Clear Sailing for DDGS
- Published on Thursday, 17 January 2013 21:30
Actually, the recommendation of the relevant IMO subcommittee and acceptance of that recommendation by the responsible committee of the IMO were obtained in 2010 and 2011. But turning a proposal into a mandatory classification is a multi-year process, said Erick Erickson, USGC director of global strategies.
"Previously, DDGS had not been classified by the IMO. But as DDGS trade grew, several insurance organizations communicated their opinion that DDGS was a hazardous cargo, raising the prospect that DDGS cargoes would be required to be shipped on vessels equipped with special fire suppression equipment – thus raising the cost of DDGS shipments," said Erickson.
Accordingly, in November 2010, after the IMO subcommittee accepted the U.S. proposal to classify DDGS as non-hazardous, the U.S. Coast Guard issued a letter to the Council affirming that the Coast Guard would consider DDGS as non-hazardous. Since that date DDGS has been loaded as a non-hazardous cargo on the authority of that letter. Beginning Jan. 1, the letter is no longer needed as the classification of DDGS as non-hazardous is now final, official and mandatory in the IMO code.
"The Council successfully organized the effort to classify DDGS as a non-hazardous material. That classification ensured lower freight costs to me, in turn increasing returns to ethanol plants," said Steve Markham of Council member CHS Inc.
Following on the success with DDGS classification, the industry asked the Council to take on the issue of corn gluten feed (CGF) and corn gluten meal (CGM). Both of these products were classified as hazardous cargoes in the general category of seedcake. But traders and shippers believed that classification was incorrect. Following a similar pattern as with DDGS, the Council organized the testing of samples and collection of information that enabled the U.S. Coast Guard to prepare a U.S. proposal that CGF and CGM be re-classified as non-hazardous. The IMO subcommittee accepted the proposal in 2012 and the new classification for CGM and CGF will be published in the IMO code in 2014, becoming mandatory in 2015.