Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
28 February 2013
Good Thursday Morning from our Observation Deck......overlooking the officially
designated "Cargo City" area
and...... Runway 25-Right, at Los Angeles International Airport, voted "Best Cargo Airport in North America."
The Cargo Letter is now perfectly designed to be enjoyed
on your iPad. Access all our internet links directly
from your device.
is what happened in our industry during the Month of February 2013.
To help you find what you need -- FAST -- there's now a transport search engine
installed at our www.CargoLaw.com website!
Contribute your knowledge, stories &
company information.......by e-mail to The Cargo Letter. We strive to bring you useful
information which is timely & topical. Be sure to visit our
Archive of The Cargo Letter ....... www.cargolaw.com/cl-archives.php
Michael S. McDaniel,
Editor, Countryman & McDaniel, forwarder/broker, hull & machinery
attorneys at LAX.
INDEX to The Cargo Letter:
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 ________
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs _____________
***Mexico The Next China? ....... as rising wages in China, long
transit times across the Pacific, and fluctuating gas prices are fueling a nearshoring trend among manufacturers serving the North
American market -- all to the benefit of Mexico. Companies are pouring billions
of dollars into new production capacity to the point where it is estimated by
2019, Mexico could surpass China as the United States' top trading partner, according to Mexico outsourcing solutions provider The
Offshore Group. Mexico has transitioned from a simple
assembler of products to "an exceedingly sophisticated manufacturer,"
the Offshore Group states. The country's government has aggressively sought
free trade agreements with other nations to foster growth and now has such
agreements with 44 countries.
***NAFTA Trade Rises ..... as
surface trade among the United States, Canada & Mexico was 6.2% higher in Nov. than the same
month a year earlier, the Dept. of Transportation reported. Trade among the
North American Free Trade Agreement partners rose to US$81.5Bn, DOT's Bureau of
Transportation Statistics said in its monthly report.Month-to-month
trade, which is affected by seasonal factors, fell 4.5% from October, BTS said.
U.S.-Canada trade rose to US$46.7Bn from an originally reported US$44.3Bn a
year earlier, while U.S.-Mexico trade increased to US$34.8Bn from
US$32.4Bn.Truck imports to the United States from the two countries rose 3.5%
to $27.2Bn, and exports rose 5.9% to $28.9Bn. This came as U.S. trucking added 5,000 jobs in Jan., U.S. employers added 157,000 jobs and the
nation's unemployment rateticked up to 7.9%, the
Labor Dept. said.
***U.S. Deficit Decline ....... as the Georgia Center
of Innovation Monthly Logistics Market Snapshot shows growth in U.S. int'l trade.
* U.S. exports of goods and services reached a
record US$2.2 trillion in 2012. Exports in 2012 outpaced the growth in imports
for the first time since 2007. Exports as a share of U.S. GDP were 13.9% in
container volumes hit a record high in 2012 with 13.1 million moves, a 5.9%
increase year-over-year. Domestic container shipments topped 5 million for the
first time, reflecting a growth rate of 12.2% over 2011 activity. International
containers accounted for 52% of the total volume.
* Import volume through
major U.S. container ports is expected to increase
8.5% in Feb.
U.S. trade deficit decreased by 20.7% in
Dec. to US$38.5Bn, the lowest deficit since Jan. 2010. Exports rose 2.1% to
US$186.4Bn and imports fell 2.7% to US$224.9Bn.
Practice" Now To Be A Standard .....
as INTTRA has announced global study findings of
high-volume shippers freight forwarders which show 81% of surveyed ocean
shippers look to cut costs through e-Invoicing in 2013. Four years of economic
volatility have intensified pressure on carriers and shippers to seek new ways
to reduce costs and have seen no relief on pressure to increase service levels.
One cost reduction method that has demonstrated results across government and commercial sectors is electronic invoicing (e-Invoicing).
Once referred to simply as a "best practice," e-Invoicing is emerging
as a critical cost reduction tool for companies in or those impacted by the
struggling ocean shipping industry. INTTRA's fall
2012 e-Invoicing survey participants included 4 of the top 5 freight forwarders
in TEU volume.
Voice Needed For Freight Policy .....
as the U.S. Dept. of Transportation is seeking
nominations for a committee to advise leaders about freight policies aimed at
improving the national freight transportation system. The National Freight Advisory
Committee will work with the Freight Policy Council, a group of DOT leaders who
are working to develop the National Freight Strategic Plan mandated in MAP-21.
The advisory committee is part of the council's plan to use stakeholder input
in its decision process. The committee will have at least 25 voting members and
meet at least three times a year, DOT said. It will exist for 2 years, but DOT
may renew its charter after two years. For instructions on how to submit a
nomination, go to:
***Russia & U.S. Beef Over Beef Ban ...... as it's over a feed additive, ractopamine,
came into effect on Feb. 11. Russia's Veterinary and Phyto-Sanitary
Surveillance Service announced the ban earlier this month because American
producers failed to agree to demands that their beef, pork, and turkey exports
be certified as free of ractopamine. Ractopamine is used to boost growth and leanness in
animals. Russia's chief health inspector, Gennady Onishchenko, said Moscow will lift the ban when the United States stops exporting meat products
containing ractopamine. But he said he expects the
ban to remain in place for a long time. The UN agency for food standards has
ruled ractopamine in meat is not harmful for human
health at low levels.
***Circling The Cash Wagons ....... as tensions among the world's
major economies over currency values and export competitiveness came to a head
this month, with G-20 finance ministers and central bank chiefs meeting in Moscow with the hopes of dispelling growing
fears of an int'l "currency war." However, despite the high-level
meeting, questions on what effects developed country monetary policy and
ensuing exchange rate movements will have on trade are expected to linger.
Taking center stage during the G-20 meeting was Japan, whose central bank has
been increasingly buying government bonds with the stated goal of reaching a 2%
inflation rate - up from the previous goal of one percent - "at the
earliest possible time." The actions of the Bank of Japan, which have
rapidly driven down the value of the yen, come after Prime Minister Shinzo Abe urged the central bank to take additional
efforts to stimulate growth in the Asian economy. The fear that developed
countries will increasingly pursue loose monetary policy despite the impact on
their trading partners has been on the rise since the fall, following news that
the central banks of the U.S., EU, and Japan would be undertaking additional rounds
of quantitative easing. In this context, officials and analysts alike have
tabled a range of opinions over whether the global economy is indeed seeing
countries pursue active monetary policy at levels seen during the 1930s
Depression era - bringing back fears of a return to that era's beggar-thy-neighbour' policies. Questions have also been raised over
what policy variables fall within central banks' mandates, and what this means
for trade. "The currency war has become more explicit now because trade
conflicts have become sharper," the Brazilian official told Dow Jones
Newswires on the sidelines of the G-20 gathering. "Countries are trying to
devalue their currencies because of failing global trade," he added,
noting that some countries "do not recognise the
existence of a currency war."
Pushes EU Envelope ...... as
it's leadership transition is complicating talks to resolve a
multi-billion-dollar dispute with the European Union over solar panels, pushing
both sides closer to placing punitive tariffs on each others' exports and risking
a trade war. The newly appointed chief of China's Communist Party Xi Jinping is set to take over the presidency at a national
congress in March. But the full line-up of government officials is not yet in
place, and China's current commerce minister is likely
to step down after what some have said was a political snub at the party's
congress in November. EU leaders want to avoid following the United States' decision last year to
impose duties on Chinese solar power products, aware that Europe needs China to help it emerge from three years of
economic crisis. But EU officials and diplomats say they have made little
progress, accusing the Chinese of "stonewalling", and are unable to
get beyond the outgoing commerce minister, Chen Deming. They complain of a
limbo in the ministry that will not end until after the March congress.
***U.S. Wineries Have Legs ..... as they set a
record for exports last year with US$1.43Bn in revenues, up 2.6% on a yearly
basis, and the 3rd consecutive year the value of wine exports has increased,
according to the San Francisco-based Wine Institute.
Taking More Risk ....... as
UK insurer TT Club notes forwarders are now "taking on a much higher
degree of supply chain risk and sustain greater liability by providing
increasingly complex and sophisticated services." Speaking as a judge at
the British International Freight Assn. (BIFA) annual awards in London, TT Club UK-Ireland development
director Brian Sullivan said he was seeing more extensive services being
provided. "The increased complexity of service offerings and the ingenuity
of operators in designing alternative supply chain solutions is
enabling the mid-sized, regional-based supplier to compete with their larger
multi-national colleagues," said the TT Club statement. The insurer, which
provides cargo, property and liability cover to freight forwarders and
logistics companies, observes the adoption of technological capabilities and
tailored supply chain processes is proliferating, the statement said.
Supply Chain Solutions In Reverse ......
as UPS-SCS and Jabil Aftermarket Services will
provide reverse logistics services for return & repair programs to
high-tech original equipment manufacturers, service providers and enterprises
on a global scale. The collaboration will combine UPS-SCS' warehousing,
transportation, returns management and trade compliance capabilities with Jabil's reverse logistics planning, repair and call-center
support. UPS has 1.8 million pickup and drop-off locations in 147 countries,
and St. Petersburg, Fla.-based Jabil Circuit has 55
service centers in 21 countries.
Aiming To Be The Leader ......
as it has expanded its healthcare facilities in Atlanta; Louisville; Reno; Mira Loma, Calif.; and Burlington, Ontario, adding 800,000 square feet to the
company's healthcare portfolio. UPS now has 37 dedicated healthcare
distribution facilities that span nearly 6 million square feet.
Cool ...... as it has rolled
out new services for temperature-sensitive shipments using liquid nitrogen dry
vapor, a dry ice alternative. The new offering can maintain a temperature of
-150 degrees Celsius for 10 days when combined with FedEx's CryoPort
Express Dry Shipper.Some of the benefits of the new
service include later cut-off times, domestic delivery options that range from
urgent to less critical and the ability to ship dangerous goods.
Elite Member ..... as
Conqueror Freight Network has joined the Elite Assoc. of Logistic Networks
(Elite) after passing the qualifying criteria for membership. Conqueror becomes
the tenth network to belong to Elite following its official launch in late
2012. Based in Madrid, Spain, its freight forwarder membership is
spread across 164 cities and 81 countries worldwide.
***Before We Insured The Motor Truck Cargo ....... as insurance for the car
has long been a major item in the budget of most households. The idea of
insuring cars against accidents began this month in 1898 when the Traveler's
Insurance Company issued a policy to Dr. Truman Martin of Buffalo. His policy cost US$12.25 and
gave him US$5,000 in coverage. Martin was chiefly concerned about
accidents between his automobile — one of less than 4,000 in the entire country
at the time — and horses, which numbered about 18 million. Now, cars and
trucks vastly outnumber horses, and there are nearly 14,000 property and
casualty insurance firms.
Canadian Truckers ........
as there could be a shortage of 25,000 to 33,000 for-hire truck drivers by
2020, disrupting not only the trucking industry, but the entire Canadian
economy, according to a new study released by Conference Board of Canada. The
report found "tens of thousands" of current drivers are approaching
retirement age, and there are "a very small number of young drivers taking
their place," according to Canadian Trucking Alliance, which commissioned
the study. CTA President David Bradley said the report "quantifies the
magnitude of the emerging gap between the supply and demand for professional
truck drivers — a looming shortage which could be 14% or more of the entire
truck driver population in Canada." The report estimates the total
economic footprint of the for-hire trucking industry was almost US$37Bn in
2011, resulting in an economic multiplier that is "significantly higher
than that of many other business services," CTA said in a statement.
2. The Cargo Letter Financial Page ____________
**Cargotec. DOWN with a year-on-year 67% net profit
decline in 2012 to US$119.07M.
**C.H. Robinson. UP with a 15.7% year-over-year increase in
revenue during 4th quarter of 2012, ending the period at US$2.97Bn.
**Maersk Group. UP with 2012 profit of US$4Bn, compared to
a loss of US$553M in 2011.
**Pacer International. UP as 4rth-quarter net income rose to US$2.2M or 6 cents a share, from US$1.1M, or 3
cents, a year ago.
**Pilot Freight. UP at US$500.6M in 2012 revenue, up 8% over
2011 and a company record.
**TNT Express. DOWN with a Q4 loss of US$198M, compared with
a loss of US$230M a year earlier, as revenue was flat at US$2.5Bn.
**YRC. UP with operating income of US$24..1 for 2012, a significant jump from the US$138M loss YRC
posted in 2011.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs __________
Deal ...... as merger of
American Airlines and US Airways at US$11Bn will form the world's biggest
airline holding more than 600 new mainline aircraft on order, following talks
that began last August. The deal will create a new company to be based at
Dallas-Fort Worth, headed by AA chairman and CEO Thomas Horton, as chairman to
the new airline's board and representative to the oneworld
Alliance. The combined airline will boast a
workforce of 100,000 and maintain existing hubs of each airline. It will offer
more than 6,700 daily flights to 336 destinations in 56 countries. Of the 600
new aircraft on firm order, 517 will be narrow-body and 90 wide-body aircraft.
Management Downsize ...... as
a voluntary redundancy program has reportedly accounted for 10% of the
company's senior management, and that over 20 vice-presidents and managing
directors who will be leaving the company. While this has not been confirmed by
FedEx, the move is said to be part of a cost reduction plan announced in
October to achieve an "annual profitability improvement of US$1.7Bn in 3
years, with a big portion achieved in 2015." Bloomberg said redundancies
come because of a shift from air freight to sea and road transport by major
shippers, resulting in as many as 5,000 leaving FedEx in the next 18 months.
Job losses are said to hit FedEx Express and FedEx Services, and were in
addition to further cost cutting at FedEx Freight and FedEx Ground, reported
the UK's Transport Intelligence. Bloomberg
quoted a FedEx spokesman who said it was a move to a new organizational
structure, but would not confirm the number of jobs to be lost, adding that
offers of more voluntary redundancies are expected this month. FedEx's founder
and CEO Fred Smith said in Oct. the cost reduction strategy was "closely
tied to effective yield management. With slow economic growth the cost
reduction is essential to achieve our financial goals."
It's Breath ...... as it
awaits a response from the U.S. FAA after submitting its plan to fix the 787 Dreamliner's batteries and get the company's most advanced
plane back in service. Boeing Commercial Airplanes President Ray Conner met
with FAA Administrator Michael Huerta at the agency's headquarters in Washington, according to statements from the
company and the agency. Boeing is proposing a battery redesign for the Dreamliner in a bid to satisfy regulators' safety concerns
following its grounding Jan. 16 as a result of two incidents in which
lithium-ion batteries smoldered and emitted smoke. According to Bloomberg,
Boeing's plan includes adding space and insulation between the battery's
individual lithium-ion cells, said the people, who weren't authorized to
discuss the matter and asked not to be identified. The battery also will have a
venting mechanism for fumes and a case made with heat-resistant glass to
contain fires, the sources said. The company is developing kits so the new
batteries can be swapped in for the old units, and occupy the same space in the
planes, the people said. The new units also may have a system that lets pilots
monitor individual battery cells, they said. Any repairs would be subject to
FAA approval, and the agency isn't expected to act immediately. Boeing must
show in tests and analysis that the fixes will ensure that the batteries meet
the FAA's safety standards. No schedule for those tests has been released. The
battery changes also would need the backing of U.S. Transportation Secretary
Ray LaHood, who has said the 787 won't fly again until the U.S. is "1000%
sure" it's safe. United Continental Holdings Inc.m(UAL) signaled on Feb.
21 it expects the process to take more time than Boeing's goal of getting the Dreamliner back into service in March. The airline said it
is removing the model from most of its flight schedule through June 5.
Chicago-based United is the only U.S. carrier with 787s in its fleet. The FAA
grounded the Dreamliner following a Jan. 7 fire on a
Japan Airlines Co. 787 parked in Boston and a battery fault which triggered an
emergency landing in Japan by an All Nippon Airways Co. plane.
Lithium Batteries ...... as
pending the outcome of the investigation being carried out presently in the U.S. and Japan, the President of the Council of the
Int'l Civil Aviation Organisation (ICAO) has
provisionally approved an interim amendment that will prohibit the carriage of
lithium ion aircraft batteries as cargo on passenger planes. The final approval
of the amendment from the ICAO Council is expected when it returns to Session
later this month. The new amendment will rescind ICAO's
recent inclusion of lithium ion aircraft batteries up to 35kg in Special
Provision A514 to the UN aviation body's Technical Instructions for the Safe
Transport of Dangerous Goods by Air. Special Provision A514 is designed to
provide airlines with the operational flexibility to transport aircraft
batteries as cargo on passenger aircraft in special circumstances. The
inclusion of lithium ion aircraft batteries in A514 had only become effective
on 1 Jan. 2013. The new amendment does not affect the carriage of other
aircraft battery types on passenger planes under A514.
To Basics ....... as Europe's biggest plane maker Airbus has
announced it will return to the use of traditional nickel cadmium batteries for
its forthcoming A350XWB aircraft instead of the newly developed lithium ion
batteries. Airbus said in a statement this decision was made due to recent
lithium ion battery problem found on Boeing's 787 Dreamliner
The Chips ...... as Drewry, the UK-based analyst, says global semiconductor
sales rose 2% in Nov. 2012, the first increase in 16 months, saying this will
lead to a recovery in air freight demand. The finding is significant because
the semiconductor sector has been a long-term reliable indicator of air cargo
volumes, noted Atlanta-based Air Cargo World. Air freight rates fell in Dec. as
the trade returned to business-as-usual following the volume upsurge from
earlier technology product launches, Drewry's monthly
Sea + Air Shipper Insight report said.
E-Message Standard ...... as
the International Air Transport Assn. (IATA) has decided to build upon XML as
the strategic direction for the air cargo industry electronic messaging. In
March 2010, the IATA Cargo Services Conference (CSC) and Cargo Agency
Conference agreed IATA will stop maintaining Cargo-IMP standard messages by end
of 2014, and maintain only Cargo-XML standard messages. This will not prevent
anybody from continuing to use Cargo-IMP, but no new Cargo-IMP versions will be
released. This endeavour had been previously
supported by IFCC.
Airlines Is On Time ...... as
it has announced exceeding its 80% on-time arrival domestic and int'l
performance goals for the month of January - the best combined domestic and
international performance for the month in 10 years. The airline explained that
despite challenging weather conditions across the system, it ended the month
with an 82.8% domestic on-time arrival rate and an 80.5% int'l on-time rate.
The on-time arrival rates are based on flights arriving within 14 minutes of
scheduled arrival time. Employees will be awarded a US$100 on-time bonus to recognise this performance.
Flight Volume Supported ......
as the financial settlement link between airlines and travel sellers reported
the consolidated dollar value of airline tickets sold by U.S.-based travel
agencies increased 4.77% year-over-year in the first month of 2013 compared to
the same period last year, totaling US$7.6Bn vs. US$7.2Bn in 2012.
***Cargolux Seeks Buyer ......
as efforts to attract an investor to acquire a 35% equity interest has
attracted 8 potential bidders for the stake recently held by Qatar Airways
until re-capitalisation plans reportedly turned sour.
This comes despite the cargo airline's forecast that it would post a loss for
2012. However, Lloyd's Loading List said the company was confident that its
losses would be significantly lower than the US$60M budgeted. The stake in Cargolux was previously re-purchased by the Luxembourg government at the end of last year for
the original sale price of US$117.5M, with the intention of selling it soon.
Potential bidders are said to be HNA, owner of Hainan
Airlines and Hong Kong Airlines, as well as Yangtze River Express, Volga Dnepr,
Nippon Cargo Airlines, Cobelfret, Luxembourg-based
freight transport company Silkway Airlines, Miami
Centurion Air Cargo and private equity fund Saphir
Aviation Regroups ...... as
the largest commercial provider of U.S. military charter flights, is to begin a
financial restructure following bankruptcy filed in Dec. 2012 due to military
spending cuts and debts of US$493.2M.. The subsidiary
of parent company World Airways & North American Airlines will restructure
and sell assets to reduce debt, exit financing facility of US$35M and new
five-year collective bargaining agreements with four of its 5 working groups.
Airlines In Africa ...... as
the world's fastest growing major carrier will to take 49% of a new Niger national airline while the government
holds a controlling 51%, Reuters reports. Turkish
Airlines is expanding in Africa where it aims to challenge the dominance of Air France and
Brussels Airlines, a Lufthansa unit, on the European, Asian and North American
routes to Africa. "The government has decided to
create a viable national airline to transport passengers and cargo that will be
based in Niamey and named Niger Airways," the government said in a statement.
***AirCargo 2013 ......
as on 10 March 2013, the Countryman & McDaniel law firm will deliver a presentation on
effects of the Panama Canal Expansion at the AirCargo
2013 at the Red Rock Hotel & Casino, Las Vegas
***The Big Heist ...... as the Feb. 18 theft of
some US$67M worth of diamonds from the tarmac of Brussels' international
airport is a "huge blip on the radar," said retired FBI agent Bill Rehder, who spent more than three decades on Los Angeles'
bank robbery squad. An armed gang dressed as police officers stole £32M of
diamonds in a daring raid at Brussels' int'l airport. The 8 masked robbers
cut their way through a perimeter fence before racing up in two cars with blue
lights flashing to a Swiss passenger jet of Helvetic
Airways where the gems were being loaded by guards. They trained the infra-red
sights of their machine guns on the terrified security staff before snatching
the diamonds. The 8 person gang fled with 120 small parcels containing the
jewels after the raid at Brussels airport. A Belgian police source said:
"This was undoubtedly a highly professional job. "The
way the gang was equipped and the way they operated suggest a meticulously
planned raid."Airport spokesman Jan Van Der Crujsse added: "No shots
were fired during the attack, which was over within 3 minutes." The Helvetic Airways plane bound for Zurich was packed with passengers and had been
minutes away from take-off when the drama began. The flight was cancelled and
several witnesses were treated for shock. The jewels were being transported
from the Belgian city of Antwerp, the world's diamond capital, in a
Brinks security van. They were destined for one of Zurich's high security vaults. The gang
arrived at the airport in a Mercedes van and an Audi automobile. The van was
later found burned out and abandoned near the scene. In 2005 at Amsterdam's Schiphol Airport, £76million worth of diamonds - the
largest haul ever recorded - was stolen from a truck heading for a plane to Antwerp.
***Volumes >>> Cathay Pacific Airways, together with sister airline Dragonair,
up14.2% year-on-year cargo and mail increase in January to 132,792 tons. >>> Chongqing international air freight volume hit 80,000 tons in
2012, setting a record high and a growth rate ranking first among China's 10
biggest airports, as the city has launched 19 international air cargo routes so
far with 40 flights weekly. >>> Dubai Airports announced traffic statistics for Dubai
World Central that showed the airport handled 219,092 tons of airfreight during
its 2nd full calendar year of operations, an increase of 144% over 2011. >>> Lyon-Saint Exupery Airport has posted a 1.4% increase in air
freight volume in 2012 to 33,327 tons, including 30,120 tons of express freight
year on year. >>> Miami Int'l Airport has set a new record of just over 2
million short tons of cargo handled, surpassing its 2007 record by more than
15,000 short tons, an increase of 4.61%. >>> Singapore's Changi Airport saw airfreight volumes fall by 3.2% in
2012 to 1.81 million tons, compared to the previous year, driven down by
uncertainties in the global economy.
Half Century Air Delivery .....
as it may have taken 46 years, but one boy's postcard
has made it home to Mom. Bert Jacobson sent the postcard to his mother in Pauls Valley, Okla., in January 1967, when he was 13 years
old. The card, from the Old Country Store Museum in Hereford, Penn., arrived Feb. 8. Jacobson said that he
traveled to the East Coast with his father and cousins to buy concrete trucks
and mixing equipment for the family business. The postcard was sent with a
4-cent Abraham Lincoln stamp. The card reads: "Mom, Hi. We've been having
a great time." Jacobson's sister, Marilyn Hubbard, says their mother
wasn't surprised her son sent a card - only that it
took 46 years to
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs
Was There All Along ........
as there appears to be reasons to hope the drop in pirate attacks off Somalia
means piracy as a serious threat is coming to an end as more ships have armed
guards aboard ready to repel boarders with military force, says Reuters. Only 5
ships were captured in 2012, down from 25 in 2011 and 27 in 2010, said the
report, adding that the last merchant ship to be successfully taken was 9
months ago, a far cry from two years ago, when several were taken in a week.
For many, the fall in attacks is a vindication of the decision to massively
deploy shipboard armed guards. Not a single ship with armed guards has been
taken by pirates, though some say security contractors have fired on innocent
fishermen from India, Oman and Yemen. Navies say the numbers show they are
finally having an impact. Since piracy first grabbed global attention in 2008,
a number of nations have sent warships to the region. Despite the political pushbaack at the time, The Cargo Letter suggesterd the armed guard solution as a least
cost approach in 2008.
***Norway Joins Up ........ as it's
parliament has approved a new marine transport and security bill that
introduces permanent rules and a legal framework to enable the country's cargo
ships to employ armed guards when sailing in high-risk waters. The country has
been testing the efficiency and operation of armed guards on board a selected
number of Norwegian-registered ships since 2011 as part of its response to
pirate attacks on vessels in the Gulf of Aden, Lloyd's Loading List reported. Norway's Union of Marine Engineers described
the new law as key to safeguarding the passage of Norwegian vessels in
Following months of acrimonious negotiations, the United States Maritime
Alliance (USMX), an alliance of container carriers, direct employers, and port
associations serving United States-based East and Gulf Coasts, and the International Longshoremen's
Association (ILA), the largest union of maritime workers in North America, have reached a tentative agreement on
a new labor contract. This tentative agreement came in slightly ahead of the
Feb. 6 deadline, with the original deadline of Sept. 30 pushed to Dec. 29 and
then to this month.
Means Vulnerable .....
as the unarmed 7,114 deadweight ton French-controled Luxemburg-flagged tanker M/T Gascogne, seized by pirates off Ivory Coast on Feb. 6 together with a crew of 17,
has been released. Two seafarers suffered injuries in the hijacking and were
receiving medical treatment, according to the French shipowner SEA Tankers. But further details were not
offered. The tanker was hijacked by pirates off Abidjan. Ivory Coast Government officials said
the crew included seven seafarers from Togo, four from Benin, two from Ivory Coast, two from Senegal and one apiece from China and South Korea, The Associated Press reported. In
another incident off West Africa, a Filipino seafarer was killed when pirates hijacked an unarmed
medium range tanker off the Nigerian coast on Feb. 4, the Philippine Department
of Foreign Affairs (DFA) said. DFA assistant secretary Raul Hernandez said
pirates shot and killed the Filipino seafarer when they boarded the unarmed
46,700 deadweight ton ITM-managed M/V Pyxis
Delta, registered in the Marshall Islands on Feb. 7.
Labor Resolution ...... as on
Feb. 21, 2013, the Journal of Commerce (JOC) published an article announcing that
the tentative labor contract previously rejected by the Office Clerical Unit
(OCU) of the Int'l Longshore and Warehouse Union
(ILWU) was approved on Feb. 20. On a joint statement issued by the lead
negotiators of the ILWU and the Harbor Employers Assn., they announced that
"OCU bargaining units voted and agreed to ratify the terms of tentative
agreements reached with the Harbor Employers Association member companies on Dec.
4, 2012. The
contracts for the roughly 600 office clerical workers and the 14 employers at
the ports will run through June 30, 2016." The contract expired in June
2010, and the office clerical workers continued on the job until Nov.
27, 2012, when
they posted pickets at 10 of the 14 container terminals in Los Angeles-Long
Annual Volume Gains In Feb. ......
as according to a Port Tracker report, 1.32 million TEU were handled in Dec.for the ports followed by Port Tracker, which
represented a 2.8% gain from November and an 8 percent gain from December 2011.
With December's tally, 2012 had a total of 15.8 million TEU for a 2.9% increase
over 2011. The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, Houston, New York/New Jersey, Hampton Roads, Charleston, and Savannah, Miami, and Fort Lauerdale,
Fla.-based Port Everglades. The report estimates January volumes at 1.34
million TEU for a 4.6% annual gain, with Feb. forecasted at 1.18 million TEU
for an 8.5% jump. March is expected to increase by 3.6% at 1.29 million TEU,
and April is expected to head up 4.4% at 1.36 million TEU. May and June are
pegged at 1.45 million TEU each, respectively, for 4.4% and 4.9% annual
increases. Port Tracker said based on these projections, the first half of 2013
should result in about 8.1 million TEU, which would be a 5.3% annual
Record ....... as
dependability reached a new record high in the 4th quarter of 2012 with the
percentage of on-time ship arrivals across all trades increasing to 79.9%, a
rise of 6.4% compared with the preceding 3rd quarter. The new ship reliability
record eclipsed the previous best of 75.7% set in the 2nd quarter of 2012. This
was disclosed in the latest publication of Drewry's
quarterly report, Carrier Performance Insight, which showed significant
quarter-on-quarter increases in reliability in the last 3 months of 2012 based
on ship-level and container-level Key Performance Indicators (KPIs). Hanjin Shipping toppedMaersk Line as the most
reliable major carrier with an all-trades on-time average of 90.2% in the 4th
***NRAs For Foreign OTIs ...... as the Federal Maritime
Commission has announced its commissioners have approved the issuance of a
Notice of Proposed Rulemaking (NPRM) allowing negotiated rate agreements for
foreign OTIs. Under the proposed rule, foreign OTIs will be able to enter into negotiated rate agreements
(NRAs) in lieu of publishing rates. In order to enter
upon an NRA foreign OTIs will need to register with
the FMC, supply more information than is currently required and renew the
registration every 3 years. The proposed rule will be issued with a 60 day
***The Weigh-In Debate .....
as shippers and forwarders are fighting the Dutch
government's support for compulsory pre-shipment container weighing The Dutch
government must withdraw its support for compulsory pre-loading container
weighing, say the Dutch shippers' council (EVO) and forwarders' association (Fenex). The two bodies have called on the Dutch Parliament
to force the government to withdraw its "over-active" role
in support of compulsory container weight verification (CWV) within IMO. They
argue that such a rule would increase the cost and administrative burden of
trade and slow down the logistics chain, but at the same time it "would
not significantly improve maritime safety" However, the Dutch transport
minister, Mrs Melanie Schultz van Haegen,
has reasserted the government's position to support compulsory pre-shipment
container weighing within IMO. She reiterated that the two Dutch coalition
parties VVD (Liberals) and PvdA (Social Democrats) had
raised the joint objections from EVO and Fenex.
"They may oppose compulsory weighing, but the shipping lines don't,"
said the Minister, adding there are reports that confirm hazards to maritime
safety from incorrect weight declaration.
***More Ghosts ..... as
the global idle fleet of containerships has risen within a week to 280 vessels,
from an aggregated 739,000 TEU to 804,000 TEU, led by an increasing number of
idle units over 5,000 TEU which is expected to continue until the summer peak
season begins. According to Alphaliner, the slowdown
and growth in the idle fleet is attributed to the post-Chinese New Year, but
will continue to grow against newbuilding deliveries
at as much as 400,000 TEU by the end of the 1st quarter. Maersk
holds the highest number of idle units at 14 without assignment and 12 of over
6,000 TEU. The crippled 15,550-TEU M/V Emma Maersk is now idle due to a flooding of its
engine room during a transit through the Suez Canal to Asia and will be out of
service for at least a few months while in repair at Palermo. Vessels over
5,000 TEU are mainly carrier-controlled with only eight out of the 31 units
controlled by a non-operating owner (NOO). This is due to an unexpected decline
in cargo demand, which created an unexpected capacity surplus.
Shipping Container Lines Bumps Up ......
as the Hong Kong carrier has announced a US$700 per TEU
peak season surcharge on the Far East to Europe and Mediterranean westbound cargo
starting March 15. The company gave as its reason the "current market
situation" in a general notice to trade.
Increase In Russian Volume Via Hamburg ........ as this
positive trend largely attributable to Russia's decision to join the WTO, resulting
in associated simplifications in commercial law as well as the dismantling of
trade barriers. With a total volume of approx. 675,000 standard containers
(TEU) handled between Hamburg and the Russian ports, the volume of container
traffic was up by a further 13.3% in 2012, consolidating the lead in foreign
trade with Europe and overseas via Hamburg. Just under
95% of the total direct traffic between Russia and Hamburg are handled via the seaport of St Petersburg, Russia's so-called "Window to Europe". The most important commodities
exported from Russia in seaborne container traffic via Hamburg include hard coal, diesel oil, crude oil, paper, copper and chemical substances. Imports to
Russia predominantly consist of meat, motor
vehicles, fruit preserves, electrical appliances and paper.
***Maersk's Largest Containership Stricken ..... as
the 15,550-TEU M/V Emma Maersk is en route by tug to Fincantieri's
repair yard in Palermo, Sicily since she suffered a water ingress into
its engine room during southbound transit through Suez Canal to Asia. The bad luck ship is expected to be
out of service for at least three and a half months while repairs are made to
its terminal berth, so 13,000 cubic meters of contaminated seawater can be
discharged from its engine room.
Largest Ship Seen ...... as
the first picture of an almost finished US$190M Triple-E Class 18,000 TEU
container vessel, M/V Mærsk
Mc-Kinney Møller (IMO 9619907), has now been posted on
the Internet. It is a boat enthusiasts who shares
images on the portal Ship Spotting who has captured an image of the first 400
meter Triple-E vessel with a telephoto lens. The photo was taken at Daewoo
Shipbuilding in South Korea, which is in the process of building a
series of 20 Triple-E ships for Maersk Line. Note the
new Bridge design. Maersk Line's new Triple-E
container ships have 2 propellers and 2 rudders, and therefore they are not
equipped with the aft thrusters that may have caused the flooding which struck M/V Emma Maersk 3 weeks ago.
***UPS Expands Ocesn Service ......
as it has added more than 300 direct less-than-container-load (LCL) ocean lanes
to its global ocean product portfolio in 2012. The company said this expansion
was made to address market trends related to increased manufacturing and
consumer demand in many regions, with these lanes originating in Asia, Europe, the Middle East, Africa &
South Africa. With this expansion, UPS has more than 1,700 direct LCL lanes
serving 116 countries. Andy Huckbody, VP of UPS Ocean
Freight Services, said a major driver for the 300-lane expansion was to address
the growing demands in the global marketplace and meet the needs of its
customers for a service that allows them cost-effeciency.
UPS has been an NVOCC (Non-Vessel Operating Common Carrier) since 2001 when it
acquired global freight forwarder Fritz Companies, which had begun offering
NVOCC services 3 decades prior in 1972.
The China Monopoly ......
as Maersk Container Industry (MCI), San Antonio, Chile, will create the first factory outside China making insulated reefer containers when
it opens in Dec. because that is where they are most needed. MCI's reefer box
factory in Qingdao, in China's north-east, produces 40,000
containers and Star Cool reefer machines a year. The US$170M San Antonio
factory will equal that output once production is fully underway. China is moving away from being a low-cost
production center, especially in well-established manufacturing areas, reports
Lloyd's Loading List, which added that this was not sufficient reason to move
out as the labor force becomes more demanding & expensive.
***Jamaica -- Next Big Hub? ...... as talks
have begun into the development of the Caribbean island as a global logistics hub for
the Americas to rival world trading hubs of Singapore, Dubai and Rotterdam. Foreign investment talks are underway
to discuss the development of vast areas of land to accommodate increasing air
and ocean cargo volumes, by the country's Ministry of Industry, Investment and
Commerce with a decade timeline at estimated cost of US$8Bn. The projects under
discussion include the development of a dedicated freight airport and expansion
at its existing port of Kingston to increase container throughput and
large scale ship repair dry docks. Jamaica has access to markets of the U.S. and Brazil on its doorstep and can benefit from
key trade opportunities which will "burst wide open" in the expansion
of the Panama
Canal in 2015.
***Swedish S/V Götheborg ........ as the largest
wooden sailing ship in the world has teamed with Swedish carrier Greencarrier as a marketing platform to strengthen the
***Throughput >>> Port of Charleston handled 121,286 TEUs
in Jan., 7.7% more than the same month in 2012. >>> Port of Hamburg lifted 8.9 million TEU in 2012, 1.7%
less than the previous year, with general cargo throughput at 91.5 million
tons, 1.2% below the 2011 total. >>> China's Hebei province posted a year-on-year 65.5% growth in
container throughput to 78,000 TEU in January 2013. >>> Hong Kong Marine Department show the port handled
1.98 million TEU in January, representing a year-on-year decline of 0.7% from
two million TEU in January last year. >>> Port of Los Angeles volume fell 4.25% to 669,000.30 TEU. >>> Port of Long Beach reached 536,263 TEU, up 17.5% >>> Port of Philadelphia throughput was flat at 2,003,909 tonnes in 2012 year on year. >>> Port of Qingdao broke its cargo handling records during
the Chinese New Year holiday as the port handled 18,177 TEU in a single shift. >>> Port of Savannah reported container volume for the fiscal
year 2013 year to date dropped 1.1% for the fiscal year to date to 1.45 million
TEU, but box tonnage increased 4.1% to 13.3 million tons in the 1st half of the
fiscal year. >>> The Suez Canal posted 15.9% fewer transits to 248
vessels with toll revenue falling 9% year on year to US$405M in Jan. Still, the
Suez Canal Authority has announced tolls for the waterway will be increased
starting May 1. For general cargo, ro/ro and
passenger vessels, the increase will be 3%. Containerships and vehicle carriers
will have the least increase at 2%. >>> Port of Tauranga (New Zealand) posted a 114% year-on-year increase in
first half profit to US$62M for the six months period ending Dec. 31, as
container volume increases 25%.
Month In U.S. Navy History
1778 - Treaties of
commerce and alliance are signed with France. This turns the American Revolutionary
War into an international conflict.
1854 - Adm. Matthew Calbraith Perry anchors off Yokosuka, Japan, to receive the Japanese Emperor's
reply to a treaty proposal.
1861 - Steven R. Mallory, a former chairman of the U.S. House Naval Affairs
Committee, is appointed Secretary of the Navy of the Confederate States.
1861 - USS Saratoga, a member of the U.S. African Squadron,
captures the slaver sloop Express.
1945 - Naval units enter Manila Bay for the first time since 1942.
1974 - Three Skylab III astronauts are recovered by USS New Orleans (LPH 11) in the Pacific Ocean about 150
miles west of San Diego.
1991 - Marine AV-8Bs conduct bombing runs off the flight deck of USS Nassau (LHA 4). This is the first time in
history that Marine AV-8B jump jets have conducted combat missions from a
helicopter assault ship.
1991 - Battleship USS New Jersey (BB 62) is decommissioned at Long Beach, Calif.
***"All Hands Magazine" ...... as the U.S. Navy has relaunched its flagship magazine for Sailors and their
families as an online publication. The new online version features stories,
photos and videos about topics that are relevant to Sailors and their families.
The magazine highlights Navy culture and heritage, and aims to be an
informative entertaining resource.
***Thunder Logs ..... as
drug enforcement agents in Guyana found 794 pounds of cocaine hidden in a
shipment of timber destined for the Netherlands, one of the biggest ever seizures in
the South American country, officials said. Customs had been holding the
container for more than a month at the Dutch-run Guyana Timber Products yard
while they ran checks, and drilled into the wood. In total, 314 bricks of
cocaine were found in 7 of the logs when they were pried open. Three people
were detained, including a Dutch national. The Guyana Revenue Authority (GRA)
said the timber had been inspected & certified by the state forestry
commission, but that staff from its Drug Enforcement Unit noticed discrepancies
between the paperwork and the container's contents. The country's biggest drug
bust was in 1998, when more than 3 tons - 3,154 kg (6,940 pounds) - of cocaine
was found hidden in an empty fuel tank of a Panamanian-owned cargo ship bound
for the Netherlands.
***Khat Kaught ...... as U.S. Customs has made
the biggest seizure of east Africa's narcotic plant, khat, the drug of choice for Somali pirates. The largest
consignment of Kenya-grown herbal high called khat
with a street value of US$30,000 has been seized by US Customs at Washington Dulles Int'l Airport from a shipment en route from Doha, Qatar. Nearly 100 kilos of the green leafy
plant, classified by the U.S. as schedule 1 narcotic along with many
EU countries was found on a routine inspection of a freight shipment listed as
wooden coffee tables. The drug grown predominately on the Horn of Africa is
reputed for its stimulant properties. Customs and Border Protection
(CBP)"remain vigilant to intercept khat and
other illicit and dangerous drugs at our nation's borders,"
said the Port of Washington. The drug which loses its potency
within 48 hours of harvesting was produced and shipped originally from a wood
working company in Kenya bound for a Washington furniture store. The CBS destroyed the
***One of The
Greatest Survival Stories Relaunched ..... as
nearly 100 years later, a group of British and Australian adventurers have
discovered why. They re-enacted Ernest Shackleton's
journey to save his crew when their ship got stuck and sank in Antarctica's icy waters. Tim Jarvis and Barry
"Baz" Gray reached an old whaling station
on remote South
Georgia island Feb. 11, 19 days after leaving Elephant Island. Just as Shackleton
did in 1916, Jarvis and his team sailed 800 nautical miles across the Southern
Ocean in a small lifeboat and then climbed over crevasse-filled mountains in South Georgia. The modern-day team of 6 used similar
equipment and clothes. But the harsh conditions forced several of them to
abandon their attempt along the way. "It was epic, really epic, and we've
arrived here against the odds," Jarvis told his project manager Kim McKay
after reaching the station, adding that "we had more than 20 crevasse
falls up to our knees and Baz fell into a crevasse up
to his armpits." Shackleton's survival story was
remarkable in that the final 2 legs of his journey came after the 28 crew had
endured more than a year in Antarctica. Their ship S/V Endurance was trapped and then crushed by the ice
pack and the men later sailed in lifeboats to Elephant Island, where 22 of them
stayed, waiting for help. After reaching the whaling station, Shackleton was able to raise the alarm and save all his
as Detroit developers have announced a project to
build a 36-room hotel made of shipping containers on the downtown Dequindre Cut at a cost of US$4M. The news comes after
developers revealed a US$3.4M project that is to create 20 condo units out of
cargo boxes near Wayne State University in Midtown, reports Detroit's MLiveMedia
Group. Construction is to begin this year. It noted that according to Wikipedia the developments are known as "cargo-tecture", a trend that has been taking off in other
parts of the country and the world. Housing made from used cargo containers is
seen as an environmentally-friendly way of deposing of these large steel boxes.
However, critics point to concerns over the difficulty to heat the steel boxes
and health risks posed by the containers' possible exposure to toxic chemicals
in their past working lives. The condo units will range in size form 850 to
1,920 square feet, with prices yet to be determined. A US$350,000 model unit is
being built. Meanwhile, plans for the hotel are gathering steam, with Shel Kimen reported to be near to
securing the first round of seed money for the project and has already
assembled an advisory board of local entrepreneurs and designers. She is also
nearing an agreement with the city to buy one acre of land for the project.
Queen's New Cargo ....... as
after more than 4 years sitting idle in a Dubai port, the storied passenger
liner RMS Queen Elizabeth 2 is bound again for the high seas as part
of deal to convert the vessel into a luxury hotel in Asia, officials said Jan.
17. The precise destination of the QE2 was not announced. But a map noted its
planned voyage ending in China, raising speculation of seaports such
as Shanghai or Hong Kong. "We promise to take good care of
her," said Daniel Chui, managing director of the Oceanic Group, a
Singapore-based maritime company leading the renovation of the vessel into a
500-room hotel. The deal marks the latest twist in the fate of the QE2, which
has been docked in Dubai since it was purchased by the state investment company Istithmar World in 2007 for US$100M at the height of the
city's boom era. In July, plans were announced to keep the vessel in Dubai as a hotel and hub of a seafaring
center. The interior of the ship has been meticulously maintained since its
last voyage in late 2008 and Dubai will retain ownership of the vessel
after its conversion to a hotel. Britain's Queen Elizabeth II launched the QE2
in 1967. Since she went into service in 1969, the ship has made at least 26
5. The Cargo Letter Cargo Damage
**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 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.
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>>>>>>
2013 International Transport Forum's Transport Achievement Award - Call For
Applications ............ deadline
15 March 2013
Aircraft Spotting At LAX
Captain of the Costa Concordia Breaks His Silence
Clean Diamond Trade Act Countries List & Summary
Protect U.S. Fleets & Shipyards! Voice your Concern
Seven Days on The Queen Mary 2
The Bionic Warehouse ..........
using warehouse technology to improve labor productivity
Training On Board ........ seafarers' fitness website has launched
U.S. Dept. of Health and Human Services' (HHS) Centers for Disease Control and
Prevention (CDC) New Final Rule For Importation of Biological Agents
"Dead Tired" -- Book Focuses On Pilot Fatigue And Its Consequences
P&I Clubs: Law and Practice. Edition No. 4.
Trade Shows, Exhibitions,
Conferences & Business Events Worldwide
World Trade Organization
7th World Cargo Symposium .......12-14 March 2013, Doha, Qatar
9th Int'l Freight
Forwarders Conference .........
15-17 March 2013, Kuala Lumpur, Malaysia
11th 3PL Summit ........18-20 June, Chicago
26th IGHC Ground Handling
Conference ........ 5 - 8
March 2013, Vancouver, Canada
AirCargo 2013 ......... 10-13 March 2013, Red Rock
Hotel & Casino, Las Vegas
Air Cargo & Logistics
Asia Conference and Exhibition .........
16-18 Oct. 2013, Singapore
Asia Pacific Rail 2013 ......... 12-14 March Ritz Carlton, Kowloon, Hong Kong
Cargo Facts Asia Conference ......... April 16-17, Langham Hotel, Hong Kong
Express Carriers Association 2013 ECA Marketplace .......... 9-11 April 2013,
Intercontinental Hotel, Dallas, TX
FIATA World Congress 2013
in Singapore ....... 16-19
IATA Ops Conference 2013 -- "The Checkpoint of the Future" ......... 15-17 April, Vienna, Austria
JAXPORT 2013 Logistics & Intermodal Conference ......18-20 March 2013, Omni Amelia
Island Plantation Resort, Amelia Island, Florida
Association of Seattle Luncheon - "Oil Spill Response Basics in Washington
Waters" ......... 5 March
Sustainable Ocean Summit ........ 22-24 April
2013, Washomgtpn, D.C.
TOC Container Supply Chain
Asia Conference ........12-16
March, Hong Kong
World Cargo Symposium 2013 ......12-14 March 2013, Doha, Qatar
AA Pilot With Balls of Steel
B-747 Flying In A Warehouse
Ten Bets You Can't Ever Lose
Aegis Ballistic Missile Defense System Scores Another Hit ....... includes video of intercept
FedEx "Ground" Service
Fed Ex Messing With DHL
iDoctor: Could A Smartphone
Be The Future of Medicine?
Iran's 'Fake' Fighter Which Experts Say Can't Fly Is Spotted In The Air ...... with a little help from
Not Yet Available For Sale, But Already Crashed -- 2014 Chevrolet Corvette
Spanish Treasure Convoys
The SS United States in 1984
Utah Plane Crash Caught On Tape
Yacht Island ......OMG
OUR "E" Section: The Forwarder/Broker World***
7. New U.S.
Transport Related Legal Cases _______
Great West Casualty
Company v. Cobra Trucking, Inc.
United States District Court for Montana
2013 U.S. Dist. LEXIS 15036)
Insurer Unsuccessfully Attempts To Argue Subcontracting Is Brokering For
Coverage Purposes.......as the United States District Court for Montana
ruled on February 4th against an insurer attempting to decline liability
coverage for a freight forwarder being pursued for a traffic accident caused by
a subcontracted owner-operator. The policy covered carrier operations but
not brokerage operations. The insurer argued that because the forwarder's
equipment was not involved, the forwarder had "brokered" the load for
purposes of auto liability coverage. The Court disagreed, citing
statutory and common law distinctions between "carrier" and
"broker," distinctions long recognized for cargo legal
liability. The freight forwarder was identified as carrier on the bill of
lading and was legally liable for the carriage despite having subcontracted the
load to an owner-operator. On this basis, the Court ruled the forwarder
had not acted as broker under the policy. Insurers are reminded that
ambiguities in policy language will be resolved in favor of the insured,
regardless of underwriting intentions. Forwarders are reminded to review
their policies carefully to avoid coverage suprises
or costly coverage litigation later. Never hesitate to contact the attorneys at Countryman & McDaniel with any insurance questions - before
Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping
News Lloyds & other world sources.
The Cargo Letter
Michael S. McDaniel, Esq. Editor (Countryman & McDaniel)
Christoph M. Wahner, Esq. (Countryman & McDaniel) Daily Vessel Casualties
Bruce Lindsay, Esq.
(Countryman & McDaniel)
Maria Jackson (Countryman & McDaniel)
_The Cargo Letter_
A world news service for Air/Ocean Freight Forwarders, NVOCC's,
Consolidators, Indirect Air Carriers, Surveyors, Intermodal
Shipper's Agents, Inland Carriers, Customs Brokers and Liability& Marine
Underwriters world-wide .............a free service to more than 8,000 industry
subscribers & readers on 6 continents.
Michael S. McDaniel,
Subscriptions........only by accepted application to:
To The Cargo Letter: CargoNews@aol.com
To Our Firm: email@example.com
Mail Address: The Cargo Letter
% Countryman & McDaniel
11th Floor LAX Airport Center
5933 West Century Boulevard
Los Angeles, CA 90045 USA
Telephone: (310) 342-6500
: (310) 342-6505
News Fax: (818) 224-3058 [24 Hours and Weekends]
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 United
States, FIATA and others.
Our Home Page Of
_The Cargo Letter Home Page _