THE CARGO LETTER 
Air & Ocean Freight Forwarder - Customs Broker News
15 October 1996
Good Monday Tuesday from our Observation Deck...... overlooking the officially designated "Cargo City" area and....... Runway 25-Right at Los Angeles International Airport. Often we bring you news of recent cargo vessel mishaps.........but in recent weeks they are too numerous to list. Encourage your customers to buy marine cargo insurance.
In Breaking News: Masked gunmen storm the U.S. President's Air Force One in wild airport runway chase ! ............... over & over & over again on 9 & 10 & 11 Oct 1996.......with camera trucks in tow ! It's just another day in our Observation Deck Conference Room at "Port Hollywood" .......aka L.A. Int'l Airport! Many of YOU have taken advantage of our courtesy conference facilities and discount lodging at the LAX Sheraton Gateway Hotel.....near your own LA offices. For arrangements contact The Cargo Letter.
Contribute your knowledge & information........by e-mail to The Cargo Letter. McD
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Our Top Story:
--- by Warren S. Levine, for The Cargo Letter
October 10 -- In a speech given in the rain today, Taiwan President Lee Teng-Hui addressed a crowd which included delegations from 24 countries on The Republic of China's 85th National Day.
Lee called for increased dialogue between Taipei and Beijing, but said, "Nonetheless, the Chinese communist authorities remain unable to set aside their prejudices and face the fact that both sides co-exist, thus preventing cross-straits relations from moving ahead.
"We sincerely hope that the Peking authorities can get in line with world trends, maintain good will ... ensure the security and well-being of people on both sides of the straits, and promote Asian-Pacific regional prosperity and world peace. This would genuinely launch a new era when all Chinese could hold their heads high!"
Beijing responded via Foreign Ministry Spokesman Shen Guofang, who asserted to the press that "The Chinese (communist) government represents all of China...."
In Hong Kong Thursday night, a group of Taiwanese and Taiwan supporters placed a 15-by-30-foot ROC flag atop Tai Mo Shan, Hong Kong's highest mountain, in defiance of the colony's official wishes.
An organizer of the celebration said, "We believe this is the last time we can publicly display Taiwan's flag in Hong Kong before 1997 (when the territory reverts to Mainland control)."
Two Taiwan flags were reportedly torn down Thursday on Nathan Road, in an incident which police were said to have been investigating.
In Manila, newspapers heralded Taiwan's economic and political success even though the government officially recognizes Beijing and not Taipei.
OUR "A" Section: FF World Trade, Financial & Inland News
Los Angeles -- Four years after its inception both houses of the U.S. Congress have passed the Overweight Container legislation. If President Clinton signs the act into law this October, as expected, implementation is mandated to occur six months later..........in April 1997. Major changes to the Overweight Container Rules include 29,000 lbs. as the jurisdictional threshold, not 10,000 lbs. as under the prior version.
It comes as good news that forwarders & brokers will be exempt from the new regulations.............unless YOU do the loading. It is the loading party who will be responsible for 1) weight and 2) contents.
If the motor carrier is fined for an overweight container, it will have the right to seek indemnity (reimbursement) from the party who is ultimately responsible. In order to enforce these rights, the motor carrier shall have a lien against the freight for ALL CHARGES INCURRED........ including the fine and the truckers attorney fees.
While any weight notation on the shipping docs will suffice, the motor carrier may presume an ability to handle the load if the weight is shown at less than 29,000 lbs. Both as good practice and in order to avoid liability involvement, forwarders & CHBs issuing a D.O. should pass on the ocean bill to the motor carrier to show the weight. We unfortunately see the prospect for many new lawsuits with these new rules. Protect your business.
Burma (Myanmar) Sanctions............to combat its human right violations President Clinton has signed in to law sanctions which prohibit: 1) new U.S. investment, 2) aid to Burma, except humanitarian, 3) U.S. entry visas to any Burmese government official.
A.E.S. At All U.S. Ports..........as U.S. Customs & the U.S. Bureau of the Census announce that the "Automated Export System" expanded to all U.S. ports as of 1 Oct.......previously operating since July 1995 at the ports of Baltimore; Charleston; Houston; Los Angeles/Long Beach & Norfolk, VA.
U.S. Customs To Keep Focus............. by stating that in 1997, it will continue with the 8 so-called "Primary Focus Industries" identified for special customs scrutiny in the 1996 Plan, being.....1) advanced displays, 2) agriculture, 3) autos & auto parts, 4) critical components, 5) production equipment, 6) steel, 7) telecommunications, and 8) textiles/footwear.
APL's 3rd Quarter Financials.......... may be an industry barometer in showing decreased revenues of $646M, compared with $711M for 1995.........said to reflect the sale of APL's domestic brokerage and Guam businesses, and declines in the U.S. import rates & U.S. export volumes, partially offset by volume increases in certain markets. 3rd quarter U.S. import volumes improved 22%, Intra-Asia volumes improved 7% and North America stacktrain volumes improved 7%, over the same 1995 period. U.S. import rates in the 1996 period fell by 22% per 40' CTNR (FEU) due to rate deterioration, commodity & service mix changes. U.S. export volumes in the period were down 21% from 1995, reflecting reduced shipments to China, Hong Kong, Korea and Japan.
Hauling To Prison................as the U.S. Justice Dept. announces its first successful prosecution of a trucker for altering driving logs. Mark Gunther of Gunther Trucking was sentenced to 30 months in federal prison for altered records, hiding the actual number of hours his drivers were operating in violation for federal law. A motor carrier known to follow such practices should never be selected for service to a customer. FFs/CHBs must be sensitive to "motor carrier selection" issues.
Some Figures.................Singapore's total 1996 trade plunged 6.5% through August..........Hong Kong Air Cargo Terminals may hit a new air cargo record for 1996 with cumulative 1996 throughput rising 3.6% to 918,326 tons as of August........and for the same period Fritz Companies Inc. proudly announced that revenue increased 1.5% to US$270.5M and net revenue increased 12.1% to $129.7M from $115.7M for the same period.
Latest Word On U.S. Rail profits................seen on the rise by experts. With over-capacity and competition there is no such general word for other modes.
Intoxicating U.S. Victory..........as the World Trade Organization (WTO) has decided in favor of a U.S. led complaint against Japan, concerning Japan's discriminatory taxation of distilled spirits, a major barrier to U.S. exports of Bourbon whiskey, vodka & other distilled spirits to Japan.
U.S. DOT Offers Valuable Training Guide........with publication of the 'Transportation Expressions' and the 'Transportation Acronym Guide' which provide definitions & acronyms of transport and related terms as well as all those mind numbing acronyms used by the DOT, other U.S. gov't, state & local agencies, and even private companies. These are MUST HAVE guides! Copies are available from DOT by phone (202) 366-DATA, by fax (202) 366-3640, or by mail to BTS/DOT, 400 Seventh Street, S.W., Washington, D.C. 20590. The internet download site is http://www.bts.gov
Kuehne & Nagel Will Chill............as the company announces it will now target the perishables market as a key future business segment.
OUR "B" Section: FF World Air News
SEATTLE, Oct. 10 -- according to Boeing's 1996 "World Air Cargo Forecast", the future of air cargo is strong, with growth expected to out pace passenger traffic and the world's freighter fleet doubling in size over the next 20 years.
The Boeing Commercial Airplane Group report coincides with news from two major Boeing customers: 1) UPS has taken delivery of its 10th Boeing 767 Freighter......UPS was customer #1 for the 767 Freighter, putting the first all-cargo 767 into service Oct. 16, 1995, and 2) Luxembourg's Cargolux International Airlines........first ever operator of the Boeing 747-400 Freighter.........announced it will take delivery of its 4th 747-400 Freighter one year early in 1997. The 747-400F can carry up to 124 tons of cargo over more than 4,400 miles with the lowest operating costs per ton-mile and according to Cargolux is "the most economical freighter for long range markets and it has enabled us to eliminate technical stops on many routes."
Boeing notes that air-cargo revenues account for an average 16 % of total airline revenues, with some carriers deriving more than 30% of their revenues from cargo service.
In addition to projecting an annual 6.6 % growth rate in air cargo traffic over the next 20 years, as compared to 5.1 % for passenger traffic, Boeing expects a need for more than 2,000 freighters during the same time span to accommodate traffic growth and replace aging aircraft. That would increase the world's freighter fleet from 1995's year-end total of 1,219 freighters to 2,261 all-cargo aircraft by the year 2015. The forecast identifies the biggest increase in large-capacity freighters -- 767 and 747 size -- with this 50-ton-plus size accounting for 600 additional airplanes. This explains the recent United decision to convert several of its DC-10s to dedicated freighters for the Pacific trade.
Boeing sees the fastest growing cargo market within Asia, where cargo traffic is expected to grow by 9 % for each of the next 20 years. Other top growth areas and their annual growth rate projections are: Asia to North America at 8 %, Europe to Asia at 7.4 % and Europe to North America at 7 %.
A major Boeing cited trend for the next 20 years is the expected increase in international "express" service, mirroring the tremendous growth pattern of U.S. express service from 1975 to date. "We see that same type of movement in the international market, with projections for 18% annual growth," said Boeing V.P. Bruce Dennis. "By the year 2015, we believe express service could account for almost 40% of the total international cargo business." In 1995, international air-express service accounted for 5% of the total market, representing an increase of more than 22% from its 1994 level.
Boeing's wide-body 747 & 767 freighters join an all-cargo version of the 757 and what's called a "green" 737, which comes without an interior and can be modified for freighter use by outside firms. The company's Modification Responsibility Center at Wichita, KS., is capable of modifying 747-100, -200 & -300 models into freighters in as little as three months. Since 1972, Boeing Wichita has modified 72 Boeing 747s for freighter use, a further indication of our industry's focus on cargo. Two of Japan's ANA 747-200s are currently being converted.
FedEx 727 Makes Emergency LAX Landing ............. .....tonight! Fire supressed. Details Pending.
HKG A Bit Tight?.............as Hong Kong's Civil Aviation Dept. said it is turning down applications from lines seeking an average of 150 extra flights a week in and out of the territory's Kai Tak airport.
Lufthansa After Iberia........................its ex-Iberia cargo business is predicted to grow around 11 % in 1996 volume, with the total from Spain and Portugal likely to reach around 14,500 tons from just over 13,000 in 1995. Express items move via a UPS freighter from Madrid or Oporto nightly to Cologne where both carriers have their express hubs. Lufthansa's strongest cargo routes from Spain are to the Far East, mainly Hong Kong, Seoul and Tokyo. On December 1 Lufthansa takes over as general sales agent for SAS's cargo business from Spain, probably extending to include Portugal too in the future. The German flag carrier is in the process of selling its DC-8 freighters but will lease some back as business demands until 1998 when the first of 5 McDonnell Douglas MD-11 freighters it has ordered will be delivered.
Bad Luck DIA Will Try Again.................as the $4 billion Denver International Airport, licks its wounds from the world's most infamous "high-tech-non-functional" baggage system, its sinking runways, etc. to announce plans for a US$50M, world-class cargo & retail facility called "WorldPort". Light a candle.
UPS "SPEAKS" Internet....................with 200,000 daily visits to its global WWW site and some 28,000 packages tracked in a day, UPS has launched new French, German, Spanish and Italian sites which allow customers to use the service in their local language. This expansion suggests higher standards to be met by our industry in serving international customers on the internet.
DHL Speaks More Spanish...........as it launched new service between Miami and Panama Oct. 1.......part of its US$30M investment program in Latin America.
FedEx Upgrades Latin America.....................as 10:30 am delivery replaces the 12 pm standard on Latin American "International Priority " moves to Amsterdam, Antwerp, Basel, Brussels, Cologne, Dusseldorf, Eindhoven, Frankfurt, Geneva, Hamburg, London, Milan, Munich, Stuttgart, and Zurich, commencing 1 Nov. 1996. Expect further alignment between U.S and overseas express service levels.
AEI Will Expand Dubai Station...................by 100% with a new 85,000-square-foot facility at Dubai Int'l Airport Free Zone to serve as the freight forwarder's hub for the Mid East, Africa and the Commonwealth of Independent States.
The Amazing Shrinking Belly................as Emery Worldwide predicted this week that space on passenger lines will continue to decline
U.S. Transportation Systems...............has acquired the West Palm Beach, FL operations of U&M Express and Eagle Air Express.
OUR "C" Section: FF World Ocean News
First Goal Of The Mega Merger..........will be Pacific Trades expansion for P&O Nedlloyd as the new line develops into a genuinely global containership operator......according to the line. Can you say "Over Capacity"?
A Major Merger Partner For Zim.......................?
Taiwan Replacing Hong Kong?..................according to Minister of Transport, Tsai Chao-yang, the Taiwan government will let ports in the Philippines & S. Korea take Hong Kong's place as the transshipment center for Taiwan-China trade after the 1997 transfer of the territory's sovereignty to China, if the mainland authorities block the continued use of HKG. The late Sept announcement is seen only as a gesture, there being little chance that HKG transhipments will be affected.
COSCO Needs Cash..................and will raise U.S.$199M by selling 250 million shares for working capital and purchase of 100,000 dry cargo TEUs and 10,000 refer TEUs in 1997. COSCO's stake in COSCO Pacific will drop from 65.6% to 56.6%.
Europe-Brazil Express................will be a new Maersk- Sea-Land-Transroll Navegacao S.A. vessel sharing agreement between 6 Argentine & Brazilian ports and 5 Europe ports to operate weekly with 7 ships starting in November.
Hyundai Given An Updated Map To The Door.......as the U.S. Supreme Court declined to consider an attempt by Hyundai Merchant Marine Co. to file a U.S.$40M claim against the U.S., in connection with the 1987 grounding of M/V Hyundai New World, a 200,000-ton vessel, on a shoal off Brazil allegedly due to an out-of-date chart prepared by the U.S. Defense Mapping Agency.
Evergreen Expands Capacity...........with a 1 Oct. order for eight 5,364 TEU containerships from Mitsubishi, to be delivered by 1999, for a total of S.$600M. Not a good sign for rates.
Lykes Struggles Back...............with U.S. FMC approval to expand its services from the U.S. east and gulf coasts to Valencia and Barcelona and between Italy and Mexico. Space will be chartered on ships of Contship and TMM Line. There is also MARAD approval to add another subsidized ship to its fleet........M/V Genevieve Lykes, formerly the M/V President Arthur, will begin in Jeddah.
Iran Shipping Lines...........to make Singapore its Southeast Asia hub with 20 monthly calls.
Future Boost For Seoul Bound Cargo............as South Korea has approved the building of an 11 mile canal between Seoul's Han River and Inchon Port to be in operation by 2010. With details pending, the canal could eliminate the land-bridge need from Busan Port to Seoul.
New Indo Port.....................will be Kabil, Indonesia as contracts are signed for mid-1999 opening of a new post-Panamax containership terminal.
Star Shipping (NY).............has relocated to Atlanta from its years at Stamford, Conn.
Uniglory's New Service..................is between Hong Kong, Taiwan and Kuantan, Malaysia, with some 250 to 300 TEUs needed for a voyage.
Good-Bye Columbus............as the line drops its Jacksonville call as of 1 Oct., with all subject freight now traveling through Savannah, GA.
Hapag-Lloyd.............will now handle its own sales and service in Canada, phasing out agent Halo Maritime.
Diamonds Not Forever.....................as Diamond Cruise Line was forced into bankruptcy by a Helsinki court. The line, owner of the dramatic M/V Radisson Diamond twin-hull passenger ship built in 1992, had been allowed to attempt to restructure debt in May 1995.
M/V Queen Elizabeth 2 .............hit a 15-ton whale during its voyage from Cadiz to Lisbon. The 18 meter/60 foot whale was discovered against the ship's bow when she entered Lisbon on 15 Sept.
First Royal Navy Ship..................to visit China in 10 years was H.M.S. Exeter (D 89), last week on a rare call to Qingdao.
OUR "D" Section: FF in Cyberspace
Treat your staff to a first hand look at cargo handling aboard a modern container vessel in full-panoramic Virtual Reality Quicktime! From the bridge to the poop, just visit...... http://www.nedlloyd.com/qtvr/qtvr.htm.........at the Nedlloyd home page.
Note: The site allows you to download special software to enhance the experience.
Aviation Employment Listing (companies hiring)
Code of Federal Regulations (Search CFR by Keyword!)
Embassies Of The World (Index & search engine)
FedEx interNetShip (Next Version: point, click & ship)
Lufthansa German Arlines (AWB # cargo tracking)
http://www.lhcargo.com [an error occurred while processing this directive]