THE CARGO LETTER 
Air & Ocean Freight Forwarder - Customs Broker News
Good Tuesday Morning from our Observation Deck...... overlooking the
officially designated "Cargo City" area and....... Runway 25-Right at
Los Angeles International Airport. Sorry for the delay in bringing you a next
The Cargo Letter, but we have been engaged in 4 non-stop trials, including a
Warsaw Convention air trial at Portland, Oregon, and a U.S. District Court
Admiralty trial at L.A. Fortunately, the Air Forwarder and the NVOCC prevailed.
Contribute your knowledge & information........by e-mail to The
-- Michael S. McDaniel, Editor
INDEX to The Cargo Letter:
- OUR Top Story
- DENG XIAOPING DIES AT 92
OUR "A" Section: FF World Trade, Financial &
- Freight Forwarder Trade Briefs
OUR "B" Section: FF World Air News
- FF World Air Briefs
OUR "C" Section: FF World Ocean News
- FF World Ocean Briefs
OUR "D" Section: FF in Cyberspace
- The Cargo Letter "Cyber Ports Of Call"
OUR Top Story
-- by Warren S. Levine, for The Cargo Letter
February 25 -- With only 129 days left until the turnover of Hong Kong to
Mainland control, Deng Xiaoping, the diminutive former leader of The People's
Republic of China, died Wednesday in a military hospital in Beijing. He was 92
years old. (By the Chinese method of expressing age, he was officially 93.)
His funeral and cremation will be held on Tuesday, with 10,000 Communist
Party officials scheduled to attend. A three-minute period of silence will be
observed across China, in keeping with a similar tribute to Mao Zedong upon his
death in 1976. However, unlike the complete standstill which enveloped China
upon Mao's death, business is expected to go on virtually uninterrupted.
No foreigners will be permitted at the ceremonies, as Deng had officially
resigned his posts and was technically "a private citizen" when he
died. U.S. Secretary of State Madeline Albright is scheduled to meet with
Chinese President Jiang Zemin on Monday, but will cut her planned trip short, in
order to leave before the funeral ceremonies begin.
China is attempting to control all reportage of the day's official activities
in order to avoid the publicizing of any spontaneous demonstrations or other
unrest which might occur.
President Clinton referred to Deng as "an extraordinary figure on the
world stage and the driving force behind China's decision to normalize relations
with the United States."
However, as the CBS Evening News signed off on Wednesday night, commentator
Mike Wallace, the only western journalist to interview Deng, remarked that
"Deng Xiaoping died with blood on his hands," a reference to the June
4, 1989, massacre of pro-democracy demonstrators in Tiananmen Square.
One of Deng's wishes was to be healthy enough to visit a "reunified Hong
Kong" before he died. But in the colony, reaction to his death ranged from
people visiting the offices of the Xinhua News Agency and bowing three times to
a black-framed portrait of Deng to the displaying of a banner saying,
"Grief-stricken mourning for the butcher of democracy."
The socially enigmatic leader did not, however, get such mixed reviews for
his economic policies. He was the architect of China's economic revitalization.
Some of his greater quotes included, "Poverty is not socialism," and
"To get rich is glorious."
Under the economic changes which he initiated, China's foreign reserve has
increased tenfold recently and its people have effectively created for
themselves a growing middle class. In almost all major Chinese cities, there are
healthy and growing free markets, full of affordable and reliable consumer
goods. Deng's leadership changed the meaning of "Made in China."
Now, however, although the future of China is not seriously in doubt, the
leadership may well be. President Jiang Zemin, Deng's hand-picked successor,
will have to deal with sure opposition from Premier Li Peng, who is often called
"The Butcher of Beijing" for his part in the events of 1989.
Although Li issued a statement that China's leadership would continue
"with Jiang Zemin at the core," one Chinese analyst said that the
immediate future "(will) be like a duck swimming -- on the surface it'll be
calm, but underneath it will be turbulent."
OUR "A" Section: FF World Trade, Financial & Inland News
- Interpool Hits One Year High .............. as its stock has
reached US$24.5, up over 11 points in the past year. The company announced
1996 revenues of US$147,148,000, up 15% over l995, with 301,000 TEUs now in
service at a utilization rate of over 98%. The company has now called for 10
March 1997 redemption of its outstanding 5% of Cumulative Convertible
Preferred Stock at a redemption price of US$103.7 per share. Members of
Interpool's senior management who own approximately US$10M in aggregate
liquidation value of the 5% Preferred Stock have indicated that they intend
to convert all their shares of Preferred Stock into Common Stock. Martin
Tuchman, Chairman and CEO of Interpool, said "We in senior management
have been increasing our already substantial common stock position over the
past several months, and we believe this conversion provides an excellent
opportunity for us to add to our holdings at a very attractive price."
Since 1968, the dawn of ocean containers, Interpool has become the one of
world's leading lessor of cargo containers used in international trade and
is the second largest lessor of intermodal container chassis in the U.S.,
leasing to over 200 customers, including nearly all of the world's 20
largest international container shipping lines. Interpool (symbol IPX)
continues its leadership with sponsorship of The Cargo Letter world wide web
research and communications site. Click here
to see the actual press release.
- Notice To U.S. Freight Forwarders ............. as the Federal
Highway Administration (FHWA) has issued a proposed rule to amend the
regulations in 49 CFR 373.201, entitled "Bills of Lading for Freight
Forwarders", to include within their scope the non-household goods
segment of the motor freight forwarding industry. The FHWA is also giving
notice that it has general jurisdiction over all segments of the motor
freight forwarding industry, in accordance with the ICC Termination Act
(ICCTA) of 1995. The FHWA states that this proposed rule is intended to
align existing regulations with statutory requirements under the ICCTA and
provide guidance to freight forwarders about how to register wit FHWA. It is
suggested that air FFs and all those whose cargo may move interstate from
time to time by truck register with FHWA. Comments are due to the FHWA by
March 31, 1997.
- Expeditors International Up 36% Net .............. with 4th quarter
net earnings of US$7.4M, up from '95's US$5M. Total revenues for the 4TH
quarter were US$221.3M. "To achieve a 39% bottom line increase in 1996
after a 32% increase for 1995 is just short of a `neener, neener, neener'
kind of experience" stated Peter Rose, Chairman & CEO.
"However, it would be a fool's game to pause and bask in this less than
`fifteen minutes of fame.' We have always believed that internal growth and
a consistent message was the best way to expand our business."
Expeditors opened 13 offices in1996, for a total of 113, with a similar
number said to follow this year.
- Circle Announces Thailand Venture ......................... with
controlling interest in a joint venture partnership with Worldbridge
Transportation of Thailand. Named Circle Worldbridge International, the new
248 employee venture will HQ at Bangkok with a full-service office at the
Bangkok Airport Import & Export facilities, and a planned office at Laem
Chabang to enhance ocean service support.
[ NOTE: The Harper Group, Circle's parent, announced this moth its intention
to repurchase of up to100,000 shares of its common stock. Since1994 Harper
has repurchased 1 million shares of its common stock. ]
- Fritz Companies Selected .............. as the industry giant
announces appointment by Nortel (Northern Telecom) for exclusive customs
brokerage service in the U.S. and Canada. As the largest customs broker in
the U.S., Fritz will also be working closely with Nortel to enhance its
global customs compliance strategy.
- NAFTA Countries Score Surplus ............ as the European Union
(EU) posted a US$3.5B trade deficit with North American Free Trade Agreement
(NAFTA) members in 1996, instead of trade surpluses it registered in 1994
and 1995. NAFTA trade represented 20% of EU commerce in 1996. Main EU
imports were computers, office machinery, electrical appliances, aircraft,
and heavy equipment.
- Shenzhen Will Not Be "Free" ............. as according to
Xu Yaping, deputy director-general of the State Council's Special Economic
Zone Office, the PRC's modernization drive will not need another free port,
and Shenzhen cannot afford to become the next one after Hong Kong. Rumors of
converting Shenzhen to an expanded trading & manufacturing zone after
Hong Kong reverts to Chinese sovereignty have been circulating for some
- New Hong Kong Rules Emerge ................ as the
"Preparatory Committee", a Chinese body overseeing the transfer
from Britain to China, has given final approval to plans for scaling back
some civil-liberty laws and protections to include changing the bill of
rights, restoring police power to ban protests, and restricting foreign
funding of local groups. Stay tuned.
[NOTE: In 1996 HKG had its smallest annual growth in exports since the early
- APL To Provide China Logistics - Including Air .............. as
its operating unit "American Consolidation Services" (ACS), has
obtained new authorization from the PRC to provide warehousing, storage
& distribution services for major retailers and manufacturers. The
newly-established ACS Logistics (China) Ltd. has become one of the 1st
wholly foreign owned enterprises in the industry to be granted a license for
a full range of logistics services in China. Since 1985, ACS has provided
consolidation services through agents in 12 Chinese cities, but now plans is
to establish fully licensed operations in the major manufacturing &
distribution centers, including, Dalian, Nanjing, Qingdao, Shenzhen (where
ACS is building a major warehouse and distribution facility), Tianjin and
Xiamen. ACS provides logistics services in 34 countries, including: freight
consolidation; warehousing; distribution and airfreight logistics. American
President Line (APL) continues the trend to retail service.
- Int'l Chamber of Commerce Winter '97 Catalog .......... detailing
new publications such as NAFTA documentation and procedures, foreign
marketing, export sales agents and distributors, and ICC marketing codes.
Order by telephone (212) 206-1150, or on the Internet at http://www.iccwbo.org.
- Brink's Continues Buying Binge ............... controlling a new
joint venture with Zurcher Freilager, a Swiss freight handler, to form
BRINK'S ZF for transportation of secured valuables in service to the Swiss
banking world, diamond, watch & jewelry industry and the gold &
precious metal trade. As reported in our last three straight issues of The
Cargo Letter, Brink's continues to make strategic purchases world wide.
Brink's parent, Pittston, also owns Burlington Air Express, Inc. Meanwhile,
Burlington has established "live" cargo tracking and
"Calc-U-Rate" which lets shippers compare the rates of other major
carriers on-line at its internet site..... http://www.baxworld.com.
- "Shipper" Trys To "Tango" With His
"Cargo".................. as a Florida man was arrested this
month for trying to buy a Cold War-era Soviet "Tango Class" attack
submarine to smuggle cocaine from South America to California. The 302 feet
long sub carried a crew of 62 during Soviet Naval service and cost over
US$100M when new. However, "shipper" Ludwig Fainberg was to
purchase his "submergible container" for US$5.5M. Mr. Fainberg is
the proud owner of "Porky's Strip Joint", a gentleman's
"entertainment" establishment in Hialeah.
- Arab Countries Seek WTO Ties ............as a Journal of Commerce
article reports that Gulf Cooperation Council (GCC) members Saudi Arabia and
the United Arab Emirates have formally acceded to the World Trade
Organization (WTO), and that the other 4 GCC members have gained observer
status. GCC members are also joining Int'l copyright and trademark rights
conventions linked to the WTO, a key for greater access to Western
computers, software, information technology, oil & gas equipment, and
[NOTE: A bill has been introduced before the U.S. Senate to require
congressional approval before any trade agreements entered into under the
World Trade Organization take effect.]
- Maquiladora Employment Jumps 20.3% ............ as workers at the
in bond Mexican border manufacturing plants grew from 674,693 to 811,376 in
- The Tower Group Announces Spring Seminar Series ............. with
topics to include automating import management, Customs' Mod Act compliance,
NAFTA compliance, U.S. drawback procedures, automotive products update,
textile and apparel rules of origin, exporting worldwide documentation and
requirements, and exporting to the U.S. from Canada. Contact the Tower Group
at 1-800-544-2849 for specific dates, cities and locations.
- FTZ Seminar For New York ............ as the American Association
of Exporters and Importers (AAEI) will conduct a seminar on the advantages
of using foreign-trade zones on 27 March at New York. Call (212) 944-2230
- Harmonized Commodity Data on CD-ROM ........... as McMullin
Publishers announces that the Harmonized System (HS) Commodity Data Base
produced by The World Custom Organization is now available on CD-ROM with
more than 200,000 commodities, and designed to help users find correct
tariffs for HS codes at the 6-digit level. For MS-Windows 3.1 or later, or
MS-DOS 3.1 or later, single user price is US$450, or US$1225 for a network.
OUR "B" Section: FF World Air News
- Atlas Air Inc. Recognized ................. as winner of the Air
Cargo Development Award for1996 by Air Transport World Magazine in
recognition of the unique niche Atlas has created in developing new markets
& services in the airline freight industry. The award for cargo
development has been presented only three previous times since 1983. Past
recipients include Federal Express. Cathay Pacific won the 1996
"Airline Media/Public Relations Award"
[ NOTE: 1996 Atlas revenues were $315.7 million, up 84% from 1995 with a net
profit of US$13.4M. ]
- Will TWA Speak Russian?............... as it is reported that
Strategic Capital Group of New Jersey has made a proposal to buy a
controlling stake in TWA. The vice chairman of Transaero, Russia's No. 2
airline, told reporters that his company is allied with Strategic Capital
Group. But TWA said in early February that neither Brian Freeman, who heads
Strategic Capital, nor any of his representatives ever met with TWA's board.
Still, Transaero's Grigory Gurtovoi, said TWA's initial reaction was
positive and that Transaero would link its 30-city route network with TWA,
the 7th largest U.S. line.
- 1996 Banner Year For U.S. Carriers ................. as profits
were up for all except Delta Air Lines and America West. Strongest growth
was for AMR, Northwest and USAir, despite increased fuel prices for the
industry in general. Continental Airlines, Delta, United & America West
each showed improvement, but USAir and Northwest did not match their 4th
quarter '96 performance.
- Shades Of Pan Am? ............ as it has been announced that
Pacific Southwest Airlines (PSA), the San Diego company which grew from 3
planes in 1949 to the largest intrastate airline in the world before its
acquisition by USAir in 1988, is coming back on a larger scale. The new PSA
has an FAA 121 Air Carrier Certificate, and has begun freight service with
passenger moves set for the future..
- The Air Freight Association Changes Name ........ and will be known
as the Cargo Airline Association starting 1 March. The group is
Washington-based with about 20 all-cargo carrier members.
- FedEx Changes Carrier Code............... U.S.Customs announces
that the carrier code to be used on all AWB's is 'FX' (instead of 'FM')
- Delta Express Now Accepts Cargo ............ Delta's low-fare
carrier, began accepting cargo for shipment on all of its flights on Monday,
24 February 1997. All 4 classes of Delta service are offered. Delta Express
offers 128 daily nonstop flights connecting 10 U.S. Northeast & midwest
- Airborne Express Crash Probe Continues ...............as NTSB has
now reported that the 22 December DC-8 crash was not caused by mechanical or
hydraulic problems. The investigation is now focusing on performance of the
flight crew. The southwestern Virginia crash resulted in the loss of 3 crew
and 3 mechanics when the plane hit a mountainside at 3,000 feet.
- Polar Air Cargo To Japan ...........as it has applied to the
Transport Ministry for permission to provide air cargo U.S.-Japan service
with 4 flights a week between Osaka & New York via Chicago, Anchorage
and Seoul starting 15 April. Weekly uplifts would increase to 6 in June.
- FAA Safety Warning ............. as air safety oversight in Taiwan
and the Caribbean island groups of Turks and Caicos is said to fall short of
some International Civil Aviation Organization (ICAO) standards and that
flights to the U.S. by the country's carriers will be monitored closely
until the shortcomings are fixed.
- "Air France Europe" Merging ................ with its
parent company, the government run Air France, later this year.
- Burlington Air Express Makes ISO 9002 ..............for its U.S.
and Japanese stations. There are now 144 BAX worldwide locations with this
certification to international quality standards.
- Airborne Express 1996 Results Up .............. with revenues
increasing by11% to US$2,484,306,000 based on 259,270,000 shipments, up 12.5
% over 1995. Domestic shipments grew 12.5% in 1996 to 254,234,000, while
Int'l moves saw a 9.5% to 5,036,000. On 5 Feb. Airborne's Board unanimously
approved a shareholder rights plan designed to protect stockholders against
abusive takeover tactics.
- Changes For JAL ............. as it will add about two dozen weekly
flights to its international service beginning 1 April. JAL will increase
service ex-Japan to Pacific resorts, begin a code-share with Air France on a
Tokyo-Paris-Istanbul route, and strengthen the links from Nagoya to
Southeast Asian destinations.
- Emery Worldwide To Taiwan ............. with two new branch offices
in Taipei and Kaoshiung to offer international air cargo services, customs
brokerage & bonded warehousing.
- FedEx Expands Anchorage .................. with an additional
909,057 square feet of storage at Anchorage, increasing total space to 2.7
million square feet at its sorting facility ................... a response
to increased Far East traffic.
- China MD-80 Freighter ............ as it is reported that the
entire domestic fleet may be converted to freighters. The aircraft will then
be used for post office services and be replaced with MD- 90's.
- New & Old In "Down Under" ................ as
"venerable" cargo carrier Pacific Rim Airlines has ceased
operations..........after only 4 weeks! Meanwhile, Pacific Air Express has
started up with Boeing 727-200 freighter service from the Solomon Islands to
Cairns and Brisbane, Australia.
- Tower Air Names Sales G.M. .................. as John P. McGhee
becomes General Manager/Sales & Marketing. With offices at JFK, he will
be responsible for restructuring Tower's sales and marketing efforts.
OUR "C" Section: FF World Ocean News
- P & I Clubs Will Fight Pirates ................. as 5 major
clubs will each contribute US$10,000 per year to ensure the Kuala
Lumpur-based Regional Piracy Center, run by the International Maritime
Bureau (IMB) stays open. The IMB has been short of funds ever since it
opened in 1992 as a response to increased pirate attacks, especially in
South-East Asia. However owners generally have been reluctant to contribute
to the center's upkeep while the two Asian owners' bodies, Asian Shipowners'
Forum and Federation of Asian Shipowners' Associations have criticized the
IMB for allegedly confusing petty crime with piracy and unfairly tarnishing
the region's image.
- FMC Sanctions Against Japanese Lines A "Go"..............
as confidential sources report that the FMC may move this week to punish for
discriminatory practices. As previously reported in The Cargo Letter,
Japanese carriers K Line, NYK, and Mitsui OSK Lines could be hit with
sanction charges of US$100K per U.S. port call. One to watch.
- Sri Lankan Warplanes Attack Cargo Vessel ............... as M/V
Caribbean Queen of Cypriot flag was bombed on 10 Feb. in the mistaken belief
the ship was supplying the Tamil Tiger guerrillas, who have been waging a
13-year civil war for autonomy in the north and east. Fortunately, no
- P & O Sees Rate Pressure ................... as its 4th quarter
1996 report (prior to its merger to become P & O Nedlloyd Container
Line) shows its container business "is continuing to face a tough
competitive environment with strong downward pressure on rates, particularly
in the Far East to Europe trade".
- But Women's Wear Daily Warns Of Pacific Rate Increase
.............. as a 28 Jan. article warns shippers that Trans-Pacific rate
reductions of the past 2.5 years may be over. Although eastbound ships still
operate at only 81% of capacity, ocean carriers may raise rates to restore
revenue .......according to Women's Wear Daily. Despite the source, all FFs
& NVOCCs hope this warning is correct.
- TSA Withdraws Capacity Withholding Plan ...................... as
the FMC reports that the Transpacific Stabilization Agreement (TSA) is
withdrawing a plan to reinstate collectively withholding capacity in the
Asia-U.S. lanes for fear of continued FMC concerns about its possible
anti-trust impact. TSA is an association of 15 conference and nonconference
ocean carriers holding a combined 85% market share of the eastbound
trans-Pacific trade lanes.
- U.S. Carriers Bow To New PRC Agency ................. as Sea-Land
and APL took last minute action this month, agreeing to provide the same
tariff information they give to the Federal Maritime Commission (FMC) to
China's newly established shipping regulatory agency. As previously reported
in The Cargo Letter, the new PRC is a tariff bureau like the FMC, but with
the power to reject rates. China had threatened to ban the carriers from
various ports, including Shanghai absent compliance with the new
- Long Beach/L.A. March Forward ............... and were the first
U.S. ports to handle a record 3 million and 2.7 million TEUs, respectively.
The record is in spite of a 1996 that saw labor slowdowns and a prolonged
walk out by port owner-operator truckers. It is very difficult for visitors
to tell where the boundary is between these neighbor ports, but taken
together they form a true mega-port for the U.S. With new port construction
continuing at a break neck pace, plans in place for the new Alameda Rail
Corridor and a massive expansion program now outlined for nearby L.A. Int'l
Airport ........... the best is yet to come for L.A.: Cargo Gateway to the
- TMM Line Visits Reef ............... as the containership M/V
Houston hi t the only remaining living coral reef in the U. S. on 1 Feb. off
Florida. The ship was not damaged but there was concern about the reef which
is in an area prohibited to shipping.
- Safmarine Eyes China ............... as the South African carrier
has dispatched a specialized fact-finding team to mainland China, following
the establishment of a "China Desk" last year. The team is
reviewing progress on Safmarine's application to set up a representative
office. Safmarine has announced the prospect of developing logistics
facilities in the PRC and considering direct calls. Otherwise, Safmarine
will resume calls to Busan this week.
- Saferoute/Trutainer To New Zealand ................ as the NVOCC
unit of Safmarine & CMBT Lines and NZ-Orient Line have started a
Southern Africa-New Zealand service, transhipping containers at Singapore.
Breakbulk cargo will be transhipped at Jakarta.
- Philippine Fleet Expansion ............. as 1996 saw101 ships
purchased at a cost of about US$90M last for use in the inter-island trades.
Another 30 leased ships were imported for service in the domestic trades.
- The Cargo Letter Panama Canal Article Series .......... has drawn a
response from Capt. Doug Allen, Panama Canal Pilot, who
writes.>>>>>> "I recently read The Cargo Letter ,
One item not touched upon is the "Third Locks Project". It was
started during WWII, but work was abandoned at the close of the war. The
lock for Miraflores & Gatun was almost completely excavated. All that is
needed is to make the locks. My opinion is that the tremendous amounts of
money being spent on the cut widening program should have been diverted to
the third locks instead. Of course it would be more economical to fix what
is already there as stated in your article."
[Ed Note: We find this new information quite interesting and will continue
to follow the story. ]
- FMC Revokes FF Licenses ................. as of 14 Feb. the list
included 1.] Alpha Cargo Services, Inc. , 2.] Cavalier Shipping Co., Inc.,
(VA), 3.] Global Shipping and Trade Services, Inc. (CA), 4.] Hidalgo, Inc.,
(LA), 5.] Interfreight Shipping Corp. (NJ), 6.] Ki Suck Chae d/b/a Pioneer
Express Line (CA), 7.] Marco Forwarding International Co.(FL), and 8.] Pafco
Forwarders, Inc.(FL). (FR Pub)
- Looking For A New Job? ............... perhaps Australia's
Transport Minister John Sharp will be after slamming the performance of his
country's ports in a television interview this week. "Australia has the
worst waterfront in the world because we are now the most unreliable ports
in the world,'' he said, quoting figures from the Shipowners Mutual Strike
Insurance Association showing that nearly 23% of all insurance claims for
dock strikes in 1996 were from Australian companies, only 2nd to Brazil's
record for the highest claims for the previous 5 years. Last month the
government introduced measures to curb union power in the ports. Good luck
with the job, John.
[ NOTE: An OOCL/COSCO-led consortium has been appointed to develop and run a
new container terminal at Melborne. ]
- The Connecticut Maritime Association ........... will hold its now
famous, annual conference and trade show from 17 to 19 March at the Sheraton
Stamford Hotel. Featuring speakers from around the world, the theme this
year is "Shipping '97- Which Way Will the Money Flow". You may
attend via the internet at http://www.nsnet.com/~cma/
OUR "D" Section: FF in Cyberspace
- Air Cargo Internet Symposium ......... has been updated with
information about the upcoming Journal of Commerce conference regarding the
present and future use of the internet in all aspects of the air cargo
industry from use of web pages and EDI to innovative new products, hidden
internet resources, internet telephony, and faxing capabilities - the
conference will focus on how inventive techniques and a basic understanding
of net usage can be translated into improved use of resources, faster
transfer of information, and immense cost savings to shippers, forwarders,
and air carriers.
- Freightworld Transportation Supersite .........a full service
center and wealth of information. It has been awarded NetGuide's 5-Star
Platinum Award for Excellence.
- Office of Airline Information Catalog (OAI) .............. this DOT
bureau provides comprehensive financial & statistical economic data on
the industry and individual air carrier operations.
- World Currency Converter ............... provides an interactive
menu that converts any one of 164 worldwide currencies to any other of 164
worlwide currencies, on any given date back to 1990. Its simple to use, but
watch the date - its European form
- World Trade Organization .......... obtain detailed information
about the WTO, including press releases, latest trade studies
http://www.wto.org [an error occurred while processing this directive]