VGM fees for groupage cargo raise concern

Additional charges related
to the new verified gross
mass (VGM) regulations
have raised global concern,
with the Global Shippers’
Forum (GSF) labelling some
of them “unjustified”.
And while South Africa
was not among the countries
named by the organisation
as transgressors, local
forwarders have questioned
the fee – R375 per shipment
– raised by groupage
operators.
Mike Walwyn of the
South African Association
of Freight Forwarders
(Saaff) said increased fees
were affecting the country’s
competitiveness and were a
growing concern.
He said groupage
operators – regardless of
size – were currently asking
R150 per shipment as a
VGM administration fee and
another R225 for weighing.
“The total VGM amount
is R375 per shipment
regardless of what size,”
explained Walwyn.
“Now if you assume that
they’re getting at least
ten consignments in the
groupage container – of
course it may be more
or less, but ten is not an
unreasonable number – then
they’re collecting R1500
for the administration fee
and R2 250 for using their
scales to weigh the cargo –
something they were always
doing anyway.”
He said in light of this it
was understandable that
industry was up in arms.
“Of course the operators
had an upfront cost in being
approved by Samsa, but
after that it’s plain sailing.”
Groupage operators,
however, maintain the R375
is not unreasonable and in
line with global standards.
Lee Viljoen, national
business development
manager for CFR Freight,
said very valid reasons
existed for the fee that
saw every piece of cargo
having to be weighed and
accounted for.
“For groupage cargo we
are using method 2. This
means each and every
consignment going into a
box has to be weighed and
has its own administration
processes attached to
it. If the box in total is
overweight and we have
not weighed all the cargo,
how do we determine which
consignment is overweight?”
Viljoen said at the same
time the groupage operator
was carrying most of the
risk as they were ultimately
responsible for the weight
declared to the shipping lines.
She said the VGM
requirements called on
groupage operators to get
accredited, calibrated scales
while it also meant increased
man hours, all of which was
part and parcel of the fee
being charged.
Several other groupage
operators agreed with
Viljoen although declining
to officially comment.
Terri Gale of the
Exporters’ Club Western
Cape however said industry
was of the opinion that it
was an excessive fee for
minimum shipments of less
than a cubic metre as it was
adding costs to exporters
who could ill afford it.
“That is why they ship
LCL as there are many
minimum shipments. They
charge for a cubic metre
anyway as the rates are low
and understandably so, but
leveraging this for every
shipment into that container
is questionable.”
Costs for a cubic metre
of freight start at around
$40 (R566) with the VGM fee R375.