Good Tuesday Morning from our Observation Deck, overlooking "Cargo City"............. and Runway 25-Right at Los Angeles International Airport! Contribute to The Cargo Letter. McD
OUR Top Story
--by Warren S. Levine for The Cargo Letter
30 June - The U.S. House of Representatives approved President Clinton's May 31st renewal of China's Most Favored Nation status last week, in a move which surprised nobody. Over the past month, relations with China have been much less confrontational.
On June 17th, American and Chinese negotiators once again headed off a major confrontation, when Beijing agreed to take more forceful measures against Intellectual Property Rights (IPR) violators.
Upon conclusion of her meetings in Beijing with Chinese Vice-Foreign Minister Shi Guangsheng, Acting U.S. Trade Rep. Charlene Barshefsky stated, "China's recent actions represent necessary and important steps [in the enforcement of copyright infringement]."
Fifteen Chinese factories said to have been involved in pirating American goods were closed recently, according to the Chinese delegation. Beijing also pledged to cooperate with U.S. Customs officials in their efforts to protect IPR. The United States has held training sessions for Chinese Customs officials, concentrating on identifying pirated goods.
The most common violators have been computer, audio and video CD and videotape duplication factories located in southern China, primarily in Guangdong Province. The flood of counterfeit goods into Hong Kong and other markets has cost copyright holders billions of dollars in royalties.
Despite the 1995 agreement and the recent crackdown, illegally-copied videotapes are easily available for rental or purchase in most major Chinese cities, and pirated CDs made in southern China are still offered for sale on hundreds of Hong Kong streetcorners.
OUR "A" Section: FF World Trade, Financial & Inland News
Here are today's Stock Watch Report AND progress on our "Cargo Letter 10" portfolio. [portfolio represents $l000 purchase of each stock at close on 3 Nov 1995]
[INDEX: 1st & 2nd Number are last price & daily change............3rd & 4th Number represent how our $1000 investment in each stock is doing and our win/loss to date.]
Our "Cargo Letter 10" winner AGAIN this week is Air Express Int'l! (29% gain in 7 mo's).......with Interpool second.....but the entire group is continuing to suffer.
|Airborne Express||ABF||26 1/4||1/4||-82.91||916.38|
|Air Express Int'l||AEI||27 3/4||-1/2||290.69||1,290.65|
|Am. Pres. Lines||APS||Not Available|
|Delta Air||DALpC||62 3/4||-1/4||93.53||1,091.85|
|Fritz Companies||FRTZ||33 5/8||1 3/8||-120.90||878.95|
|Mercury Air Cargo||MAX||8||0||-179.48||820.48|
And in other financial news.......
Interpool Subsidiary Will Go Public...............with a proposed initial public offering (IPO) of 7.65 million shares of Interpool Limited's common stock at an offering price of $14-16 per share. Upon consummation of the offering, public investors would own approximately 22.4% of Interpool Ltd's common stock, and Interpool, Inc. would continue to own 77.6% of Interpool Ltd's common stock. Interpool, Inc has two separate business -- the international container leasing business, by Interpool Limited, and the domestic intermodal equipment leasing business, by Interpool, Inc.
--by Michael S. McDaniel for The Cargo Letter
Intercargo Insurance Co. (NASDAQ:ICAR) has announced unique new products as enhanced business protection for the transportation specialists (e.g. customs brokers, freight forwarders, freight consolidators, etc.) which it has served since 1980. For the first time in our industry, Intercargo will now provide...... Foreign Agent Liability, Bailee Liability, Packing Liability, Container Coverage, Customs Liability, and Third Party Liability coverages.
In 1993, Intercargo introduced the International Transit Liability (ITL) Policy as a means of combining Forwarder Legal Liability Insurance (for damage to goods moving under your house bill) and Errors & Omissions (E&O) Insurance (for your negligence) into one package policy. Intercargo was the first U.S. insurance company to offer this type of combined coverage to transportation specialists.
A newly renamed Integrated Transit Liability Policy (ITL) will continue to feature E & O/Forwarder Legal Liability protectioins, plus these one of a kind optional coverages:
In proof of its leadership in our industry, Intercargo Insurance Co. has the exclusive endorsement of the National Customs Brokers & Forwarders Association of America (NCBFAA) and the International Association of Non-Vessel Operating Common Carriers (IANVOCC). The company's primary products include: U.S. Customs Bonds, Marine Cargo Insurance, Property & Casualty Insurance, and Professional Liability coverages.
Information concerning these new liability protections for your company may be obtained from Trade Insurance Services Inc. (TIS), a subsidiary of Intercargo at (800) 338-4904
--by A. Blaine Prentiss for The Cargo Letter
Los Angeles - 10 June - The United States Supreme Court has ruled in the case of United States v. International Business Machines (IBM) that the Export Clause of the U.S. Constitution does not permit the nondiscriminatory assessment of federal taxes on cargo in export transit. In a similar case, the U.S. Court of International Trade (CIT) has held that assessment of the Harbor Maintainance Fee (HMF) also violated the Export Clause of the United States Constitution. [U.S. Shoe v. United States]
OUR "B" Section: FF World Air News
OUR "C" Section: FF World Ocean News
--by Pete Bower for The Cargo Letter
Capetown -30 June - Neil Oosthuizen, the CEO of SA's national port authority Portnet, has resigned effective August 31. His deputy Philip Venter is also reliably understood to have resigned. The pair are believed to have resigned following a board meeting of Portnet's holding "company" Transnet last week.
Transnet has recently been vigorously following a policy of affirmative action in senior appointments, with a number of key managing positions recently filled by blacks. Portnet itself has been a part of the process, with the port managership of Africa's busiest port, Durban, and Portnet's human resources executive at head office, now being affirmatively filled. Portnet staffers are speculating whether the resignations of Oosthuizen and Venter are not part of the same process.
OUR "D" Section: FF in Cyberspace
Here are The Cargo Letter transport World Wide Web sites of the week...........
OUR "E" Section: The Forwarder/Broker World
--by Charles Veigel, Esq. for The Cargo Letter
Seattle - 30 June - Continuing in the series of articles on cargo insurance, this article will discuss how a cargo policy is valued.
As most of you are aware, a marine cargo insurance policy is issued at a stated value. In the event of a total loss of the goods, the insurer will pay the holder of the policy the face amount stipulated in the policy. The face amount is stated in the valuation clause. Typically, the amount is formulated as follows:
The insurance company is obligated to pay the face amount reflected in the policy in the event of a total loss even if the loss surpasses the face amount of the policy. In order to prevent fraud, the insurer reserves the right to demonstrate that the goods were worth less than the stated invoice value.
The predetermined amount often does not cover customs duties. Consider this: a container load of chairs is shipped from Hong Kong to Oakland. The chairs arrive damaged and in a condition beyond repair. If the goods are not surrendered to U.S. Customs, the consignee, usually the buyer of the goods, must pay duty and clear the goods through U.S. Customs. Even if the endorsement to the policy is made to cover the customs duties, the insurance company may place an obligation on the consignee to seek a refund/drawback of the duty from Customs.
Above we indicated that the typical marine cargo policy will include approximately 10% to the invoice amount and prepaid/collect freight charges. A shipper or consignee may want to insure for lost profits. Often a shipment is worth much more than the value stated on the invoice. The cargo is lost or damaged, and the shipper/consignee not only lost the invoice value but also significant profit having sold the goods in advance at the port of destination. An endorsement reflecting the percentage increase to the value of the goods is appropriate.
Ocean/Air forwarders often issue marine cargo certificates to their customers under open marine cargo policies issued by the insurance company. Under these cargo policies, numerous shipments are made, each of which is separately valued. Separate shipments are reported by the forwarder to the insurance company on a set schedule. The policy will extend for a specific period and the insurer will be liable for all losses under a set limit. If a shipment is partially damaged and valued below the set limit, the insured is responsible for compensating the holder [shipper/seller/consignee/buyer] for the percentage damage/loss and effectively reducing the set limit by the amount paid.
A careful review of the cargo policy to determine the appropriate value of the goods is an important duty of any ocean/air forwarder. An ocean freight forwarder is under a duty to exercise due diligence to ascertain the accuracy of any information it imparts to the principal [shipper/client] regarding the forwarding transaction. 46 C.F.R. 510.22 (c). An air freight forwarder is under a similar duty. Our advice: read the cargo policies and explain them to your clients. Not only is this a good business practice, but you are also under a duty to do it. [Charles Veigel is a partner with the Brusanowski & Veigel law firm - Seattle] [an error occurred while processing this directive]