Law Offices of Countryman & McDaniel
THE CARGO L
Air & Ocean Logistics - Customs Broker News
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Happy World Maritime Day, Sept. 27. Here is what happened in our industry during the Month of September 2012.
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Michael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker, hull & machinery attorneys at LAX.
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs ______________
2. The Cargo Letter Financial Page ______________
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs ____________
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs _____________________
5. The Cargo Letter Cargo Damage Dispatches _____
**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***
7. New U.S. Transport Related Legal Cases ________
Muddying The Waters - a cautionary tale for ocean forwarders
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs _____________
***A Major Industry Acquisition .....as on Sept. 25, C.H. Robinson Worldwide Inc, a major 3rd-party provider of freight transport, announced it would buy smaller rival Phoenix International for US$635M in cash and stock to expand its int'l freight forwarding business. C.H. Robinson, which arranges freight transport through its 53,000 contracted carriers, said it expects the deal to be modestly accretive in the first year. The company, which has a market value of about US$9.30Bn, said it would pay US$571.5M in cash and the remaining in newly issued C.H. Robinson stock. Sources had told Reuters in June that Chicago-based Phoenix International was exploring a sale that could fetch as much as US$500M from global logistics companies, including C.H. Robinson & United Parcel Service. CJ Korea Express,
Start to plan your trip to the conference:
FIATA 2012 Video
***Taking China To Task ...... as the Obama administration has filed a complaint to the World Trade Organisation (WTO) accusing China of subsidizing its auto parts industry to the tune of US$1Bn over the past 3 years resulting in the loss of thousands of American jobs. The action comes as the U.S. Presidential campaign heats up and may be seen as political, given that the announcement was made before Obama's electoral campaign visit to Ohio - which has more than 50,000 workers employed in the auto industry, reports London's Containerisation International. It is also a response to Republican rival Mitt Romney's accusation that Barack Obama was "being too soft on
***Multiple Complaints Target
***Counterfeit Goods Warning ..... as the British Int'l Freight Association (BIFA) is urging its members to make sure that their procedures, when accepting consignments for shipment, are as tight as possible to avoid legal perils in shipping counterfeit goods. The European Commission recently published statistics showing that EC Customs detained almost 115 million items that were suspected of violating Intellectual Property Rights (IPR) in 2011, up on 2010's figure of 103 million. In total 73% of all IPR-infringing goods originated in
***Fixing Freight Forwarding Fixes ...... as on Sept. 14, int'l forwarder Kuehne + Nagel said it had entered into a settlement agreement with the U.S. government to pay US$28M in a class action price-fixing lawsuit over surcharges assessed for freight forwarding services.
***Larger, Smaller Railroad ....... as Genesee & Wyoming Inc.'s (GWI) agreement to acquire Jacksonville-based RailAmerica for approximately US$1.4Bn, thereby combining the two largest shortline and regional rail operators in
***Trucker Turnover Epidemic ....... as the annual driver turnover rate surged in the second quarter, breaking the 100% barrier at large truckload fleets for the first time in more than 4 years, American Trucking Associations said Sept.12. For large truckload fleets with more than US$30M in revenue, driver turnover rose 16% to 106%, the highest level since the 4th quarter of 2007. The last time the turnover rate was over 100% was in the first quarter of 2008. The turnover rate at smaller truckload fleets rose to 86%, a 15-point jump from the previous quarter. The spike put turnover at its highest level since the 3rd quarter of 2007.
***Wheels Up ...... as third-party logistics provider Wheels Group Inc. has signed an agreement to acquire freight broker and forwarder MSM Group of Cos. for US$18.8M in cash and stock. Toronto-based Wheels Group will pay almost US$17M in cash and issue 2 million shares of its stock worth about US$2M for the
***Damco Changes Country ...... as the major 3PL is relocating its corporate headquarters from
2. The Cargo Letter Financial Page ____________
**Cosco. DOWN as first half net loss to US$770M in the first six months of 2012 from the US$421M the company lost in the corresponding period last year.
**El Al Israel Airlines. DOWN with a 7.2% decline in 2nd quarter cargo revenue to US$47.6M year on year as net profit loss narrowed to US$6.2M from US$19.7M last year.
**Evergreen Marine Corp. UP with 2nd quarter net profit of US$29M on operating income of US$22M.
**FedEx Corp. DOWN with a 1% slip in quarterly net profit to US$459M, drawn on revenues of US$10.79Bn, up 3% year on year.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs __________
***Protection For American Carriers & Airforwarders ...... as the Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, commended the Senate for passage of S.1956, which would allow the Transportation Secretary to direct U.S. airlines to not participate in the European Union Emissions Trading Scheme (EU ETS) because it violates international law and U.S. sovereignty. "Congress has spoken -- U.S. airlines should not be subjected to this illegal scheme that amounts to little more than a cash grab for the European Union as none of the funds collected are required to be used for environmental purposes," said A4A President and CEO Nicholas E. Calio, noting that the House previously passed a similar bill.
***Global Volume Flat ....... as air freight demand in July fell 3.2% year on year after 0.1% uptick in June, leaving volumes flat worldwide, according to the International Air Transport Association (IATA). The only gainers were the Middle East carriers that posted a 16% increase in demand on an 11% boost in capacity year on year, helping raise load factors two percentage points to 45.3% But all other markets experienced declines and the small recovery seen since the end of 2011 has stagnated, said IATA. Asia-Pacific carriers saw a 7.6% decline in demand in July compared to the previous year, the steepest decline for any region, while capacity dipped just 4.3%. Asia-Pacific carriers have experienced no growth in freight since the fourth quarter of 2011. European airlines had a 3.6% decline with a 0.9% rise in capacity.
***Fraud Warning ...... as the British Int'l Freight Association (BIFA) is warning its members not to be fooled by fake emails demanding payment from IATA. BIFA claimed in a news letter that many of its members have reported receiving fake email demands for payment, similar to those it warned about earlier in May's edition of BIFAlink. "Most of the emails bear the usual tell tale signs of a scam such as an email address for IATA at gmail or Yahoo. However, some of the more deceptive scammers have managed to replicate @iata.org into the e-mail suffix. "Don't be taken in," BIFA says. "The only payments made to IATA will be via your CASS account and unsubstantiated e-mails should be deleted immediately."
***High Tech Interference? ..... as Cathay Pacific cancelled 13 flights to Frankfurt, London, Paris, Malpensa, Manchester & Amsterdam earlier this month while Cargolux Italia cancelled 4, arousing suspicions from regular customers that they were being dumped to serve of high-paying, high-tech shippers demanding mass delivery of new e-gadgets, reports London's Loadstar. "The implication is that
***High Tech Boost ...... as air cargo rates are expected to rise more than 20% as new smartphones and tablets from Apple, Google Inc (GOOG), Microsoft Corp and Amazon.com (AMZN) Inc flood the market, benefiting the likes of
***EU Volume Down ...... as argo traffic among European airports fell 3.2%, year-over-year, in July, according to Airports Council Int'l statistics. This decline is in line with the cargo drop European airports recorded in the first 6 months of 2012. Traffic stalled 3.4%, year-over-year, during this period.
***Boeing Big Buy Seen ...... as it has forecasted
***Airbus See Freighter Boom ...... as its most recent Global Market Forecast, the European aircraft manufacturer projected that the global aviation sector will generate a demand for 3,000 freighters by 2031. This figure, which represents a near doubling of the global freighter fleet, will be propelled by increased urbanization and economic growth in emerging regions, according to Airbus. Overall, Airbus estimated that the industry will necessitate 28,200 passenger and freighter aircraft, valued at US$4 trillion, by 2031. The Asia-Pacific will lead the world in aircraft demand, accounting for 35% of aircraft deliveries, followed by
***American Cargo Goes Back To Space ...... as Hawthorne, Calif.-based Space Exploration Technologies (SpaceX) and NASA have set an Oct. 7 launch date for the first of 12 contracted cargo missions to space. The upcoming launch follows the successful attachment of SpaceX's Dragon cargo spacecraft to the International Space Station (ISS) in May. ISS program managers confirm the readiness of Dragon and Falcon 9, the rocket carrying Dragon, for the SpaceX CRS-1 mission, as well as the ISS's availability to receive Dragon. The spacecraft will filled with nearly 1,000 pounds of cargo. In a press release, NASA said SpaceX's mission ushers in a new era of freight transportation.
***Air Fixing Now Up To US$100M In Fines ...... as Japanese freight forwarder Yamato Global Logistics Japan Co. Ltd. has agreed to plead guilty and pay a US$2.3M criminal fine for its role in a conspiracy to fix certain fees related to air cargo services from Japan to the United States, the U.S. Justice Dept. announced on Sept. 19..As a result of the department's price-fixing investigation, 14 companies have either pleaded guilty, or agreed to plead guilty and pay more than US$100M in criminal fines.
***B747-8 Engine Trouble ....... the National Transportation Safety Board (NTSB) has ordered checks of all GEnx engines for cracks on Boeing 747-8 cargo planes in an urgent bulletin released Sept. 14. The NTSB also said all 747-8s should be grounded until the inspections take place. The agency said GE has used a field ultrasonic inspection method to inspect the fan midshaft on all in-service and spare GEnx-1B engines, used on the 787 Dreamliner. The similar but smaller GEnx-2B engines on passenger versions of the 747-8 have also been inspected, the NTSB said, but approximately 43 GEnx-2B engines on 747-8F cargo airplanes that have not yet been inspected. GE says fewer than 10 planes need to be inspected, and that task should be completed within a few days. The first engine issue took place when a GE engine had a failure on a 787 during a runway test in
***Growing Your Own ...... as Delta Airlines plans to purchase the Bakken oil field in
***Cargo-XML ..... as Descartes Systems Group says it has developed an innovative technology bridge that helps air cargo messaging participants move from older software to new Cargo-XML standards in partnership with the Int'l Air Transport Assn. (IATA). The solution provides bi-directional translation & message version control between legacy Cargo Interchange Message Procedures (Cargo IMP) and the new Cargo-XML schema. Since 2009, the IATA Cargo-XML Task Force, on which Descartes is a participant, has been developing new XML standards designed to innovate how the air cargo industry communicates and offer industry stakeholders an alternative to Cargo-IMP messages. The new Cargo-XML standards are designed to provide airlines, forwarders and their trading partners with more robust capabilities for data capture, enhanced data exchange and accuracy in support of the e-freight, an ability to keep pace with rapidly evolving customs and security requirements and reduce costs.
***Airways & Qantas Divorce ....... as they have agreed to terminate their joint business as of
***Dubai Airports' Big Expansion .....as part of its US$7.8Bn Strategic Plan 2020,
***Southwest Cargo At ATL ..... as in the first six months of it's new cargo operation at
***Volumes >>> Air France-KLM has posted a 7.8% year-on-year decline in cargo in August attributed to weak Asia-Pacific and the
***Conveyor Death ....... as US Airways has been fined US$21,000 by an
***Breaking The Speed Limit ...... as Boeing Business Jets (BBJ) set a new world record for "Speed Over a Recognized Course" when a BBJ flew non-stop from Los Angeles to Auckland, New Zealand for installation of its VIP interiors. The BBJ, a 737-700 modified for VIP use, made the 5,658 nautical mile (10,479 km) trip in 13 hours, 7 minutes and 54 seconds. The record-setting trip was monitored by the National Aeronautic Association based in
***Really? ....... as American Airlines and United Airlines will face a federal trial for negligence claims when jets owned by the carriers were flown in to the World Trade Center Twin Towers in New York City destroying them. Nearly 3,000 people were killed in the attack on
***Forced Cargo ..... as when an
***Dropping In On Kent, Washington ...... as FAA investigators are trying to find out why a cargo plane lost a landing gear door in mid-flight. The door, nearly the size of a refrigerator, crashed onto a quiet street outside
***Good To Know About That "Find My iPad" App ....... as a flight attendant for Horizon Air was arrested on Sept. 21 for allegedly stealing a passenger's iPad computer.
***Thanks, But I'll Just Take A New Bag ...... as a sewage pipe that ruptured at London Heathrow's Terminal 5 covered dozens of British Airways passengers' bags in raw sewage on Sept. 3. The Daily Mail of London reported: about 100 suitcases were covered in the raw filth when a pipe in the sewage system burst in Terminal 5?s baggage hold. Many passengers were still waiting to be reunited with their suitcases today after the airport sent them off to be cleaned.' "The smell was absolutely foul, as was the mood of the passengers who had to leave without their bags," one unnamed source said to The Sun, a British tabloid. A spokesman for airport operator BAA Heathrow acknowledged the incident to The Independent. "We appreciate this will be upsetting for passengers," the spokesman says. "The bags have now been cleaned and are being reunited with their owners." British Airways has apologized to its customers.
***Shrouding Yourself At Turin ...... as a man posing as an airline pilot was arrested Sept. 21 at
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs
***100 Years After Titanic ...... as the World Maritime Day (Sept. 27th) theme for 2012 is "IMO: One hundred years after the Titanic", which will focus on the Organization's roots and raison d'être, i.e. safety of life at sea. One of the consequences of the sinking, in 1912, of the Titanic, in which more than 1,500 people lost their lives, was the adoption, two years later, of the first International Convention for the Safety of Life at Sea (the SOLAS Convention). The 1914 version of the Convention was gradually superseded, respectively, by SOLAS 1929, SOLAS 1948, SOLAS 1960 (the first adopted under the auspices of IMO, then known as IMCO) and SOLAS 1974. SOLAS 1974 is still in force today, amended and updated many times.
World Maritime Day 2012 Links, Events & Videos
***The Storm Has Passed - For Now ...... as the International Longshoremen's Association (ILA) and United States Maritime Alliance (
***Deminished Spirit? ...... as general confidence levels in the shipping industry dropped to the 4-year low to 5.3 of a scale of one to 10, according to int'l accountant and shipping adviser Moore Stephens. Oversupply of ships and a sluggish global economy were blamed by many respondents. "Supply trends are negative. Banks are reluctant to put out any money, let alone new money. The economic outlook, particularly in
***Great Expectations ...... as import cargo volume at the nation's major retail container ports is expected to increase 8.5% in Sept. compared with the same month last year, and strong increases are expected into the holiday season, according to the monthly Global Port Tracker report provided by the National Retail Federation and Hackett Associates. ugust was estimated at 1.43 million TEUs, up 4.4% from last year. Sept. is forecast at 1.49 million TEUs, up 8.5%; Oct. at 1.48 million TEUs, up 11.7%; Nov. at 1.32 million TEUs, up 1.9%; and Dec. at 1.25 million TEUs, up 2.7%. Jan. 2013 is forecast at 1.23 million TEUs, down 3.8% from Jan. 2012. The first half of 2012 totaled 7.7 million TEUs, up 3% from the same period last year. For the full year, 2012 is expected to total 16 million TEUs, up 4.2% from 2011. These figures reflect this month's addition of Port Everglades in
***Global Fleet Grows ....... as this month our friends at the Bow Wave e-zine featured a report on the 2012 data on world fleet numbers. After an annual growth of almost 10%, as of Jan. 2012, the world fleet reached a total tonnage of 1,534 million dwt. At the beginning of the year, there were 104,305 seagoing commercial ships in service. Dry bulk carriers saw the largest growth of tonnage, 17%, reaching now a 40.6% share of the world total. This is followed by oil tankers, which grew by 6.9% and now account for 33.1% of the world fleet. The third most important vessel type is container ships, with a share of 12.9% of the world fleet; their tonnage grew by 7.7% during 2011. The general cargo fleet continued its relative decline, being the only major vessel type with a smaller tonnage compared to previous year.
***Singapore Joins The Armed Vessel Solution ...... as the Maritime and Port Authority (MPA) has authorized the deployment of armed security contractors on board Singapore-registered ships when sailing through pirate-infested waters. "While armed security personnel may lawfully bear arms, they will still be liable under Singapore's laws if they use their arms on board the ship without lawful excuse, as a person on board is not exempted from criminal liability in respect of any offence that he commits on the ship," said the MPA statement. The MPA said the new guidance is "in line with the revised interim guidance being promulgated by International Maritime Organization (IMO)". As we have pointed out for some years now, in modern times, no armed vessel has ever been taken by pirates. The solution was there all the time, Yet, The Cargo Letter and the Countryman & McDaniel attorneys were frequently challenged for this opinion.
***New Antitrust Probe ...... as reports from Bloomberg and Reuters say executives of several major shipping companies that operate car carriers were interviewed by antitrust authorities today in
***Slow Steaming To The Airport ...... as shipping lines embarking on super-slow steaming in a bid to cut fuel costs, shippers appear to be more open-minded to send their goods by air, according to
***Leasing Trend Continues ...... as London based Drewry Maritime Research has published its latest Container Leasing Industry 2012/13 report, saying container lessors are expected to experience overall growth in 2012 but due to the slowdown in shipping market, newbuild lease rates have been slackening over the past few months. The Drewry report said the rental container fleet increased 10.6% in 2011, improving on the 9% returned in 2010 with a 9.5% compounded rate for the two years combined.
***Important To Know The Weight ...... as talks continue within the IMO (International Maritime Organization) to introduce mandatory weighing of containers. The goal is to avoid accidents & equipment damage due to overloaded containers, poorly loaded vessels consuming additional fuel and revenue loss for terminals and shipping lines from transporting containers with under-declared weights. Port operators can significantly improve both safety and productivity by allowing crane operators to know exactly what weights they are lifting, enabling vessels to be correctly loaded and by ensuring all containers are charged according to actual weight. As a forensic tool, verification of container weight will expose a short-loaded container or help determine where in the supply chair a shipment may have been pilfered.
***Not Guilty ....... as the managing director of APL Dubai, Steve Dolan, who was implicated in the smuggling of 30,000 handguns and faced 50 years in prison, has been acquitted in
***Inchcape Expands ....... as marine services provider Inchcape Shipping Services (ISS) has opened 10 new offices in
***China - Taiwan Trade Up ...... as sea shipping services between
***Throughput >>> Port of Hamburg has achieved cargo volume growth of 2.7% in the first half of 2012 to total 65.8 million tons, while container throughput was up 1.9% year on year to 4.4 million TEU. >>> Hong Kong Marine Dept. figures show the port handled 1.9 million TEU in Aug, representing a year-on-year decline of 9.2% over the 2.1 million TEU in Aug. of last year. >>>
***This Month In
1804 - USS Intrepid (Lt. Richard Somers) blew up in failed attack on
1813 - USS Enterprise captures HM brig Boxer off
1915 - Secretary of the Navy Josephus Daniels organizes the Naval Consulting Board to mobilize the scientific resources of the
1918 - USS Mount Vernon torpedoed by German submarine off
1941 - U.S. Navy ships escort eastbound British trans-Atlantic convoy for 1st time (Convoy HX-150). Although the U.S. Navy ships joined HX-150, which left port escorted by British ships on 16th, the official escort duty began on 18th.
1957 - Bathyscaph
1992 - Joint Task Force
1992 - Joint Task Force
***False Testimony ....... as a Miami-based marine surveyor was sentenced today for lying to the Coast Guard and for falsely certifying that inspections had been performed on two ships, which were designed to ensure the ships were seaworthy and did not pose a threat to the crew or the marine environment. Alejandro Gonzalez, 60, of
***M/V Liberty Star ...... as the former NASA vessel used to recover solid rocket boosters from the Space Shuttle, will become the new training ship at the U.S. Merchant Marine Academy in Kings Point, N.Y. The vessel is one of two NASA-owned and United Space Alliance operated merchant vessels serving as recovery ships. Each is used in retrieving spent Solid Rocket Boosters (SRB's) following the launch of Space Shuttle missions. Her sister is the M/V Freedom Star. The Maritime Administration will relocate the vessel from
***Shackleton's Epic Reimagined ...... as a crew of 6 British & Australian adventurers will re-enact Sir Ernest Shackleton's epic Antarctic small boat voyage. With only 4 months to go before the 'Shackleton Epic' adventure gets underway, a significant milestone has been reached with the sea trial and the expedition's naval element is eager to get going on the trip of a lifetime. The 'Shackleton Epic' has been in development since 2008 when The Honourable Alexandra Shackleton, grand-daughter of Sir Ernest, had the idea of an expedition to honour one of the greatest leadership and survival stories of all time. Now, a crew of six British and Australian adventurers will attempt to become the first to authentically re-enact Sir Ernest Shackleton's treacherous boat voyage from
5. The Cargo Letter Cargo Damage Dispatches
**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.
See our new feature: "Hurricane Isaac Grounds M/V Hansa Berlin"
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 byChristoph 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>>>>>>
10 Years after the Maritime Transportation Security Act
Is the Juice Worth the Squeeze?
Key Factors in Motor Carrier Selection: Balanced Risk Assessment
Inside The McDonald's Supply Chain ....... from Inbound Logistics
Obama Administration Challenges China's Export Subsidies To Auto and Auto Parts Manufacturers in China
A Simulator Study of The Effects of Singing On Driving Performance .......a questional study of the effects of singing on truck drivers. Really?
The U.S. Needs a Department of the Supply Chain
UPS 2012 Pain in the (Supply) Chain Healthcare Survey
PalletPal Level Loaders
Walkie Tug Handles 20,000 Pounds
Trade Shows, Exhibitions, Conferences & Business Events Worldwide
World Trade Organization Events
2012 FIATA World Congress ...... 8-12 Oct. 2012, Hyatt Regency Hotel, Los Angeles
7th World Cargo Symposium .......12-14 March 2013, Doha, Qatar
8th International Conference on Marine Technology (MARTEC) ......20-22 Oct., Malaysia
10th 3PL Summit........22-24 Oct. 2012, Antwerp
17th Annual Regional & Business Aviation Industry Suppliers Conference .....14-16 Nov. 2012, Paradise Valley (Scottsdale), AZ
18TH World Route Development Forum .......29 Sept. - 2 Oct. 2012, Abu Dhabi
19th Annual GAD 2012 - Global Airport Development Conference ..... 5 -
21st Annual Admiralty and Maritime Law Conference ........
AirCargo 2013 ......... 10-13 March 2013, Red Rock Casino,
Air Cargo Africa 2013 ........ 20-23 Feb. 2013, Johannesburg, South Africa
Cargo Security Summit ........Nov. 12 - 14, 2012 - Washington, DC
Council of Supply Chain Management Professionals Annual Global Conference 2012 ..........Sept. 30-Oct. 3, Atlanta
Intermodal Europe 2012 ......... 27-29 Nov. 2012, Amsterdam RAI, Holland
JAXPORT 2013 Logistics & Intermodal Conference ......18-20 March 2013, Omni Amelia Island Plantation Resort, Amelia Island, Florida
Maritime Piracy & Security Summit ....... 30+ 31 January 2013, London
Transport Security Expo 2012 .......14-15 Nov.,London Olympia
World Cargo Symposium 2013 ......12-14 March 2013, Doha, Qatar
Apps For That - iPhones>>>>>>>>>
Find iPhone ....... for when a flight attendant misplaces your device.
Numbers ........ make stunning spreadsheets, charts & graphs
Arctic and Northern Maritime Heritage
A Toy Train In Space
FedEx Office TV Ad "Candidates"
Freeing The Siren: The Evolution of The Starbucks Logo
Keepsake Aircraft Carrier Offer Sought
Navy To Commission Littoral Combat Ship Fort Worth
USS Somers - the only U.S. Navy ship to experience a mutiny that resulted in executions
Voice mail Accident Hilarious
Why Couldn't We Save Glacier?
WWl Submarine Mystery Disapearance Honored
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases _______
MUDDYING THE WATERS ....... a cautionary tale
As an NVOCC on an ocean import ending at the port (CY/CY), more often than not you will also act in the seperate capacity of a Customs House Broker. Most Brokers issue a Delivery Order (D.O.) on behalf of the importer to the on-carrier once the cargo has cleared U.S. Customs. The traditional purpose of the D.O. is to notify the on-carrier as to cargo location & availability.
The customer has requested door delivery and you have accommodated this request by arranging the inland transportation with an independent motor carrier. The Delivery Order does not describe the nature of the service you are providing or your status. However, your Customs Power of Attorney incorporates your standard Terms and Conditions of Service which limit your agent liability for cargo loss & damage, perhaps using the terms and conditions of the NCBFAA as a model. If the bad thing then happens to the cargo while being transported by the motor carrier to final destination inland, you are not responsible as an agent arranging the service, but only for any independent negligence. You are covered by your liability limitation, either because the cargo is damaged while in the custody of a third party or by the monetary damage limitation (usually US$50 per shipment), right?
The answer is definetly yes, under traditional industry design, case law and the correct interpretation of cutomer agreements. But not necessarily, if your company falls prey to the wrong claim lawyer in a court which has little or no experience with transportation cases.
Though the scenario described above fits the accepted business model of NVO/CHBs followed in the industry for many years, we are now seeing the trend of claims by plaintiff attorneys representing subrogating cargo insurance companies which intentionally attempt to obscure the well-defined multimodal roles of NVO/CHBs and attempt to claim the CHB is no longer acting in the capacity of a customs broker for the inland dray, but instead has magically assumed the capacity of a motor carrier or Title 49 freight forwarder, liable to the cargo interests under the Carmack Amendment for the damage to the assured's cargo.
This twisted theory of claim springs from the very broad definition of motor carriers and freight forwarders within the Carmack Amendment (at 49 U.S.C. section 13102) and various court decisions which hold an entity need not be licensed either as a motor carrier or domestic freight forwarder to be found liable as one, if they "held themselves out" as a motor carrier or Title 49 freight forwarder to any of their customers, even though they did not do so for the particular transaction at issue. The allegation is made that your duties as a CHB only involved clearing the cargo and you represented you would transport the cargo inland in accepting the door-to-door shipping request. Thus, the subrogation attorney makes the completely spurious arguement you somehow held yourself out as a motor carrier or Title 49 forwarder.
Worse, the claimant lawyer disingenoully attempts to deny application of your Terms and Conditions to limit your liability for the loss by the false argument that the document no longer applies to your actions as a "motor carrier" or "Title 49 freight forwarder," as your customs broler duties were over and finished at the moment the cargo cleared.
This twisted theory of claim recovery against international ocean forwarder/brokers has become a "flavor of the month" tactic by the industry claim attorneys, and you need to know.
The Countryman & McDaniel attorneys can help prevent such a claim nightmare. It only requires taking steps to clarify your actual legal capacities on operationg documents, such as your Delivery Order. Countryman & McDaniel is available to revise your transportation documents Terms and Conditions of Service and Service Agreements to see that you are not challened by this ploy, simply because your documents do not clearly define your role for the inland drayage.
Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News Lloyds & other world sources.
The Cargo Letter Correspondents:
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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_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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