Container Weight Regulations June 2016

IMO “Safety of Life at Sea (SOLAS) treaty

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SOLAS – UPS Webinar – June 2016

Agenda

• Basics review

• Local requirements

• VGM cut-off hours

• Risks and potential costs

• Transmitting Information

• What to do now

• Resources

• Questions

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Review – SOLAS Basics

What is the SOLAS weight requirement?

• Effective July 1, 2016, shippers listed on the bill of lading will be required to provide

signed certification stating the Verified Gross Mass (VGM) of the loaded ocean container

Who is responsible?

• The “shipper” listed on the carrier master bill of lading is responsible for providing the

VGM

− Where UPS acts as the NVOCC, the shipper will be required to provide the VGM

How is the VGM calculated?

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Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Developments in Local Requirements

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Local governing authorities or ports may add specific requirements

International SOLAS Requirements

VGM

Signature

Shipper

Potential Additional Local Requirements

Weighing method

Weighing date

Scale/process registration

Name of scale operator

Company stamp

Who is responsiblefor knowing this?

The local shipper

Who can help?

UPS local OceanService Center may

be able to help

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Potential Terminal VGM Cut-off Hours

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There are two likely models for VGM cut-off timing

• UPS VGM cut-off will be prior to carrier cut-off and will be communicated on the bookingconfirmation

• Carrier’s cut-off will vary by country by port and by terminal• UPS will work to make the timing as easy as possible• The May 23rd IMO circular urging “practical and pragmatic” policies does not change the

effective date of July 1

VGM Info.

Shipper

Cut-off TBD

Freight Cut-off

Terminal In-gate

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© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Risks

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There are a number of cost and supply chain risks associated withVGM delay or non-compliance

Scenarios:

• Refused at gate due to no VGM

• Accepted but held pending VGM

• Audited weight outside of tolerance

Consequences:

• Additional trucking costs

• Repositioning costs

• Demurrage

• Document amendment charges

• Costs to expedite rolled cargo

• Increased inventory costs for delays

• Lost sales

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Transmitting Information

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There are a number of acceptable methods for communicatingVGM information

VGM Info

Shipper

TransmissionOptions

Email

Fax

Shipping order

Shipper’s Letter ofInstruction

UPS provided form

• GT Nexus• EDI message• Carrier website• Physical shipping document

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Transmitting Information

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Direct carrier contract situations

• Where UPS acts only as the forwarder, the shipper may provide the VGM to UPS and we will sendto the carrier

• Should the shipper choose to submit the VGM directly to the carrier, UPS is asking that theyprovide a copy to the local UPS Ocean Service Center

VGM Info

Shipper

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

What to do now

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Sharpen internal compliance processes and develop contingency plans

Develop Internal Processes:

• Begin collecting accurate weights

• Develop procedure for Method 2

• Develop procedure for producing

signed VGM certificates

• Understand the local requirements

• Determine who your authorized

certificate signer will be, and have a

backup

Develop a Contingency Plan:

• Consider accelerating criticalshipments

• Consider UPS air freight services

• Work with your UPSrepresentative to understandalternative services

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Resources

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Helpful references and tools for our customers and their vendors

FAQs

Shipper Sheet

World Shipping Council – FAQshttp://www.worldshipping.org/industry-issues/safety/faqs

World Shipping Council – RegionalImplementation Info.http://www.worldshipping.org/industry-issues/safety/global-container-weight-verification-rule-effective-july-1-2016

Links

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

For questions, contact your UPS Account Representative

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Thank you