New SOLAS Amendments
- In November 2014, the International Maritime Organization (IMO) adopted mandatory amendments to the International Convention for the Safety of Life at Sea (SOLAS) Chapter VI, Part A, Regulation 2 – Cargo information. The SOLAS convention is applicable global law.
- The SOLAS amendments become effective on 1 July 2016 for packed containers received for transportation (gate-in or off-rail).
- Main reason for the change is that there is currently no rule or process to ensure that the weight being provided for loading is accurate, leading to huge risks to workforce, vessels, terminals and equipment.
- Immediate consequences for the shipper are that as of July 2016, the Verified Gross Mass (VGM) weight of every container needs to be provided to the carrier, before the VGM cut-off date provided by the DGF/carrier.
- Furthermore, it will be the shipper’s responsibility to ensure that the accurate weight, and not an ‘estimated’ weight, is being provided.
If no Verified Gross Mass weight has been provided, the shipping line will not accept to load the container on the vessel. It may also be refused at the terminal gate if VGM is missing.
- Two permissible methods for weighing:
- Method 1: Weigh the packed container.
- Method 2: Weigh the cargo and the mass of pallets, dunnage and other packing and securing materials and add tare mass of the container. Hint: Packages that have the accurate mass clearly and permanently marked on their surfaces do not need to be weighed again when they are packed into the container. Shippers may want to review their packaging and database records to ensure the most accurate weight is stored in their system.
- But — shippers remain responsible for verified weight. “Shipper” means the party identified on carrier’s or Danmar Lines Bill of Lading.
Difference between booked weight, bill of lading weight and the VGM
- Booked weight is the estimated weight at the time of booking.
- Bill of Lading weight is the correct weight of the cargo (excluding dunnage and other packing and securing materials and the tare weight of the container.)
- Verified Gross Mass (VGM) is the weight including the cargo + dunnage and other packing and securing materials + tare weight from the container.)
- Presently more and more information is being released by national authorities on how they plan to implement SOLAS.
- Carriers and other parties are beginning to align their activities. It will require a lot of cooperation to support the transition from a legal framework to an operational one which will also have a commercial impact. Currently there is no uniform worldwide procedure agreed, for this reason implementation will be done country by country and as per country regulations.
- As expected national variations are emerging, especially related to tolerances and penalties for non-compliance.
- Carriers have also started to release how and when they want to receive Verified Gross Mass (VGM). It is clear that while many parties are addressing the subject, many decisions still need to be made in order to meet the July 1, 2016 deadline.
When is the starting day?
- Official starting day is 1 July 2016, even if national government has not provided guidelines.
- Carrier will abide by the new SOLAS regulations.
- Continue Shipment
- Containers already boarded on a vessel prior to 1st July
Preliminary operational guidelines
Ocean Connect (LCL)
The SOLAS amendment calls several times for the commercial parties to come to practical agreements for implementing the requirements. Commercial agreements between forwarders and shippers may therefore state that the forwarder may transmit the VGM to the carrier on the shipper’s behalf.
This situation is complicated when dealing with consolidations. For an actual shipper/forwarder in a (LCL) consolidation environment, the SOLAS amendment does not apply. It is the consolidator who packs the container and who acts as shipper towards the shipping line.
Due to the fact that consolidated cargo is not homogenous and due to the high number of shipments handled, it may not be practical or even possible to weigh each and every single shipment.
In the case of LCL cargo in a consolidation environment the consolidator could consider implementing a LCL document verifying the actual weight of the cargo. Similar as for FCL, the consolidator is then able to use the actual shipper or forwarder’s verified weight declarations to prepare and compare this info with its own verified weight declaration towards the shipping line.
Preliminary LCL operational guidance
DGF recommends the following preliminary operational guidelines until more information becomes available.
- DGF has decided that physically weighing each individual LCL shipment will be too cumbersome and will therefore instruct their offices to weigh each consolidation container after loading. This weight will be considered as VGM and transmitted to the carrier.
- For LCL, DGF must receive the actual weight per shipment from the customer who has made the booking before loading and compare the sum of all individual weights/shipment with the total actual VGM of the consolidation container after loading. The carrier or NVOCC is not a ‘verifier’ of the weight provided by the shipper.
- Each DGF office will advance the CFS Cut-off dates with 1 or 2 days so re-loading is still possible in case there is overweight found at the terminal.
- In case the VGM exceeds the maximum payload of the container, all relevant reloading and weighing costs of the individual shipments and transport costs will be charged to the party or parties who have mis-declared the weight (based on declared VGM received from the customer/shipper before loading of the container).
- A clause will be mentioned in our booking conditions.
- DGF is preparing an inventory of which warehouses can facilitate weighing of the containers or have a weighing scale nearby.
- All the DGF warehouses are recommended to have a weighbridge by June 1, 2016 to support customers who cannot provide VGM, additional costs for weighing to be confirmed.
- DGF will add an admin fee to the tariff to cover the extra workload and charges for weighing the containers.
How can you send us VGM information?
VGM reporting is the sole responsibility of the shipper who may use a third party to perform this function of a completely packed container. The local VGM cut-off may vary by location.
Preferred Methods of reporting:
- An eVGM for which VERMAS was developed
- (VERified MASs is a new EDI-message specifically created for Solas VGM)
- Existing EDI connections (electronic shipping instructions)
- DHL public website (under development) – Template
- Via email – Template
- Various portals such as INTTRA, GT NEXUS, Cargosmart (for non-Danmar lines moves)
Mandatory information to be submitted:
- Booking number
- Container Number
- Verified gross weight (VGM)
- Unit of Measurement (UOM)
- Responsible party (shipper named
- on the carrier’s bill of lading or Danmar B/L
- Authorised person (in capital letters)
Optional VERMAS-supported information:
- Weighing date (strongly recommended)
- Shipper’s internal reference
- Weighing method
- Ordering party
- Weighing facility
- Conutry of method
- Documentation holding party
Carriers & terminals
- Cut-Off times – No carrier has announced if there will be a change in cut-off times, as this is a commercial decision between carriers and terminals
- Every terminal decides on their own VGM strategy and it’s a local (commercial) decision
- Gate-in of containers with/without VGM
- Some terminals will keep containers without a VGM in a separate stack pending the VGM, but also here it will depend on availability of space.
The cost of being compliant
- Availability of weigh-bridges will indicate costs
- Additional time/km due to weighing facility not directly on the road to the terminal
- Waiting time at the weigh bridges (queuing)
- EDI set-up costs
- Transmission costs
- Handling / communication fee
- Guidelines regarding the verified gross mass of a container carrying cargo:
- Guidelines for improving safety and implementing the SOLAS container weight verification requirements:
- The IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units (CTU) and CTU Code informative materials can be found at:
- SMDG, including the Implementation Guidelines:
- Local guidelines & authorities
Exporting into Africa
When it comes to intra-regional trade, the African continent is lagging seriously behind its North American and European counterparts. In North America, intra-regional trade accounts for 40% of all foreign business. In Europe, the figure is 60%. In Africa, it’s around 12%. Despite calls from governments, the private sector and trade organisations to stimulate business between African countries, that figure remains stubbornly low. However, when it comes to trade between South Africa and other African countries, we are seeing an increasing trend, contrary to what’s happening on the rest of the continent.
“South Africa has a relatively well developed manufacturing sector when compared with many other African countries,” says Stephen Segal, divisional director at Value Logistics. “This creates a demand for our products and puts us in an ideal position to export goods into the continent.
“In addition, many of our neighbours are landlocked and rely on our ports as points of entry for their imports from further afield.”
These are just two of the factors that contribute to an increase in freight transportation across our borders.
“Anyone involved in the movement of cargo into neighbouring countries, or further northwards, should take care to ensure their goods arrive safely, timeously and legally,” says Segal. “Each week we hear of a new type of border transit scam that leaves exporters sitting in a loss situation. Many vehicles also experience long delays at borders when drivers don’t have the correct paperwork, or when customs queues are long. This could be disastrous for certain types of goods or for tight delivery schedules.”
Segal says it can be difficult to keep abreast with changes in various countries’ import regulations.
“You might send a consignment of goods across the border one month using one type of documentation, only to find that the requirements have completely changed by the next month when you send exactly the same load through exactly the same border post,” he says.
Segal recommends making use of a reputable cross-border logistics company whenever sending goods into other countries.
“There are plenty of advantages in using a reputable transport company when it comes to sending goods into other countries,” he says. “Firstly, these companies keep up to date with the latest road freight import requirements across sub-Saharan Africa. Secondly, once a transportation company has established a reputation for being honest, reliable and compliant with the law, its trucks will be less likely to be stopped for inspection when crossing borders. Thirdly, a reputable organisation will refuse to pay bribes. Fourthly, these companies are more likely to keep a well maintained fleet, reducing the risk of breakdowns. Fifthly, most will come with vehicle and load tracking, allowing you to keep tabs on your cargo from loading to delivery.”
These are just a few of the reasons that Segal puts forward as benefits of doing business with a reputable cross-border freight company.
“Even though it may cost slightly more, but it’s well worth the extra expense when you consider all the risk mitigation factors,” he says. “At the end of the day it’s all about peace of mind, knowing that your cargo will arrive safely and efficiently at its final destination.”
Winners of Steel Awards produce world-class work
The winners of the annual Steel Awards, which was simultaneously held in Johannesburg, Cape Town and Durban, have been announced.
The awards recognises the excellence in the use of structural steel, where 81 projects were entered this year.
Convener of the awards, the Southern African Institute of Steel Construction’s (SAISC) Spencer Erling, said that the quality of the entries in 2015 easily matched the outstanding quality of previous years. “We are going through very tough times in the steel construction industry yet, in spite of this, we are able to produce world class work – an indication that the future is a bright one.”
The judges affirmed that the Value Logistics’ new distribution centre in Kraaifontein, Cape Town, is one of those model projects in which from start to finish one can see that the structure was well designed, and that the team worked closely to ensure that the architects could fulfil their vision of a highly aesthetically pleasing office facility. Value Logistics walked away with top honours in the Factory and Warehouse Category.
Wide range of services
In order for Value to offer its wide range of logistical services, it needs to have distribution centres which enable them to offload, sort, store, reload and deliver any product imaginable, from the biggest to the smallest quantities, both domestically and internationally, and that the new facility fulfils these requirements ingeniously.
The installation consists of two warehouses, one for Value Logistics (about 13,000m²), and one for Freightpak (about 7,000m²), as well as support facilities such as wash bay and vehicle inspection, dispatch, refuelling, gatehouse and canopies to many of the structures.
As one would expect, these warehouses are massive with columns spaced far apart with the double pitched roof (the Klip-lok roof sheeting was of course rolled in long lengths on site) supported on light transverse roof trusses, which in turn are carried by long span longitudinal lattice girders between the columns. In this instance, the lower sections of the columns are made using tilt up concrete columns.
Other categories and winners included:
- Winner Mining and Industrial Category: Medupi Power Station-air cooled condenser
- Overall Winner and Tubular Category Winner: SKA Africa radio antenna positioner
- Bridge Category Winner: Kirstenbosch Canopy Walkway (The Boomslang)
- Joint Winners of Light Steel Frame Category: House De Clercq and Cottage and Mediclinic
- LSFB Category Commendation: Kuruman Casino façade
- Winner Residential Category: Zinkwazi Beach House
- Residential Category Commendation: Hennie De Clercq House
- Winner Architectural Category: Multichoice City
- Winner Cladding Category: ‘Peak Cap’ at Multichoice City
- Winner Retail Category: The Watershed at the V&A Waterfront
Read the original article HERE.
Exporters face penalties for VAT transgressions
Problems with zero-rating of indirect exports
Exporters who incorrectly zero-rate goods bound for overborder destinations are facing sti penalties for non-compliance with the VAT law – and according to Value Logistics divisional director Stephen Segal, it’s largely a question of ignorance rather than a conscious effort to sidestep the regulations
“The only time that the goods can be zero-rated is where the exporter is in full control – where they arrange for the goods to move from SA to the overborder destination. They also have to ensure that the transporter who is moving the freight gets the correct clearance documents at the border
“If it’s one of Value’s clients and we do the export for them, they pay us for the freight, we do the export and all the documentation, transport it over the border and bring back proof that it has moved across the border. That’s a direct export where the exporter is in total control of the goods.”
According to Segal, Sars is doing a number of audits and is beginning to penalise exporters for failing to charge VAT.
The problem arises with what are termed indirect exports. “Where the customer collects the goods from the supplier’s warehouse or the supplier delivers them to the customer’s nominated warehouse in South Africa – or that of a consolidator – for export there is no confirmation that the goods have left the country. Zero-rating VAT is therefore totally illegal. The minute there’s a VAT query by a customer and Sars does a VAT audit, this is the first thing they look at.”
Segal said most buyers out of South Africa didn’t want to pay VAT. “If they can prove to Sars that the goods have crossed the border they are entitled to claim back the VAT, but it’s a process.”
Exporters also often mistakenly believe that the UCR number exonerates them. “When you export you quote this number and when the goods are paid for the same number is quoted so that Sars can verify what’s gone out and what’s come in – and this is all done electronically.”
The problem is that for every export that has been zero-rated, the VAT has to be brought to account. “The exporter would also have to pay interest on the VAT – and for them to then claim it back is virtually impossible because they would have to track down the export documents.”
The issue was brought to Segal’s attention during regular client visits. “More than 90% of the time exporters are selling out of their factories and zero rating – which opens them up to signicant penalties.”
The only time that the goods can be zero-rated is where the exporter is in full control. – Stephen Segal
They’re also often unaware that there is a 90-day time limit from the time a consignment is invoiced until it leaves the country.
“You can’t invoice it today and ship it in six months’ time. And if they don’t get their money on time they have to bring the VAT to account.”
The regulations are less onerous for air and seafreight where goods are required to be delivered to one of the designated harbours or airports. “You don’t physically have to pay the freight which is the ruling for road transport.
“The exporter is liable for the cost of moving cargo from the warehouse to the port or airport. Then they can zero-rate it.”
The bottom line is – if you want to avoid paying the penalties, make sure that you have the rules at your fingertips.
Enjoying a substantial lead
Advanced systems and in-depth knowledge of global trade enables Value Logistics’ Clearing and Forwarding Division to maintain a substantial lead in the provision of services to some of the country’s largest and most prestigious importers and exporters.
in a heavily traded market, Value has succeeded in differentiating itself through the provision of end-to-end clearing and forwarding services utilising a global network of forwarders to ship goods from any country in the world by means of the company’s wholly-owned supply chain.
As a result, the company exerts full control over each stage of the import or export process while ensuring speedy compliance with foreign countries duties and other requirements. In addition, ownership of the entire supply chain ensures visibility at every stage of the import or export process and clients are provided with real-time communication regarding the whereabouts of their goods.
Through our Hong Kong Office we are able to give our clients the kind of advice they need to successfully import goods from the Asian region
Divisional director, Stephen Segal, says rather than trying to compete on rates against over 500 other clearing and forwarding agents, the company chooses to make service its top priority to provide faster, trouble-free import assistance.
“We feel that price and cost are worlds apart as delays at any of the many points along the way take time and can erode profitability. When it comes to Customs Clearing, expertise is of prime importance as mistakes can cost the importer financially and can lead to penalties for nonconformance, storage for late clearance and potential loss of sales as a result of late stock arrival. What’s more, unsuspecting clients out there often do not pick up errors and continue to pay unnecessary yet substantial charges.”
Choosing the right options in terms of compliance with legal complexities, SARS requirements, route maximization, bonded and warehousing, as well as clearing and distribution will lead to quicker delivery times and substantial all-round savings. As a member of the South African Association of Freight Forwarders (SAAFF), Value Logistics’ Clearing and Forwarding remains up-to-date with all relevant information and is able to adapt and advise clients of changes in requirements.
“As we are in the loop regarding global trade requirements, we ensure that unnecessary duties or other charges are avoided along the way which saves our clients money. Our company’s network of more than 190 forwarders around the world also means that we are able to provide a seamless door-to-door service if required”, Stephen emphasizes.
On a global scale, the company has the right partners in place to ensure they have the edge in terms of finding the best routes. In growing markets such as China, South Africa’s largest trading partner since 2010, the company has opened a dedicated office to provide clients with an improved service resulting from its local knowledge and understanding of cultures and business principals.
“Through our Hong Kong Office we are able to give our clients the kind of advice they need to successfully import goods from the Asian region and provide a more nurturing and guiding service that will allow them to more safely import goods while reducing duties and fees.”
Another very real advantage for customers, when goods arrive in this country, is that Value Logistics’ full service offering is available to clients to ensure they have the right solution for their requirements. This includes the company’s intermodal freight division which leverages the best of rail and road transport to provide reliable and cost effective transport of landed goods. The service includes all documentation as well as railing all full and empty containers from Transnet terminals to and from the point of consumption.
Simultaneously, clients may choose to make use of the company’s container storage service for full or empty containers with delivery to and from points and container terminals when required. Container storage depots are situated around the country in Port Elizabeth and Boksburg , with similar depots planned for other major centres in the near future.
“Not many other clearing and forwarding companies can claim to have anything like the sort of infrastructure and transport set-up we do,” Stephen asserts.
Not many other clearing and forwarding companies can claim to have anything like the sort of infrastructure and transport set-up we do
With a large fleet of truck trailer combinations available from Value Logistics’ Linehaul Division, clients are able to arrange transport to all major centres in South Africa and across borders to neighbouring countries. All vehicles have satellite tracking and are fully monitored 24 hours per day.
“Whatever our clients need, we are there to ensure that every product is taken from source to destination in the safest, most efficient manner, every touch point, every milestone, every step of the way” Stephen concludes.
Petrus Baloyi celebrates 34 years at Value Logistics
DRIVER NUMBER ONE
Petrus holds the honour of being the first driver at Value and holds the prestigious position as driver number one. The business started on the 1 May 1981 and on that day Petrus reported to duty as the first driver in the Value Group. The customers loved Petrus and due to his hard work there was call for more horse and trailers from the customers. In those early days we somewhat roughed it and did not have all the facilities and back up that the Group currently enjoys. A good example is on one fine day in about 1983 at 16h00 our 30 ton truck tractor came in with a faulty engine. There was a committed booking for the unit at 06h00 the following morning, so our team worked through the night and refurbished the truck tractor and had the job done by 03h00 the following morning. The booking went out on time at 06h00. In today’s time, if we are lucky, it will take 2 to 3 weeks to get the vehicle back on the road. This type of commitment is the real true grit that Value was built on and Petrus dedicated many long days, weeks and months in assisting to build Value into what it is today. Thank you Petrus for all that you have done, we are going to really miss you!
In those early days, the first three code 14 drivers were Petrus Baloyi, Moffat Mokpo and Johannes Seriti. All three of these code 14 drivers were the best in the country, and could change gears on the truck that you would think that it was a Nissan 1600 car, and could reverse those trucks into parking places, first time, with inches to spare in the tightest of situations. Our CEO Steven Gottschalk was privileged to have these three top class drivers teaching him to drive a 30 ton horse and trailer. Johannes has also retired, and Moffat Mapoko still works for the business.
34 years may seem like a lifetime to some, but for Petrus Baloyi (64), it has been an adventure. Petrus has been in the logistics industry for more than half of his life, and joined the Value team on 1 May 1981. It’s fair to say that he has most certainly earned his stripes and has built up a career anyone would be proud of.
On 28 September 2015, Petrus bid his Value family adieu as he headed off into retirement.
A committed husband and a doting father to 13 children, Petrus is very much a family man. He smiles when he speaks about his family, and recounts at how his family have been his motivation through the many decades he has worked to forge a successful career.
Petrus passed each and every one of his driving tests throughout his career, with flying colours.
If you’re looking for a driver who’s a pro when it comes to driving 30 ton superlink horse and trailers, Petrus is your man.
And his favourite part of his job? Engaging with customers and people along his journey. “I realised very early on how important customers and relationships are to us, and if we treat customers well, they will stick with us.”
Petrus is a prime example of how happy, well-trained and motivated employees are likely to be more engaging and committed to business tasks at hand, which in the greater scheme of things, leads to improved business practises and client deliverables, ultimately strengthening a company’s reputation and brand. And Petrus will be the first to tell you how his Value family became an extension of his family at home – who provided him with opportunities to progress in his career and reach new heights, all for the benefit of his family.
What’s next for Petrus? He’s very much looking forward to spending time with his family in his home in Soshanguve.
Petrus Baloyi, thank you for all your years of dedication that you have shown to the business, I thank you from the bottom of my heart. Enjoy your retirement my good old friend.
The one thing that remains with Petrus that can never ever be taken away, is the honour of holding the title as DRIVER NUMBER ONE AT VALUE GROUP. This can never be beaten by any one or ever taken away and Petrus Baloyi will forever hold this title till eternity.