Industry News
From The Cargo Letter

THE CARGO LETTER [317]
Air & Ocean Freight Forwarder - Customs Broker News
9 June1997

Good Monday 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. We strive to bring you useful information which is timely & topical. Be sure to visit our web site .......... http://www.interpool.com/cargo.shtml

Michael S. McDaniel, Editor

INDEX to The Cargo Letter:

1. OUR Top Story
   
2. THE WORLD COUNTS DOWN TO 1 JULY 1997
   • Hong Kong Honors TIANANMEN Dead
   • AS COUNTDOWN TO TURNOVER CONTINUES
   • Disssident Released From Forced Labor Soccer Ball Factory
   • TAIWAN SCHEDULES WAR GAMES FOR T-MINUS-7
   
   OUR "A" Section: Trade, Financial & Inland News
3. Customs Outbound Compliance Now In Effect
   • FF Warning
4. Freight Forwarder Trade Briefs
5. The Cargo Letter Financial Page
   OUR "B" Section: FF World Air News
6. Freight Forwarder World Air Briefs
   OUR "C" Section: FF World Ocean News
7. FF World Ocean Briefs
8. The Cargo Letter Cargo Damage Dispatches
   OUR "D" Section: FF in Cyberspace
9. The Cargo Letter "Cyber Ports Of Call"
   

OUR Top Story

1. THE WORLD COUNTS DOWN TO 1 JULY 1997

• Hong Kong Honors TIANANMEN Dead
• AS COUNTDOWN TO TURNOVER CONTINUES
• Disssident Released From Forced Labor Soccer Ball Factory
• TAIWAN SCHEDULES WAR GAMES FOR T-MINUS-7

-- by Warren S. Levine, for The Cargo Letter

JUNE 5 -- It was no surprise that over 50,000 Hong Kong residents held a candlelight vigil to honor the students who were killed in Beijing. But the early release by Beijing of a prominent dissident from a forced labor camp on the anniversary of the Tiananmen Square Massacre knocked international observers for a loop Wednesday.

Bao Ge, co-founder of the pro-liberties group Voice of Human Rights, was released from a forced labor factory in Dafeng, Jiangsu Province, where he made soccer balls for export, according to a report by the Associated Press. Upon his release, Bao said that he plans to form a political party called the Citizens Assembly Party. Most of the other vocal protesters of Tiananmen Square have been jailed or otherwise purged.

In Hong Kong, an estimated 3500 marchers carried banners and placards through the streets of the Central district to the headquarters of Xinhua News Agency, the unofficial Chinese embassy in Hong Kong. The demonstrations were peaceful, although Tung Chee-Hwa, who will assume leadership of Hong Kong under Beijing's appointment, opposed them.

In a statement to the press Wednesday, Tung said, "Some people have continued to persist on the issue of June 4. Perhaps they should look forward." However, he has not specifically banned further demonstrations once Hong Kong reverts to Beijing control.

The former shipping tycoon further stated, "We must not become a base which will threaten the existence of our country." Beijing has warned Hong Kong against becoming a "base of subversion" and has already outlawed rival political parties, foreign contributions and free demonstrations in what will become a Special Administrative Region of the People's Republic of China.

Forty-one relatives of people killed at Tiananmen Square signed a public petition urging the Beijing government to punish those accountable for the murders. This is the highest number of signatories ever to this annual petition. China has lent a deaf ear to such requests, and holds to their statement that violent action was taken to quell a counter-revolutionary demonstration which threatened the stability of the country.

To support this, the government publishing ministry put out a large-format paperback edition entitled "The Truth About the Beijing Turmoil," in which the picture which appeared in the world's press of a bicyclist who was crushed by a tank is captioned to the tune of "Army troops used utmost restraint in turning back the demonstrators." The volume was printed in English, and is available in many international hotel gift shops in China.

The setting for a televised debate on the subject of future demonstrations drew angry protesters on both sides of the issue. However, the only violence reported was at a rally held in Tokyo at which former student leader Wu'er Kai Xi spoke. A demonstrator attempted to run his car through a row of police cars, but was stopped before causing any injuries to the crowd. The driver and another man were arrested.

Many people showed up at this year's Hong Kong memorials for the first time, stating that they wanted to experience the opportunity to participate in just one demonstration before China assumes control of the colony at midnig ht on June 30.

In Taiwan, demonstrations were peaceful. However, just so Beijing doesn't focus all its attention on Hong Kong, Taiwan announced a series of war games (sound familiar?) to be started on June 23rd in the southern part of the island.

A senior military spokesman in Taiwan said that, "Although the exercises are held close to Hong Kong's handover to Communist China, please do not link the two things together."

Taiwan will test new American F-16 aircraft and missiles, in addition toMirage 2000 fighters acquired from France. They are also expected to try out their upgraded M60A3 tanks and their new French-made "stealth" warships, so named for their ability to evade radar. And so it goes.

[Ed. Note: Read more about Hong Kong at our The Cargo Letter "Cyber Ports Of Call" page, in Part 2.]

OUR "A" Section: Trade, Financial & Inland News

2. Customs Outbound Compliance Now In Effect

• FF Warning

Washington - 7 June -- Gone are the days when the humble SED (Shipper's Export Declaration) can be so thrown together that estimates provided to The Cargo Letter from Dept. of Commerce sources in 1996 suggested some sort of error in over 20% of all filings. On 1 June 1997, the Outbound Compliance Program became mandatory .

Customs' new Outbound Compliance Program has now moved from the 'Informed Compliance' phase which began on 1 Feb., to the 'Enforced Compliance' phase in which the agency will begin to enforce compliance with Shipper's Export Declaration (SED) & manifest requirements. Now, when Customs detects a first violation, it will inform the carrier verbally about the problem. Any 2nd violation detected by Customs will result in both a verbal warning and a formal letter of non-compliance. Any 3rd violation and all which follow will result in penalties and/or bond review as Customs deems appropriate.

At the penalty stage, carriers are subject to fines up to US$1,000 per violation if SEDs are filed late. The American Shipper magazine has suggested that carriers many simply accept fines as the price of doing business because paying the fine is easier than losing a customer's freight. Indeed, U.S. Customs says that enforcement focus will be on carriers ......... at the beginning.

The U.S. Bureau of Census, which is responsible for ensuring exporter and freight forwarder compliance with SED requirements, has established a world wide web site to help you & your customers with the following tips and instructions:

1. Correct way to fill out the SED (with samples);
2. Telephone numbers providing SED assistance;
3. Table of Forms & Guide. http://www.census.gov/foreign-trade/www/

3. Freight Forwarder Trade Briefs

• Boris Belatedly Believes Bad Bovine Banging Bop Bomb Badly Bashed Boring Big Boat ............ as the Journal of Commerce shared a true "cargo tail" of the sea & air last month, reported by the German Embassy in Moscow to the German Foreign Ministry in Bonn. Russian rescue workers plucked some Japanese fisherman from the sea and detained them when they claimed their vessel sank after being hit by a falling cow. Investigations by Russian authorities then uncovered a bizarre crime story involving Russian soldiers and airborne cattle-rustling. The German daily newspaper Hamburger Morgenpost wrote:

  "Members of the Russian forces stole a couple of cows and transported them in a plane. During the flight the cattle got out of control. The crew felt forced to throw the cows out in order to avoid a crash," the paper said, quoting an official embassy dispatch.

• U.S. Trade Hits Volume Record ........ as the Journal of Commerce reports that in March 1997 U.S. exports reached a record high of US$76.5B, while imports rose to a record US$85B. Exports were led by civilian aircraft, while for imports it was semiconductors and paper and pulp machinery.
• China Smiling On Surplus ......... and says its trade surplus for the first four months of 1997 grew 13% from a year earlier to US$10.3B, as exports surged 27% to US$50.3B and imports fell 0.5% to $40B. The Journal of Commerce states that Japan, Hong Kong, and the U.S. continued to be China's top three trading partners.
• Made In The USA" Standard May Be More Liberal ............ as the U.S. Federal Trade Commission (FTC) last has proposed new guidelines for product labeling & advertising of the claim "Made in the USA". The proposed guidelines call for at least 75% of manufacturing costs to be incurred in the U.S. - instead of the 98% currently applied - and for the products to be "substantially" transformed or assembled in the U.S. The rules would not pertain to items covered by the Textile, Wool or Fur Acts, nor apply to the automobile industry.
• U.S. Will Lift Ban On Encryption Export .............. as the Commerce Department has announced it will finally allow the export of the strongest available data encryption products for electronic commerce around the world. New regulations will be issued to allow export of "financial transactions" products, including inter-bank software and direct home banking software offered by banks to their customers. Export licenses will be granted after a one-time product review. According to the Commerce Dept., the move will be allowed because banks and other financial institutions are subject to explicit legal requirements and have shown a consistent ability to provide appropriate access to transaction info in response to authorized law enforcement requests. Pressure has continued to mount for allowance for encryption exports, in order to protect the U.S. competitive edge with nations which freely exchange the commodity.
• Expeditors Awarded For Certification ............. as the Cargo Network Services (CNS), an air cargo industry trade association, has honored Expeditors for achieving the freight forwarding industry's highest participation level in the group's internationally-recognized air cargo training certification program. Said the CNS, "as the pioneers to take this training program in-house. Expeditors has helped to `raise the bar' for training in our industry." CNS is a wholly-owned subsidiary of the world's leading airline industry trade association, International Air Transport Association (IATA). The International Air Cargo Training Program was launched two decades ago to meet the growing demand for well-trained staff in air cargo agencies. Worldwide, 28,000 students have completed the course. Since 1992, 466 Expeditors employees have enrolled in the CNS training course, 72% of the students passed the test. The 800 pages of course materials deal with virtually every aspect of international air cargo, from regulations and aircraft types to air cargo rates and the global automation of air cargo telecommunications and data processing. IATA recommends students study for at least 200 hours before taking the 5 hour test.
• BNSF Opens Biggest Yard ............ as Burlington Northern and Santa Fe Railway Co. dedicated its new Kansas City area, freight-car classification yard last week. The 780-acre "Argentine Yard", built at a cost of US$95M over the past 18 months, is one of the largest yards of its type in North America and will triple the volume of freight cars sorted at the yard it replaced, to 2,400 daily. The yard features more than 75 miles of newly-installed track, including 60 classification tracks up to 3,914 feet in length, where railcars are grouped for common destinations. Trains arriving at Argentine Yard containing cars to be sorted, enter a receiving yard comprised of 10 tracks ranging in length from 6,103 feet to 8,466 feet. Freight cars are sorted when a yard locomotive pushes them up a small hill known as the crest (or "hump"), and they are manually separated for their gravity-fed descent into the 60-track "bowl." The sequence of cars on inbound trains, along with their destinations, is stored in the classification yard computer database. As each car rolls eastward, down the crest, it is routed by the computer to the correct track, based on that car's destination. To prevent impact damage to freight customers' shipments, each car rolls through four sets of retarders between the crest and where it couples to the next car on that track at no more than 4 miles-per-hour. Master, group, tangent and distributive retarders slow each car during its journey from the crest to its destination on a bowl track.
• Paperless Summaries Delayed ............ as U.S. Customs will postpone until June 23, 1997, its new policy of not accepting (paper) entry summary documents for entry summaries that have been designated by Customs for 'paperless status.' While filers are encouraged to retain entry summaries with paperless status, Customs will not return the entry summary package to the filer if submitted to before 23 June. The extension is said designed to give filers additional time to adjust their procedures for retaining summaries that are determined by ACS to be paperless.
• Cambodia Gets GSP ........... and is now a beneficiary developing country for purposes of the Generalized System of Preferences (GSP) effective 31 July.
• ITC Says NAFTA Created Rail/Road Jobs ........... as the U.S. International Trade Commission stated its belief last month that NAFTA has created 40,000 to 50,000 trucking and rail-related jobs for the U.S. economy. in areas such as driving, administration, truck stop services, equipment maintenance, and software development.
• Shipment From Hell" Contest Kicks Off ........ as Roberts Express (the largest surface-expedited carrier in the world) announces the grand prize for its contest this year of a dream vacation for two -- anywhere in the world. You are invited to describe your worst experience in trying to transport something from one place to another. Last year, the contest attracted more than 600 entries. Among last years true stories were:
  • The Human Organ That Never Made It Past The Air Terminal. The carrier that received the human cargo admits to "losing" it, but insiders say that it was run over by a forklift -- and ended up in the garbage.
  • Unexpected Stowaways. A truck equipped for temperature control was dispatched on a load that didn't require refrigeration, so the driver turned the unit off. Little did he know that the clumps of "dirt" in the trailer were actually the remainders of the previous load: live bees that woke up as soon as they warmed up.
  • Decorating Disaster. A rush order of custom carpet had been trucked to the wrong city; to make up for lost time, the manufacturer flew it to the right city. Too bad the carpet had to share the plane with a drum of black ink
  • One Stop Too Few. An ocean cargo container was ordered from a supplier on the East Coast, then traveled all the way to the departure port on the West Coast -- empty -- because someone forgot to "stop by" Michigan to pick up the actual shipment.
  • While Alaska Burned. Hundreds of specially designed containers were needed ASAP to transport gasoline for emergency equipment & crews battling a forest fire in Alaska. The shipment didn't get far before it was "bumped" from its flight and given a new delivery date: one week later. By then, thousands of acres would have been cinders.

  The grand prize winner in the Roberts Express "Shipment From Hell" contest will receive a one-week vacation for 2 anywhere in the world! Five second prize winners will receive $1,000 American Express gift cheques. Everyone who enters receives a free gift. The contest is open to residents of the United States or Ontario, Canada. All entries must describe a business shipment occurring since January 1, 1996; and entries must be postmarked by September 30, 1997. Judging will be based upon description of the situation, problems encountered, and the impact on the business or person. To receive an official entry form, call 800-856-7920. Be sure to send a copy of all entries to The Cargo Letter.

• "Chunnel" Finally Reopens To Freight ...........as the financially troubled Channel Tunnel received clearance on 22 May to restart services on its freight shuttle trains - the type that caught fire in November. An Anglo-French commission said Eurotunnel can run its trains that pick up freight trucks and carry them between Folkestone, England, and Calais, France.
• Fritz Expands In Pakistan ........... with the opening of full service operations in the key cities of Karachi & Lahore.
• FlightMasters/SeaMasters Opens LAX .......... with newly established offices at L.A. and Ontario, CA.
• U.S. Customs Allows Only For Passenger Style .......... as our member Trudie Day, CHB, of Schenker International, Columbus, Ohio has pointed out an error in our recent story which stated that U.S. Customs will no longer require a visa for textile & apparel articles described as "fashion samples" w hich are entered for U.S. consumption. Trudie points out that the exemption from visa/quota requirements only applies for textile samples accompanying a passenger. It does not apply to cargo shipments. Thanks Tudie!

4. The Cargo Letter Financial Page

The 1ST Quarter 1997 Results

• Aramex Int'l Ltd. UP for the Middle East express courier & freight forwarding companies with revenues increased by 36% to US$14.6 million compared to US$10.8M in first quarter 1996. Earnings per share increased 36% to US$0.15.
• Arrow Air. DOWN with a loss of $453,000 or $0.11 per share on revenue of US$6.2M compared to a loss of US$390,000 or $0.09 per share on revenue of US$6.7M for the same quarter 1996.
• Atlas Air, Inc. UP with revenues of $82M, a 40% increase over the $58M in revenues for the same period 1996. Atlas has announced plans to add 5 aircraft to its B-747 fleet this year.
• Expeditors Int'l. UP as net earnings increased 48% to US$5.6M.
• Golden Eagle Group (DAHER Golden Eagle). The FF/CHB reported net income of US$60,651 on revenues of approximately US$17.15M as compared to net income of US$266,904 on revenues of approximately US$15.67M for same period 1996, or an improvement of 9.4% in revenues and a reduction in net income of 77.3%.
• Hawaiian Airlines. DOWN with an operating loss of US$4.5M and a net loss of US$2.4M for the quarter. Cargo Ton Miles (CTMs) flown in April 1997 were 5,410,000, an increase of 28.1% from 4,225,000 flown in April 1996.
• Japan Airlines. DOWN Japan Airlines, the nation's largest airline, lost 9.24 billion yen (US$80M) in the last fiscal year, mainly because of sharply higher fuel costs.
• P&O Nedlloyd. DOWN as the newly-merged container giant lost US$42M compared with an equivalent figure for the two separate companies of US$13 million last year. The company says rates have continued to fall but are now showing signs of stability.
• Pan Am Corp. DOWN ........ Just Like The Old Days with a net loss of US$14.6M. With the planned delivery of its 5th & 6th Airbus Industrie A-300's, Pan American World Airways plans to triple its daily JFK/LAX service to three daily trips . Good luck!
• The Freight Connection. UP with revenues of US$6.28M, compared to US$4.61M for the comparable months in 1996, an increase of 36%. The revenue growth can be attributed to the offices in Atlanta and Los Angeles which were added during 1996.

Fiscal Year End Results

• Air France. UP with a net profit for the first time since 1989!! For airline operations the net was 211 million French francs in the fiscal year ending March 31. This result compares with a loss of FF 2.87 billion for the year-earlier period, which included a substantial provision for restructuring purposes. Traffic for Air France Cargo showed a 5.5% increase.
• Japan Airlines. DOWN as it lost 9.24 billion yen (US$80M) in the last fiscal year, mainly because of sharply higher fuel costs.
• KLM. DOWN with net profit for the year ended 31 March was 236 million guilders, or US$124M, down from 547 million guilders in the previous year. The company blamed higher fuel costs and a restructuring charge for the decline.
• Fine Air Services Will Go Public ............. and on 6 June announced that it has filed with the Securities and Exchange Commission a registration statement for an initial public offering of its common stock. The company is a leading provider of air cargo services between the U.S. and South & Central America and the Caribbean. Since 1994, the company has been the largest international air cargo carrier serving Miami International Airport, based on tons of cargo transported. For info, call (305) 871-6606

OUR "B" Section: FF World Air News

5. Freight Forwarder World Air Briefs

• ATA Says Volume UP ......... as the Air Transport Association reported a 9.9% increase in March cargo traffic, compared to the same period last year. ATA says 1997 cargo growth is "impressive," with a 10.3% year-to date increase. International cargo grew by 16%, with domestic cargo growing by 6%.
• Opening Southern Skies ........... as the U.S. Department of Transportation announced the 8 May 1997 signing of "Open Skies" agreements with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama, ending outdated regulatory restrictions in Central America. The agreements eliminate restrictions on how often airlines can fly, the kind of aircraft they use, and the prices they can charge. However, until safety improves, Guatemala may not expand services to the U.S., and Honduras & Nicaragua may not conduct U.S. services. Further south, the text of an "Open Skies" accord has been agreed upon between the U.S. and New Zealand.
• Solution For B-727F Problem Expected .........as the air cargo industry's fleet of converted 727s won't be grounded but load limits are almost certain to be imposed when the FAA releases its Notice for Proposed Rule Making this summer, said the FAA official heading up the investigation into the aircraft.
• AA & BA Alliance Hearings ........... continued last week as their opponents testified before U.S. Senate aviation subcommittee on competition. While American Airlines and British Airways both stressed again that the proposed alliance between the airlines could only increase transatlantic competition because approval of the alliance could only come with an "Open Skies" agreement between the UK and the USA. ................ the critics said the increase would not materialize because there are not enough slots at London Heathrow to start new services to compete with the dominance of both airlines currently accounting for 60% of transatlantic traffic. Virgin Atlantic chairman Richard Branson pounded the table saying "Heathrow is full. There are no slots. It's incredible to hear this (the position of American & BA)!" Testimony from the U.S. General Accounting Office (GAO) was that 6 US airlines should receive 23 additional daily slots to compete effectively against AA and BA, but that it would take years for additional slots to be created. GAO suggested that the 6 US airlines will likely need to have some slots transferred to them from AA & BA.
• Announcing The MD-17 ........... as McDonnell Douglas Corp. has decided to start production of the commercial version of the C-17 military transport plane even though no commitments have been made to buy them becauseit believes that one or two potential customers are close to buying or leasing one or more of the US$173M planes. Air cargo companies that haul bulky items such as oil drilling equipment and large machine parts are the most likely customers for the MD-17.
• JFK Air Cargo Theft Ring Smashed .......... as a 3 year undercover investigation involving large-scale air cargo theft that included designer fashions and jewelry at JFK has resulted in federal & state charges against 83 individuals and the recovery of US$13M in stolen merchandise last month. Stolen goods with such labels as Calvin Klein, Ann Taylor, Tommy Hilfiger, Nike, and Polo Ralph Lauren, were being sold by the thieves at prices 20% below wholesale.
• Socialist Wins Will Keep Air France Public .......... and not privatized in the next few months as had been expected. President Jacques Chirac appointed Socialist Party (PS) leader Lionel Jospin prime minister after the victory of the PS at the June 1 elections to renew the French parliament. Throughout the campaign, PS candidates stressed the importance of public service in France, which was seen by insiders as meaning the end of privatization plans taken by the previous rightist government, should they be elected Insiders fear the new government will also order the French airline to stop its rationalization process, which includes cutting hundreds of employees from its payroll, and start hiring instead as a first step toward fulfilling a campaign pledge of creating 70,000 jobs in the public sector. Ha ving just turned its first net profit since 1989, Air France may not see such rosy performance again for some time.
• FedEx To Vietnam ............ with approval from the governments of the U.S. and Vietnam to operate charter direct freight services to and from Vietnam.
• UAL April/May Volume Soars ............ with an April 20.7% increase in cargo traffic. Company officials credited the increase in freight-ton miles to additional Boeing 777s serving trans-Atlantic markets, as well as two converted DC-10-30 freighters introduced for service. For May, freight ton miles were 237,935,000, up 19.5%.
• Continental May Volume Up .............with revenue ton miles at 46,188, up 12.9% and 222,532 year to date, up17.2%
• Arrow Air Owns San Juan ......... as it has become the #1 carrier of domestic air freight in and out of San Juan. During 1st quarter 1996, Arrow carried 31,455,664 (that's million) pounds of domestic cargo between Luis Munoz Marin International Airport and the Mainland U.S. -- more than 20% of the total San Juan domestic cargo market, which is served by 21 commercial cargo-carrying airlines. Indeed, Arrow has signed a 2 year contract with industry FF leader LEP Profit International calling for the airline to operate a minimum of 20 weekly flights between San Juan and the Northeast and Midwest U.S. Meanwhile, Arrow has sold its authority to operate 2 weekly scheduled all-cargo flights between the U.S. and Argentina to FedEx.
• Own Your Own Cargo Facility/Pacific Hub ...........as Anchorage International Airport's North Airpark be auctioned July 1 at the airport. The site will be developed as a cargo facility. Minimum bids start at a $10 million to fund construction of five widebody aircraft parking positions and a 100,000 square-foot building. For more info, call (907)-266-2420.
• Not The Company Howard Hughes First Built ......... as the highly troubled Trans World Airlines plans to lay off about 8% of the workforce at its overhaul base, a sign of its current plight. A TWA spokesman said the layoffs would be effective June 2 and would affect 268 mechanics and workers. TWA has a new ad campaign underway, and we wish them well.
• Emery Worldwide Takes Charlotte ........... as the express freight carrier has opened a new 43,500 square-foot service center & warehouse facility at Charlotte/Douglas Int'l to expand its global transportation and logistics services to the company's growing customer base in the region. In other Emery news, the company was recently awarded $1.7B, 58-month U.S. Postal Service contract (the largest in history) to transport and sort Priority Mail, primarily on the East Coast.
• AIF To Build Cargo Hub At Ft. Wayne .......... as American International Freight (AIF), the overnight, scheduled air cargo operation that services 45 U.S. cities, today announced its plan with the Fort Wayne-Allen County Airport Authority (FW-ACAA) to build a new air cargo hub on 75 acres at the Fort Wayne Int'l Airport with a US$33.5M bond issue. Nice deal.
• Pan Am Honors A 70 Year Anniversary ............ as the carrier christened its newest Airbus Industrie A-300 "Clipper Charles A. Lindbergh" la st month at MIA, the carrier's home base of operation. Pan Am planes have always been named "Clipper", after the famous sailing ships and Pan Am's own "China Clipper" service across the Pacific before WW II. On the destination end, Air France named one of its Concorde aircraft on 20 May after Charles A Lindbergh to mark the 70th anniversary of his historic flight across the Atlantic.
• Logan Int'l Growing ........ with news that the volume of cargo handled at Boston's airport during 1st quarter 1997 increased by 11.4% over the same period 1996. This is the first time in over 3 years that Logan's cargo volumes have maintained double-digit growth during an entire quarter, this time Logan handling 189,912,465 pounds of air cargo. Domestic cargo volume was 146,536,748 pounds, a 10% increase. International cargo was 43,375,717 pounds, a 14% increase over 1996.

OUR "C" Section: FF World Ocean News

6. Freight Forwarder World Ocean Briefs

• Japan's Harbor Boss Dies ............ as Shiroo Takashima, the effective boss of Japan's seaports, died of an abdominal aneurysm on May 29, 1997. The U.S. gov't had protested his actions for years ....... ending in the now famous (canceled) decision this year by the Federal Maritime Commission to impose sanctions of US$100,000 per port call on Japanese vessels as of 4 Sept.1997 unless Japanese ports were deregulated.
• Los Angeles Gets Largest Terminal ............ as on 12 May APL opened the largest dedicated container facility in the United States ......... Global Gateway South. The new 232-acre terminal at the Port of Los Angeles' Terminal Island, costing U.S.$270M, has 4 berths with 12 gantry cranes, a gate complex with 10 entry and 10 exit lanes with automated procedures and an on-dock rail yard which can load and unload 3 double-stack trains simultaneously on eight tracks. Another 3 trains can be stored off the dock. The yard has 10 intermodal cranes, all of which are electric and which will save 300,000 gallons of fuel annually. The terminal even has a special 15-acre nesting area for birds. The terminal is expected to handle one million TEUs next year and 1.44M in 1999, paying U.S.$25M annually to the Port of Los Angeles. BUT WAIT, there's more ........because L.A.s' new "Pier 400" will open in 1999 after dredging 25M cubic yards of spoils and 3.1M metric tons of quarry run for dike revetment at a cost of U.S.$147,685,450 just for the rock and fill work alone!
• APL - Neptune Orient Marriage Blessed .......... with U.S. Justice Department antitrust approval last month.
• APL - TMM China Deal .......... with the signing of a memorandum of understanding to establish a joint operating company in the Asia-Mexico container transportation trade. TMM (Latin America's largest) will have an equity share of 57.5% of the new operating company, while APL will have 42.5%. The joint operating company would provide transportation operations & certain services for both companies, while APL and TMM will maintain their separate sales, marketing & customer service channels. Under the current slot-exchange agreement, APL & TMM share vessel space and coordinate the sailings of 6 vessels presently operated by TMM between North Asia, Los Angeles and Manzanillo, Mexico. These 6 ships would be chartered to the new joint operating company.
• Largest China Logistics Center Due .......... as American Consolidation Services, Ltd. (ACS), the consolidation & logistics unit of APL, together with Shenzhen Chiwan Wharf Holdings, Ltd. and Shenzhen Sungang Warehouse Holdings, Ltd., have launched a joint venture to develop and operate a US$27M consolidation & logistics center in Longhua, Shenzhen, P.R.C which will consist of a 500,000 square foot, cross-dock and bonded warehouse, as well as a 500,000 square foot container depot, will provide a full range of logistics support including consolidation, distribution, container storage & container repair. Mike Nelson, of ACS, explained, "This is a major and important step in our company's continuing strategy to provide world-class logistics services in China. "Our agreement to build and operate this consolidation and distribution hub in South China, as well as our recent licensing and start up of distribution services in Central and North China, indicates the strength of our commitment to become a premier provider of logistics and distribution services to China's growing export, import and domestic markets," said Nelson, sounding very much like the APL forwarder/broker arm that ACS is. Ground breaking at Shenzhen is scheduled for July 1997, with completion expected sometime in the mid-1998.
• APL Gives U.S. "The Spin" .......... as APL Ltd., the U.S.' 2nd largest ship line, is planning to spin off the portions of its ship operations that relate to control of its 9 subsidized, U.S.-flag vessels in order to clear federal obstacles to its historic merger with Neptune Orient Lines. The new company will be called American Ship Operators.
• Sea-Land(s) In The Mist ......... as the U.S. carrier has introduced FreshMist, a humidity control feature for reefer containers. The system has a water source, a pump and an atomizer which is linked to the air circulation system. Activated when humidity reaches a set level, atomized water enters the container through the air circulation and turns off when the set humidity limit is reached.
• Kobe Is Back After Quake ........... as over 2 years after the earthquake, the city says it has fully restored its port. The magnitude 7.2 earthquake on Jan. 17, 1995, killed 6,300 people. Before the quake, Kobe handled more cargo than any other Japanese port. The port now is handling about 80 percent of the amount of cargo it moved before the quake, and ranks 3rd after Yokohama and Tokyo.
• Singapore Gets 1st P & I Club .......... as the Standard P. & I. Club will soon be the first protection & indemnity insurance club in Singapore. Standard (Asia) will be managed by Charles Tayler Mutual Management (Asia) Pte. Ltd. Operations will begin the second half of the year.
• Hyundai Expands China .......... with announcement of 4 new offices at Dalian, Qingdao, Shanghai and Tianjin.
• Shanghai Sets Euro Container Minimum ........... as the Shanghai Shipping Exchange has set a base rate for containers in the Shanghai to Europe routes. The TEU rate is U.S.$1,050 and the FEU rate is U.S.$2,000. The action is consistent with other recent PRC moves to check falling rates. Shanghai ctnr traffic was up 31% for 1st quarter 1997 over same period 1996.
• Far Eastern Freight Conference Rates Up ........with announcement of an increase in the westbound, Asia-North Europe trade of US$125/250/6 for 20'/40'/LCL rates from July 1. FEFC says the rates after the increase will still be lower than they were a year ago.
• New Inland Container Terminal For Belgium .......... and will open in Sept. at Willebroek, using the new 821 foot long Hingene lock on the Brussels/Western Scheldt Canal.
• Vietnam Pvt. Container Terminal Soon .......as ground breaks for the first major private container terminal in Ho Chi Minh City. With its 1st ship expected in a year, Vietnam International Container Terminals is located in the Saigon River at Tan Thuan. With 16 gantry cranes, the terminal will handle 600,000 TEUs per year.
• China - Taiwan "Flag Fight" Ends ......... with a 24 May agreement reached over what flags should be flown by Hong Kong-registry vessels visiting Taiwan, after Hong Kong transfers to Chinese control on 1 July. The vessels will now fly the new Hong Kong flag, a white Baihuania flower on a red field. The ships will also fly the Chinese flag, except when they visit Taiwan. Talks on the issue of direct sailings between the two will not return to session until after 1 July. However, some 5 weeks after the start of direct services across the Taiwan Strait, several PRC lines have pulled out of the trade because of lack of cargo while three Taiwan-based carriers have put off entering the trade.
• Too Many China Boxes .......... as due to an Over-capacity of new containers and efforts to sell them cheaply, the Chinese government has imposed a minimum export price as of 1 May. A dry CTNR reportedly now costs U.S.$2,000. There is some debate, however, as what constitutes a "new" container, so be careful when shopping. China has 40 dry & seven reefer CTNR manufacturers.
• Rock'in To The Oldies At Gdask ........ as a portion of the famed shipyard will become discotheque. Sad times for the bankrupt Stocznia Gdansk S.A. shipyard.
• The Drive By Phone Concept .........as The Swedish National Maritime Administration has recommended that ocean carriers ban the use of mobile telephones aboard ships. In Norway recently, a man aboard a ship used a phone on the foredeck, at which time the ship's rudder suddenly swung hard over while the vessel was on auto pilot. After the ship returned to its course, he again tried to use the phone and the auto pilot again made a course change. It is believed that the phone's magnetic pulse interfered with the autopilot's operation.
• U.S. Naval Institute Offer ......... as now you may receive their famous book catalog or a free copy of the noted magazine "Naval History" by sending a request to Mary Beth Straight Kiss (really) at USNIWest@aol.com
• 1997 Maritime Law Symposium .....as Roger Williams University School of Law and the Journal of Maritime Law & Commerce will be the host at Newport, Rhode Island, August 7-9, 1997. Contact Prof. Harrington at mph@rwulaw.rwu.edu
• FMC Revokes Ocean Forwarder Licenses .............
  1. Cauci Shipping Inc. (failed to maintain surety bond.)
  2. Land Joy International Forwarders, Inc. (surrendered license voluntarily.)
  3. Leonard A. Kanczuzewski d/b/a Consolidation Services Int'l (surrendered license voluntarily)
  4. Pee Jay International Shipping Company (Worldwide Freight Forwarders) (surrendered license voluntarily)
  5. Romat Shipping Corporation (failed to maintain surety bond)
  6. Winair Freight, Inc. (failed to maintain surety bond)

7. The Cargo Letter Cargo Damage Dispatches

As you will see ........much has happened since our last edition.......
1.] on 6 May A sailor & two 18-year-old women (twins), thought to have died after jumping overboard from the M/V Bunga Terasek on 5 Feb. off Australia, were found 6 May on Cape York Peninsula near Coen, Queensland, Australia;
2.] on 7 May M/T Ming Hui (Chinese) and the M/V Soon Li Fa (Panamanian) collided in the South China Sea southwest of Hong Kong. The crew of the Ming Hui was rescued after the vessel caught fire and sank the next day;
3.] on 7 May M/V The Lubo No. 2 ((Singapore)) collided with the M/V Yucheng (Chinese containership) and sank on in thick fog, in a narrow channel between islands near Dalian, China, with 15 trucks and 73 people aboard. There are 7 dead;
4.] on 10 May South Korean containership M/V Jang Yung sank after being in a collision, in thick fog off the Korean coast, with the cargo ship M/V Lucky Star. The Jang Yung's containers (with YOUR freight) posed a navigational hazard;
5.] also on 10 May M/V Tobias (U.S) capsized and sank 600 feet offshore near Morgan City, La., after hitting a Chevron Corp. satellite petroleum well;
6.] on 11 May M/V Sofia (Finnish general cargo ship) ran aground off Helsingborg, Sweden while sailing with containers from St. Petersburg, Russia, to Rotterda;
7.] on 14 May M/V Jang Yung Lotus (South Korean), sailing from Pusan, South Korea, to Moji, Japan, with general cargo in containers, was in a collision with the M/V Lucky Star (South Korean.). The bow of the Lucky Star hit the Jang Yung Lotus on the starboard side, puncturing the No. 2 cargo hold. Conditions in the area included dense fog. The M/V Jang Yung Lotus sank soon after near Pusan. A small fuel spill was reported and some of the Jang Yung Lotus' 45 containers were reported afloat;
8.] on 15 May the U.S. Coast Guard cutter USCGC Cowslip and the container ship M/V Evergrade (Evergreen Line, bound for Tokyo) collided 10 miles up the Columbia River in heavy fog, slightly injuring one crew member, damaging both vessels and spilling diesel fuel into the Columbia River;
9.] REPORTED 16 May that the M/V Kapitan Man (Russian), operating in the Strait of Juan de Fuca in Washington, used a laser against a Canadian Air Command CH-124A Sea King on 4 April. The two aboard, a Canadian Air Command pilot & a U.S. Navy officer, reportedly suffered eye burns and were temporarily blinded at midday 5 miles N.W. of Port Angeles, Wash. The ship was searched at Tacoma, Wash., by the U.S. Coast Guard on 7 April, on its route between Tacoma, Los Angeles and Vladivostok, Russia. Nothing was found. Protests have been made with the Russian government. Allegations say that the ship was a "spy vessel," recording the transit of the U.S. Navy's lead vessel of the U.S.S. Ohio (SSBN 726)-class Nuclear-powered Ballistic Missile Submarine, based at Bangor, Wash. M/V Kapitan Man has an unusually large number of antennas aboard.
10.] On 21 May, COSCO's M/V Yan He (725-TEU capacity containership of COSCO Container Lines) collided with a fishing vessel on the Chao Phraya River in Thailand, and 10 aboard were killed when the vessel capsized;
11.] On 21 May police found the M/T Daniel, carrying 1,300 tons of fuel, aground in the delta of the Maas/Rhine River. After freeing herself, it was observed that the vessel could not maintain a straight course, and it was stopped and boarded. The master was drunk, and was not allowed to proceed for another 8 hours.
12.] on 22 May a 25-year-old man fell overboard from the M/V Hedda (Liberian containership) 1,000 miles S.E. of Norfolk, Va. Two HC-130H Hercules aircraft from Coast Guard Air Station Borinquen, Puerto Rico, searched an area the size of Delaware. No luck.;
13.] on 22 May M/T Coastal Eagle Point (U.S. tanker built in ran aground 22 May in Tampa Bay, Fla., after a steering casualty. The tanker was carrying 280,000 barrels of No. 6 fuel oil. There was no spill, and the ship was refloated;
14.] on 24 May the tug Venture (U.S tug built in 1922) had trouble at the compensating works of the Soo Locks on the Canadian/U.S. Great Lakes. The tow capsized when it was pinned against the gates by the current and during attempts to free the vessel, it rolled. All crew members were able to get off the tug before it capsized.
15.] on 25 May M/T Mes I (Honduran tanker) had an explosion & fire in its engine room while anchored near Sultan Shoal off Singapore. Two crew members were killed and three were injured. The crew abandoned the ship and were rescued by a supply vessel;
16.] also on 25 May M/T Elisa D'Alesio (Italian tanker) caught fire off Sardinia, Italy, with 350 tons of fuel aboard. The crew abandoned the ship and were rescued, while tugs worked to extinguish the fire;
17.] also on 25 May M/V Wana Naree (Thai) lost power in the Panama Canal after having entered the system at Balboa, Panama. The ship ran aground between Buoys 80 and 82. It was refloated by Panama Canal Commission tugs and escorted to Gamboa for an inspection;
18.] on 26 May M/V Wakeke (Indonesian) caught fire while under repair at Tanjung Priok, Indonesia. The three people aboard were rescued. Tugs towed the Wakeke 4 miles offshore and the ship last reported still ablaze;
19.] On 28 May, Sri Lanka Navy vessels intercepted several boats of the Liberation Tigers of Tamil Eelam (LTTE) north of Trincomalee, Sri Lanka. Seven vessels were destroyed and 50 people killed;
20.] also on 28 May M/V Atrotos (Bahamian general cargo ship) ran aground in the Elbe River between Buoys 11 and 13 on 28 May;
21.] on 29 May M/V Athena (Greek.) was damaged 29 May while anchored in the outer harbor of Tincomalee, Sri Lanka. The ship, with 52,000 tons of wheat, had sailed from Necochea, Argentina. An underwater explosion flooded the engine room;
22.] on 2 June M/V Yani Express, with 62 aboard, sank off Pulau Muda, Sumatra, Indonesia, killing 14 and 20 are missing;
23.] on 4 June M/T Daqing No. 243 (Chinese) sank in the Changjiang River in China following a fire in its No. 3 cargo tank and leaving 8 missing;
24.] On 4 June M/T Gole (Turkish) exploded and caught fire - status unknown; ..................and there were even more incidents we had no room to tell you about in this edition of The Cargo Letter.

The historic dangers of carriage by sea continue to be quite real. Shippers must be encouraged to purchase high quality marine cargo insurance from their freight forwarder or customs broker.

OUR "D" Section: FF in Cyberspace

8. The Cargo Letter "Cyber Ports Of Call"

The Cargo Letter's Site of The Week

Hong Kong 1997 ......The Return To China
A bilingual site from China Internet Corp. (CIC), to celebrate Hong Kong's return of sovereignty to China, with a pictorial history, background, archives, events, & an online encyclopedia.
http://hk1997.china.com/

Hong Kong Stock Market
http://www.tdc.org.hk

Our Other Cyber Ports of Interest

Country Desk Office Phone Numbers ........... Travel warnings & Consular Info.
http://www.state.gov

U.S. Customs-Administered User Fees
http://www.customs.ustreas.gov

Asia-Pacific Economic Cooperation (APEC) ....... Tariff Database
http://www.apectariff.org

Center For Taiwan International Relations (international)
http://ourworld.compuserve.com/homepages/ctir/ctir-idx.htm

U.S. Statistics Site (FedStats) ......... links users to statistics gathered by 70 agencies on topics ranging from agriculture to transportation to the Census Bureau.
http://www.fedstats.gov

Holidays Around The World ......... is a must for your international business. Know when gov't offices are closed., when to send a gift, etc.
For an e-mail list each month, write: to holidays@go-global.com
http://www.Go-Global.com

Credit Reports For Chinese Companies (not authenticated)
http://www.wtdb.com/service/service.htm

The World Guide 1997/98 ........... alternative reference to the countries of our planet. Up to the minute information on 217 countries. Global maps together with illustrated graphs & statistics of key global issues.
http://www.chasque.apc.org/guiatm/perman2/in-home.htm

World's Chambers of Commerce Directory ......... the 1997/98 edition includ es addresses of all the chamber of commerce in more than 200 countries. (More than 300 Pages and 3000 listed, with many details)
http://space.tin.it/economia/gibrau/Chamberofcommerce.htm

WTO Dispute Settlement Activities ....... summary of the World Trade Organization's (WTO's) dispute settlement procedures.
http://www.wto.org/wto/dispute/bulletin.htm

Unisys Corp.'s Worldwide Transportation Market Sector Group ........a service from the computer giant to our industry.
http://www.corp.unisys.com/trans/

New Contest From Mariners' Museum ...........as the Newport News, VA. organization has announced its "3rd Maritime Puzzler Contest. Just go to the site and attempt to identify the random photograph selected from the archives of more than 400,000 images. The first 3 entries which correctly identify the photo will win a free "Electronic Postcard"
http://www.mariner.org

Maritime Research ........ as The Mariners' Museum has announced that the Research Library Card Catalog is searchable for FREE with approximately 8,000 volumes of books represented. Nearly 90% of the 75,000+ volumes will be uploaded this summer.
http://www.mariner.org
http://www.mariner.org/libsearch.html

Roadway Express ........ Small Business Resource Center to help these businesses navigate and locate information on the World Wide Web.
http://www.roadway.com/wsrexsmallbr.htm

Aeronet Worldwide ......... air / ocean forwarder, with HQ at Irvine, CA. Web site with full tracking capabilities.
http://www.aeronet.com