Industry News
From The Cargo Letter

THE CARGO LETTER [302] Air & Ocean FF News For 24 July '96

Good Wednesday Morning from our Observation Deck...... overlooking the officially designated "Cargo City" area and....... Runway 25-Right at Los Angeles International Airport ! Our feature....."Freight Forwarder STOCK WATCH" will return in the next issue.

Contribute your knowledge to The Cargo Letter. McD

INDEX to The Cargo Letter:

  1. OUR "A" Section: FF World Trade, Financial & Inland News
  2. Circle Predicts Continued Carrier Reach For The Forwarder's Business
  3. Clear Communications The Key to Customer Service for International Companies
  4. Freight Forwarder Trade Briefs
    OUR "B" Section: FF World Air News
  5. DHL Adds Freight Forwarder Service
  6. FF World Air Briefs
    OUR "C" Section: FF World Ocean News
  7. FF World Ocean Briefs
    OUR "D" Section: FF in Cyberspace
  8. TWA Flight 800 Informational Links
  9. Cyber-Focus On World Ocean Ports
    OUR "E" Section: The Forwarder/Broker World
  10. Filing A Cargo Claim With The Marine Insurance Underwriter


OUR "A" Section: FF World Trade, Financial & Inland News

1. Circle Predicts Continued Carrier Reach For The Forwarder's Business

--- by Michael S. McDaniel

With ocean & air direct carriers such as FedEx, OOCL, APL, Maersk, DHL, COSCO, etc continuing to announce expansion of their "customer service" and intermodal capabilities, The Cargo Letter has warned since 1994 that these changes suggest a disquieting trend for the future of independent forwarders and brokers. Given the intensive investment and fiercely competitive environment in which the direct carriers exist, it is only logical to expect their expansion into the "retail" side of the industry. "Retail" is properly defined as YOUR side of the business, in direct contact with the forwarding public. For our American readers, the dynamic at play is much the same as when Home Depot stores began to impact on local hardware merchants.

In a 12 July interview with Reuters, Harper Group CEO Peter Gilbert (Circle International) explained his expectation that FFs will soon be forced to align with particular carriers, perhaps as subsidiaries. "Five years from now, I wouldn't be surprised if some of us are an integral part of this carrier or that carrier," said Gilbert.

The other side of the trend is represented by a campaign of mergers, acquisitions and alliances recently seen in our industry as led by Fritz, Circle and Expeditors. There is a race by non-asset intensive forwarders and asset intensive carriers to control the "retail" end of our industry where ultimate customers are located.

Who will win the race? Financial might on either side may not win the entire field.......especially for the local FF/CHB whose stock & trade is SERVICE. CEO Gilbert of Circle quite correctly points out that the "larger role" played in maintaining customer loyalty comes from the efforts of staff and management in making and supporting personal service connections with shippers. Such is the current edge maintained by all dedicated forwarders in this 1996 race for YOUR business. Be advised and send your comments to The Cargo Letter.

2. Clear Communications The Key to Customer Service for International Companies

--- By Warren S. Levine, for The Cargo Letter

As the virtual world continues to shrink, clarity of communications is playing an increasingly important part in determining the level of customer service an international transportation company can provide. Your company -- as well as your customers, the importers and exporters -- must by nature rely upon good communications and a clear understanding between operations people on both sides of each transaction.

The requirement is not just knowing normal logistical patterns of the freight, which is learned, not taught. It means understanding and expressing instructions and responses clearly so as not to be misunderstood. In this respect, with our relatively monolingual attitudes in America, companies in the States will find themselves losing ground to their more globally conscious overseas-based competitors.

One of the basic problems is the narrow scope of American education in international studies. Americans are notorious worldwide for being culturally unaware of the other peoples on this planet. As a result, if we are to keep our customers and our jobs, it is the responsibility of management to enlighten our operations people. Add to these variables the twists and turns of procedure changes due to acquisitions, mergers and expansion, and you have a latent virus of misunderstanding, just ready to infect your company's operations. The implications are scary.

Since most international business is conducted in English, we also get to experience the influence of others' native languages on their use of our language. (Or languages -- American English is not British English.)

On a visit to Singapore, where Oxford-Cambridge English is spoken, I was in a meeting with six or eight customer service clerks. At the end of the meeting, the manager, a woman, said to me in very proper English, "We would love to have you for dinner tonight, if you've got nothing on." (I understood what she meant, and just stood there smiling.) It was a moment before she realized that what she had said meant something totally different in American English. But by then, of course, everyone in the room was red-faced.

Words which indicate abstract concepts such as relative span of time are frequently subject to misuse and misinterpretation. The words "since," "until," "while" and "by" are commonly used incorrectly, causing a great many problems. An advertisement for a CD-ROM package offered by Hong Kong-based Asiaweek Magazine, in their June 28, 1996 issue stated, "Offer Valid Until Supplies Last." Excuse me?

Say you get a message from overseas reading, "The shipment has not been received until now." Does that mean the shipment was just received now, or does it mean that the shipment has not yet been received? When a non-native English speaker uses this phrase, ask for a clarification every time.

Another example is one of a new importer who gets a sales confirmation from a factory that says "Delivery in 90 days" and "Payment by L/C." Despite the looks of it, that doesn't mean the goods will be at the importer's warehouse 90 days from date of the sales confirmation. Almost definitely, it means the goods will be at the FOB point 90 days after he's opened the L/C and had it confirmed by the factory's bank. If your business depended on that order and you didn't understand the terms, you would be in BIG trouble.

When your Tokyo office tells you that it will be "very difficult" to ship your customer's freight on the next flight, does that mean they'll have to pull some strings to get your shipment on board, or is the aircraft fully booked? An inexperienced reader might think there's a chance, and tell that to the customer. But when the plane shows up and your customer's freight is still on the ground at Narita, in the eyes of the customer, you have failed. "Very difficult" usually means "impossible."

Companies that succeed in teaching their operations staff how to communicate clearly and effectively, so that they understand each other implicitly, should never lose a customer because a shipment was lost in translation.

3. Freight Forwarder Trade Briefs


OUR "B" Section: FF World Air News

4. DHL Adds Freight Forwarder Service

DHL Airways calls it "Second Segment Service," a new port-to-port cargo service between U.S. cities designed for freight forwarders, and other "major shippers" needing prime time reliable freighter service. The service uses empty space after core DHL express material has been dropped off, or before it has been picked up at each stop along the normal route.

According to DHL, the new "Second Segment Service" offers an alternative to belly space in passenger aircraft, as DHL dedicated freighters can accommodate FCL or loose loads on direct flights that do not have the danger of being bumped for passenger baggage. The service is now offered between the following destinations>>>>>>New York & Minneapolis, New York & Detroit, Atlanta & Tampa, Miami & Orlando, Chicago & Minneapolis, Philadelphia & Hartford, Los Angeles & Honolulu, Los Angeles & Phoenix, Dallas & San Antonio, Kansas City & Denver, Detroit & Minneapolis, Salt Lake City & Sacramento.

5. FF World Air Briefs


OUR "C" Section: FF World Ocean News

6. FF World Ocean Briefs


OUR "D" Section: FF in Cyberspace

7. TWA Flight 800 Informational Links

The Cargo Letter wishes to express the profound sorrow of all in our industry for this great loss. May God bless each of the families. The following links are provided for ready reference and will automatically link you from our electronic edition of this publication at The Cargo Letter Home Page at IPX-Interpool

TWA - Trans World Airlines

TWA Flight 800 Passenger List (CNN)

Federal Bureau of Investigation (FBI)

JFK International Airport

QuickAID - John F. Kennedy International Airport

NYC Port Authority Incidents

Port Authority of New York and New Jersey

National Transportation Safety Board

8. Cyber-Focus On World Ports

Adding to our collection of world ocean ports for automatic linking at The Cargo Letter International Resource Links Page...........

Port of Baltimore, MD

Port of Charleston, SC

Port of Corpus Christi, TX

Port of Freemantle, Australia

Ports of The Great Lakes, USA

Port of Hong Kong

Port of Houston, TX

Port of Kaohsiung (info)

Ports of Latvia

Port of Mobile, AL

Ports of New York & New Jersey, USA

Port of Philadelphia (& Camden)

Port of San Diego, CA

Port of Seattle, WA

Port of Setubal, Portugal

Port of Singapore

Port of St. John, Canada

Port of Tacoma, WA

Port of Tianjin, PRC (INFO)

Port of Vladivostok, Russia (info)

Port of Yokohama, Japan


OUR "E" Section: The Forwarder/Broker World

9. Filing A Cargo Claim With The Marine Insurance Underwriter

--- by Charles H. Veigel with Michael S. McDaniel

Seattle- 23 July - Thus far, our "Back to the Basics" article series has reviewed the general structure of marine cargo insurance policies, exclusions from coverage and valuation clauses. Now we'll discuss the steps necessary to protect your shippers & consignees (CGNEEs) when the time to make a claim arrives.

Modality differences aside, we have made clear in past editions that air & ocean claim theory is similar and both are often controlled by the very same form of insurance policy. One CRITICAL difference between air & ocean claims is the time periods during which claims must be made.......and we'll cover this important topic next time.

ANY cargo claim is subject to REJECTION unless EACH of the following steps is correctly taken. A word to the wise:

The Necessity of Notice: When goods arrive at the air or ocean port of destination lost or damaged, the CGNEE/shipper must immediately notify:

One may ask: Why should a shipper/CGNEE notify the carrier when one already notified the insurance company? An insured shipper/consignee is under a duty to protect the cargo insurance company's subrogation rights so that the underwriter may sue the carrier to obtain reimbursement for any settlement paid to the claimant. In addition, the carrier has a right to conduct an inspection/survey of the loss or damage. The carrier may agree to a joint survey or will appoint its own team of surveyors to evaluate the circumstances of loss or damage.

Help From The CHB...........In the U.S., it is common practice for many customs brokers to simply send the carrier an automatic notice of loss to preserve the claimant's rights when clearing the freight through U.S. Customs regardless of whether the shipment is damaged or lost. It is a good practice and all CHBs should follow it.

Talk Is Cheap: The CGNEE/shipper should remember that they can fully protect rights by refusing to provide a clean receipt (i.e., no exceptions for irregularities) for the cargo unless it is under protest and in writing to the carrier. Also note that all communications should be in writing. The notice of damage or loss to the carrier is REQUIRED to be in writing.

If cargo damage or loss is evident at an intermediate or transshipment port, the above steps should be taken. In addition, a shipper/CGNEE/FF/CHB/insured should ask the carrier whether the goods will no longer be delivered to final destination and whether the bill of lading is now "frustrated". In other words, you must ask whether the carrier still intends to make final delivery. Be aware that the insurance underwriter's obligation ceases at the transshipment port if the shipment is frustrated. Immediately notify the underwriter of any such event. Steps must be taken BY CLAIMANT to prevent further deterioration of the freight. This NECESSARY step is often difficult due to communication logistics.

The Necessity of Documents: The following is a list of common documents necessary in effectuating a cargo claim with the insurer as compiled using the informative work entitled Marine Claims Handbook by N.G. Hudson and J.C. Allen, published by Lloyd's of London Press LTD. By no means is this list exclusive as one is never surprised to learn of new documents being required in support of claims. In any event, the cargo survey often incorporates the following documents into the survey report along with numerous pictures of the loss/damage:

When in doubt regarding claims procedure.......refer to the Certificate of Insurance, where many of these requirements are spelled out. >>>>>Charles Veigel, Esq. practices transportation law at the Law Offices of Brusanowski & Veigel, Seattle, WA<<<<<<<<<< [an error occurred while processing this directive]