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1st Quarter 2016

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CS Sales Awards
Container Weight Mandate
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In the News!
 
Cornerstone Trademark Logo   

 
 
Cornerstone Systems
Announces 2015 Sales Awards 
 
"2015 Salesperson of the Year"
Tessa Lloyd

2009 Tessa Lloyd

Congratulations to Assistant VP Sales Tessa Lloyd.
  This is her 10th year to receive this prestigious award.  

 
Congratulations to all of our 2015 sales award winners:
Tessa Lloyd
Burke Anderson
Guy Wallace
William Kallaher
Gregg Mitchell
Jim Chaltas
Matt Arthur
Bill Casey
Bob Cook
Chip Riley
Bob Dowd
Larry Pritchett
Kevin Rodell
Sherri Thomason
Ken Sanders
Nick Whitten
Todd Moye
 
Container Weight Mandate Effective July 1, 2016
Basic Background and FAQ's
            
Basic Background:  Effective July 1, 2016, any shipping container leaving from any port in the world must be accompanied by a shipping document signed either electronically or in hard copy by the shipper on the bill of lading listing the verified gross mass of a container in order to be loaded onto a ship. The container weight mandate from the International Maritime Organization under the Safety of Life at Sea (SOLAS) convention comes after misdeclared weights contributed to maritime casualties such as the breakup and subsequent beaching of the MSC Napoli on the southern U.K. coast in 2007 and the partial capsizing of a feeder ship in the Spanish port of Algeciras in June, 2015.           
 
The weighing must be done in one of two approved ways, called Method 1 and Method 2, on scales calibrated and certified to the national standards of the country where the weighing was performed. Many of the finer points of the new regulation have not yet been finalized, such as enforcement, and what happens to a container that arrives at a port without the necessary documentation or if the VGM (verified gross mass) declaration for a container turns out to be false or incorrect.

--------------

FAQ's:  The FAQs found in the link below relate to new mandatory rules that apply from 1 July 2016 concerning the requirement of shippers to verify the gross mass of a container carrying cargo. They have been prepared by a coalition of industry experts, jointly lead by the World Shipping Council (WSC), the TT Club (http://www.ttclub.com/) , the International Container Handling and Coordination Association (ICHCA), (http://ichca.com/) and the Global Shippers Forum (GSF). (http://www.globalshippersforum.com/) They were developed in response to questions that have been raised by various stakeholders regarding the revised SOLAS regulation and the accompanying guidelines. 
 
 
 
     
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How Will VGM Declaration Be Handled? 
New Container Weight Rule:  VGM - (Verified Gross Mass)   
         
Shippers seeking to avoid supply chain disruption on July 1 when a new container weight rule takes effect need to be mindful of one key fact irrespective of what they may or may not be hearing from government enforcement agencies:  No matter what country a ship is departing from, container carriers cannot load a container for which it has not received a verified gross mass declaration from the shipper.
The reason is that to do so would leave the ship out of compliance with rules of its own flag state and its insurers, leaving it vulnerable to liability in the event of an accident.               
  
Thus, shippers need to figure out how a VGM will be created for each of its containers and handed or transmitted to the carrier in advance of its cutoff time for the information to be received. This needs to happen whether or not enforcement agency of the port of origin has published guidance on compliance. While a few countries have stated what allowed tolerances will be, many have not, and yet the absence of such guidance shouldn't prevent shippers from ensuring they are able to present a VGM to the carrier for every container as of July 1.        
  
For example, the U.S. Coast Guard officials have said that it has no power to force compliance from shippers. But that does not mean that shippers have a pass, since the rule, an amendment to the Safety of Life at Sea convention, is ultimately a requirement on the ship to ensure it's in compliance with international safety rules.          
 
"The USCG is simply saying that they will focus their enforcement efforts on the vessel owner. And that if the vessel owners, in turn, know, as they do,  that they can't comply without forcing their customers to comply, then the owners need to have that discussion with their shippers. And the "discussion" is obviously going to be: comply or don't get loaded! It's a non-discussion-discussion," said Bjorn Jensen, vice president for global logistics at consumer products maker Electrolux. "Therefore, as a shipper, you'd have to have a very unhealthy gambling streak to bet on non-compliance being an option. That's not a bet we are willing to take."              
  
In terms of determining how their VGMs will be created, shippers are largely on their own. Carriers will provide avenues for the VGMs to be transmitted, whether through EDI or through tools like the E-VGM functionality offered by the carrier portal Inttra.  But carriers do not plan to ask questions about how the VGMs were created or to verify the figures that shippers provide.             
  
According to one major carrier: "I can tell you that on the carrier side there is no focus to investigate/inquire on the origin of the weighing method used by the shipper. As long as we have a certified VGM form, with a signature / name on it, we have covered our portion and will simply transmit to the terminal "vgm received/not received". That's all."           
  
That is why Electrolux, like other shippers, is taking matters into its own hands to ensure it's in compliance for July. They are doing so to ensure the company encounters no supply chain disruption resulting from containers not being loaded because it doesn't have a valid VGM presented to the carrier. "We're in front of the ball, I think," Jensen told JOC.com. "The company takes it seriously, has made the right people available, and everyone understands the enormity of what will happen if we do not comply. We are working with our suppliers, and I feel good that we have a path to compliance in time, but it's hard work every day to make sure that we have dotted every I and crossed every T."            
  
He said the company will use Method 2 under the SOLAS amendment, which allows a shipper to weigh the contents of the container separately and add that and any packing materials to the tare weight of the container to produce the VGM.
 
"Method 2 is universally the one we will go with, and we are lucky that having the weight on the packaging is standard across the company in the first place. So at least we have the tools and the process, now we just have to make sure it happens. We are fortunate."         
  
Earlier this year Jensen was critical of carriers who he said seemed to have no idea how the rule will be implemented and weren't communicating effectively if at all with customers. That has changed.
"The carriers are waking up, too, and every day we see another advisory and another carrier starting to get their act together relative to how they are going to allow us to send the VGM declaration. They are, as usual, not born equal, but generally it seems to me that if, as a shipper, you take this seriously and dedicate the right resource, who understands what needs to be done, this is not an insurmountable task," he said.
   
     
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Transportation Industry News
News
Industry News
  
 
NRF forecasts retail sales to grow 3.1% in 2016 -
The National Retail Federation released its 2016 economic forecast, projecting retail industry sales (which exclude automobiles, gas stations and restaurants) will grow 3.1 percent, higher than the 10-year average of 2.7 percent.  NRF also announced it expects non-store sales in 2016 to grow between 6 and 9 percent.  
 
"Wage stagnation is easing, jobs are being created and consumer confidence remains steady, so despite the headwinds our economy faces from international developments - particularly in China - we think 2016 will be favorable for growth in the retail industry," said NRF President and CEO Matthew Shay. "All of the experts agree that the consumer is in the driver's seat and steering our economic recovery. The best thing the government can do is stay out of the way, stop proposing rules and regulations that create hurdles toward greater capital investment and focus on policies that help retailers provide increased income and job stability for their employees."
 
 
Trucking Hits Hiring Roadblocks as U.S.  Unemployment  Drops -  
The U.S. economy added jobs in February, but not in trucking. Payrolls at for-hire trucking companies declined last month for the first time since October, shedding approximately 600 jobs, according to the U.S. Bureau of Labor Statistics. That pushed the JOC.com For-Hire Trucking Employment Index down from a reading of 101.3 in January to 101.1 in February.
 
Trucking employment at the motor carriers surveyed by the BLS was still up 1 percent year-over-year at nearly 1.47 million jobs, according to data released by the Labor Department agency last week. The sequential monthly decline in February may be more a sign of improvement in other sectors of the economy than a decline in demand for trucking.
 
As the unemployment rate stays low, trucking companies and other transport employers are running into increased competition for workers. Construction companies hired 19,000 workers in February, and residential specialty trade contractors hired 14,000 of those employees. Payrolls at other transportation industries, including railroads and air, water and warehousing operators also declined in February.   
 
Trucking companies increased driver pay 14 percent on average from mid-2014 through January, according to the National Transportation Institute, but that rate is hard to maintain in a period of softer economic demand. Carriers now are aiming pay raises at drivers with specific qualifications or training or accident-free records. That selective pay strategy is likely to spread well into 2016.
 
 
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Fuel Prices           

The Energy Information Administration reports U.S. On-Highway Diesel Fuel Prices (dollars per gallon) every week.   

 

3/14/16                                       Date Released 


2.099                                           Average U.S. Retail Price  
 
 0.078 (Up)                                  Change From Week Ago
-0.818 (Down)                             Change From Year Ago
  
Fuel Pump                  
If you would like to monitor the DOE website directly, click on the following link.  http://tonto.eia.doe.gov/oog/info/wohdp/diesel.asp 
  
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Newsletter Sources:  Cornerstone Systems,  World Shipping Council, TT Club, International Container Handling and Coordination Association, Global Shippers Forum, Journal of Commerce, Transport Topics, National Retail Federation, SmartWay Transport-U.S. EPA, U.S. Energy Information Administration 

 

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