Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
Good Friday Evening, from our Observation Deck......overlooking the officially designated "
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Here is what happened in our industry during the Month of March 2012.
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Michael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker, hull & machinery attorneys at LAX.
INDEX to The Cargo Letter:
OUR Top Story***
Big Brown' Big Buy ......
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs ______________
3. Freight Forwarder World Air Briefs ____________
4. FF World Ocean Briefs _____________________
**Back By Popular Demand**
OUR "D" Section: FF in Cyberspace***
6. The Cargo Letter "Cyber Ports of Call" _________
OUR "E" Section: The Forwarder/Broker World***
OUR Top Story***
Big Brown' Big Buy ......
After protracted public negotiations, UPS will acquire TNT Express for US$6.77Bn, a deal that comes a little more than a month after TNT Express rejected UPS' US$6.4Bn acquisition offer. The all-cash offer comes out to a per-share price of a little less than US$12.50.
According to a joint press release, "The combination of UPS and TNT Express will create a global leader in the logistics industry, with annual revenues of more than US$60Bn and will deliver significant benefits for the shareowners, customers, employees and other stakeholders of both companies."
The deal has been given the go-ahead by the supervisory and executive boards of TNT Express, and PostNL, which holds 29.8% of the outstanding shares in TNT Express and had been reportedly holding up an earlier deal between the two firms, has committed itself to the acquisition. The deal helps UPS gain a bigger share of business outside the
TNT has a broad South Asian road network, which would certainly give UPS an advantage in the Asian market, but the new venture may represent a majority of the market in some European countries, triggering European antitrust laws.
1. Freight Forwarder Trade Briefs _____________
***CargoNet Sounds Alarm ..... as the source for cargo theft information said it recorded 1,215 cargo theft incidents last year, 17% more than the 1,035 in 2010. Its annual report said 116 incidents involved base metals, 229 electronics, 105 apparel & accessories, and 200 prepared foodstuffs and beverages. Most cargo theft incidents occurred on Fridays (227), Saturdays (202) & Sundays (198) at locations such as truck stops, carrier/terminal lots and unsecured parking lots. The report said 85% of the reported cargo thefts took place in 10 states, and that municipalities containing a major port continued to be targets for cargo theft activities. Total estimated
***Seasonal Smiles ..... as importers who sell to
***Admiring Transport .... as for the 50 most admired companies of 2011 overall, Fortune magazine's survey asked businesspeople to vote for the companies that they admired most, from any industry. Four of the Top 50 were from our transport industry. And yes, Apple was #1.
4. Southwest Airlines
***FIATA Continues To
***KORUS For Us ..... as on
***Say It's Not True .... as the U.S. Commerce Dept. investigation has determined
***Rare Trade Problem .... as a dispute has developed between
***Boeing Gets The WTO Trade Edge ....as on March 12, the U.S. largely prevailed in a World Trade Organization dispute over claims by the European Union related to The Boeing Co. In specific, the WTO Appellate Body rejected claims that the
***New Help For Exporters .... as the U.S. Export-Import Bank will be opening branchess in
***New CN Fleet .....as Canadian National Railway said it will buy 161 high-horsepower locomotives (65 new & 96 used) to accommodate anticipated traffic growth and to improve efficiency. The current fleet of1,900 locomotives employs direct-current (DC) traction technology, but many of the new units from GE Transportation & Electro-Motive (EMD) will be powered by alternating-current (AC) traction, which features much higher adhesion or train-pulling ability at low speeds. CN will assign the new AC units to heavy-haul coal service in northern
***Grand Central Terminal Has New Look & Big Birthday ..... as it will celebrate its centennial as a landmark transportation hub. The railroad station that has served as a gateway to the city since 1913 unveiled a new logo, featuring an image of the big clock that's a popular meeting spot in the marble-paved main concourse. Each morning, as commuters rush through the 80,000-square-foot hall, they encounter a lighting effect that lends the terminal its charisma: "sunlight beaming through the eastern windows," Joseph Lhota, chairman of the Metropolitan Transportation Authority, said. Grand Central serves 750,000 commuters daily plus visitors who shop, take photos and eat at both high-end and affordable restaurants. Modeled on ancient Roman baths, the Beaux Arts building is home to Metro-North, the nation's busiest commuter railroad that links the city with its northern suburbs. Metro North is replacing its older cars with new ones. By 2016, it will not be Grand Central's only rail service; tunnels are being excavated so the
***All Aboard Florida! ..... as Florida East Coast Industries, Inc. is developing a privately owned & operated passenger and freight rail service to connect
***Truck Stop Lobbyists .... as on March 14, the U.S. Senate voted down an amendment during consideration of the federal highway bill that would have allowed commercialization of interstate rest areas. The measure — which was authored by Sen. Rob Portman (R-Ohio) and was opposed by a coalition representing sellers of food and fuel products — was defeated 86-12, the coalition said. "This marks a major victory for the 97,000 highway-based businesses across
***Cold Solution ..... as Klinge Corp. has announced its Blast Freezer Model CBU-30 which is primarily used for the quick freezing of high-value seafood & meat. The picture frame style freezer is designed for freezing cargo to -60°C (-76°F and is mounted to 20' or 40' ISO containers or trailer bodies}.
***Over Watch .... as part of its KN PharmaChain product, Kuehne + Nagel group will begin deploying newly developed active wireless sensors that are designed to record & transmit the temperature of pharmaceutical airfreight shipments along the entire supply chain. The use of active wireless sensors is mainly intended for pharmaceutical products. Generally, security rules prohibit the active use of mobile sensors during the air transport. However, together with a number of airline partners, the Swiss logistics group thoroughly tested low-emission devices which stay active during the flight to constantly measure & report the temperature, practically, in real-time. To guarantee temperature visibility from pick-up to delivery, warehouses and logistics facilities both belonging to the company and its airline partners will be equipped with transmitting technology. Full transparency is provided to customers as the temperature indications can be viewed directly inside the KN Login online tool.
***Honored Woman ..... as Navistar, Inc. and the Women In Trucking Assn. (WIT) presented the 2nd annual "Influential Woman in Trucking" award to Joyce Brenny, Owner, Brenny Transportation, Inc. & Brenny Specialized, Inc., at a ceremony March 6, during the Truckload Carriers Assn. (TCA) annual meeting.
***Five Different Views of Logistics In Year 2050 ...... as with its release of the study of the future, "Delivering Tomorrow: Logistics 2050", Deutsche Post DHL is taking a far-reaching look into the future of trade, business and society. The study examines five different scenarios of life in the year 2050. Study & video:
***Trusted Ketsikaew Transport ....as a Thai taxi driver has returned gold worth US$450,000 to a customer who left the jewelry behind 3 days earlier. Police Col. Naradet Tiprak said on March 19, driver Saksi Ketsikaew turned in 8.2 kilos (289 ounces) of jewelry in cardboard boxes. He said gold seller Ekarat Kanokwannakorn bought the gold in
**Air Transport Services Group (ATSG). UP with a 14% increase in 4th quarter net profit year on year to US$13.5M, drawn on revenues of US$166.5M, down 7%.
**CMA CGM. DOWN with a net loss of US$30M on revenue of US$14.87Bn,in 2011, compared to a profit of US$1.6Bn in 2010.
**Damco (Maersk's standalone forwarder). UP with a 29% year-on-year profit increase to US$97M in 2011, drawn on revenues of US$2.8Bn, up 3.7%.
**FedEx. UP with a 126% 3rd quarter net profit increase to US$521M, with revenue up 9% to US$10.56Bn.
**Hapag-Lloyd (world's No 4 container carrier) DOWN with a net loss of US$38.3M in 2011, despite an operating profit of US$133.3MUS, after reporting a $565M net profit in 2010.
**Kuehne + Nagel. UP with a 0.16% increase in profit to US$665M.
**Lufthansa Cargo. DOWN with net losses of US$17M in 2011, down from record profit of US$1.5Bn in 2010, due to costs from valuation & sale of its UK-based British Midland Airways (BMI).
**OOCL. DOWN with operating profits of US$183.6M in 2011, a huge decline from the US$922.9M the company made in 2010.
**Regional Container Lines (RCL). DOWN with a net loss of US$25.8M.
**Seaspan. DOWN with an 83.4% decline in 2011 net profit to US$23.5M.
**UTi Worldwide. UP with profit for 4th quarter ending Jan. 31 of US$12.4M, compared with US$14.5M in the same period a year earlier.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs __________
***IATA, TIACA, FIATA & Global Shippers' Forum Unite .......as the Global Air Cargo Advisory Group (GACAG) is now their combined Internert voice. GACAG's website currently provides information about the coalition's four task forces — customs and trade facilitation, e-commerce, security and the sustainability of the global air cargo industry — and identifies the members of each group. The unified voice of air cargo:
***Family Feuled..... as putting their differences aside, competitors Airbus, Boeing & Embraer have signed an MOU to collaborate on the development of aviation biofuels. In joint press releases, the aircraft manufacturers detailed their plans to "speak in unity to government, biofuel producers and other key stakeholders to support, promote and accelerate the availability of sustainable, new jet fuel sources." The aircraft manufacturers seek to fulfill the International Air Transport Assn's goal of slashing carbon emissions in half by 2050.
***Carbon Tax Backlash ..... as
***Fixing The Forwarders ..... as the European Commission has fined 14 air forwarders US$225M for price fixing with the largest fine - US$71.5M - going to Swiss logistics giant Kuehne + Nagel (US$71.5M) with fellow Swiss operator Panalpina having to pay US$61.9 M penalty. Both are contemplating appeals. The Wall Street Journal reported that the probe, started with EC office raids in Oct. 2007, concerned price-fixing in 4separate cartel infringements, including services from the
***Bite of The Apple ..... as must-have high-tech devices, such as Apple's new iPad sensation, will likely cause a mini-boom for Asia-Pacific air cargo carriers this year, say industry experts. The semiconductor product industry has begun a rebound shown in booking increases, "signs that the air cargo industry may recover more quickly than most currently expect," ING group chief economist Tim Condon told Bloomberg in
***American Airlines Cuts Loose ..... as it has asked a federal bankruptcy judge next week to throw out its union contracts if it can't reach cost-cutting deals with labor unions. One of American's lead lawyers in the bankruptcy case said on March 22, the company & unions have bargained in good faith, but he doesn't expect them to reach compromises. American and parent AMR Corp. filed for bankruptcy protection in Nov. Last month, the airline made cost-cutting proposals to the unions that included the elimination of 13,000 jobs, the outsourcing of maintenance work, hiring regional airlines to do flying now handled by American pilots and increasing working hours for many employees. Under federal bankruptcy law, judges can let companies break union contracts if the company first negotiates with its unions and then shows it needs relief from the contracts to be successful. Unions for pilots, flight attendants & ground workers have been expecting the company to seek to break the contracts, which they said would destroy morale among American's 73,000 employees. American says it needs to cut costs by US$2Bn per year, with US$1.25Bn coming from lower labor expenses. American's much-smaller regional affiliate, American Eagle, said Wednesday that it needs an additional US$75M per year in labor savings.
***Merger Intelligence .... as U.S. Airways has been rumored as a potential acquirer of American Airlines since the latter went into bankruptcy protection. Over two dozen recent domain registrations suggest that the acquisition is very likely, if not a done deal. On March 9, the same day American parent company AMR asked for an extension on its bankruptcy reorganization, American Airlines or U.S. Airways registered a number of domains for the combined entity. The domains were registered through DNStinations, an affiliate of brand protection company MarkMonitor.
Among the domains registered:
american-usairways.com, .net, and .org
americanairlinesusairways.com, .net, and .org
americanusairways.net (the .com was registered by someone else in 2010)
usairways-american.com, .net, and .org
usairwaysamerican.com, .net, and .org
usairwaysamericanairlines.com, .net, and .org
usandaa.com, .net, and .org
***Forget The Cargo Pilots? ..... as the Air Line Pilots Assn. Int'l (ALPA), gathered representatives from government agencies, the airlines, and other aviation labor groups at a landmark conference this month to explore how the Federal Aviation Administration's new pilot fatigue rule could be put into practice and how the airline industry can implement Fatigue Risk Management Programs and other tools to further enhance aviation safety. "The monumental achievement embodied by the FAA's new science-based regulations was not without political interference and the result was a 'carve-out' that excludes pilots who fly cargo from this important safety regulation and places them at a lower level of safety," said Capt. Lee Moak, ALPA's president. "ALPA will not waver in its commitment to achieving 'One Level of Safety' throughout the airline industry. A fundamental component of this goal includes applying the new fatigue rules to all professional pilots, regardless of whether they transport passengers or cargo. As long as pilots who fly cargo are excluded from these critical safety regulations, ALPA's work is not complete. We are committed to achieving the same high safety standards for all air carrier operations, and to include pilots who fly cargo in the FAA's new pilot fatigue regulations, which represent a monumental improvement in aviation safety."
***Around-The-Word ...... as starting March 27, DHL connected
***The New Big Port ..... as Chinese authorities are slated to begin construction on
***DHL Regiggers In The U.S, .... as it is investing US$47M to expand its
***Over The Pole .... as
***Volumes >>> Air France - KLM suffered a 5.1% year-on-year decline in Feb. cargo despite a slight decrease in capacity of 0.8%, and a load factor was down four percentage points to 63.7%. >>>
***United Airlines Over The Years ..... a photo feature
****Marooned ....... as a 13-hour flight from San Francisco to Shanghai is not a commuter flight, but the 262 passengers on a United Airlines flight were ready for that. Instead, they were stranded in
***Drunk Driver High Speed Chase On Runway 27 Right....... a YouTube film feature
***First It Was The Attendant ! ..... as an American Airlines flight moments from take-off at DFW was sent back to the gate March 9, after a flight attendant began ranting over the PA system about the plane crashing and eventually had to be restrained by passengers and flight attendants, according to two passengers on the flight. Flight 2332, scheduled to take off for Chicago at 8:25 a.m., was back at the gate by 9:15 as police escorted the flight attendant, kicking and screaming, to one of the several police cars surrounding the plane on the tarmac, passengers said. According to two passengers, the flight was taxiing toward take-off when the flight attendant came over the PA. "We are not taking off," she said, according to the passengers. "We're having technical difficulties. We are heading back to the gate." Another flight attendant came on and assured the passengers: Yes, actually, we are taking off, so buckle up. But the flight attendant up front wouldn't let up. She kept going on about technical difficulties and plane crashes, the passengers say. "Captain," she said. "I am not responsible for crashing this plane." Passengers started yelling, asking what was going on. Flight attendants hustled through the aisles, saying nothing. A passenger from
***Now It's The Pilot ! ..... as screaming "They're going to take us down!" a JetBlue pilot stormed through his plane rambling about a bomb and threats from Iraq on March 27, until passengers on the Las Vegas-bound flight tackled him to the ground just outside the cockpit, passengers said. The captain of JetBlue Airways Flight 191 from
Blue Tales Blog
***Taking A Dump Over
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs
***International Marine Forensics Symposium in Washington D.C., April 3-5......as Geoffrey Gill and Christoph Wahner of the Countryman & McDaniel law firm will be presenting their technical paper immediately followingJames Cameron's keynote speech on April 3. Their paper, which has been accepted for publication, reviews on board as well as shore side human factors that contributed to the historic M/V Herald of Free Enterprise casualty and discusses how that loss triggered a shift in international maritime safety from reactive response to a "safety culture" oriented philosophy currently imposed through the International Safety Management Code. Maritime trial lawyer Geoff Gill will also be contributing his analysis of the M/V Costa Concordia casualty at the Symposium. His new text, Maritime Error Management, can be purchased here:
Geoff Gill writes on the loss of M/V Costa Concordia
***When Your Freight Dies ..... as on March 21, Mediterranean Shipping Co. said began charging a no-show fee (also know as "dead freightr") on bookings that failed to materialize on the eastbound Asia-Europe trade. The fee, US$300 per 20-foot container booked and US$600 per 40-foot container booked, comes the same week Maersk Line announced it would stop accepting bookings until May on the same trade, the backhaul leg of the Asia-Northern Europe lane. On March 23, MSC also said it would assess a US$100 per container equipment imbalance fee on the same trade. The move is intended to discourage false bookings for waste shipments and due to increased volume demand in
***Tip 'O The Hat ..... as the
***Fast Is Slowed ...... as FastShip Inc., a company that once proposed building high-speed containerships for a service that would offer a lower-cost alternative to air freight, filed for protection under Chapter 11 of the federal bankruptcy code on March 20. In a filling with the U.S. District Bankruptcy Court in
***Volume Rush .... as a number of enormous containerships have recently flooded the market as ships held back at yards during the downturn are being delivered at last, adding needless capacity in an already overtonnaged world. China Shipping Container Lines has taken delivery of the 14,074-TEU M/V CSCL Uranus, the 7th ship in a series of 8 "neo-overpanamaxes" ordered in August 2007, with the Far East-Europe route in mind, at the Samsung shipyard for US$170M each. Alphaliner reported that UASC has taken delivery of the M/V AL Ula and M/V Tayma, the 4th & 5th vessels in series of nine 13,100-TEU (A13 class ships), rated at 13,500-TEU by UASC. The ships were ordered at Samsung Heavy Industries in June 2008.
***Largest Container Vessel To Ever Visit North America ...... as MSC's 12,500-TEU M/V Fabiola has become the largest containership to call at a North American port, after making a stop at Long Beach on a transpacific service. The ship called at the Total Terminals International, and was accommodated with a channel depth of 76 feet (23 metres), making it one of the few ports that can handle ships of this size. The shipping line is expected to continue to add more box ships ranging in size from 11,000-12,500 TEU into its transpacific services over the course of the year. A report by Alphaliner cited port officials as saying the M/V MSC Fabiola, "Is the first of what is expected to be a string of larger containerships to be deployed by ocean carriers in
***New Window On
***This Month In U.S. Navy History
1895 - The first submarine building contract is awarded to John P. Holland Torpedo Boat Co.
1911 - The hulk of battleship USS Maine is sunk at sea with full military honors.
1917 - Armed merchant ships are authorized to take action against U-boats.
1942 - Patrol Wing (VP) 82 aircraft sinks German submarine, U-656. It is the Navy's first submarine kill of World War II.
1945 - The
1966 - Gemini 8 is launched. Former naval aviator Neil Armstrong flew on this mission, which completed seven orbits in 10 hours, 41 minutes at an altitude of 161.3 nautical miles. Recovery was by USS Leonard F. Mason (DD 852).
***Continuing Tragedy ..... as searchers on March 22 found 3 bodies under the hull of the shipwrecked M/V Costa Concordia cruise ship that capsized off an Italian island in Jan., raising the number of bodies found so far to 28 and leaving 4 still missing. Civil Protection agency chief Franco Gabrielli did not give details on the sex or ages of the victims. He told reporters on the island that the three bodies were spotted when divers were working to set up a robot to search otherwise inaccessible parts of the wreck. The bodies were seen "in the spaces between the hull and the seabed," he said. It was not clear when they could be removed. All of the other bodies had been found inside the ship, except for 3 found in the sea near the ship in the first hours after the accident. The remaining missing are presumed dead. Even before the latest bodies were found, eight removed in recent weeks were awaiting official identification. Weeks in the water badly decomposed the remains, and forensic authorities have used DNA sampling to try to identify them. Among those listed missing or unidentified are a crew member from
***Continuing Shame ..... as the Capt. & 2nd officer of the stricken 3,036-TEU containership M/V Rena have pleaded guilty in Tauranga District Court of New Zealand for mishandling the vessel & forging documents. Both the 44-year-old captain and 37-year-old navigation officer are Filipinos, and were charged after an investigation into the ship's collision with Astrolabe Reef off Tauranga on Oct. 5, reported
***Love, Exciting & New - Come Aboard, We're Expecting You! .... as The Love Boat promises something fun for everyone! But sadly, one of the most famous cruise ships of the modern era, the former M/V Pacific Princess, is heading to the scrapyard, according to
**Back By Popular Demand**
We're sorry, but there were so many sinkings, explosions, pirate attacks, fires, cargo mishaps, battles on the water & other disasters at sea that we do not have room to print even the highlights this month. Many people lost their lives at sea this month!!
But you can read all this month's disaster news at our special Internet web feature which provides full details of each event -- our Vessel Casualties & Pirate Activity Database. Bookmark the site and visit every day! Updated twice daily.
SPECIAL NOTE: Please view the dramatic new pictures at our special "Gallery of Cargo Loss" website feature.
See our new feature for March 2012: "Acute Rena Failure" - the saga of M/V Rena continues.
See our new "Single" for March 2012: "Yet Anonther On The
See our newest photo feature "Singles Only" - Transportation Disasters Told In A Single Photo!
Daily Vessel Casualties ...... as we don't want you to miss the excitement of our 24 hour reports of the dramatic events at sea each day -- stories of casualties & pirates --- almost none of which are carried on your local news. Edited daily by Christoph Wahner, Esq. of Countryman & McDaniel.
NOTE: The historic dangers of carriage by sea continue to be quite real. Shippers must be encouraged to purchase high quality marine cargo insurance from their freight forwarder or customs broker. It's dangerous out there.
OUR "D" Section: FF in Cyberspace***
6. The Cargo Letter "Cyber Ports Of Call"
Here are our suggested world wide web sites of the week for your business, your information and your amusement..............
Cargo & Trade>>>>>>
Air Cargo World Findings of 2012 Air Cargo Excellence Survey
Amazing American Airlines From 1933
Flying Magazine - 1930s to Present - Free on Google Books
Maritime Security Association
Temperature-Controlled Transportation Report
The The World Container Index .......assessed by Drewry reports individual market prices on major East-West container shipping
U.S. Federal Maritime Commission Final Rule For Freight-Index Based Service Contracts
U.S. Regulatory Actions Under Review ...... including those with international trade & investment implications
U.S. Trade Representative 2012 Trade Policy Agenda & 2011 Annual Report
FleetSafer Mobile........to ensure that employee drivers' cell phone usage is fully compatible with FMCSA regulations
Logistics Dynamics ....... new carrier portal allows motor carrier unlimited load searching & truck position -- free to carriers
Trade Shows, Exhibitions, Conferences & Business Events Worldwide
World Trade Organization Events
9th Annual Virgina Maritime Assoc. International Trade Symposium ...... May 3,
25th Annual Agriculture Transportation Conference ........ 20-22 June,
2012 CNS Partnership Conference ........ 6-8 May, 2012, Miami
2012 FIATA World Congress ...... 8-12 Oct. 2012, Hyatt Regency Hotel, Los Angeles
ALACAT 24th Congress ....... 13-16 May 2012, San Antonio, Texas
Between the Wharf and the Warehouse – What's Next? ......
Breakbulk China 2012 .... 28 Feb. - 1 March 2012, Shanghai
Cief Supply Chain Officer Forum .......18-20 Junw, Chicago
CNS Partnership Conference 2012 ......6-8 May 2012, Miami
Cool Logistics Africa 2012 Conference ...... 24-26 April, Cape Town
ECA Marketplace 2012 (shippers & carriers) ........10-12 April 2012, Chicago
European Shortsea Convention 12.... 24 May 2012,
Operation Sail - Tall Ships .......
TOC Container Supply Chain:
Transportation & Logistics Council 38th Annual Conference ........ April 23 - 25, 2012, Orlando
U.S. Customs 2012 West Coast Trade Symposium: "Harmonizing Trade for a Stronger Economy" ......10 May 2012, Long Beach, CA
Apps For That - iPhones>>>>>>>>>
Beat The Traffic
The Journal of Commerce Mobile App
Toyota Material Handling Europe's Forklift Challenge ....... rather challenging. Free
All Hands Magazine
C-130 Hercules on an Aircraft Carrier!!
Cobra Helicopter Crash ..... they walk away
FBI Anti-Terrorism Expert: TSA Is Useless
Google Spots Boeing's First 787 In Retirement
Infographically Enhanced Observation Deck at Zurich Airport
Japanese Deep Ocean Exploration Ship Shown Off
Photos: How To Get A Boeing 737-400 In A Hangar That Is Too Small
The Texas Navy
Testing A Dream: An In-Depth Look At Boeing 787 Flight Test
US$1B of TSA Nude Body Scanners Made Worthless By Blog — How Anyone Can Get Anything Past The Scanners?
What Makes a Video Go Viral .......suggested by our friends at Bow Wave
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases _______
St. Paul Travelers Insurance Co. Ltd. v. Wallenius Wihelmsen Logistics et al
433 Fed. Appx. 19, 2011 WL 1901738
The subrogating cargo insurer of a yacht damaged when a crane toppled over while the yacht was being offloaded, brought action against the ocean carrier, crane owner and operator and discharging stevedore, seeking to recover some US$4,179,938. Defendants moved for summary judgment. The U.S. District Court for the Southern District of New York granted the motions, dismissing the claims against the crane owner-operator & stevedore and directing that judgment be entered against carrier in amount of US$500 as the limitation amount for a single package. The cargo insurer appealed.
In a Summary Order, the Second Circuit Court of Appeals agreed with the District Court that the service contract between the ocean carrier and the shipper's freighter forwarder did not cover the yacht in question because the bill of lading for the yacht did not include or incorporate the service contract number. The service contract itself required its number to be included in any bill of lading to be applicable. The service contract also failed to specify a freight rate for this particular yacht. Additionally, the complaint relied exclusively on the bill of lading to assert jurisdiction in the Southern District of New York; although the service contract provided that all disputes were to be settled through arbitration in
The cargo insurer also argued that the Himalaya Clause (clause extending protections of the carrier to its servants) in the bill of lading would not cover the crane operator, but the Second Circuit Court of Appeals did not reach the argument because any action against the crane operator and the stevedore was precluded by an independent, covenant-not-to-sue clause contained in the bill of lading. The cargo insurer forfeited any challenge to the validity of such clause by failing to raise it, earlier in the triel and, more, abandoned the issue on appeal. Thus, it could not resurrect the claim in later filiings for case argument.
As to the ocean carrier, the Second Circuit Court of Appeals considered "in the absence of any contrary evidence, the bill of lading's unambiguous statements that the "No. of units or packages" is "1" and that the "Total No. of containers or packages received by the Carrier" was also "1", evidenced the parties' intent that the yacht was to be treated as a single package. The decision of the District Court dismissing the claims against the crane operator and stevedore and limiting the ocean carrier's liability to US$500 was affirmed.
This result again demonstrates the importance of your paperwork as an NVOCC or OTI. Was the result to be US$4,179,938 or US$500? it's all about your company forms. This difference could make the difference between your next year in business, or your last. Contact Countryman & McDaniel for a yearly review of company forms, just as you have your yearly cancer screening. It's that important.
Read the court decision: http://tinyurl.com/pckglim
Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News Lloyds & other world sources.
Michael S. McDaniel, Esq. Editor (Countryman & McDaniel)
Christoph M. Wahner, Esq. (Countryman & McDaniel) Daily Vessel Casualties
Maria Payne (Countryman & McDaniel)
_The Cargo Letter_
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Michael S. McDaniel, Editor.
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_The Cargo Letter_ is published by The Law Offices of Countryman & McDaniel: Legal, Business, Marine Insurance and Claims representation of Air/Ocean Freight Forwarders, NVOCC's, Indirect Air Carriers, Shipper's Agents, Inland Carriers and Customs Brokers......and Liability & Marine insurance Underwriters since 1978 in the United States & world-wide via The Cargo Law Network. Member, Maritime Law Association of the
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