THE CARGO LETTER 
Air & Ocean Freight Forwarder - Customs Broker News
4 March 1997
Good Friday Morning from our Observation Deck...... Overlooking the
officially designated "Cargo City" area and....... Runway 25-Right at
Los Angeles International Airport. Contribute your knowledge & information
.......by e-mail to The Cargo Letter.
Michael S. McDaniel, Esq., Editor
INDEX to The Cargo Letter:
- OUR Top Story
- Gore & Gingrich Delegations Visit China, Japan and
Taiwan; Chinese Wish Outspoken Speaker Had Stayed Home
OUR "A" Section: Trade, Financial & Inland
- Can David Become Cyberspace Goliath?
- New Service For Small Forwarders
- 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
- The Cargo Letter Cargo Damage Dispatches
OUR "D" Section: FF in Cyberspace
- The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
- Getting Down To "Terms"
OUR Top Story
-- by Warren S. Levine, for The Cargo Letter
APR 3 -- In a stream of diplomatic visits, Vice-President Al Gore and House
Speaker Newt Gingrich, the latter attracting a tail of Congressmen which
rivalled Comet Hale-Bopp's celestial one, met with Chinese leaders from Jiang
Zemin to Li Peng to Tung Chee-Hwa to outgoing Hong Kong Governor Chris Patten
In separate meetings with the current and future governors of Hong Kong,
Gingrich first expressed optimism that the "one-country, two-systems"
policy will work, and then issued stern philosophical edicts to the Chinese
regarding economic and political freedoms.
The fact that so many powerful American politicians happened on China in
rapid-fire succession was unfortunately viewed by the Chinese as further
pressure from the United States, as a number of mixed messages were delivered
within a short time frame.
On Sunday, after attending Easter services at the Shanghai Community Church,
a PRC government-approved worship facility, Gingrich warned a high advisor to
Jiang Zemin, "We understand that in principle you will not renounce the
right to use force. I want you to understand we (the United States) will defend
An unnamed government official in Taiwan expressed concern that many of
Gingrich's remarks were "quite different from the U.S. government's
traditional rhetoric on the (China-Taiwan) issue."
Chinese Foreign Ministry spokesman Shen Guofang's response to Gingrich was
predictable: "We don't need any foreigner making indiscreet remarks on this
question." He further urged the U.S. to "speak with one voice,"
and stated that, "We really don't hope to see each branch of the U.S.
Government advancing different foreign policies. If so, I'm afraid that would be
Gore's visit was in part designed to familiarize himself with the Chinese,
and to familiarize the Chinese leadership with the vice-president. Not much of
any substance was resolved. In this, his first visit to China, the VP kept up
his low-key image, and in the process drew the ire of human-rights groups for
not having given ultimatums nor having made public statements regarding this
sensitive and divisive issue. Throughout, the soft-spoken Gore held that public
humiliation has only angered China in the past, a sentiment Shen echoed:
"If there is confrontation, then I'm afraid that there will be no basis for
dialogue." In a statement to reporters, the vice-president did say that he
got a more receptive response from the Chinese on human rights than in previous
Gingrich spent four hours in Taipei on Wednesday, meeting and lunching with
Taiwan's leadership. In a press conference, he expressed the need for peaceful
relations between the U.S., China and Taiwan: "Woven throughout our
bipartisan American foreign policy . . . Is the commitment by both Beijing and
Washington to ensure that the future of Taiwan will be resolved by peaceful,
In Washington, White House Press Secretary Mike McCurry characterized
Gingrich's remarks as a "shorthand version" of a much more complex
American policy, and said that the Speaker "spoke for himself" in
China and was welcome to say what he pleased.
Even Japan, an ally of the United States, did not escape unscathed from the
Speaker's kamikaze tongue. In Tokyo Monday, Gingrich called Japan, "...the
most sophisticated protectionist system in the world," and accused Japan of
stalling in opening their market to imports. He also described US trade
relations with Japan as an "irritant."
OUR "A" Section: Trade, Financial & Inland News
- New Service For Small Forwarders
30 March - Our industry has become familiar with the revolution resulting
from impressive technology accomplishments by the major carriers offering their
marvels of computer freight tracking & POD. While such technology is usually
priced beyond the budget of most small to medium forwarders, Global Logistics
Village of San Ramon, CA. has now entered the market with a new Internet service
designed for small & medium size freight carriers to participate without the
significant investments needed to develop an operational world wide web site
with sophisticated freight tracking abilities. Member companies will now have
the opportunity to compete with even the largest carriers (FedEx, UPS, DHL,
Emery, Airborne, APL, OOCL, etc.) Services include order entry, POD and
Tracking. Subscribers will provide their customers with shipment activity, as
well as a supply chain reporting system. For forwarders & small carriers
lacking the technology to take advantage of these opportunities Global Logistics
Village offers computerized systems & software to implement the concept. [Ed
Note: The Cargo Letter has sampled this new service and believes it has merit.
Visit the new service at http://www.glovill.com
......or call (510) 830-1744.
- Plea For NAFTA Support ............ as U.S. Ambassador to Mexico
James Jones has said that NAFTA could come apart unless U.S. executives
publicly support NAFTA. According to the Ambassador, unless the world is
convinced of NAFTA's success, the U.S. "will not be able to sell the
larger free trade package envisioned for the Americas in 2005".
- U.S. Democratic Party Leaders Firm On China .......as the White
House was requested this week not to bow to Chinese demands in negotiating
its accession to the World Trade Organization (WTO) given that China has
made no concessions on some very basic trade issues. The situation is
certainly not aided by allegations that China illegally funneled money into
1996 U.S. election campaigns. In related news, Mexican commerce officials
have rejected China's plea to lift trade penalties in place for Chinese-made
clothing over concern that China had been flooding Mexican markets with
unreasonably inexpensive imports for the past 4 years.
- Hemispheric Transportation Initiative .........will be addressed in
the Summit of the Americas Agenda, according to the U.S. Dept. of State. The
Initiative seeks greater cooperation between governments and integration of
transport services in the Americas.
- Award For Fritz ..........as the leader has won Xerox Corporations
Certi fied Supplier status, the highest level of international achievement
that Xero x can bestow on a supplier. Fritz has also gained ISO 9002
certification for its Rochester, N.Y. facility, with implementation set for
25 additional stations this year.
- Expeditors is "Freight Forwarder of the Year"
............ says leading PC manufacturer Gateway 2000, based upon ISO 9002
quality standards to measure transport & service performance. In other
Expeditors news, Glenn Alger (a company founder) has been promoted to
Executive Vice President and Director - North America, and Idevaldo Silva
was named Managing Director - Latin America.
- EU To Join Myanmar Boycott .........as the European Union has
agreed to expel the former Burma from its Generalized System of Preferences
to protest the military regime's use of forced labor to promote economic
development. The U.S. boycott continues.
- Roadway Becomes "Easy" ............ as the LTL motor
carrier introduces an online version of its shipment rating application, E-ZRate,
a service allowing customers to receive instant rate quotes based on origin
and destination zip codes via the World Wide Web.
- FMC Revokes Freight Forwarder Licenses ............ 1.] American
Cargo Forwarding, Inc.; and 2.] Denise Zappola d/b/a Corporate Relocation
- "Instant" Customs & Trade Docs Available ......... as
Boskage Commerce Publications claims 1 day shipment of the latest paper or
CD-ROM editions of various government publications for importers &
exporters, including 1997 Harmonized Tariff Schedule, 1997 Customs Regs.,
and 1997 U.S. Export Administration Regulations. Call (616) 673-7242.
- World Trade Law Association .........will hold an inaugural
conference 25 April 1997 at London to address the role of the World Trade
Organization (W TO) in international regulation, WTO dispute settlement
mechanisms, intellectual property, & the international harmonization of
Contact: Cameron May Ltd. at 44 (0)171 582 7567.
OUR "B" Section: FF World Air News
- Air Cargo Internet Symposium Approaches ........ and will be held
22-24 April 1997, at the JFK Ramada Hotel. The Air Cargo Newsgroup (misc.transport.air-industry.cargo)
web site has been updated with information about Journal of Commerce's MAJOR
CONFERENCE regarding present & future use of the Internet in all aspects
of the air cargo industry from use of web pages & EDI to innovative new
products, hidden Internet resources, Internet telephony, and faxing
capabilities. The conference will focus on how inventive techniques & a
basic understanding of net usage can improve use of resources, speed
transfer of information, & cut costs for shippers, forwarders, and air
- U.S. / Taiwan Skies Are Open ........... as the two countries
agreed to "open skies" 27 Feb. This protocol, as well as
agreements with Singapore and Brunei, will take effect within the next few
weeks. Still, no U.S. carriers have applied to the U.S. Dept. of
Transportation to initiate or increase service either to these countries or
to Malaysia, South Korea, and New Zealand, which are scheduled to begin
negotiations soon. Panama & the U.S. ha ve also just now reached an open
skies agreement, the first for a Latin American country.
- U.S. Will Now Charge For Air ..............as this May the U.S.
Federal Aviation Administration (FAA) will require fees for "aviation
services" (mostly air traffic control) for aircraft flying in U.S.
airspace, but which do not take off or land in the U.S. FAA estimates US$90M
in new fees for this in 1998. Carriers will be charged US$78.90 per 100
miles flown over U.S. territories, and $69.50 for each 100 miles flown over
U.S.-controlled oceanic airspace. Certainly the toll collection booths will
need to be constructed on very long poles!
- World Air Cargo Growth ............ is forecast by the
International Civil Aviation Organization (ICAO) to grow at 7% per year
until the year 2005 in terms of freight ton-miles.
- Russian Express Market Seen Larger ........... as FedEx estimates
40% annual growth in the Russian express delivery market. FedEx began
regular flights to Moscow in Oct. 1996.
- KAL Gets Serious ........... as the 30 year old carrier plans to
spend more than US$10B, doubling its passenger & freight fleet
(currently 112 planes) by 2005. This week KAL took delivery of its first of
seven new Boeing 777 planes for the year. Korean Air's cargo operation, 3rd
largest in the world, provides more freight service to Asia than any other
airline and operates the West Coast's largest cargo terminal at Los Angeles
International Airport. To quote KAL "There is no doubt that Seoul is
the heir apparent as the Pacific Rim's transport hub." In 1999, KAL
will open a US$100M freight station at New York's JFK. [Ed Note: We also
like the KAL cuisine ! ]
- EVA Air To Brussels ......... as the Taiwan carrier will begin
twice-weekly dedicated cargo flights from Taipei to its new
Brussels-Zaventem Airport gateway on a route serving Dubai and Singapore.
- A Lufthansa Summer? .............. as Lufthansa Cargo will increase
to 34 weekly Boeing 747 all-freighter flights from the U.S. during the
summer schedule, from March 30 to October 25, 1997, the most scheduled
freight capacity of any airline on the North Atlantic run (including 128
belly flights per week). The carrier will integrate 4 "Gateway"
ports -- New York, Atlanta, Chicago and LAX. [Ed Note: In 1996 Lufthansa few
1.7M metric tons of air cargo which ranked it #1]
- Customer Air Transport Looks For Customers ......as the Fort
Lauderdale, Fla., carrier will begin overnight freighter service to LAX,
Atlanta & San Juan, 6 times a week to provide early-morning arrivals for
the 3 cities.
- (The New) Pan American World Airways ........... marches forward
and is doubling daily flights from JFK to San Juan with 2 Airbus A-300's
starting 6 April. More, Pan Am announced that it has reached an agreement to
acquire all of the shares of Carnival Air Lines. [Ed Note: Pan Am's IATA
code is changed from "OP" to "PA" effective
- Calling (The New) "Sir Freddie" ..........as Laker
Airways, an historic name in transatlantic air transport, returned to Miami
on March 20 with daily wide body service to London. Cargo Services, Inc. of
MIA has been selected by Laker as its cargo sales and ground handling
agency, throughout the U.S. & Europe.
- Varig Upgrades Cargo ......as South America's largest shoots for 48
hour delivery with 95% reliability, the planned result of a US$52M pact with
computer giant Unisys to improve cargo services over the next 10 years.
- Ah, Montego Bay ! .......... as the int'l airport will convert to
Air Jamaica's hub within 3 months, linking its flights between North
America, Europe & the Caribbean .............all in direct competition
with American Airlines's Puerto Rico hub.
OUR "C" Section: FF World Ocean News
- It's Overweight Container Time ......... as the new law will
finally go into effect on 9 April 1997, requiring that weight & content
certifications be given by shippers tendering cargo for inland movement ex
U.S. Ports. Because of lien rights granted under the law, the failure of
int'l shippers to provide the CORRECT certifications required under this law
will result in shippers being liable for overweight container fines &
penalties imposed by U.S. authorities. If fines are not paid, delivery of
cargo in the U.S. will be delayed. Requirements apply to any container with
a gross weight (including pallets & packaging) of more than 29,000 Lbs.
For a full discussion of the regulations, please review The Cargo Letter 
for 15 October 1996.
- Fight Over Long Beach Navel Station Continues ............. as
Congressman Duncan Hunter of California has introduced a bill in the U.S.
House of Representatives to stop transfer of the closed U.S. Navy facility
to China Ocean Shipping Co. and prevent any part of the former base to be
transferred to a shipping company owned or controlled by a foreign country.
The move is intended to block the 24 March approval of COSCO's bid by the
Lon g Beach Harbor Commission. Meanwhile, necessary approval by the Pentagon
rema ins pending. COSCO has operated from the Port of Long Beach since 1981
- Report From Guangdong .......... as trade through the 195 ports in
this China province was valued at US$110B, up 5.8%in value and 6.1% with 128
million tons over 1995. Five more ports are expected to open in the province
this year. Not a backwater.
- New Mitsui O.S.K. Americas Service ......... with the addition of
direct calls between the ports of Houston; Manzanillo Int'l Terminal (MIT)
in Colon, Panama; Puerto Sucre, Venezuela; and Manaus, Brazil via MOLs CX-1
service deployed in 900 TEU type vessels.
- Pirates May Open Typing School ..............as 6 pallets of
Olivetti typewriters were among the cargo and US$24K in cash seized from
container vessel M/V Libra Buenos Aires when she was boarded by 10 armed
pirates on 9 March off Rio de Janeiro, Brazil. The crew was beaten and the
- Okinawa As Transshipment Point? ................as Taiwan's
Kuomintang Political Party visited the Japanese island last week, reportedly
discussing it as a transshipment point to replace Hong Kong for the
Taiwan-mainland China trade lane. Practicality?
- China Approves Carriers ................ to operate between China
and Taiwan. They reportedly include China Maritime Transport Corp., COSCO
(who would guess), Kien Hung Shipping, Nantai Line, Uniglory, Yangming and
Wan Hai Lines Ltd.
- Japan Carriers To Increase Rates ...........as K Line, Mitsui
O.S.K. Lines Ltd. & NYK plan up to a 10% increase for containers moving
from Japan to Europe and North America on 1 May. The move comes after a rate
increase by conferences on the routes. Indeed a general rise seen in Asia
rates. There is no other direction for them to go.
- Japan's Electricity Bills To Reduce ...........as the Nat'l Council
of Dockworkers' Unions of Japan has announced that member dockworkers will
not work between 1800 and 0800 daily at Japanese ports, effective 31 March,
in protest of recent U.S. Federal Maritime Commission action to impose fines
on Japanese ships in an effort to speed port reform in Japan. The protest
will affect 50% of Japan's ports, including Kawasaki, Kobe, Nagora, Osaka,
Shimonoseki, Tokyo & Yokohama, involve 55,000 people and surely cause a
- NVOCC To Be Fined US$650,000 ............ as Comm-Sino Ltd. was
found to have violated sections of the 1984 Shipping Act by, among other
things, claiming that it was shipping '"KD (knock down) furniture"
or "kitchenware" when it actually was shipping footwear to obtain
lower transport rates. This is an old scheme. Twenty four moves were
- Carriers Will Build Laem Chabang Port ......... as Neptune Orient
Lines and Peninsular & Oriental Steam Navigation Co. Ltd. (we believe P
& O Nedlloyd) plan to develop a container terminal at Laem Chabang,
- N.Y.K. Adding Sendai, Japan .......... to its
"Japan-California Express" this month with five 2,600 TEU
containerships will making round trips in 35 days, calling at Shanghai;
Japan ports of Hakata, Kobe, Nagoya, Shimizu, Tokyo and Sendai; Los Angeles
& Oakland; Shimizu, Nagoya, Kobe and Shanghai.
- Interpool To Pay Dividend
.............. as the world container leasing leader announced that it will
pay US$3.75 cents per share , or a total of US$1,033,000.00, for the first
quarter of 1997, even after giving effect to the March 27, 1997 3 for 2
stock split. With the NYSE symbol of "IPX", Interpool is corporate
sponsor of The Cargo Letter world wide web site..... http://www.interpool.com
- Moving Your Company to Thailand? ......... as the country has
agreed in principle to exempt maritime related businesses from corporate
taxes, if the companies are registered and have their headquarters in
Thailand. How about an independent company station?
It was a quiet three weeks. 1.] on 7 March U.S. Coast Guard units dropped
food to the disabled freighter M/V Na Na Express (Haitian) off the Bahamas; 2. ]
on 8 March, off Nuevitas, Cuba, the freighter M/V Sea Boekanier sank, her crew
rescued by U.S. Coast Guard; 3. ] since 12 March the freighter M/V Samir
(Cypriot) has gone missing in the Mediterranean, on a voyage from Alexandria to
Trapani, Italy, with a crew of 12; 4. ] on 12 March the RO/RO M/V Saudi Makkah
(Saudi Arabian) collided with the bulker M/V Turtle Queen (Panamanian) east of
the Chesapeake Bay Bridge; 5. ] on 15 March an explosion aboard M/T Evgenia
(Greek) at a shipyard in Perama, Greece, killed one person and injured seven; 6.
] also on 15 March, bulker M/ V Theodoros S. (Cypriot) collided with the M/V
Gulsum Ana (Turkish) S.W. of Malaga, Spain; 7. ] on 16 March, containership M/V
Sea Regina (Cypriot) ran aground entering the Port of Riga, Latvia, but attempts
to refloat her have failed; 8. ] on 20 March 100 cargo barges on the Mississippi
River broke loose near Laplace, La., closing the waterway between miles 120
& 132 while the barges were brought back under control; 9. ] on 22 March a
fire aboard M/V Gokalp-I has left one crewmember missing and the ship abandoned
as she sailed through the Dardanelles Strait; 10. ] on 25 March the cargo vessel
M/ V Myo Hyang San (North Korean) sank off Iki Island, Japan, after running
aground, but the crew was rescued; 11. ] also on 25 March the freighter M/V Cita
(Antigua) sailing from Southampton to Belfast, with 200 containers, ran aground
and remains abandoned in the Isles of Scilly. >>>OTHER CARGO MISHAPS:
At least 16 other cargo & 3 military vessels suffered groundings or were
disabled during the period, but not reported here due to space considerations.
[ED NOTE: This report addresses only cargo mishaps. It would require several
more pages to detail problems for passenger, fishing, military and ferry
vessels, etc.. It is dangerous out there.]
OUR "D" Section: FF in Cyberspace
OUR "E" Section: The Forwarder/Broker World
-- by Michael S. McDaniel for The Cargo Letter
As attorneys, we often see forwarder & broker uncertainty on the issue of
what constitute "Terms & Conditions of Service" and exactly how
many there are. Here is a primer regarding the major three:
1. Ocean Bill Terms: Contract conditions of carriage with many vital
protections for your company. Warning, the shipper must be given a
"fair opportunity to declare full cargo value" or the damage
limitation protections commonly provided under law may be denied you.
Contents must be specific.
2. Air Bill Terms: Contract conditions of carriage with many vital
protections for your company under the Warsaw Convention (int'l) or provided
in your damage release rate (domestic). Contents must be specific.
3. Invoice Terms: These commonly are the "Terms &
Conditions" promulgated by the National Custom Brokers & Forwarders
Association of America, and apply to ALL SERVICES OTHER THAN YOUR ACTIVITIES
AS A CARRIER, for which a US$50 per shipment damage limit usually applies.
These terms may be similar to those stated of the "Forwarders Cargo
Receipt" (FCR) of some companies and should NEVER be used as a carriage
document, or when the forwarder is listed as "shipper/CGNEE" on
the bill of lading of the custodial carrier. Because this is THE most
important and most often misunderstood forwarder/broker document, The Cargo
Letter will continue to discuss (invoice) "Terms &
Continuing changes in the law, require that your company contract documents
(B/Ls, etc.) be by an expert reviewed annually. McD. [an error occurred while processing this directive]