is vitally important. • International Chamber of Shipping is working with the Washington based World Shipping Council on best practice guidelines which will also take into account findings from the Annabella and MSC Napoli accident in the UK.

7. Annabella crushed container

8. MSC Napoli

9. The case for accurate weights • The Maritime Accident Investigation Branch (MAIB) report on the MSC Napoli found mis-declaration of weights and contents of containers was a contributing factor in the accident • Noted many shippers/consolidators do not have access to weighing facilities and mis-declaration erodes or eliminates safety margins. • Overweight boxes influence stack wt, changing metacentric height (GM) calculations, affecting stability and safety in heavy weather. • Est. 5-10% of all boxes carried are overweight.

10. Compliance issues • Early this year SAL wrote to the National Transport Commission relating to their compliance enforcement legislation. • The CEO replied outlining briefly the intention of the legislation to meet NTC’s chain of responsibility and outlined the communications programme that is associated with rollout of the model legislation. (Slight differences in most jurisdictions) • NTC acknowledged the point made by SAL there needs to be a continuous education of parties influencing the transport chain under this legislation and he pointed to a number of jurisdictions that were taking such a proactive approach. • Of interest is also the fines that are being levied in the grain handling industry for overloading trucks. • Nevertheless the NTC pointed that these matters of operational nature are guided by the resources and operational directives of each jurisdiction but NTC did pass on our concerns through the peak standing group for the C&E legislation, the Transport Agencies Compliance Committee at its meeting in mid February 2008. • The NTC also shared SAL’s view that successful prosecution for persistent offenders under the provisions of the legislation will have a positive educative and behavioural effect on parties in the transport chain.

11. Weighting of containers • It is not necessarily a simple matter to get an accurate weight of the container and its contents in practice. Lifting equipment whether it be gantry cranes, fork lifts, straddle carriers are subject to stresses caused by unequal loading, wind and so on which can give false readings. • Different truck weights and trailer weights along with the container could be consistent with overall gross limits but in effect have a mis-declared weight in the container. (Again depends on where in the chain the container is loaded) • Really needs to be matched with what is on the commercial documents which clearly should be conveyed electronically at the time eg. electronic weigh-bridge at say container terminal gates. (Or new weighing technology) • Truck companies could provide this information electronically prior to setting out to the container terminal. (What happens when a container is found to be overloaded?) • The important point is to develop procedures which will give reasonably accurate weight for the container as a whole ie. the gross weight.

12. How to progress from here? • It has been reported in the media last month besides the development of a best practice code for the container shipping industry by the end of this year, the ICS is advocating the adoption of a voluntary code by the International Maritime Organisation and subsequently the maritime industry on weighing containers. • Peter Hinchliffe of ICS has told a seminar that he hoped the code would enable the industry to be self regulating and able to influence local legislation. • The code will be presented to the December meeting of IMO’s Maritime Safety Committee. • The code calls for the weighing of containers at pre-shipment but the industry is eagerly awaiting suggestions as to how weights will be validated as I have outlined previously. • This proposed action is against the background of a number of classification societies and others calling for the weighing of all containers prior to shipment.

13. Draft ICS Best Practice Guidelines in the container industry • Currently points out that weighing only part of the problem; Code covers many issues: • Regulatory environment, standards, packing, shippers’ responsibilities, ship planning, observing road/rail wt-limits, intermodal, marine terminals ops, master and crew responsibilities etc. • On weighing, recommends shipper to weigh, avoiding overloading (above ISO standard) stevedores to verify weight against documentation, shore to ship data exchange on weights, audit system, random selection, EDI used to override inaccurate weights found.

14. Conclusion • As you can see there is light at the end of the tunnel and hopefully it is not the approaching train. • We support an international voluntary code but would have concerns with any mandatory action to make pre-weighing a legislative requirement; certainly in the absence of proper validation techniques and accuracy in terms of determining the actual weights. (And who determines them) • SAL continues to promote the code of practice to our industry • SAL will be actively pursuing a multi-disciplined approach for this issue including urging State jurisdictions to enforce the new legislation and determining how technology including IT can assist in finding solutions that will not only provide an overall improvement but not inhibit our trade facilitation efforts. • Questions